West Hartford Town Council Approves Issuance Of Pension Bonds

WEST HARTFORD, CT — The West Hartford Town Council has authorized the issuance of $365 million in pension obligation bonds as part of a "strategic financing plan to reduce legacy pension costs."

The Town Council adopted this plan in a 7-2 vote. The plan is projected to save the Town more than $140 million over the next 30 years, officials said.

"This is an exciting and unique opportunity to save West Hartford a significant amount of money over the next few decades," Town Manager Matt Hart said.

Mayor Shari Cantor said the action is important for the financial future of West Hartford.

"This strategic initiative greatly improves West Hartford's fiscal position for future generations," Cantor said. "It upholds our promises to retirees while reducing a significant long term liability for taxpayers."

Director of Financial Services Peter Privitera said that the town's actuary performed "extensive financial modeling to assist in the development of the plan. " As a key component of the financing plan, the council also adopted an ordinance establishing a Pension Bond Reserve Fund to provide a fiscal buffer for periods of economic volatility.

Deputy Mayor Leon Davidoff, who chairs the Finance and Administration Committee, supported the plan.

"This is a thoughtful and innovative approach that will help keep West Hartford on solid financial footing," Davidoff said. "I'd like to thank the town staff and our outside advisers for all of their hard work on this issue."

The plan takes advantage of historically low interest rates for municipal bonds to fund legacy pension debt, Hart said.

The proceeds from the sale of the pension obligation bonds will be deposited in the town’s pension fund, where the money will be invested in "higher yielding assets."

Following issuance of the bonds, West Hartford’s pension plan will be 100% funded for the first time in nearly two decades, he added.

In support of the measure, Council Minority Leader Lee Gold stated, "Establishing pension obligation bonds will help contribute to the financial health of our town and enable it to be guided in a fiscally positive direction for many years. It will also allow us to explore other retirement plan options to attract and retain talented town employees in the future."

West Hartford has taken other steps in recent years to reduce the cost of future retirement benefits. Most current employees participate in a hybrid system that is similar to benefits available in the private sector.

The town is not legally allowed to change pension benefits for employees who have already retired, and legacy pension debt is one of the main drivers of growth in the town's annual operating budget.

More information regarding the details of the bond issuance and financing plan can be found at the Town’s Website at http://www.westhartfordct.gov.