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Akron, Ohio

Mayor Horrigan Issues Statement regarding Retiree Benefits Arbitration Decision

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City of Akron Press Release
From the desk of Ellen Lander Nischt, Press Secretary
Published: 04-04-2018

The City administration is incredibly disappointed in the unreasonable arbitration decision that overturned Mayor Horrigan’s common sense efforts to stabilize the City’s finances.

The 2016 report of the Blue Ribbon Task Force was not a work of fiction – the City’s long-term financial stability is deeply threatened by the burden of ever-increasing legacy costs attributable to retiree benefits. The City took fair and equitable steps to control these costs—the City continued to provide excellent, low-cost benefits to retirees, but reduced the burden of those benefits on Akron taxpayers. In October 2016, City Council passed legislation requiring retirees to contribute the same amount for healthcare benefits that current employees are asked to pay, and stopped offering liberal retirement health care for new workers hired in the future. 

The FOP challenged those reasonable reforms through arbitration and succeeded in securing their right to free supplemental benefits – something few if any of our hard-working residents could ever imagine receiving. 

“What this City needs is funding to fill potholes, maintain neighborhood services, protect our safety forces, and help our residents access a better quality of life. Instead, this illogical decision forces us to continue to pour money into an outdated and unsustainable ‘Cadillac’ benefit system. This decision sadly put the demands of a few above the needs of the many, including our residents.”

The Blue Ribbon Task Force Final Report and Recommendations clearly identified “legacy costs” as a weakness in the City’s finances and reported the following:

“These plans [the City’s self-insured healthcare plan and retiree healthcare plan], as they’re currently structured, pose significant long term financial risk. The City’s bargaining units share tremendously in this risk as it has the potential to escalate its erosion of union membership. The City should consider preparing a comparative analysis of what other public and private employers are doing in both of these areas to determine if these plans continue to be appropriate.”

An independent study was performed, as suggested, and the results were clear – the old way of doing things was harming the City and was not sustainable.

“Legacy costs are a threat to Akron’s financial future, period,” Mayor Horrigan continued.  “Times have changed – healthcare costs are exponentially higher now than they were went the current system was put in place decades ago. We care about all our employees, past and present – but we simply cannot continue to provide free benefits forever.”

“Many of our residents are struggling just to make ends meet,” Mayor Horrigan said. “We cannot ask taxpayers to continue to fund this broken system. My administration will continue to do whatever it takes to implement reform and put our City on a more sustainable and justifiable financial path for this and future generations. We have no other choice.” 

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