Press Release | Office of the Mayor | Through Strategic Long-Range, Financial Planning and Partnering with Employee Unions, Westland Reduces Retiree Healthcare Costs by Over $27 Million

For Immediate Release | Official Press Release

PRESS RELEASE

OFFICE OF THE MAYOR

36300 Warren Road | Westland, Michigan | 48185

Office 734.467.3200 | Fax 734.422.1230

WWW.CITYOFWESTLAND.COM

Through Strategic Long-Range, Financial Planning and Partnering with Employee Unions, Westland Reduces Retiree Healthcare Costs by Over $27 Million

Westland, MI - The City of Westland has reduced its Other Post-Employment Benefits (OPEB), also known as legacy costs for funding retiree healthcare benefits, through several innovative measures that will reduce liabilities by over $27 million. OPEB refers to the benefits employees receive in retirement including healthcare, dental, optical coverage and life insurance.

Since 2010, the City has taken a methodical and steady approach to reducing retiree costs. Including the compassionate downsizing of staff through attrition and retirement incentives that reduced the City's workforce from a high of 405 full-time employees in 2009 to 320 employees in 2017. Changes negotiated with the city's bargaining units to retiree benefits include:

Eliminating healthcare in retirement for new hires in some employee groups
Offering other new hires health care savings plans as their retiree "healthcare." These plans provide funding the future retiree may use to purchase healthcare or pay for unreimbursed medical expenses.
Eliminating retiree healthcare at age 65 for all current employees hired prior to 2010. At age 65, these retirees will instead receive a health reimbursement account. Funds may be used to purchase Medicare Advantage plans or otherwise pay for unreimbursed medical expenses.

Beginning in 2016, 220 existing retirees, roughly half of the City's current retirees and those over age 65, were transitioned from the City's PPO health plans to customized Medicare Advantage plans. These plans mirrored the coverage these Medicare-eligible retirees had been receiving but with less costly plans that better coordinate with Medicare. Today, this change alone saves the City roughly $600K annually in retiree health care costs.

"This year's OPEB valuation, something all municipalities must undertake every two years, was the first to fully reflect the scope of all changes the City has made over the past eight years;" commented Mayor William R. Wild. "Strategically, we knew reducing liabilities related to legacy costs could not happen overnight;" Wild continued. "It was with the support of City Council, partnering with all of our unions through many years of negotiations, and the trust placed in us by current retirees that these changes that will reduce liability and increase sustainability for years to come made this $27 million reduction possible;" said Wild.

Mayor Wild praised the work of Plante Moran Employee Benefits Consultants, a division of the independent public accounting firm, members of his administration including the Finance and Personnel Departments, and the employee groups represented by AFSCME, UAW, IAFF and the POAM. "Unfunded retiree healthcare benefits are among the most serious economic pressures facing public entities globally. In Michigan, it is estimated that unfunded OPEB liability exceeds $13 billion. In the coming years, the City must continue to monitor OPEB liability;" Wild commented. "Today, I am proud of the collective effort undertaken by so many to reduce this liability here in the All American City;" said Wild.

For more information, please call Aubrey Berman at (734)467-3200

Westland, Michigan is the state's 10th largest municipality, with a population of over 84,000 people who exhibit a great deal of pride in their All-American City. Westland has a thriving business community along with beautiful residential areas. The citizens enjoy a wide array of amenities and a quality of life that is second to none.

In 2014, Westland was rated as one of 24/7 Wall Street's America's Best 50 Cities to Live, offering residents and visitors an ideal blend of single-family affordable homes, apartments and condominiums, great schools, and access to numerous outdoor activities. Public safety is delivered by full-service, professional law enforcement and firefighting personnel. Westland Police Department, whose motto is protect and serve, provides emergency dispatch services to four cities and over 100,000 residents; the Westland Fire Department are licensed paramedics who responded to over 9,000 calls for service last year, about 85% being medical based. They never forget their mission of preserving life and property.

Westland is well-known as the premier destination for shopping and dining in Wayne County with hundreds of shops and restaurants anchored by the Westland Shopping Center, one of the country's original four regional malls.

Infinite opportunities are available in Westland for the recreation aficionado including, more than 40 parks and 1,500 acres of trails, a 9-hole golf course, hockey arena, athletic fields, playscapes, a Farmers and Artisans Market and more. One of Michigan's most environmentally friendly cities, Westland has a progressive curbside recycling program with one of the highest participation rates in the nation and the City is raising the bar for cultural experiences with the placement of public art throughout the City.

The City is served by two public school districts; Wayne-Westland Community Schools serving 12,000 youth was recently named one of the Best School in Michigan by WXYZ-TV and is the proud recipient of 14 Golden Apple and two Michigan Blue Ribbon Exemplary School Awards. Livonia Public Schools, educating nearly 15,000 students, is proud of their MEAP/MME scores that exceed state averages and the District has also earned Golden Apple and Michigan Blue Ribbon Exemplary School Awards.

The City provides competitive incentives for those who are interested in investing in Westland, making it one of the hottest investment markets in the region. Our Fast-Track to Business Team, which consists of key decision makers who work diligently on a development plan will "cut the red tape" and expedite the approval process for new business development.