Norwell Faces Rising Pension, Health Insurance, and Salary Costs

Norwell officials are facing mounting financial pressures as pension contributions, health insurance costs, and employee wages increase significantly, adding new challenges to the town’s budget. At a recent Advisory Board meeting, officials reviewed the projected cost hikes and discussed potential strategies to manage the escalating expenses.

The town’s pension contributions are set to increase by $568,918, bringing the total to $4.68 million for the next fiscal year. Pension costs will continue rising through 2031, when the town is expected to reach full funding.

"Your 26 is your actual," said Darleen Sullivan, Town Administrator, referring to the pension funding schedule. "The funding schedule's going out through 2031."

Health insurance costs have also surged, with a 14.28% increase, adding $881,360 to the town’s budget. Officials attributed the spike to rising healthcare premiums and the increasing number of employees and retirees covered under the town’s plan.

"The new dollar amount, if you want to edit that, we just got our numbers," Sullivan said. "It's $7,053,353. It's a 14.28% increase instead of the 16."

In addition to benefits, salary increases for town employees are also putting pressure on the budget. Sullivan noted that the town has contractual obligations, including steps and licensing stipends, that contribute to rising personnel costs.

"We have personnel, the clerical staff," Sullivan said. "One of them has longevity, they've been here a long time, so they're more so at the top of the scales under the personnel bylaw."

The discussion revealed that some departments have seen significant salary increases over the past two years.

"Can we add that to just some of the analysis that we asked for?" said John McGrath, Advisory Board Chair. "Can we add the tree department to that analysis?"

Sullivan confirmed that town staff are reviewing salary increases to provide a clearer picture of cost drivers.

"Steps are mandatory increases," Sullivan explained. "It's usually based on time, you know how many years you kind of go up a step after a year based on performance."

The town is also exploring ways to level out pension contributions over the coming years to avoid sharp budget spikes.

"If I wanted to keep it stable, we could pre-fund plus or minus a million and a half," Sullivan said. "Try to keep it level, but it wouldn’t be in effect until 2028."

Despite these rising costs, Sullivan noted that Norwell’s municipal salaries remain behind those in neighboring towns.

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