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Duluth's Financial Picture Improving after Health Plan Reforms

Updated: 01/30/2014 11:11 PM
Created: 01/30/2014 11:06 PM WDIO.com
By: Darren Danielson

Mayor Don Ness Thursday painted a frightening picture of what the city of Duluth's financial situation would have looked like, had the city not made drastic changes to retiree health care plans.    

Flanked by charts and graphs, Ness illustrated the effect of the reforms made over the last few years.

The retiree health care plans put in place over previous decades, Ness said, could not be paid for and the City was moving toward bankruptcy.

"In 2005 the city's unfunded liability was $280-million dollars. However, if the issue was not addressed and if no changes were made, today in 2013 that liability would be $405-million dollars."

But many changes were made and the mayor unveiled the latest numbers Thursday.

"The latest actuarial report that just came out has our unfunded liability at 182-million dollars. That represents a 223-million dollar decline in our projected liability", Ness said.

The mayor says while the city's financial picture is brighter because of the reforms, that $182 million unfunded liability is still a large one.  

"Going forward, there are only two ways to deal with it: increase revenue or reduce city services".

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