1. 1 Article 7 - Concord Town Manager FY11 Transfer from Insurance Reserve Fund to OPEB Trust Mr. Whelan moves: that the Town vote to transfer the sum of $700,000, from the Insurance Reserve Fund established by vote under Article 22 of the 1987 Annual Town Meeting, to the Post-Retirement Group Health Insurance Trust Fund (the “OPEB Trust”) on or before June 30, 2011. Mr. Whelan moves: that the Town vote to transfer the sum of $700,000, from the Insurance Reserve Fund established by vote under Article 22 of the 1987 Annual Town Meeting, to the Post-Retirement Group Health Insurance Trust Fund (the “OPEB Trust”) on or before June 30, 2011.

2. 2 Article 7 Transfer from Insurance Reserve Fund established at the 1987 Annual Town Meeting established at the 1987 Annual Town Meeting purpose – to set aside a reserve for purpose – to set aside a reserve for the cost of: employee insurance benefits employee insurance benefits retained portion of an insured loss. retained portion of an insured loss. Source of funds: Source of funds: Unexpended appropriations Unexpended appropriations

3. 3 Fund balance at June 30, 2010: Fund balance at June 30, 2010:$2,051,223. $700,000 increase over the past two years: $700,000 increase over the past two years: - drop in property and liability insurance costs; - employee group insurance costs below budget estimates. - employee group insurance costs below budget estimates. Article 7 Transfer from Insurance Reserve Fund

4. 4 Article 7 The “OPEB” Liability Beginning with the financial statements of June 30, 2009, the Town is reporting its liabilities for post- retirement group health insurance costs (its 50% share) on an actuarial basis, just as it reports actuarial liabilities for its pension obligations. Beginning with the financial statements of June 30, 2009, the Town is reporting its liabilities for post- retirement group health insurance costs (its 50% share) on an actuarial basis, just as it reports actuarial liabilities for its pension obligations. At January 1, 2009: At January 1, 2009: actuarial liability was estimated at $46 million; actuarial liability was estimated at $46 million; annual General Fund cost estimated at about $2 M. annual General Fund cost estimated at about $2 M.

5. 5 Article 7 Meeting the “OPEB” liability The Town is fully meeting its annual required contribution for the OPEB liability of its enterprise operations Water, Sewer, Light, Swim & Fitness Center) from the revenues of those operations. The Town is fully meeting its annual required contribution for the OPEB liability of its enterprise operations Water, Sewer, Light, Swim & Fitness Center) from the revenues of those operations. The proposed FY12 General Fund budget includes $150,000 to begin to meet the OPEB liability due to all other town operations. This amount will likely be increased gradually in budget proposals of future years. The proposed FY12 General Fund budget includes $150,000 to begin to meet the OPEB liability due to all other town operations. This amount will likely be increased gradually in budget proposals of future years.

6. 6 Article 7 OPEB (“other post-employment benefits”) Trust Home Rule petition by a Concord vote at the Home Rule petition by a Concord vote at the November 2007 Special Town Meeting; enacted as Chapter 188 of the Acts of 2008; enacted as Chapter 188 of the Acts of 2008; authorizes the Town to establish an OPEB Trust Fund authorizes the Town to establish an OPEB Trust Fund and to invest; Trust Fund established as of June 30, 2010. Trust Fund established as of June 30, 2010.

7. 7 Article 7 Transfer $700,000 to the OPEB Trust long-term objective: long-term objective: funding the Town’s obligations and avoiding passing current costs to future taxpayers. Without an investment fund, future costs to taxpayers would escalate dramatically. Without an investment fund, future costs to taxpayers would escalate dramatically.

8. 8 Article 7 FY11 Transfer of $700,000 from the Insurance Reserve Fund to the OPEB Trust Maintaining the Insurance Reserve Fund at $1.3 million (its balance of two years ago), is deemed sound and sufficient for its purpose. Maintaining the Insurance Reserve Fund at $1.3 million (its balance of two years ago), is deemed sound and sufficient for its purpose. Allocating $700,000 to the OPEB Trust will be a significant start in meeting the Town’s obligation to its 50% share of the future cost of retiree health benefits. Allocating $700,000 to the OPEB Trust will be a significant start in meeting the Town’s obligation to its 50% share of the future cost of retiree health benefits.