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The City of Hollywood faces financial challenges due to high pension costs and Other Post Employment Benefits (OPEBs). OPEBs, like health care benefits, have created a liability to the City of about $500 million, more than all 30 other Broward cities combined.
As of July 2015 Hollywood’s unfunded pension liability was more than $490 million, with all three of the city’s pension plans funded at less than 57 percent, according to the Sun-Sentinel.
To address this, a pension task force has been established for each of the City’s pension plans: police, fire, and general employees. The task forces will comprise one each of the following:
- City representative
- Pension administrative representative
- Trustee (pension board member)
- Retiree receiving pension
The task forces which are currently being established will begin meeting on October 1, as the new fiscal year begins.
During a recent Hollywood Budget meeting, City Manager Dr. Wazir Ishmael explained that the Hollywood’s generous pension plan for retirees is creating major difficulties for Hollywood.
The current annual contribution for pensions is $53 million, more than half of ad valorem tax revenue collected by Hollywood, according to Ishmael.
Also, health care costs for City employees and retirees increased by about $6 million last year, to an annual total of about $28 million. This City is self-insured for this benefit and is experiencing double digit annual cost increases, which cannot be sustained.
The City is also in litigation and conflict resolution with all three pension plans over the 13th check, a bonus check sometimes sent to retirees at the end of the fiscal year.