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Pontiac EM: Retiree healthcare the 'last battle'

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Pontiac Emergency Manager Lou Schimmel said retiree healthcare is the "last battle." Pontiac Emergency Manager Lou Schimmel said retiree healthcare is the "last battle."
PONTIAC, Mich. (WJBK) -

There are two sides to every story, and this one is no different.  However, one thing is clear.  If nothing changes, if nothing is done, retirees will be the ones who pay the price.

"This is the last battle.  This would fiscally fix the city," said Pontiac Emergency Manager Lou Schimmel.

This last battle could leave a lot of casualties.  Schimmel has slashed the city's debt by $85 million, and under his watch, Pontiac is now leaner and many would say stronger.  However, there is one more line item the city can no longer afford -- retiree healthcare.

"The city flat out has no money available to pay retiree healthcare, which is a bill of about $6 million," Schimmel explained.

He said there is an obvious solution.

"The General Employees' Retirement System has the money, and it has more than enough money to pay for retiree healthcare," he said.  "53 percent of that fund, which is well over $100 million, has really no purpose at all and could easily be used to pay for retiree healthcare."

"Their reaction was no way and we won't even look at it."

"We also have to consider just because we're overfunded to that degree today, what happens when we have a couple of downturns in the market?  We need a cushion," said Pontiac Pension Board Chairman Charlie Harrison.

He said Schimmel cut off talks months ago and is more concerned with downsizing the board, but regardless of the reasons why and the back and forth, there is one thing that both Schimmel and Harrison can agree on.

"There are some that their pensions are very low as it is, and if they have to pay for their own healthcare, it can be devastating to a number of them," Harrison said.

The change is expected to go into effect July first, but Harrison told me that he and his board members will do whatever it takes to protect their members.  Hopefully, negotiations will resume.

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