Newton Finance Committee Unanimously Approves Petition to Issue Pension Obligation Bonds

NEWTON -- April 13, 2026, Newton Finance Committee votes 7-0 to pursue pension obligation bonds, seeking up to $20 million in annual budget relief. The committee unanimously backed authorizing Mayor Laredo to petition the Massachusetts General Court for special legislation allowing the city to issue pension obligation bonds, the first formal step in a process that could restructure an unfunded pension liability estimated between $250 million and $275 million. Chief Financial Officer Maureen Lemieux, who chaired the 10-member pension working group that recommended the move, said a successful bond sale could reduce the city's annual pension appropriation from a projected $68.1 million in fiscal year 2031 to roughly $35 million to $37 million, a savings approaching $20 million per year at the curve's peak. The taxable bonds would likely carry an interest rate of approximately 4.7 to 4.8 percent against a projected pension fund return of 6.9 percent. Moody's analyst Nick Lehman told the working group that either a 10-year or 14-year bond term "is generally favorable because the plan is well-funded" and that the issuance "is just a shift from a pension liability to a debt liability." The city has also asked its Retirement Board to extend its funding schedule from 2032 to 2035 in exchange for a phased increase in the retiree cost-of-living adjustment base from $15,000 to $18,000, a deal the board was meeting to consider April 14. Senator Cream and Representatives Sangiolo, Schwartz, and Lawn have all agreed to shepherd the home rule petition; the full City Council is scheduled to vote April 27.