Mayor Thomas Peacock told the Quincy City Council on Oct. 20 that the city's $475 million pension obligation bond (POB), downtown District Improvement Financing (DIF) and recent capital projects have changed the city's long-term debt picture and are projected to reduce pension-related costs by about $168.5 million over the life of the bond.

The mayor opened a wide-ranging fiscal presentation that grouped the city's liabilities into three buckets'the POB, DIF-related borrowing and general obligation debt for schools and infrastructure'and explained how each affects the tax base, the operating budget and capital planning.

Peacock said the POB was issued in late 2022 after state approval and market work with Milliman (actuarial consultant), Ramirez & Company (senior manager) and a S&P rating process that produced an AA long-term rating with a stable outlook. The city obtained a 2.62% interest rate on the POB, Peacock said, and invested the proceeds with the state's PRIM fund. "The $4.75 would bring us up to a 100%," Peacock said when describing how the $475 million issuance completed the funding needed to fully finance the system under the state schedule.

Peacock said the POB sets annual debt service at about $37 million beginning in 2026 and continuing through the city's statutory amortization target in 2040; by contrast, he said, without the POB the actuarial-required contribution in 2026 would have been about $50 million and would have grown roughly 5.4% a year. The mayor's slides showed the gap between the contribution path without a POB and the fixed POB debt service, a difference Peacock called "staggering" for the municipal budget.

Councilors pressed for detail during questions. Councilor McCarthy asked whether the $475 million was an addition to an already funded balance; Peacock replied that the issuance brought the retirement system to full funding under the state schedule and noted market volatility since issuance (the mayor said funding levels had dipped and were expected to rebound). "We fully funded the system," Peacock said, adding his expectation the system would be near or above 100% funding well before 2040.

Peacock described the city's downtown DIF program as a major revenue source for debt tied to downtown infrastructure. He said general fund revenues have grown 4.1% since 2007 while DIF revenues have risen about 375% and downtown assessed value about 140.2% over the same period. Peacock used case studies including West of Chestnut and 1 Chestnut Place to illustrate how new development increases tax receipts and helps repay DIF borrowing tied to streets, utilities and parking garages in the core.

On general obligation debt, the mayor listed major categories and examples. He cited approximately $155 million in MSBA-related school projects, about $100 million in self-supporting water and sewer debt (paid from enterprise rates), and roughly $50 million tied to Community Preservation Act spending, as presented in the slide deck. He highlighted recent school construction, the Christopherus special-needs center (financed partly with ESSER and ARPA funds and county assistance), seawall work, and a multi-year street-reconstruction program that Peacock said has rebuilt about 44% of city streets over the last decade.

Peacock also reviewed liquidity and capacity measures: chapter 90 gas-tax receipts of roughly $1.9 million a year, a $24 million capital program this year, and an excess levy capacity he estimated at about $31 million. He framed those numbers as reasons Quincy can continue borrowing for capital without immediately seeking an operating override under Proposition 2'1/2.

Councilors asked about several specifics: timing of projects rolling off the debt schedule; the city's plan for reserves and bond-rating signals from S&P; the DIF's eventual sunset and how excess DIF revenues feed the general fund; and ongoing federal grant monitoring. Councilor Liang asked whether the DIF will eventually end and return revenues to the general fund; Peacock replied that as development continues the tax base grows and "the excess goes into the general fund. It's already helping the general fund today." Councilor Campbell and others asked about inflation, grant risk and school reimbursement from the MSBA; Peacock said construction inflation had moderated from pandemic-era peaks and that the city is continuing to monitor federal and state grant pipelines.

The presentation included a timeline of the POB's approval steps: internal analysis beginning in 2020, contracting Milliman, A&F approval by the state, S&P rating and a November sale and December closing in the year the mayor described. Peacock credited prior local actions, the city's capital planning and outside partnerships in building downtown projects that produce new tax revenue.

Votes at a glance

Separately during the meeting, the Council approved a traffic ordinance (Ward 4, 2025-118) to add two stop signs at Kimball and Campbell streets and approved the previous meeting's minutes and the November meeting date. The stop-sign ordinance passed on a roll-call vote with all councilors voting yes.

Why it matters

Councilors and the mayor described the POB and DIF as choices that reduce near-term volatility in pension contributions and fund visible downtown and neighborhood capital work. The city's decisions on reserves, bond sizing and the use of DIF revenues will shape operating budgets and property-tax capacity as major projects come online.

The mayor concluded by offering staff and finance officials as ongoing points of contact for councilors. "We're in a good place," Peacock said when the presentation closed.