CFO tells Lowell council FY2027 will include $3.3M debt-service increase; pension and OPEB remain major pressures
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Summary
The city’s CFO reported an anticipated $3.3 million increase in FY2027 debt service (about $1.7M for school debt and $1.5M for other general fund obligations), a long-term debt balance of roughly $422 million and a pension funding schedule targeting full funding by 2037; OPEB remains a substantial long-term liability.
During the Dec. 16 meeting the City of Lowell’s chief financial officer briefed the council on FY2026 results and pressures for FY2027, including rising debt service and retirement-related liabilities.
The CFO said the scheduled increase in debt service for FY2027 is "just over $3,300,000," of which roughly $1,700,000 is related to school debt (largely the high school) and $1,500,000 to other general-fund obligations such as roadways and building improvements. Total long-term debt outstanding was reported as approximately $422,000,000.
On retirement liabilities, the CFO said the city is on a funding schedule to have the pension fully funded by 2037, which will materially reduce annual budget pressure once achieved. The CFO described OPEB (other post-employment benefits) as a larger, longer-term liability; the OPEB trust was initially seeded with about $7,800,000 and the city has been adding to the trust with free cash each year.
Councilors pressed for more detail on balancing capital investment with operating needs, and asked whether pre-payments or pension-obligation bonds might accelerate relief; the CFO said some strategies exist but often require special legislation or favorable market conditions.
Council referred detailed budget questions to the finance subcommittee for additional scrutiny and recommended staff return with further analysis of capital-versus-services tradeoffs, pension/OPEB strategies and possible pre-payment scenarios.