With the votes of five council members who agreed to a special meeting to consider a tentative agreement between the administration and Warwick firefighters only to have it fail procedurally more than two weeks ago, the council approved Monday a three-year contract creating the city’s first trust fund to help pay for retiree health care.
The package, which Mayor Joseph Solomon terms “revenue neutral,” will take effect once an arbitrator settles the salary for the 2017-18 fiscal year.
The four members opposed to the contract argued the lack of a starting point for the new contract; ambiguities in the terms of the agreement that were noted during the seven-hour special meeting but not addressed; and the inability of the administration to provide long-range costs were reason not to approve the agreement.
They were prepared to have the contract go to interest arbitration, with the exception of Councilman Jeremy Rix. He termed the basics of the agreement good but wanted to nail down terms that could lead to litigation in years to come.
The overriding concern of City Council President Steve Merolla is that the contract doesn’t address retirement health care benefits of active employees or current retirees, which he said has the city on the verge of bankruptcy. He said city liabilities when calculating the actuarial projections for pensions and OPEB (other post-employment benefits) are three to four times assets.
Nonetheless, members of the administration touted the OPEB trust fund new hires will fund with a 2 percent deduction for their pay sets the path for similar provisions in other municipal contracts and is an important first step to addressing the cost of post-employment health care. While it will manage and invest contributions, the city will not contribute to the trust fund. On retirement the funds in each individual’s account will help pay for health care with any residual going into their estate after death. According to the fiscal note prepared by the administration, the fund will cover 27 to 30 percent of new retiree health costs.
That projection, when future health care costs and times of retirement are unknown, served as the basis for Councilman Ed Ladouceur’s reasoning that the city’s fiscal note was flawed and until costs were calculated the council could not responsibly vote on the contract. Merolla ruled the fiscal note failed to meet requirements, but by enacting a council rule Councilman Anthony Sinapi called for a vote that overrode Merolla.
Such legal jockeying dominated the meeting, which was not open to public comment or questioning. Public comment came during the finance committee hearing during the special meeting.
Solomon, who largely was silent throughout the process and did not attend council meetings, was jubilant Tuesday with the outcome. He called the contract “indicative of the cooperation between the administration and employees for the benefit of the taxpayers.” He is confident the first year of the contract will save $600,000 and possibly more when overtime costs are tallied. The contract implements a 24-hour shift with the option of reverting to the existing schedule should there not be savings in overtime costs after a year.
Solomon thanked those who supported the agreement – council members Sinapi, Steve McAllister, Donna Travis, Timothy Howe and James McElroy – while not disparaging those who voted against it – Merolla, Ladouceur, Rix and Richard Corley.
Solomon said rejecting the agreement would have resulted in costly arbitration with the prospect of losing all that had been gained through collective bargaining.
“You can’t sacrifice the good for perfection,” he said in apparent acknowledgment the contract is less than perfect.
“This is a cost-neutral agreement that takes an important first step in collective bargaining agreements to significantly address concerns regarding pensions and other post-employment benefits,” he said in a statement released by his office.
Solomon expects some aspects of the contract, and especially the 24-hour shift, can be implemented immediately without waiting for the arbitrator’s ruling on the 2017-2018 contract. As part of the agreement, both the city and the firefighters agreed to wipe clean all issues and grievances in interest arbitration with the exception of pay increases. The neutral arbitrator is to arrive at an amount between the 1.5 percent increase the city was offering and the 3 percent firefighters were prepared to accept.
The agreement also resolves the dispute over the Tier II pension system that has been applied to all municipal employees employed after June 30, 2015. Tier II reduces pension benefits for these employees. At the time, the council was under the impression the system also applied to firefighters. However, after the system took effect, firefighters contested their inclusion. An arbitrator sided with the firefighters in a ruling that the city appealed to Superior Court. Under the agreement, the city is dropping its appeal, and the Tier II system will apply to new hires after July 1, 2019.
In addition to the OPEB trust fund and resolution of Tier II, McAllister enumerated benefits of the package, including no wage increase in the first year followed by 2-percent increases for each of the following years; the addition of a year in the steps between pay grades; and the give-back of seven days to the city.
“What happens if we vote no tonight?” McAllister asked.
“This entire agreement is null and void. We go back to arbitration. Everything negotiated in this TA [tentative agreement] goes away. It is not like the city gets to keep all these things then ask for more. We go back into arbitration, where the only thing guaranteed is legal costs for the city. We could lose all the give-backs I listed, plus we could put the taxpayers on the hook for many more costs,” he said.
“A ‘no’ vote is not going anywhere but backwards,” she said. She said she was voting “yes” to start saving the taxpayers money now.
Sinapi questioned attorney Vincent Ragosta, who was on the negotiating team for the city, the city’s chances should the parties return to interest arbitration.
“It’s a gamble the city should avoid,” Ragosta advised.
He called the contract incrementally better than the one it succeeds and a starting point for reforms in other municipal contracts.
“Like it or not,” he said, “the prior administration has given away the farm.”
Observing how the council faced angry students and parents when schools moved to cut programs including sports to balance its budget last spring, which was averted when the council transferred funds from the road repaving budget, Merolla said he fears what will happen if the city fails to address lifetime health care for municipal retirees – “we’ll bankrupt the city.”
Corley based his opposition to the agreement on what he said is its “lack of clarity.” He questioned what constitutes a day – 10 or 14 hours – when calculating sick time, and he thought firefighters should not be paid double time when performing civic details on a holiday. He also wanted a clause that would negate any side deals, suggesting, “If it is not written in the contract it doesn’t exist.”
Ladouceur, who extensively questioned Chief of Staff William DePasquale and the administration’s financial consultant Michael D’Amico, was not happy with projections on savings when there were no numbers on which the calculations were made. He also asked, but was not provided an answer, why the administration had not responded to cost projections requested following the special meeting on Dec. 20.
In frustration at one point after a five-minute exchange where the same question was repeated numerous times, he said, “What I’m asking for is the documentation. There are no numbers to prove that.”