September 15, 2014
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Mayors Polisena, Fung still critical of pension deal
Daniel Kittredge

Following a Tuesday briefing for city and town officials, local mayors remained sharply critical of a proposed settlement in the legal challenge to the state’s pension overhaul and the manner in which it was negotiated.

“A lot of mayors were frustrated and angry … I voiced my opposition, my frustration, to the people that were there,” said Johnston Mayor Joseph Polisena. “We were never informed. It’s kind of a slap in the face … There was no appetite to accept this.”

“I was still disappointed in the outcome,” said Cranston Mayor Allan Fung, who has called on the General Assembly to reject the settlement.

Fung asserted that those who negotiated the proposed settlement are “treating [municipalities] like an ATM,” and said that “fits with what’s been going on in a secret nature.”

“It’s not something we can afford,” he said of the proposal.

The settlement, announced publicly by General Treasurer Gina Raimondo, Gov. Lincoln Chafee, other officials and the legal counsel for both the state and unions, would resolve six cases challenging reforms made to the public pension system in 2009, 2010 and 2011, the latter and most sweeping of which was championed by Raimondo. It was negotiated under the guidance of federal mediators during closed-door talks ordered by Judge Sarah Taft-Carter.

The deal faces multiple steps before being enacted, including approval by unions, the court and the General Assembly. Lawmakers would need to approve the deal without amendment for it to take effect.

Those backing the settlement say it would protect retirement benefits for public employees, preserve 95 percent of the savings realized under the 2011 law and stave off further litigation that could prove costly, lengthy and unpredictable for both sides.

The financial impact of the deal on the state’s cities and towns, however, has drawn significant criticism. The settlement would slightly increase the state’s unfunded pension liability to just over $5 billion – compared with roughly $4.8 billion under the 2011 law – and require an estimated $24 million in additional funding split between the state and municipalities for fiscal year 2016, which begins in July 2015.

Fung said for that fiscal year, Cranston’s share would be just shy of $1 million. Polisena said Johnston’s liability would increase by approximately $278,000.

The Warwick School Department would also be affected by the proposed settlement. The department’s business affairs officer, Anthony Ferrucci, said Wednesday that prior to the announcement the department was advised to budget a 10 percent increase in contributions. That would boost pension costs to almost $10 million for the next fiscal year. Ferrucci believes the settlement could tack on $600,000 to $700,000 on top of that.

The prospect of “re-amortization” – or extending the timeframe over which pension liability is funded – as a means of lessening the financial impact of the settlement was also raised during the municipal leaders’ briefing.

Fung said he finds that option problematic.

“Even with that, you’re going to incur a cost over time … there’s no free lunch,” he said.

Polisena was more receptive, saying such a move would be the “path of least resistance” and would make the added burden “a little more palatable.” He continued to voice opposition to the settlement, however, given the impact on local taxpayers.

“To have a tax increase, whether it’s this year, next year or the year after, it would be very difficult,” he said. “Right now, my concern is people are struggling to pay their bills.”

A former state senator, Polisena said he has reached out to Johnston’s legislative delegation to voice his concerns with the settlement. He said lawmakers, like mayors and town managers, find themselves in a difficult position.

“It’s not fair to them, either,” he said. “They’re probably just as angry.”

Polisena said he also believes the deal will be a “tough sell” to union members, and also questioned what impact it would have on private pensions negotiated by municipalities.

Fung said he found it “very surprising” to learn of a “side deal” the parties to the settlement made with the unions for Cranston’s police and fire personnel. Those unions opted not to participate in the settlement, and will instead continue to pursue litigation. They will, however, still be covered under the terms of the settlement if it receives the needed approvals.

“It gives those two bargaining units a free run,” Fung said.

Cranston’s fire union, in a statement, did indicate it is open to the creation of a private pension plan outside the state system. Fung said it is “something I’ll take a look at,” but added that any such arrangement would only be acceptable from his perspective if it is beneficial to the city’s taxpayers.


Comments
8 comments on this item

What am I missing? Why do Polisena, Fung, Lombardi and all of the other Mayor and town managers have their undies in a knot? They are absolutely in control of this and here's why...The imbeciles in the GA already have a slim majority to overturn the 2011 law. The rest of this with talk of informational meetings etc. is a dog & pony show...So, why do I say the Mayor's and towns are in control? They can warn the GA that if they overturn the law rather than let the Supreme Court decide it, they as a group will all file chapter 9, just like Central Falls...and, if the Supreme court doesn't recuse themselves from hearing the case because of the obvious financial conflict of interest and overturns the law...the same thing happens...Chapter 9. Enough of the Marquis of Queensberry rules and hello to Obama style Chicago politics...bare knuckles. Oh, and have a pleasant day.

That is one of the most ridiculous things I've heard. The mayors aren't going to threaten the GA. The GA has the control in this (as they usually do). They have more of a say than the Governor, and the Treasurer. The real dog and pony show in all of this comes from Gina Raimondo. She told people how important it was to get this thing passed as is, and then went back on that just to try and win a few union votes in the democratic primary. If the GA decides to do nothing this thing goes to court, and neither side wants that. Talking about "Obama style Chicago politics" has no place in this argument. My only hope is people see what a FRAUD Gina Raimondo is, and how this whole thing was meant to try and help her political career. If there's anyone practicing sickening politics in this fight it's the treasurer. Try reading up on this "bendover", and then maybe you want have to bring up the President in a state issue.

Memo to skell24: LMAO! You might be sitting at a desk, (on State time or city time?) reading from your union provided crib notes. You conveniently stay away from my main issue...The State and cities in this pension and healthcare fiasco because of gross financial irresponsibility and financial malfeasance by ALL parties involved in signing agreements that were reckless, unsustainable, and actuarially unsound should be criminally charged....That is without getting into the nuts and bolts of Title XVIII...Secondly, this is RI...Spare me the "where is the crime" defense...You have to have an active investigation with people who are actually willing to look for something...kinda like the $39M mistake in the traffic courts...Third, you have explaining to do to young union members because they have been thrown under the bus along with the average taxpayers who you think are going to bail this thing out again with aid to the cities and towns cut and hefty property tax increases slated to make up the difference. I don't want to hear, "we put our money in, therefore we are owed"...That is no different than the Bernie Madoff defense of out of luck investors...We never questioned the unrealistic returns we were getting, we simply cashed the checks...Either way, I no longer care about this soon to be banana republic. I'm an old man who will soon move to be with family far away from this three ring financial circus. Don't make any difference who the next Governor is, you can't unwind 60 years of one party rule that has left this State on the brink of insolvency...Good luck in your future Sasso...I'm sure like the other big shots in all of this, the Florida property is already purchased, ready for the quick escape in the event indictments ever do happen.

As a matter or fact I'm not reading any crib notes that were provided to me, its called thinking with your own brain and READING. You should try it sometime, but that would require you to turn off Fox News and John Dipetro in order to think for yourself. Instead you are probably sitting home, collecting a social security check and medicare. while talking about government OVER-SPENDING. HAHAHA! Once again you've brought ZERO facts to the table. You can talk about the pension system being unsustainable all you want, but it was never due to the Unions not paying into it. 8.75% out of every check was sent from union membership to the pension system. Almost 10% of every check, that was one of the highest contributions in the COUNTRY. Where the system starts to break down is because the state never paid there share into it. For years they would defer payments, and then never put that money back in. They were plugging budget holes with money that was supposed to go to peoples retirement. All you do is use union bashing rhetoric, but you don't put any numbers into your argument. That's because you CANNOT think for yourself. I'm sure if somebody knocked on your door tomorrow and told you that your social security would be taken away, you would say something like "I paid into that system for years, how could that be?" Well how is that any different than what union members across the state are facing. People making $25,000-$35,000 a year. They weren't at the negotiating table, they weren't telling members of the GA to defer payments and never make them up. They were busting their ass, making their contributions and providing a public service all across this state. It's people like you that divide this state by placing blame on the unions. The people who pick up trash, work in hospitals, schools, libraries, snow removal etc. The blame belongs on the GA, the MAYORS (yes, your beloved Scottie A too!), and the governor. You'd have to explain where I used the "where is the crime" defense? Or was that just something you heard on Hannity? Wake up! Since you're so down on government and overspending than surely you won't mind sending back your social security check, and also not seeing Dr's anymore, because all that stuff costs taxpayers money. Although you've paid into it, the politicians haven't kept their word and so with your argument...apparently that's YOUR FAULT. You say you don't care, but please read up on this issue because you CLEARLY don't have a clue what's gone on in this state. Let me know if you need help packing!

Way to go Sasso...Yeah, no crib notes...Resort to the same "party" line talking points...insults, Fox News, talk back radio, blah blah blah...Oh you want numbers...OK...How did the pension fund and healthcare benefits get to a $14B+ unfunded liability? With so many Reps. and Senator's acting as the eyes and ears as well as benefactors of their union controllers, all the union leaders up at that State House everyday, all the paid lobbyists...How did things get so out of control? They controlled all the key votes and committees in both the Senate and House...It just happened? Or better yet, how about all the special pension deals that went down right after the credit union fiasco...When this State was flat on its back..All the union Reps. and Senator's, the lobbyists, union leaders like Harvey Press, Reback, Nee, Walsh, Boeniger, who was in the assembly, Ruggierio, Moura, they all got hoodwinked when those dirty deals went down? They all looked the other way...Bianchini was up to his eyebrows in the RISDIC/credit union fiasco and yet he was able to sponsor the special pension deal legislation and none of the above "saw" it? Those two events were the beginning of the end..YOUR people were in charge and they dropped the ball...incompetence or collusion, you figure it out.

You compare social security with a State pension fund and say its the same? Crude analogy, at best. By the way, I'm not collecting social security yet...My satisfaction will come when I read how this corrupt fiefdom finally falls into the financial abyss and people like you are left looking at each other, wondering where to assign blame next. Mr. Almonte might be the only hope to fix some of this mess.

You've now posted 2 giant paragraphs...you used the word numbers, but I'm not sure you know what those are because you still didn't include any. I am comparing social security in the sense it's something everyone pays into and like the pension fund it was raided by politicians to plug budget holes and fix deficits they created. Social security shouldn't be insolvent, it's insolvent because the money paid into it is taken and used for many other discretionary items. The pension fund was treated the same way. People in the public sector sacrifice income to get better than average benefits. Clearly you know nothing on this issue because all you can do is cite the credit union crisis 20+ years ago, when I was in pre-school as your big scandal. Anyone can google names of union leaders and throw out these "corruption" falsehoods, but that's the only trick in your book. The public sector has taken a huge hit through the recession, and what people like you fail to realize is that public sector workers pay taxes too. You live in this fairy land (along with your heroes on talk radio) that talk to the "lavish" lifestyle that these TEACHERS, JANITORS, COOKS, LANDS & GROUNDS employees live. These people make less than $35,000 a year. It's funny that people with your point of view look down on people for bashing the rich, yet you people make a lifetime out of trashing people that make an honest living. You can blame union leadership and all the other "corruption" you speak of. The fact is that hard working union members paid into a system (some for 25+ years) and at the end of all their hard work, their told that they will get 75% of what they were originally promised. If you don't think there's anything morally wrong with that, than that says a hell of a lot more about you than it does me. Had the state made their side of the payments they were supposed to the system would be solvent. THAT'S A FACT!! Now you obviously don't know what those are since you haven't used any...but once again I ask you to come back with facts. Not the names of politicians and union leaders from the past 30 years. I know that can be hard to get off the talking points Johnny Dipetro gives you everyday...but try a little harder next time.

Way to go Sasso...Congrats...You have done everything to re-enforce the stereotypes of many State workers...OVERWEIGHT, OVERPAID and UNDER WORKED...You are still wet behind the ears little boy. "Clearly you know nothing on this issue because all you can do is cite the credit union crisis 20+ years ago, when I was in pre-school as your big scandal." Your own words little boy...You know nothing...I suggest you join the military and get some real combat experience, then go to school, get a degree, then get an MBA, then run or own a business in which you are personally responsible for a payroll. Do that for 35 years, then come back and have a conversation with me...Been there, done that...You are out of your league and pay grade...I hope you are a smart investor, because if you are depending on this State's pension system to be solvent by the time you retire, assuming you can climb through all those desk audits, you better have a fall back position. Good luck in your life young man...Your generation is in for a rude awakening...and your big shot union bosses...They'll all run off to Florida or parts elsewhere when it hits the fan...Just like the credit union crooks of 20+ years ago which you trivialize...Thanks for putting teachers with janitors in your inane analogy...

First of all you have no idea who I am or what I do, so I laugh at your ignorance...and it is TOTAL IGNORANCE on display by you. This is now the 3rd time you've responded and once again you can't use any facts or use any useful information so you try to get personal. Lucky for me I own a home and a car and I'm not even 30 years old...so clearly I've done something right in life. Out of my league? Out of my pay grade? You call me little boy, you're the one who sounds like a 6 year old child. Congratulations for running a business and payroll for 35 years, wouldn't knock you for that...the fact you have to use that in a post while discussing the pension crisis and "political corruption" is PATHETIC. I wasn't trying to say the credit union crisis wasn't a big deal, it obviously was. I wasn't alive for Pearl Harbor but i'm pretty sure i know what it was and that was bad also. I didn't need you to try and explain it (obviously you can't because the only thing you could do is attack me). I was saying the fact you are bringing it up in the context of "corruption" today involving state pensions is a joke. The only thing you've done in any of these posts is trash people (once again you look down on people, that says a lot about the type of "business man" you are.) If you hate it here so much why don't you leave? If this state has been full of such "corruption" since the credit union crisis of 1991, then why have you stayed here for 23 more years? If its all run by the unions, then why not leave? I can't stand people like you...all you can do is bad mouth people from your ivory tower and talk about how everyone else's ideas are wrong and if they only listened to people like you we'd be fine. In this entire conversation you have brought NOTHING to the table. People that read this are going to look at how you can call people names, and make up conspiracy theories, and talk yourself up for being a great "business man" (so sad) but you have stated no real argument. Once again I will say that you attack union members who have taken a pay freeze for almost 5 years while their health insurance costs went up each year. On top of that their pensions were slashed THROUGH NO FAULT OF THEIR OWN in 2009, 2010, 2011. You can call me all the names you want, but you once again refused to answer any of that. Is that fair that these people will get 70-75% of their expected pension after being promised for years (some of them 20+) that their full pension would be there. I'm sure you will have thought of a few more names to call me by then (hopefully you read up on this so you realize the real crooks are the general assembly) but I don't think you will have anything useful to say. Please don't try to talk yourself up anymore as that was one of the most pathetic displays I've seen in my lifetime

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