Like the tennis volley that keeps going and raises the stakes with each stroke, Councilman Steve Merolla’s call for an actuarial study of health care and pension liabilities has the potential for similar back and forth between the council and the mayor.
The council approved an ordinance requiring the actuarial study at the last council meeting by a vote of 5-4. The next day, Mayor Scott Avedisian vetoed the measure. It’s not the first time. The council approved a similar measure earlier this year on a 5-4 vote, only to have the mayor veto it, too.
Now Merolla intends to bring the action before the council again.
To override the veto, six council members, or a majority of two-thirds, need to agree. Merolla and Avedisian appear to be set in their positions.
Saying that actuarial studies are already being done, Avedisian sees no need for the added expense. He invites Merolla and council members to quiz the actuaries when the actuaries visit the city. As the consultants that perform the assessment of pension and health care liabilities are from out of state and also work for other municipalities, the administration coordinates visits so travel and housing expenses are shared.
Also, since the Pew Charitable Trusts' Center on the States is looking at options for the funding of the Fire and Police 1 pension plan, with a projected unfunded liability of $242 million, Avedisian would like to complete that process before opening fresh discussions.
“Let’s go with the Pew group and see what they suggest,” he said.
Merolla believes the combined liabilities of pensions and health care to retirees is far worse than the public realizes. Further, he claims the mayor is trying to hide the truth.
“If the public doesn’t understand how bad our unfunded pension and health care liabilities are, then they can’t complain. It is actually pretty easy to see why the mayor wants to bury the fact that the unfounded liabilities of the city of Warwick are approaching one billion dollars,” Merolla said in an email.
“He keeps combining health care and pensions into one group,” Avedisian says of the $1 billon reference.
The mayor sees no need for an ordinance as the administration performs pension actuarial studies and those actuaries have come before the council in public sessions and will continue to do so. “First and foremost, Councilman Merolla is incorrect and is purposely misleading people,” the mayor said in an email yesterday. He went on to say the city's actuary prepares a report on the pension plans and to other post-employment benefits [OPEB] on a regular basis. Avedisian said reports have been provided to Merolla the entire time that he has been a member of the council. “Further,” he said, “the Municipal Retirement Board meets regularly but to my knowledge, the councilman has never attended a pension board meeting.” Merolla claims the mayor “certainly does not want to give the council and the public the opportunity to ask questions of the actuaries that prepared the reports. The facts might actually get out and they would reflect badly on his decisions over the years, including giving away 80 percent pensions to some.” The mayor counters with, “Councilman Merolla is lying about 80 percent pensions. There was a proposal to grant pensions of 80 percent to employees who had worked for 30 years for the city. That was rejected by the council. There are no city employees receiving a pension of 80 percent of their salary. Perhaps Councilman Merolla should start telling the truth.” As for pensions, Avedisian believes the city is in a good position. He notes that the city is in the 18th year of a 40-year plan to fund the Fire and Police Plan 1 and that with revisions implemented for all municipal employees hired as of July 1, 2012, the city will reduce pension costs by millions of dollars going forward. The city’s municipal employees union, as part of its three-year contract, dropped all challenges to the pension revisions.
In the bigger state picture, Avedisian said if the courts were to reverse the pension reforms enacted by the General Assembly more than a year ago, Warwick schools would immediately be faced with funding an additional $17 million. Ironically, he adds, “If this [state pension reforms] gets turned over at the state level, we’ll have the best pension in the state.”
Ward 3 Councilwoman Camille Vella-Wilkinson, who voted for Merolla’s ordinance, thinks he may need to shift directions. She would prefer it to be a resolution, rather than carrying the mandate of an ordinance.
“He may have to relent to get it passed,” she said. Vella-Wilkinson said her “main concern” is the long-term liability of health care.
“It will be interesting to see how your council member will vote on this issue,” Merolla writes. “They can choose to bury their head in the sand or vote to override the veto so we can have an opportunity to listen to the updated facts and make meaningful changes to prevent Warwick’s fiscal cliff. I would encourage every citizen to call their council person and encourage them to override the veto to allow us to have such a discussion.”