November 20, 2014
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Merolla vows to pursue effort for actuarial reports
Jessica Botelho
PENSION PROBLEMS? Ward 9 Councilman Steven Merolla (left) and Ward 4 Councilman Joseph Solomon discuss business at Monday’s meeting.

A game of ping-pong has come to an end – for now, as the City Council sustained, Monday, the mayor’s veto of an ordinance requesting that the health care and pension actuary appear before the council.

Ward 9 Councilman Steven Merolla, who sponsored the legislation, said during an interview Tuesday he plans to bring the issue up again.

He also hopes to get some answers about the issue from the Pew Charitable Trusts Center, a Pennsylvania-based non-profit agency that provides analytical approaches to improve public policy, inform the public and stimulate civic life. The council unanimously approved a resolution Monday that asks Pew to appear before the council to discuss its findings and reports.

As for the ordinance, newly elected Council President Donna Travis opposed it, and Ward 2 Councilman Tom Chadronet and Ward 8 Councilman Joseph Gallucci abstained. The rest of the council, including Ward 4 Councilman Joseph Solomon, Ward 5 Councilman Ed Ladouceur, Ward 7 Councilman Charles “C.J.” Donovan and Ward 9 Councilman Steven Merolla voted in favor.

Ward 1 Councilman Steven Colantuono and Ward 3 Councilwoman Camille Vella-Wilkinson were not in attendance.

“It’s one thing to try and solve the unfunded pension and health care problem for the city of Warwick, it’s another thing not even to be able to talk about it or have a dialogue,” Merolla said. “I’m going to continue to push this dialogue about pensions and unfunded health care when I can. That’s why I put in the resolution for Pew to come before us.”

This wasn’t the first time the council voted on legislation calling for the actuaries to appear before the council. An ordinance was approved in September on a 5-4 vote, and again in November on a 6-3 vote, but Mayor Scott Avedisian vetoed it each time, noting in recent articles in the Warwick Beacon that it’s costly to fly the actuaries in from out-of-state to make a presentation to the council, as well as the fact that actuary studies are already being done.

As reported last week, since the Pew Charitable Trusts Center 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. The mayor is interested in seeing what they suggest.

Still, Merolla, who has been referring to the 2011 actuarial reports, says the combined liabilities of pensions and health care to retirees are in rough shape, and believes Avedisian is attempting to hide the truth. He said Warwick’s unfunded liabilities are approaching $1 billion, and can’t understand why the mayor continues to veto the ordinance when a majority of the council favors it.

“I think it was hovering around $650 million, but we also have unfunded liabilities on bonds and things like that, which push us up to close to $1 billion, or $800 million,” Merolla said. “He said that he would bring the actuaries back last year and he didn’t. All of this could be avoided if he could tell us the date that they are coming. Either he’s going to keep his word or he’s not.”

But Avedisian said Merolla has been told in the past that the actuaries will be available to the council when they are in Rhode Island, and has agreed with the administration's position on that.

“The fact of the matter is that the city's actuary, GRS, has not been in Rhode Island since last spring, and now Councilman Merolla apparently wants to legislate their appearance,” said Avedisian.

He went on to say that Merolla is “confused by this issue,” and is lumping pension liabilities and other post employment benefits (OPEB) as if they are the same when they are two “distinctly different issues.” According to City Finance Director Ernest Zmyslinski, the other post employment benefits unfunded accrued liability for the city as of June 30, 2012 was $223,593,412.

Avedisian said Merolla’s most recently failed legislation would have had the city paying pension actuary costs out of the health care budget.

“That is totally inappropriate,” Avedisian said.

Additionally, Merolla and Solomon are in the process of drafting a resolution regarding the Pew Trust Foundation but were mum on details because it is still in the works.

Merolla said he thought it was strange that the council voted to sustain the mayor’s veto but then unanimously voted to approve the Pew resolution.

“Why would you not override a veto and the same night vote for Pew to come give us their impression of our pensions?” asked Merolla. “Why not actually invite the people that we’re paying to do this?”

In terms of the mayor, Merolla thinks he has the answer as to why he doesn’t want the actuaries to appear before the council and citizens in a public setting: because he “can’t control the flow of the information.”

“When the council members ask questions and the actuaries give an answer that he may or may not be prepared for, he doesn’t like that,” said Merolla. “You can use your own brush to paint how rosy the picture is to your benefit.”

Avedisian said that’s not the case. Rather, he said he has been up front in presenting the status of the city's pension plans and is pushing for local pension reform.

“I am fully aware of the challenges of the Police/Fire 1 Plan, and am continually looking for ways to improve the plan,” he said. “However, I would also like to remind Mr. Merolla that the city's other three pension plans have been classified as ‘Tier 1’ plans – the highest performing plans in the state. Warwick is the only community in the state to have that distinction."

As for the Pew resolution, Avedisian said all of the information Merolla is seeking is available to him upon request as an elected official and also available to the public on the city website.

“However, it appears that Councilman Merolla would prefer to try and pass superfluous legislation when the information he seeks is already readily available to anyone who's looking for it,” Avedisian said.

Further, Avedisian said that General Treasurer Gina Raimondo invited Pew to Rhode Island, and he gladly accepted their offer to look at the Police/Fire 1 Pension System, as he is “always looking for ways to improve the city's pension systems. If Mr. Merolla wants to meet with the Pew Foundation, I would suggest that he contact the general treasurer to see if she can facilitate his request, as I have no authority over the Pew Foundation.”

In other business, the council held a handful of items, including two ordinances regarding unregistered vehicles in residential areas, and another relative to amending Warwick’s absentee landlord registration legislation, which will be discussed at the Feb. 11 meeting.

They also held an ordinance for Jan. 23 that would require venders to detail any city employee who is on their payroll. Solomon’s resolution to abolish the Warwick Sewer Authority was also held for Feb. 11.


Comments
12 comments on this item

Thank goodness Merolla is watching out for the taxpayers. He an Solomon will do a good job asking the questions regarding Avedisian's mishandling of city finances.

Let the residents of Warwick aware of how Scottie has put this city on the verge of bankruptcy.

Hey Scottie what are you afraid of !!!!!!!!!!!! People will finally see how incompetent you are.

Angry old man!

Amazing when ANYONE would want LESS information exchange. When that happens, look out. On the other side, our Mayor says that 3 of 4 plans are high performing. Assuming that to be true, what percent of our pension pie is the very troubled pension plan Police/Fire 1 of the overall warwick pensions?

"newly elected Council President Donna Travis opposed it"

the king looks like he has less HAIR

They don't want the citizen of Warwick to know how bad it really is.. The Mayor wants to move up the the political chain in Rhode Island. He has to wait until he has left office before we will find out how bad it is. And we know the Beacon is a sounding board for the Mayor.. The less defense for the citizens is the news and our news media,news papers has sold out .Shameful!

Ok Schwanee . . .and aliens landed at Area 51

Nice picture. Two pease in a pod.

Cost to bring in the actuaries to be accountable to the taxpayers is $6000.00

Cost of DPW workers driving around all day doing nothing, stealing from the taxpayer, punching each others time cards, wasting fuel and resources (and thats just what we have seen first hand) - Probably alot more than $6000.00

Too bad we dont have a mayor that is man enough to allow all of the financial information out to the general public. Must be scared to death to finally let the cat out of the bag.

Here are the facts from the latest Warwick Actuarial pension and OPEB (Healthcare) Reports

Benefit Plan and Actuarial Accrued Liability

---------------------------------------------------

Police/Fire I Pension $311,707,868

Police II Pension $162,563,786

Fire II Pension$31,782,763

Municipal Pension $122,721,770

OPEB (City and Schools) $283,220,644

Total Actuarial Accrued Liability

$911,996,831

If we add in the outstanding bond liability at about $150,000,000 --- result is over $1,000,000,000 (that's ONE BILLION FOLKS)

If we reduce the pension investment rate of return form the curernt 7.5%, which has not been obtained in over 15 years the liability grows even bigger.

WITH NUMBERS LIKE THIS - IT'S NO WONDER WHY AVEDISIAN DOESN'T WANT TO DISCUSS THESE FACTS NOR THE BEACON TO REPORT THEM HONESTLY.

Thank you Mr. Cushman for the numbers. When I read the posts on pension related stories the tone is that information is hidden. Even the title of this story implies that. It leads me to a simple question. How can the information be hidden if you have it or it's on the city's website? If it's hidden it is hidden in plain sight.

@Gordianknot: "How can the information be hidden if you have it or it's on the city's website?"

To answer your question, it took extensive research by me to accumulate all this data into one document. This is not something that the every day taxpayer can do. You need to understand the actuarial reports, the terminology and figure out where in the reports the data can be found.

The so called experts in the Mayor's office should have no trouble doing this, but they don't. They will roll out hundreds of pages of complicated reports and say, "The data is all there", when they can easily do what I did. So why won't they present a consolidated look at the liabilities? It's simple, with numbers approaching $1,000,000,000 on your watch, would really want anyone informed with the facts. It easier to claim everything is ok and people like me don't know what they are talking about. One thing they have never done is prove that these numbers are wrong becuase they know there are right.

By the way for the numbers I quoted in the previous post here are the source documents:

Sources of Data

-------------------

1) City of Warwick Municipal Employees’ Retirement Plan Actuarial Valuation, Gabriel Roeder Smith & Company Consultants & Actuaries,

a. as of July 1, 2010, June 2011: pages 1, 3, 7

b.as of July 1, 2008, June 2009: page 1

2) City of Warwick Firefighters/Police I Pension Fund Actuarial Valuation, Gabriel Roeder Smith & Company Consultants & Actuaries,

a. as of July 1, 2011: pages 2, 3,4, 6

b. as of July 1, 2009: page 3

3) City of Warwick Police II Pension Fund Actuarial Valuation as of July 1, 2011, Gabriel Roeder Smith & Company Consultants & Actuaries:

Pages: 1, 2, 6

4) City of Warwick Firefighter II Pension Fund Actuarial Valuation as of July 1, 2011, Gabriel Roeder Smith & Company Consultants & Actuaries:

Pages: 1, 2, 6

5) City of Warwick Actuarial Valuation Post Employment Benefits Other Than Pensions as of July 1, 2009, Jefferson Solutions, Inc: pages: 12, 20, 21

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