On Monday night, the majority of the City Council ratified a collective bargaining agreement that my administration and the Warwick Firefighters Union agreed to in November.
This concluded a long, difficult series of negotiations and arbitration that spanned 1.5 years. It was a trying process, but I, and my administration, take financial matters very seriously, since I’m charged with being a prudent financial steward of our taxpayer’s money. I thank the union and the City’s negotiating team for their persistence in reaching a resolution that is a win for the taxpayers and fair to the union.
Most importantly, this three-year pact, which is effective July 1, 2019 through June 30, 2022, establishes a strong foundation upon which to build to further ensure the city’s future fiscal health.
The contract is cost neutral.
The contract will save the city’s taxpayers over $600,000 in the first year. These savings will offset modest wage increases of two percent in the second and third years of the contract. There are no salary increases in the first year of the contract.
It reduces future retirement costs with the establishment of Warwick’s first Other Post Employment Benefit (OPEB) trust.
Firefighters who are hired after July 1, 2019 will be required to contribute to current co-shares for health insurance, and will also be required to contribute an additional 2 percent of their pay to an OPEB trust, which will be used to offset their healthcare costs in retirement. By the city actuaries’ calculations, this reduces the city’s obligation to the OPEB fund for new hires by 30 percent – meaning 30 percent savings for taxpayers.
The contract implements Tier II pension reform.
Although approved by the City Council in 2011, previous fire contracts have failed to include language to solidify this important, cost-saving reform. Implementation of Tier II means new hires will have to work longer before they will be eligible to retire, and will have fewer pension benefits than their predecessors. It also caps disability pensions and reduces the maximum pension benefit. All of this translates into savings for taxpayers.
The contract also realizes costs savings through increased management rights and requirements for new hires.
The contract includes implementation of a 24-hour shift schedule, which has been used successfully in other communities in the region, and which is projected to lead to decreased overtime costs. In addition, new hires will remain on a lower pay scale for two additional years (four years instead of two) before they are able to achieve the top step.
The contract results in significant savings through the union’s agreement to give up a week’s worth of days off.
This concession is particularly rare during a strong economy, and I thank the union for their willingness to help my administration and its taxpayers realize savings. The reduction of four sick days will save over $170,000 a year, and the elimination of one holiday means annual savings of over $60,000. The elimination of two personal days will result in savings of $135,000 each year.
It resolves legacy issues relative to prior contracts.
This agreement also corrects the issue of unused sick time payout, which will now be paid annually instead of monthly, and eliminating the practice of so-called “side agreements” that had been established in the prior administration whereby firefighters had been paid for a portion of their unused sick leave and allowed to carry over the remaining portion until the end of the year.
Ratification of the contract avoids costly arbitration.
Binding arbitration is generally not a winning proposition for Rhode Island’s cities and towns, and, in the majority of cases, may result in more generous terms for public sector unions. Just last month, the City of Cranston lost an attempt to vacate an arbitrator’s award in RI Superior Court. The message is clear: arbitration is not a winning strategy, and is gambling with taxpayers’ money, particularly when there are significant concessions on the table, as there were in this case.
Had the majority of the City Council not approved the tentative agreement, the matter would have remained in binding arbitration, where the arbitrator would have had sole discretion to order wage increases of up to 6 percent as well as other costly items, including increased minimum manning. It is also very likely that the Tier II pension reform and establishment of the OPEB trust would not have been upheld by an arbitrator’s ruling, costing millions of dollars in the future.
It enhances efforts for transparency in government.
New policies that my administration implemented ensured that the City Council, and the general public, had timely access to the full tentative agreement, complete with red-lines and strikeouts. This eliminates any ambiguity. Further, when the contract is signed, a true, notarized copy will be kept in the City Clerk’s Office, with copies provided to the Finance Office, the union and the Personnel Department.
Despite all of this, opponents have said the contract doesn’t go far enough.
Is any contract perfect? No. It involves give-and-take on both sides. Full reform won’t happen overnight, but this three-year agreement puts the city on a forward, positive path by saving money during the life of the contract, implementing pension reform, and addressing OPEB concerns.
All of which is a win for our taxpayers, our hardworking firefighters, and our community as a whole. I thank Councilwoman Donna Travis and Councilmen Tim Howe, Steve McAllister, James McElroy and Anthony Sinapi for approving this contract for the good of our city and for avoiding the binding arbitration that would have cost our residents and the business community dearly now, and in the future.