While we cannot take for granted the encouraging signs of progress that comes from the tentative agreement forged between Mayor Joseph Solomon and the membership of the Local IAFF 2748, we feel it is important to scrutinize the terms of said agreement to assess whether or not it is actually as good of a deal as advertised.
Unfortunately, the Beacon is not able to access a copy of the tentative deal prior to the Warwick City Council reviewing it during their December 16 meeting, so we are unable to give it the proper line-by-line vetting that such a potentially momentous document deserves. Although we shouldn't feel too left out, as the city council has reportedly not seen the document either.
What we have access to is a list of changes that have been made that result in what has been billed as a "revenue-neutral" agreement, meaning there is no increased cost to taxpayers associated with the inking of this new deal.
This has been reached through some clever means, such as reducing the number of paid holidays from 14 to 13 by combining Washington and Lincoln's birthday into one "President's Day" holiday, reducing the number of paid sick days from 20 to 16, and striking two personal days. This, combined with a 0-2-2 raise structure over the three-year deal, add up to no additional costs, reportedly.
But the deal also means more than just dollar signs and decimal places. The agreement means that the city has ended its dispute with the fire department over the Tier I/Tier II disagreement that culminated last March – a result which means the city is raising the white flag on an issue where contract language somehow made its way into two collective bargaining units' new deals, but not the fire department's. It means that the city will eat a roughly $2.6 million impact in long term expenses due to the higher cost burden associated with providing health and pension benefits to those in Tier I and Tier II.
The new deal, while it did change things for all members of the union in some respects, also went after what some may consider the low hanging fruit: new hires. Perhaps it is no surprise that those without much say or ability to protest any proposed changes – people who have yet to be hired – are the only ones who will be subject to a brand-new experimental condition to their employment.
This experiment is the city's first ever OPEB trust fund. We have to ponder what caused the change in heart among Mr. Solomon and his administration, who have on more than one occasion balked at the mere mention of long-term OPEB costs as being fanciful, inaccurate figures that unfairly predict costs many, many years ahead in the future.
It is interesting, given that stance in the past, that the same administration is now heralding the creation of an OPEB trust that will accrue what amounts to a rather insignificant overall amount towards the some $352 million OPEB liability, and as we understand it, be reserved only for those paying into the plan.
The 2 percent charge assessed will only be applied to firefighters hired after July 1, 2019. Over the course of their employment, it is assessed that such a trust will cover approximately 27 percent of just their long-term health benefits. To put it in simple math, a new firefighter making $40,000 will pay $800 towards the trust. Even if 50 new employees were hired in a year, that would amount to a paltry $40,000 in the OPEB trust.
As the current OPEB liability already stands, Warwick would have to allocate $34 million each year as recommended by its actuary to pay off the debt in a timely manner. The changes in this contract do nothing to reel in the high cost of paying health benefits to the generation of firefighters already retired, or the generations set to retire in a few years.
This is why we find the inclusion of an OPEB trust so confusing. Mayor Solomon has indicated the city has no issues paying its healthcare costs – retiree and active – year to year, and that the entire healthcare landscape may change in the coming years. So why, now, venture off into creating an OPEB trust, let alone one that won't even put a dent in the actual liability?
Unfortunately, by reaching for the low-hanging fruit, the city has compromised on issues that may have been able to result in larger long-term savings. Discussions of minimum manning would have been useful, as would have discussions of the fire department's shift swapping procedures, which as we have documented in the past, have little oversight and a high potential for abuse at the expense of the city.
We suppose time will tell if the 24-hour shift structure does result in reduced overtime and sick time expenses, but our overall impression is that while the new deal may make a lot of smoke in terms of enacting meaningful changes to save the department – and the city – money in the long run, there doesn't seem to be any flames.