OPEB trust, 24-hour shift part of firefighter pact

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After wondering where it came apart in June when he announced a three-year contract with no raises only to have the agreement shot down by city firefighters, Mayor Joseph Solomon announced Thursday night that the union’s membership has approved a three-year “revenue neutral” tentative agreement. The agreement, which would take effect July 1, 2019, still needs City Council approval.

If approved, the city would for the first time establish a trust that would help pay for retirees’ other post-employment benefits, or OPEB. Firefighters hired after July 1, 2019, of which there are none at this point, would pay 2 percent of their pay into the trust – which, upon their retirement, would annually help pay an estimated 27 percent of the cost of those benefits.

Michael D’Amico, executive assistant/consultant to the administration who served on the negotiating team, sees the provision as a model for other municipal contracts in the effort to address the projected escalating cost of retiree health care. Under this plan, retirees would get full health care – there’s no co-pay – but the cost would be offset with funding from the trust. Further, the agreement does not impact existing retirees who are receiving fully paid health care, for as D’Amico points out, they are not members of the union and not subject to terms of an agreement.

Other key components of the agreement are:

• A reduction in the paid sick days from 20 to 16

• Elimination of two paid personal days, meaning firefighters would have no paid personal days for a savings of about $200,000.

• The elimination of Lincoln and Washington’s birthdays as paid holidays and the creation of a Presidents’ Day holiday, resulting in an overall reduction in paid holidays from 14 to 13 for a savings of $85,000.

• No increase in pay for the year starting July 1, 2019, followed by a 2 percent increase in pay on July 1, 2020 and another 2 percent on July 1, 2021.

• This still leaves out the year ending July 1, 2019, which is in arbitration. D’Amico explained the two sides have agreed to drop all proposals before the arbitrator with the exception of pay. Furthermore, the union has reduced its proposal for a 5 percent increase to 3 percent. Meanwhile, the city is holding its proposal at 1.5 percent. D’Amico did not venture on how the arbitrator would rule, but assuming the ruling is somewhere between the two proposals, he said the city has budgeted $750,000 as a “contingency” for the increase. He said every 1 percent pay increase equates to $250,000.

• The city would drop its appeal of the arbitration ruling that found firefighters hired after July 1, 2015, were subject to a tier II pension plan, as police and municipal employees agreed. The tier II system will now apply to firefighters hired after July 1, 2019. This affects about 60 firefighters who will get the higher benefits of the tier I plan. D’Amico felt this was a reasonable agreement as there was no certainty on how the court might rule.

l Firefighters would go on a 24-hour shift – 10 day hours and 14 night hours. Under the plan, which D’Amico said is similar to that in Providence and Boston, following a 24-hour shift, firefighters would get two days off. After the two days they would have another 24-hour shift, which would be followed by a 24-hour shift and a repeat of the cycle. D’Amico said this works out to a 42-hour work week that firefighters are now working. He said the schedule allows for firefighters to better plan their lives and has been shown in other departments a reduction in the use of sick time and the need for overtime.

l The contract would increase the time between the increase in pay for Grade 3 firefighters and Grade 1 firefighters. Under the current contract, Grade 3 firefighters are paid $947 a week, which is elevated to $1,033 for Grade 2 after one year and then to $1,312 for Grade 1 after another year. Under the new contract, the time between grades and a pay increase would go from one to two years. D’Amico didn’t project what this might save the city, but he feels it could dramatically reduce overtime costs as it would incentivize the city to fill the ranks rather than pay overtime that is less costly than hiring personnel.

D’Amico said neither minimum manning provisions – which are a principal driver of overtime costs – nor the fact that the city has nine fire stations were discussed. Under minimum manning, the city is to have 45 firefighters on duty at all times.

In a statement released by his office Thursday night, Solomon said, “I thank the union membership for working with me and my administration to come to an agreement that is fair to our firefighters and addresses a great number of taxpayers’ concerns. With the first-of-its-kind OPEB trust, this contract creates a template to forge a new way forward in helping to manage retirement benefit costs in the future.”

In addition to Solomon, the city’s negotiating team included D’Amico, Chief of Staff William DePasqualle and attorneys Vincent Ragosta and Timothy Bliss.

Michael Carreiro, president of IAFF Local 2748, called the tentative agreement that was approved by 90 percent of the members Thursday night “a great step in the right direction.” He concurred that the 24-hour shift would reduce overtime and would not impair service to the community. He noted the 24-hour shift works for Providence and Boston firefighters.

Carreiro, seven members of the union’s executive board and attorney Joe Penza negotiated on behalf of the union. Carreiro observed he has been in negotiations ever since becoming president of the local or almost two years. He’s pleased with the result.

The City Council is expected to consider the tentative agreement on Dec. 16.

Comments

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Jethro

I only gradiated in 6th grade with my council person Travis, but how does this crap stain save me money?

Tuesday, November 19
Show me the money

Giving up the legal proceeding on the tier 2 pension for those 60 firefighters will cost the taxpayers $2.8 million according to the pension actuarial experts.

What is the cost for the free lifetime healthcare for those 60, is anyone's guess. I doubt the fiscal note will address that cost.

More importantly, the city is giving up the right to determine if the City Council and Mayor can set working conditions for future employees by establishing ordinances.

The OPEB trust fund is a ponzi scheme that will make no real impact. For example a new firefighter making $50,000 a year would contribute $1,000 to the OPEB fund. To get the contribution to $100,000 a year, 100 new firefighters need to be hired.

Keep in mind the annual required contribution that should be contributed to OPEB is $25,000,000. That number grows by millions each year. So with 100 new employees hired, the contribution would be .000004 percent of the annual required contribution.

To put that in prospective, if parents of a newly born child desired to save $200,000 for their child's college fund, they would contribute 80 cents to the fund annually.

The mayor must have consulted with Bernie Madoff to come up with this plan because by doing this the city will be able to write off about hundreds of millions of dollar in unfunded liabilities by contributing pennies into a trust fund.

Here is a great presentation by Council President Merolla from 3 years ago on why this OPEB fund is a fraud.

https://youtu.be/dX7uImhkJgs

Tuesday, November 19
Please

This contract is horrible for the taxpayers. Solomon should be ashamed. D'Amico should return the $50K per yr he is receiving.

Nothing was done to control the runaway legacy costs.

Solomon has to be defeated at the next election

Tuesday, November 19
Apollo

show me the money

But if that $ is invested in stocks and bonds.....

Wall street is off the hook thanks to Trump.

Trump 2020

Wednesday, November 20
Apollo

OPEB is a figure of imagination. Pensions are well funded !!!!!!!!!

OPEB should just consider medical only !!!!!

Medical has many variables and changes all the time, up down.

This contract is a start !

Btw, what exactly does the Stacias, Cushman , Cote want? Just say it. Just spell it out. Sick of the games. Lets hear just how crazy you are. Time to lay out your cards on the table.

Wednesday, November 20
I saw the money

Show-me-the-money's comment was great, and I watched as much of that video as I could stomach. It is obvious that these very high, increasing costs for lifetime Blue Cross etc are not being effectively addressed, and the experts say that they cannot be "pay as you go" because that will become unaffordable..

Therefore, taxes will continue to rise every year. Road and school maintenance and things like that will be hard to pay for even with these higher taxes.

It seems that some here should stop calling the issue "crazy" and start working with others to get a fair solution that the city can financially handle.

Wednesday, November 20
Thecaptain

Here is Solomon's testimony in 2016 when he was bitterly opposed to an OPEB trust fund as it was found to give an impression that is not reality. He starts at the 22:00 minute mark.

http://audio.warwickri.gov/citycouncil/2016/warwickcitycouncil-03-21-16c.mp3

Now all of a sudden he supports the scheme. What a shady character this guy is.

Wednesday, November 20
Jimmy

Thanks Captain, your hard core sleuth work completely changed the new contract. Oh wait, it had no impact.... Your not relevant

Wednesday, November 20
Gave the Store Away

Flip Flop Joe

You gave the store away with this contract.Do you put blinders on when you agreed to it ?

Wednesday, November 20
Apollo

I don't know what they expected Jimmy. They won't say

Wednesday, November 20
Jimmy

Apollo,

They think a volunteer department can handle the call

Volume. Lol.

Wednesday, November 20
Apollo

Lol Jimmy I think you're right. WFD does almost 20,000 calls a year!

Volunteer places may be 250 a year.

Wednesday, November 20
Quid Pro Quo

Lifetime healthcare was given away by former Mayor Avedisian less than 20 years ago. Prior to that the municipal unions received the benefit. Since that time the unfunded liability has grown to $400 million. Contrast that to the school department unfunded healthcare liability of $50 million. The Warwick School Department retiree healthcare benefit structure should be the model used for all city employees.

With the new buzz word in Washington politics being Quid Pro Quo, Mayor Solomon has followed the Avedisian model of seeking a Quid Pro Quo from the Warwick unions by providing these million dollar retirement benefits in exchange for supporting his re-election. Take a look at who attended his last fund raiser for proof.

Word on the street is that Joe even used Quid Pro Quo when he promised some council members plum committee assignments and other perks for friend and family when he was acting mayor in exchange that in order to help him get the union support he needed to defeat Sue Steinhouse, those council members ratify the 2018 Police and municipal contracts. He also promised that he would re-open those contracts after he was elected to reform some of the benefits he knew were extreme. That never happened.

So is it any surprise that Joe is proposing this contract for the Firefighters. Too bad we didn't have a strong opposition party in charge of the council that would be willing to investigate are own Quid Pro Quo scandal in Warwick.

Thursday, November 21