EDITORIAL

Lots of smoke, but not much flame in new fire deal

Posted 11/21/19

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

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EDITORIAL

Lots of smoke, but not much flame in new fire deal

Posted

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.

Comments

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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 .0004 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 $800 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

Thursday, November 21, 2019
Well Done

The Beacon is right on point. Solomon's solution is a sham.

Solomon is creating the OPEB Trust fund so he could reduce hundred of millions in liabilities by putting pennies in the fund.

Bernie Madoff is smiling.....Stop the con game Joe.

Thursday, November 21, 2019
Toby

Correct me if I’m wrong but didn’t the City already lose the decision on the pension tier 2? With this contract, the city simply decided to cease their appeal of that decision. I know from similar dealings of my own that these rulings are virtually never overturned and appeals of them are widely considered “throwing good money after bad” with untold legal fees expended in the process. It sounds to me the City was wise forgo that effort in futility. Especially considering all new hires will in fact go into the new tier that the city was pushing for anyhow.

It also seems the firefighters agreed to some significant concessions. They gave up sick days, personal days, holidays... they took a year of no raises and then two years of a substantially smaller raise than the Laborers and Police got. I saw int notes in a previous article that they made concessions on management rights as well, why no mention of that here? As for the OPEB trust, it seems the firefighters should be commended for establishing a way for them to prepay a portion of their healthcare in retirement. I read recently they also agreed in their last contract to limit that healthcare in retirement to only the former employee and not his/her spouse. These are steps in the right direction for the City and it’s taxpayers.

Also, this editorial sounds nearly verbatim to numerous comments I’ve seen on these pages. It’s no secret that Ethan Hartley has bought Rob Cotes lines hook and sinker (Phantom FBI Investigation, anyone?) but by god, it sounds as if Mr. Howel has made Cote Editor in Chief with all the slant expressed in this editorial.

By and large it sounds like the firefighters are trying to be good partners with the city here and I think most reasonable people would agree. It’s seems the only people poo-pooing this deal are the those who have made a name for themselves criticizing the employees of this city. A “thank you for stepping up” to the firefighters doesn’t fit into their narrative, I suppose.

Thursday, November 21, 2019
Thecaptain

Toby,

What you dont understand is that the firefighters still want a 5 % raise for 2018. What you dont understand is that there is a significant difference between an arbitration decision and a supreme court ruling. The city has nothing to lose by appealing and everything to lose by not appealing. You obviously havent seen the actuarial report that is on the city web site here https://www.warwickri.gov/sites/warwickri/files/pages/fireii_va2018.pdf

that explains that Solomons intent is to pay the 2.8 million dollars over a 20 year period at a cost of $250,000 per year in interest totaling another 4 million bucks.

In addition, the ARC payment is increased by approx $700,000 per year for these people. Evidently you did not see the contract or the ordinance or the fiscal note that all have the language of the pension changes contained within the documents that the WFD union signed and agreed to and then disputed it 3 years later.

Evidently you did not read the arbitration ruling that showed that WFD, particularly Bill Lloyd did not file the grievance within 30 days in accordance with the law and then his defense was that the city of Warwick conducts random enforcement of ordinances. None of his BS will hold up in supreme court which was the opinion of Ragusta who was hired as council for the city. Yet fat Joe ignores his own councils recommendations.

What person as a defendant ignores the recommendations of his council?

Also, I have nothing to do with this editorial other than reading it, however, research, and understanding of legal documents is imperative if you are going to make an opinion statement on a media platform.

There is an old saying. If you keep your mouth shut one can only assume that you are a moron, as soon as you open it you relieve all doubt.

Thursday, November 21, 2019
Toby

Captain,

Your reply is erroneous right off the bat. The previous article states the firefighters are reducing their 2018 arbitration raise ask from the 5% you mention to 3% with the arbitrators expected to meet the parties in the middle.

I recognize there is a difference between a arbitration ruling and a Supreme Court decision but first, battles taken all the way to Supreme Court cost a lot of Moolah and as I’ve said, it was highly unlikely to be overturned in the City’s favor, because despite your claims, Judges have been loathe to overturn arbitrators rulings. I understand the lawyer who would stand to make lots of that taxpayer money by being the attorney to bill for that Supreme Court fight recommended the city do so but, is that really any surprise? Regardless, there stood a very good chance that the city would lose the decision anyway, pay gobs of money to attorneys in the process and still have to make the firefighters whole. Now, maybe that’s worth it if that was the only chance the City ever had to enact Tier two but the thing is, in this contract the firefighters agreed to enact Tier 2 after all! The City gets what it wants and avoids a costly legal battle. You only fail to see the logic of this because you’re blinded by your dislike of the firefighters.

Reread the snarky snarky anecdote you directed towards me. I’m of the opinion it’s more aptly applied to you.

Thursday, November 21, 2019
Thecaptain

Toby,

Costly legal battle?? The cost of not taking it to the Supreme Court is 20+ million bucks. That is a fact and the documents reflect that. So if your asking if I am all in favor of spending $100 grand to save 20 million, sign me up. I'll even contribute the first $10,000.

Thursday, November 21, 2019
Dexter

The captain is just whiny because he thought he slapped them around and uncovered schemes (that aren’t there) . He thought he was going to be able to ride around town proclaiming he was the one who got rid of the fire department. When NONE of that happened he turns on the next person. Typical town clown. He still doesn’t get that the council and admin all laugh and joke about him behind his back.

Friday, November 22, 2019
davebarry

Perhaps Warwick can learn to cut expenses instead of increasing taxes. One thing the city could do is to require retired police and fire who go to work elsewhere (the majority) to take the next employers healthcare. This would go a long way to save money on benefits. If the new employer's plan was worse than the city plan, the city could make up the difference.

Tuesday, November 26, 2019