Warwick, RI – Councillors Joseph Solomon and Steve Merolla questioned $200,000 for Other Post-Employment Benefits (OPEB) and $1.4 million for as-yet undecided municipal raises Monday night as hearings continued on Mayor Scott Avedisian’s $294,048,252 FY16 budget.
The councillors also criticized the budget for its lack of transparency and Avedisian for failing to include them in the details of contract negotiations with the city’s unions, questioning the board’s counsel whether a vote on the budget, scheduled for Wednesday, could be postponed until after the results of the police union’s vote on their portion of the $1.4 million in raises.
The city’s OPEB funding, largely legacy pension and healthcare benefits promised to city employees, currently shows an unfunded liability of $264 million, according to Warwick Chief of Staff William DePasquale. (As Warwick Post has previously reported in coverage of the 2014 primary and observed in an editorial, the liability is a pressing, but not immediate, problem.)
Solomon questioned the $200,000 in this year’s line item, referenced in Avedisian’s budget summary as an initiative in cooperation with Council members President Donna Travis, Steven Colantuano, Camille Vella-Wilkinson, Joseph Gallucci and Kathleen Usler to set up an OPEB trust study group that would explore how to fund the liability.
Solomon pointed out that the $200,000 was negligible in light of the $264 million needed to fully fund city pensions and retiree healthcare.
Depasquale explained that the funding was intended to begin studying the problem, and how best to address it.
“This is by no means a cure,” Depasquale said.
Solomon said he felt the $200,000 was too much for a consultant on the issue, particularly in light of next Monday’s scheduled visit from Raymond Cerrone of Jefferson Solutions, Inc. before the council to discuss the issue.
In a letter to the council, Cerrone had listed a number of possible strategies for solving the problem, including employee contributions to healthcare, altering benefits for new hires and capping benefits, Solomon said.
Merolla said the gravity of the unfunded liability has been known to councillors and Avedisian for the last four years, after a consultant advised that fully funding OPEB obligations would cost the city $20.2 million annually.
Bob Cushman, a former councillor, referenced the Warwick School Department’s$3 million request for student Chromebooks and an earlier budget hearing debate about the need for a bigger paving budget. He said those needs could be funded if city employee benefits were reined in.
“You can. If you address the elephant in the room,” Cushman said.
Roger Durand, a regular public speaker during the budget hearings, seemed of the same mind. He said Avedisian has long coupled private market wages with public employee level benefits.
“One of those has got to go,” Durand said.
Merolla questioned $1.4 million in the 75-198 line item, “City Contractual Obligation”, noting that the Mayor had not shared the details of the contract negotiations making up that sum with the Council.
“It’s just an amount of the percentages of the salaries of the city,” City Solicitor Peter D. Ruggiero told the councillor. He said the details had been withheld until the police union, the last employee group to sign on, voted on the terms Wednesday. He said the intent had been to avoid disclosing the information publicly in the midst of negotiations.
“We are part of the city government,” Merolla said, arguing that the City Council could have been made privy to the details without violating public meetings law.
“You know and I know that we are part of the city government. He (Avedisian) doesn’t consider us part of city government,” Merolla said.
Councilman Ladouceur asked if the Council could postpone their scheduled Wednesday vote on the budget until Thursday, after the police union meets and the details of the negotiations would be released.
City counsel advised the Council had up to three days after the end of the budget hearings to vote on the budget. Assuming the Council finished the hearings that night, he said, the council could legally wait until Thursday for their vote.
The hearing ended Monday night with the agenda for the next meeting on the budget Wednesday, June 3, 5:30 p.m., for a vote on the budget and setting the tax rate unchanged.
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