Council Update: OPEB Plan Implemented

Editor’s note: The Council Update is a twice-monthly update on Council meetings and developments from Warwick City Council President Steve McAllister. The column is written after each council meeting, twice a month. This review of Warwick City Council events has been lightly edited to update time references, for grammar, and to include referential links for further reading.  

WARWICK, RI — At last week’s meeting, for the first time, Warwick adopted a plan for OPEB (other post retirement benefits), a major step that will benefit the future of our city.

The city has been doing a pay as you go approach to address these liabilities.  However, after having a presentation with the city’s actuary and a number of meetings with the Mayor and the finance director, we are now implementing a plan that will put the city in a much better financial position in the future.

[See prior Warwick Post coverage of the OPEB plan, and Warwick’s OPEB problem since 2015 ]

I will attach the ordinance that passed 7-2 last  Monday. It is technical and details the formula of the plan. Basically, because of a long term plan that was put in place 30 years ago to pay for Fire and Police pension 1, we now have the ability to shift future payments from that plan into an OPEB fund to help pay for those liabilities.  Over 30 years ago, Mayor Chafee and the city council came up with a 40 year plan to pay for Fire and Police 1 pension plan.  Now in 2023 that pension plan is in a good position, and we no longer need to fund it at the same level we have been every year while still meeting our obligations for this plan.  The actuary presented a plan where we keep budgeting at the same level, but shift some of that money into this OPEB fund.

Last week the city council along with the Mayor put the City on a new path, which future mayors and councils will benefit from and will allow them options to address the major issues of their time.  This is a long term issue, with a long term plan, that will have positive benefits in the long term.  This is a major step in the right direction that will finally address our long term liabilities.  This plan will benefit all Warwick residents and all city retirees in the future.  It is a good plan that will ensure the City can meet all its obligations in the future.

We also had a large bid package where we voted on a number of purchases for the fire, police, MIS, and DPW departments.  We also had second passage for an ordinance to provide regular city pay for city employees who utilize military time.  Finance Chairman Tim Howe should be commended for identifying this issue and leading the way to address it.  Now city employees who are deployed to serve our county in the military will no longer have to use their vacation time or personal time to get their time back when looking at retirement dates.

I also would like to highlight the state budget this week.  Warwick is benefiting in a major way with having Speaker Shekarchi leading the House.  In the state budget Warwick is now set to receive $5.5 million more than originally proposed in the Governor’s budget.  Warwick will benefit from the education formula plan and municipal roads grant program.  Speaker Shekarchi is also shepherding through a one year extension of new school construction reimbursement deadlines.  The Speaker supports the City Council’s plan to do our own feasibility study on the cost of the two new high schools.  This extra time will ensure we can do our homework and make this decision with the most accurate information possible.  I thank the Speaker for delivering for Warwick!

Upcoming events:

Gaspee Day’s Symphony in the Park has been rescheduled to Saturday June 17th. The Symphony will be held in Pawtuxet Park from 5 to 8. Then just down the street at Salters Grove the fireworks will start at 9PM.

 Next Council meeting: Monday – June 26

Have a great week!

 Steve