Warwick Budget Hearings Wrap; Amendment Voting Starts 9 a.m. Saturday

WARWICK, RI  — The Warwick City Council wrapped its review of the FY18 budget Wednesday night at City Hall, covering pensions, the DPW, Fire Department and the city’s healthcare provider among the balance of budget items not covered Tuesday night, and they’ll reconvene Saturday at 9 a.m. to make amendments.

One likely change will reduce the city budget by $548,693, saved by the City Council’s recent vote to move to self-insured healthcare with West Bay Community Health during their May 15 meeting.

The residential tax rate would then be $20.64, a reduction of .06 cents from .46 to .40, assuming there are no further changes.

City Councilor Jeremy Rix live-blogged Wednesday night’s meeting on his Facebook account, as the final hearing stretched till 12:30 a.m. this morning before the City Council was finished.

Rix’s more detailed notes included city pensions, and city employee benefits, which included the healthcare savings.

Pensions “$31,716,877 proposed between the 5 pension plans. Warwick projects a 6.9% rate of return when determining its contributions. Councilman Merolla suggests that a 6.0% projected rate of return may be more realistic and therefore the City would have to contribute more in order to stay on target.

The Fire 1 and Police 1 pensions – which were poorly funded or not funded at all for decades – are on track to be fully funded in approximately 16 years under a 40 year plan. These are long closed off to new enrollees with only 1 active police officer and 24 active firefighters in these plans; the large majority are retired. These two funds are $17.9 million of the total $31.7 million. The Administration points out that once these large liabilities are gone, the money the City must put away for these can go toward the unfunded healthcare liabilities. Councilman Merolla states that even this kind of contribution would be insufficient to fund the long-term healthcare liabilities, especially if we’re waiting another 16 years. 

Councilman Ladouceur asks why the actual pension contributions for FY 2017 are higher than expected, although the police force was not fully staffed.

Per public comment, former Councilman Cushman suggests that the City Council consider setting an anticipated rate of return lower than that anticipated by the City’s actuaries. He also questions the amount being paid out vs. the amount being put in.”

Employee Benefits “This was largely discussed at the Council meeting two weeks ago in which the Council opted to go with self-insurance through West Bay Community Health. In total, benefits cost the City approximately $27 million per year. Councilman Merolla presents his concerns on how long-term liabilities have grown in relation to health insurance, as well as ongoing costs of benefits for current employees.

EDIT: Extensive public comment and discussion with the Administration, Mayor, and Council President on same topics.”