Posted on Leave a comment

Warwick Firefighters Contract Takes First OPEB Step

Warwick City Hall

[CREDIT: Rob Borklowski] Warwick City Hall. On Monday, the City Council ratified a new Warwick Firefighters Contract.
WARWICK, RI — The Warwick City Council ratified the new Warwick Firefighters contract with the firefighters union, International Association of Firefighters, Local 2748, 8-1 at a special meeting Monday, taking a first step to meeting Warwick’s looming OPEB liability.

The contract granted firefighters 3.8% raises in the final two years of the contract, trading an agreement for across the board 2 percent salary payments into an OPEB trust, contingent on the municipal and police unions agreeing to do the same, in the final six months of the contract. The city would then negotiate the next firefighters contract to continue the OPEB payments in perpetuity.

OPEB Action Perpetually Postponed

Long discussed, routinely recommended yet never committed to, an Other Post-Employment Benefits (OPEB) trust would provide a way to move from the city’s current pay-as-you-go method of funding the OPEB liability, $352 million in 2019, to begin paying it down.

With such a trust established, regardless of the funding, the city would immediately qualify for a discounted rate to be used to calculate its liability, Dennis Hoyle, Rhode Island’s auditor general, said in 2019.

“The liability would be smaller because of the discount rate,” he said.

Ladoceur Bid to Extend Speaking Time Fails

Councilman Ed Ladouceur, ultimately the sole no vote on the contract, started the meeting with a motion to suspend Council rules to allow the council and members of the public enough time to pose and answer questions, he said.

The motion was deconded by Councilman Jeremy Rix.  Ladoceur said it was unreasonable and unfair to limit discussion of questions on the contract to 10 minutes. He also objected to not hearing from the Finance Committee on the matter during the meeting.

“And if it means that we’re here for six hours this evening, or more, or if it means that we need to come back for another day, my opinion, we owe that to everyone, including the taxpayers, to vet this to its fullest extent,” Lacouceur said.

McAllister disagreed.

“I believe individuals should be able to fully explain their position within the time given this evening,” McAllister said.

Councilman Vincent Gebhart noted the rules agreed on at the start of the year establish a process for allowing someone who reasonably needs more time to speak to do so on a case-by-case basis, so there is no need to suspend the time limit rules, he said. The motion failed, with Rix and Ladouceur the lone “yes” votes.

Warwick Firefighters Contract Details Outlined

Mayor Frank Picozzi said his negotiation team for the contract consisted of Carol Proulx, WFD Chief Peter McMichael, City Solicitor Michael Ursillio, and Chief of Staff Susan Nahabediian. Picozzi  noted that while he listened to their counsel, the decisions made on the contract were his own. He repeated the Council’s choice between ratifying the contract, or not.

“If you choose the latter, the matter goes straight to arbitration. If that is what this council decides, I will support your decision, and begin the process,” Picozzi said.

With an OPEB trust established, regardless of the funding, the city would immediately qualify for a discounted rate to be used to calculate its liability, Dennis Hoyle, Rhode Island’s auditor general, said in 2019. “The liability would be smaller because of the discount rate,” Hoyle said.

Arbitration, McAllister noted last week in an email previewing the evening’s vote,  would take the decision out of the hands of the city, with Warwick responsible for the contract the arbitrators decide on.

Presenting the three-year contract through June 30, 2025 was Bruce Keiser, director of economic development for Warwick. He noted pay raises were: 2.5% for the current fiscal year, then 3.875% in year two and 3.875% again in year three. “The other major element of this contract, which was a key component of negotiations, and played heavily into our decision to reach agreement on the salary increases that we’re proposing to the council tonight,” he said, was a 2% OPEB contribution applying to all members, into an irrevocable OPEB trust. That provision will begin July 21, 2025, during the last year of the contract, contingent on similar agreements with municipal employees and the police union. After that, the next firefighters contract, as well as the other unions contracts,  will need to be negotiated with that contribution to OPEB in perpetuity, Keiser said.

“We also recognize that we’re in a very highly inflationary environment.” Keiser said. He added that an analysis of wage increases for Warwick Firefighters have only kept pace with the consumer price index (CPI) over the last 20 years.

“The wage rates paid in 2002 are the same, in terms of real wages, as in 2022,” Keiser said.

Additional changes to the contract included:

  • Prescription drug cap current $300 individual, $600 families increasing to $400 individual and $800 for family.
  • $18,000 per year for cancer screening every two years, important given the hazardous materials firefighters come in contact with doing their jobs.
  • Annual clothing allowance increased by $50 to $1,050 per year.
  • Department-wide education expenses increasing from $20,000 to $25,000 per year.
  • Attendance to the National Fire Academy, increasing from $1,000 to $1,500 per participant
  • No Copay share higher than 5%.

Year 1 adds .05 cents on the tax rate, or $12 more per year on a $250,000 home. Years 2 and 3 would each see a .09 cent increase in the tax rate, or an additional $22 more per year on a $250,000 home each of those years, Keiser said.

Michael Carreiro, President of Local 2748, said in past negotiations, Warwick Firefighters have forgone salary increases, holiday pay and sick days, once agreed to a 5 percent salary cut, and in 2015 agreed to eliminate family healthcare and retirement for those members.

“Since those concessions, we have had less and less applicants applying to this department,” Carreiro said, adding that the contract provides inflation-adjusted benefits that will ensure the department can effectively recruit quality members to its ranks.

Councilman Rix asked if the city could afford the contract and still meet other commitments, including the bond for the two new high schools. Peder Schaefer, finance director, said the agreement wouldn’t interfere with the bonds.

Ladouceur asked how long before the OPEB  clause in the contract would start to save the city money. Keiser said the city doesn’t know that. He said the move is a first step toward addressing Warwick’s long-standing and looming OPEB liability, reported on in previous Warwick Post articles.

“This is an enormous problem for the city,” said Schaefer during Monday’s meeting, responding to Ladoceur’s question. Schaefer added that with an OPEB trust in place, bond rating agencies will also grant the city lower borrowing rates for bonds such as for the new high school projects, regardless of the scope of their OPEB investment. But he assured Ladouceur the OPEB plan would not rely solely on union-negotiated contributions. “You’ll see a comprehensive plan, sometime this spring on that. This is one little piece of it,” Schaefer said. He said the yearly contribution negotiated would be $182,000 for the six months that the payments will last before the new contract will need to be negotiated, funds the city will not have to contribute to the OPEB trust.

When the question was moved to a vote, only Ladoceur voted, “No.”

Copies of the Fiscal Note on the Contract as well as the Contract itself and related documents have been posted to the city’s website.

Rob Borkowski
Author: Rob Borkowski

Rob has worked as reporter and editor for several publications, including The Kent County Daily Times and Coventry Courier, before working for Gatehouse in MA then moving home with Patch Media. Now he's publisher and editor of Contact him at [email protected] with tips, press releases, advertising inquiries, and concerns.

This is a test