FOP, town reach a bargaining impasse

FOP, town reach a bargaining impasse

Town’s lawyers seek to void contract, while council considers new benefits language

CUMBERLAND – Taking steps that they say will significantly decrease taxpayers’ cost of funding the pension and health care accounts for retired police officers, attorneys for the town filed a complaint in Rhode Island Superior Court Monday that declares the current police contract null and void.

At the same time, Town Council members are reviewing an ordinance that unilaterally spells out new, reduced benefits for active officers that match the town’s “Fund Improvement Plan” submitted to the Rhode Island Department of Revenue back in April.

If all elements of the plan were adopted, taxpayers would see the annual required contribution to the cops’ pension fund drop from $2.2 million to $1.48 million. For health benefits, or “other post-employment benefits,” the annual contribution would drop from $3.5 million to $1.39 million.

If no changes are made, taxpayers’ current and future obligations to retired police officers will be about $5.5 million a year.

The town’s contract with police officers, who are unionized as Lodge 14 of the Fraternal Order of Police, expired in August 2010, was extended one year, and ran out some 18 months ago.

Since then, the town’s plan to negotiate sweeping changes has been discussed at Town Council meetings as Mayor Daniel McKee sought to reduce those OPEB and pension accounts.

The police pension fund, started in 1962, is the only one still managed on a municipal level; benefits for all other town employees are handled by state funds.

This issue reached the public’s eye in September of 2011 when the state’s auditor general released a study of Rhode Island’s municipalities that put Cumberland’s police pension plan, at less than 60 percent funded, in the “significantly underfunded” category. Additionally, only 30 percent of the annual required contribution to the police retirees’ medical account, or OPEB, was being made.

A timeline devised by the state required communities to have actuarial studies completed and a “Funding Improvement Plan” approved by the town and city councils by April/May 2013 or face the loss of state aid.

McKee brought in labor attorney Joseph Rodio and negotiations with the FOP – with the town’s offer already very public – continued this spring.

In May an impasse was declared, a move that would normally send both sides to arbitration.

In fact, FOP attorney Marc Gursky “demanded” in a June 4 letter to the town that all unresolved issues be submitted to arbitration.

Instead, the town is taking the more aggressive stance that says there is no longer a contract; terms will be dictated by the town.

FOP President Robert Fay did not return the Breeze’s call for a comment.

Said Rodio, “When negotiations broke down the end of May, I knew we had to take action.”

Rodio told The Breeze, “Frankly, this is a road we didn’t want to go down. You don’t want a bad relationship with any of the unions in town, but we’ve explored all the legal avenues available.

“We had to convince the state we are taking appropriate action to make the system healthy again.”

Rodio says that if officers choose to resume negotiation, “Some adjustments to the town’s plan might be possible. There’s always room for a little give and take, but not a lot.”

McKee notes that proposed changes don’t affect retired officers, but those very early on the job who haven’t served a whole career.

Said McKee, “If someone’s been on the job 5 percent to 7 percent of his or her career, to me this is a reset that will probably benefit him or her in the longer term.”

Caught in the crossfire was a Lincoln man who Cumberland sent to the Rhode Island Police Academy for training before joining the force.

While his fellow graduates were sworn into positions on police forces around the state, he was left jobless for now because McKee is refusing to add one more officer until the lapsed police contract is settled.

McKee said the town has been making calls to secure the would-be officer a position on another municipal force.

This entire contract conflict is, of course, heading to court.

And this year’s 2013-14 budget includes a $275,000 line item dedicated to the legal expenses of settling the contract.

Bill Connolly of East Providence, the solicitor in Johnston, will be representing Cumberland when the case goes before a judge, perhaps later this summer by Rodio’s estimate.

Last week, the FOP sought a temporary restraining order against Town Council action on the ordinance, but it was denied because no immediate harm could be proven by the simple introduction of the legislation.

The ordinance is now before the council’s Finance Committee and the separate Cumberland Pension Board.

The ordinance before the Town Council calls for the following contract changes:

• All new officers hired after July 1, 2011 shall participate in a defined contribution plan only, with a town contribution of 7 percent.

Currently Cumberland’s plan is a defined benefits plan.

• Future retirees must serve 20 years and reach the age of 55.

Currently, an officer is eligible for all pension benefits, at 55 percent of salary, after 20 years of service regardless of age. After 25 years of service, the pension increases to 60 percent.

• Pensionable earning would be base pay, holiday pay and longevity pay.

Currently added in, too, are payments for overtime, shift differential, and accreditation incentive.

• The pension would be based on earnings over five years.

Currently it is based on the final three years.

• All cost of living adjustments to future retirees would cease for 10 years from the date of the ordinance, and resume with a cap of 3 percent and tied to the Northeast Urban CPI.

Currently, retirees receive 3 percent non-compounded COLAs annually after age 57.

• Defined benefit participants would contribute 11 percent of base pay, holiday and longevity.

• Accruals as of July 1, 2011, are locked in with future accruals and changed to 2.5 percent for the first 20 years and 1 percent for years 20 to 30, for a maximum accrual of 60 percent.

• Early retirement after 15 years would be available at 25 percent to be collected at age 55.

Currently, retirees may collect 35 percent of salary after 15 years, but not benefits until he or she reaches what would have been the 20th year of service.