Budget Commission report: Debt paid off by 2017, future savings in the millions

Budget Commission report: Debt paid off by 2017, future savings in the millions

WOONSOCKET - The adjustments to union contracts negotiated and enacted by the Woonsocket Budget Commission have changed the city's long term financial outlook, decreasing the cost of post employment benefits by roughly $107 million over the next 30 years.

That is, if all costs remain constant over the next 30 years, and the changes to the healthcare policies of both active and retired city employees hold up in court.

An updated version of the city's five-year plan, released by the Budget Commission this week, demonstrates how those changes will affect the city's bottom line.

As of last June, Woonsocket was scheduled to come up more than $9 million short on its annual required contribution for OPEB, or "other post employment benefits," a term for retiree costs including healthcare, life and dental benefits. With the new contracts in place, that figure is decreased to $3.6 million in 2014.

"Our annual OPEB has dropped down for the city, and for the schools it has dropped down significantly," said Finance Director Thomas Bruce.

"Through collective bargaining that we obtained with most of the unions except for public safety, we were able to save dollars against what we projected against the baseline back in February," explained Stephen Coleman, fiscal adviser to the commission. "The most important part about this is by FY17 the city is able to eliminate the cumulative deficit between city and school."

According to a chart released by the commission, projected deficits will remain around $3.6 million until 2016. That is the final year Woonsocket has to pay back the deficit funding bond - an $11-million, five-year loan taken out in 2011. The city currently pays $3 million annually on the debt and according to Bruce, after 2016 those funds will be dedicated to OPEB.

"What this means for retirees is positive news," said Bruce. "The commission intends to set up a private trust that can't be used by the city for any other reason."

But first, the city must face several legal challenges to the plan, some of which will begin this month.

Bruce said a suit by a group of police retirees over the changes to their health care policies has yet to be scheduled, but will likely start in November. Both Bruce and state Finance Director Rosemary Booth Gallogly are expected to testify.

Members of the International Brotherhood of Police Officers Local 404 never agreed to changes to their healthcare policies, but they took effect nonetheless after the police union's last contract expired in June. That matter is currently subject to a grievance and arbitration hearing and may head to Superior Court.

"The position that the city has been advised legally is that because the contract has already expired prior to the date of the enactments the possibility of the city prevailing in that particular suit is more likely," said Bruce.

Another enactment, affecting the contract for the city's firefighters, is slated to take effect in July of 2014 when that group's current contract expires.

Bruce said the new five-year projection released Tuesday night will be used during all of those court challenges.

The meeting, the commission's first since a municipal election changed two of its future members, was held at Woonsocket Middle School. Mayor-elect Lisa Baldelli-Hunt will be taking current Mayor Leo Fontaine's seat on the board and the spot currently held by City Councilor John Ward will be filled by whomever is elected the new council president.

Ward and Fontaine will continue to serve on the board until the inauguration scheduled for Dec. 3. Four of the new council members - Robert Moreau, Mellissa Murray, Garrett Mancieri and Albert Brien attended the session along with Baldelli-Hunt.

The meeting, which was scheduled to begin at 5 p.m., did not begin until 5:45, when the board came out of executive session, and then lasted only 25 minutes.

The state-mandated commission is not subject to the same state Open Meeting Act as other government bodies under state law.

Brien said Tuesday that if he becomes council president, he's considering submitting legislation to the General Assembly requiring more transparency from the board.

Comments

All the uber-high taxes compounded every July stay in effect. In a city with zero jobs it doesn't matter how much they're going to save. I'll never be convinced...unless they start cutting taxes.

And that, very obviously, and STUPIDLY, was the message sent to Mayor Fontaine and City Council President, John Ward, for the EXCELLENT, but tough job they had to undertake in order to turn the situation around.

Without a real clue as to the situation, and what it was going to take....but sold a bill of goods by a known name, associated with Star Status, that did more harm then good while she served in the RI Legislature, the voters of Woonsocket (Mostly Democrats??) unceremoniously sent both these highly dedicated Public Officials packing, only to, then, elect the same kind of "Same Old - Same Old'" that caused Woonsocket's financial predicament in the first place!

That along with. Financially Incompetent and Arrogant School Administration!

Woonsocket, it is time to move on ! The State of RI is watching you. Playing the blame game is not going to help.

I wonder if anyone is even watching this, debit fix by 2017, at this point I cannot see how we are going to survive 2013 or 14, Our sewer went from 191, to 231, to 258, this year, our water has gone up again, and now we find out the more issues from the diamond hill area threatens to kill whatever budget our officials and the Budget Commission can put into place.
interesting article in the Woonsocket call about diamond Hill. any deal will hurt the residents (right). The residents will have to carry the missing tax load if the store(s) leaves, (right!), and on the flip side, the residents will have to carry the tax load if the store(s) do get a incentive to stay tax break and they stay even with the so call MED break. so let me understand this, no matter what, we will have a heavier tax load to carry, something is really wrong here, !!!
I don't think that 5 year plan is going to make it, by 2017, there won't be a "Woonsocket" left standing... what are they going to do, throw another emergency supplement tax on us next year.
They have to know Eventually, the tax payers are going to run out of resources, then what, sell every ones home out from underneath them via tax sales? shut of the water services to every home that can no longer absorb the rising cost?? we cannot support our city officials and they would be plans any longer. I would love to say it is time to "Cut Bait and run Home" but they way it is looking, I have no bait, and soon no home..