October 24, 2014
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Mayor pulls pension plan, opts for negotiation

Retirees from Cranston’s police and fire departments poured into the auditorium at Cranston High School East on Monday night, waiting for their turn to speak on ordinances that would make serious cuts to their pensions. They didn’t have to wait long.

After a brief period of public comment, Mayor Allan Fung approached the podium and requested that the City Council withdraw the two ordinances from the agenda, saying that enough retirees were willing to sit down with the administration to make negotiations a feasible alternative.

“There were more retirees that were willing to come to the table and have negotiations about trying to resolve this pension issue,” Fung said.

The announcement was a surprise to everyone, including those on Fung’s staff, and Paul Valletta, president of the Cranston Fire Fighters Local 1363. The deal came together at the last minute, literally just moments before the council meeting began.

“I did give the mayor the list of retirees that had signed on for me to represent them, so I don’t know if that changed his mind,” Valletta said.Fung said it was a combination of Valletta’s commitment, as well as additional assurances from retirees from both police and fire funds.“That was the crux of why I had waited so long because, prior to that night, I only had two written confirmations from retirees. Last night was the first indication I had that outside of the unions,” Fung said.The mayor could not say how many retirees were on board with negotiations, but did say he had “enough reasonable assurances.”“It was an encouraging sign for me,” he added.Regardless of what changed the mayor’s mind, Valletta said he was very pleased with this week’s turn of events. When Fung initially proposed his plan for pension reform, Valletta’s primary complaint was that passing the ordinances would circumvent the legal arbitration process. He wanted the city to go through negotiations before any litigation was necessary.

“I think what happened last night was the right way for things to go. I really think we can get something done, but I think those ordinances were going to put a glitch in negotiations,” he said.

The city’s unfunded pension liability is roughly $256 million. To tackle that, Fung’s initial plan was to freeze COLAs for 10 years and then capped at 3 percent after the freeze ends. The plan would also re-amortize for an additional four years and change assumptions on interest rates.

When presenting his proposal, a state mandated response for municipal plans in critical status, Fung said he could not sit down with retirees unless they had a point person in negotiations.

Valletta has offered to be that person and said Tuesday that he believes the retirees will be able to come to an agreement with the administration.

“This goes a long way to start negotiations that the mayor pulled [the ordinances]. It is a credit to him,” he said.

Had the Cranston City Council passed the ordinances, retirees indicated that they were poised to take legal action against the city. Valletta said arbitrarily changing pension benefits through ordinance was tried before in 2003, and in that case the unions came out on top. He doubted that the courts would even hear the case, as a ruling had previously been made.

“We would have had to file a grievance and a court action the next day, and you can’t negotiate under those circumstances,” he said.

Prior to Fung’s withdrawal, Councilman-elect John Lanni also spoke against the ordinances.

“We’re doing exactly the same thing as we did in 2003. Common sense would say look for another way,” he said.

With the ordinances pulled, the administration can begin negotiating. While an initial meeting was not yet planned as of press time Tuesday, Valletta said it shouldn’t be long before talks begin.

“We already know where he’s coming from, so it shouldn’t take very long to go in there and try and work something out. That’s going to be the baseline starting point,” he said. “We’re ready to get started any time with it.”


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