News Item:
Public Safety Retirees Told to Fight Pension, Benefits Cuts
08/03/2011
CENTRAL FALLS, RI — A national police union lawyer told about 60 angry retired city police and firefighters Tuesday night that they should go to court and fight what he called an unconscionable decision by the state receiver to cut their pensions and health coverage.

The retirees applauded when Jack Parlon, a lawyer for the national Fraternal Order of Police, said " someone should go to jail" over receiver Robert G. Flanders Jr.' s reduction in pension benefits by about 50 percent to save $2.5 million this year. Flanders also required the retirees to pay 20 percent toward their health– insurance premiums.

Flanders has said he hoped to negotiate concession agreements rather than impose the cuts and higher costs, which he announced Monday in connection with petitioning the city into Chapter 9 bankruptcy. An initial hearing on the petition is Wednesday morning.

Parlon told the gathering at the Cumberland Fraternal Order of Police Hall that they should put together a legal team to fight Flanders' order. The FOP can only represent active members and not retirees. But, he said, he and the national FOP were willing to help them raise money to wage that fight.

Flanders, who was appointed by Governor Chafee in February and given broad power to close the city budget deficit, which now stands at $5.6 million, met with more than 100 of the 143 public safety retirees or survivors on July 19 and asked them to voluntarily accept the pension cuts because of an $80– million unfunded pension liability. According to the federal bankruptcy court filing, it was the pensioners' overwhelming rejection of that plan and debt payments due at the end of the month that led Flanders to file the bankruptcy petition.

Several retirees Tuesday night claimed they stood to lose 60 percent or more of their retirement income when pension cuts were combined with what some said would be thousands of dollars more a year in health– insurance costs.

Despite the imposed pension cuts, Flanders has said he is willing to continue talking with the retirees about alternatives.

Municipal bankruptcies are rare and, because of that, there are few precedents.

In the two most recent and often cited cases, Orange County in California in 1994, and Vallejo, Calif., in 2008, the governments were able to use the bankruptcy court' s contract– busting authority to find the savings in their operating budgets they needed. Pension payments to retirees were not affected.

But with Central Falls facing $3.4 million in pension payments this year if nothing is changed, Flanders has said pension restructuring will have to be part of the solution.

In addition, he is seeking bankruptcy court approval to reduce operating budget spending this fiscal year by more than $5.6 million to achieve a balance with revenue, now projected at $16.4 million. Expenditures are now set at more than $22 million.

In the court filing, Flanders proposes making the largest operating budget cuts in police and fire spending. He wants court approval to cut those budgets by 40 percent each for a total of more than $4 million. There was no explanation of what that would mean, though he said Monday that residents would not see a change in police or firefighting services.

In addition to the decision affecting retirees, Flanders announced Monday the voiding of contracts with the police, fire and public employees unions. That came after talks on concessions failed.

While Flanders' action was drastic, a University of Rhode Island labor– relations specialist said injecting the uncertainty of how a third party might rule — in this case, a bankruptcy judge — could actually improve the chances of reaching agreements with active employees and retirees.

" If there' s a legitimate expectation of loss on either side, there' s a motivation to reach a settlement," said URI economics department chairman, Prof. Matthew M. Bodah.

The filing could create a new dynamic on the union side, he said. Before, employees and retirees were being asked to give up things they had. With Flanders' filing, the losses have happened, and the negotiating process provides an opportunity to get some of them back.

Michael Downey, president of Council 94 of the American Federation of State, County and Municipal Employees, the union that represents City Hall workers, said he thought terms of an agreement with his members had been in sight before the filing.

Bodah added that it takes time for those being asked to make the sacrifices to evaluate their choices. He said he was not surprised that when given a yes– or– no offer July 19 and told to answer in 10 days, the retirees balked.

" People who were pondering the loss of about half of their pensions were given a relatively short time to say yes," Bodah said.

In conjunction with spending cuts, Flanders, last month, ended city funding of the library and laid off its staff in an effort to stave off the bankruptcy filing. That move and closing the community center were projected to save $570,000 annually. While the city paid the library workers, the building is owned by the library trust and that left the trust free to try to reopen it.

Library director Thomas Shannahan and library board chairman Jerauld Adams have organized a volunteer effort to reopen the library, though at reduced hours and without the benefits of being connected to the Ocean State Libraries network.

" Welcome to YOUR library," a banner festooned over the door of the library announced Tuesday, with a half– dozen pleas for volunteers in two languages taped to the doors.

So far, 12 people have stepped forward to help, Adams said, allowing the library to open on Mondays, Wednesdays and Fridays from noon to 5 p.m. As more volunteers sign up, he said, the hours will be expanded.

Built at the bequest of industrialist Stephen L. Adams a century ago, Jerauld Adams (no relation) and Shannahan said the library is going back to its original name, the Adams Library, now that the city isn' t supporting it.

The biggest loss from the removal of city government support was the connection to the Ocean State Libraries network. Once the city stopped payment, the network pulled the plug. Shannahan said that means the library can' t get a list of the approximately 7,000 Central Falls residents who had library cards. And because the library staff had used the network to track the library' s collections, they' ve lost access to the up– to– date list of books in the building.

When someone checks out a book now, Adams said, it has to be scanned to see if it is on the current list and, if not, the person at the counter has to scan and manually enter the book' s information into the system.

Ocean State Libraries Executive Director Joan Gillespie said the situation is unfortunate, but is the result of specific rules established for the network. If a municipality doesn' t support its library, it isn' t allowed access to the information in the network.

Note: Paper error, Jack Parlon is a labor specialist for the FOP, not a lawyer.

Hillby, John; Mooney, Tom. " " . The Providence Journal. August 3, 2011. http://www.projo.com/news/content/CF_FOLO_08– 03– 11_IEPHCPH_v37.54729.html