Politics & Government

Council Approves Historic Pension Deal in Unanimous Vote

"What we did tonight will go a long way to straightening out the financial situation of the city," said Council President John E. Lanni Jr.

Municipal pension reform in Cranston took one step closer to reality last night after a unanimous vote by the City Council on a pair of ordinances that make major changes to the pensions of retired police and firefighters.

"What we did tonight will go a long way to straightening out the financial situation of the city," said Council President John E. Lanni Jr. "This settlement was fair and I know there's some firefighters and police who do not agree, but when you average it out, they're going to get a 1.5 percent COLA per year. . .nobody should be complaining. What we did was fair and I'm glad this council passed it unanimously."

The $300 million unfunded local pension liability has hung over the city like a dark cloud in recent years and the annual required contribution, or ARC, to keep it solvent has been increasing and increasing — and the city has been falling further and further behind. 

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The historic pension deal is expected to save more than $6 million next fiscal year and tens of millions over the next few decades. And for the first time in years, the city will make the full ARC payment in next year's budget.

Before the vote, Councilman Steve Stycos said the ballooning liability is the fault of previous city leaders who failed to make proper contributions into the pension plan year after year. He said the bulk of the hole was dug in the 90s under the Michael Traficante administration, noting that in a few years when the arc was $13 million, the city only put in $5 or $6 million, for example. 

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"That's really where the ball was dropped," Stycos said. 

But serveral people objected to Stycos putting the blame on one mayor.

"I don't think you can blame one administration," said Councilman Paul Archetto. "It was done over the past 40 years or so."

In fact, Traficante, now a member of the School Committee, got praise for his push to get new employees into the state municipal employee retirement system (MERS) in the 1980s and out of the local pension plan. Had he not done that, the city would be in much more dire fiscal straits, they said.

"If we didn't do that, we'd have a double unfunded liability right now," said Paul Valetta, head of the Cranston Firefighter's Union. "There's blame to go around, but it shouldn't be at the feet of Mayor Traficante."

Not everyone is happy with the pension deal. A group of retirees threatened to take legal action against the city if the deal goes through, arguing the city can't change retiree pensions without collective bargaining. Another group hired a lawyer and argued a similar case in November, but that group apparently has changed its mind, city officials said, revealing fractions and factions among retirees. 

Lanni said the fact of the matter is retirees are going to give up something, but it's to spare the city in the long run. And what they'll still get is fair, he said, noting the average pension is between $50,000 and $60,000 and that includes medical and they're still going to get cost of living increases.

"We can not carry a $300 million plus unfunded liability because that's going to have to be paid for by the taxpayers," Lanni said. "The settlement was fair."


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