It's back to the negotiating table.
A pair of ordinances that if approved, would have made dramatic cuts to the pensions of retired Cranston police and firefighters were yanked from the City Council's agenda at the last minute after Cranston Mayor Allan W. Fung requested they be withdrawn.
The request was made by the mayor during the public forum portion of the council's meeting — an unusual occurrence, the mayor noted, but it came to his attention tonight that "enough retirees are willing to have a discussion to [find] a resolution to the pension issue."
That means the City Council will not have to make any decisions about whether to approve or reject the mayor's plan to freeze cost of living adjustments (COLAs) and make other cuts to retiree pensions to save the ailing pension plan.
The plan is closed to new members and is currently $271 million underfunded, according to an actuarial study.
if their pension benefits were cut by city ordinance and not through collective bargaining.
The plan (see the attached PDF) was submitted to the state by Cranston Mayor Allan W. Fung earlier this month. It was required by the state-run Pension Study Commission with a Nov. 11 deadline because Cranston's locally-run pension plan is just 16.9 percent funded and the unfunded liability is $271 million, which means the plan is in "critical status."
The plan offers four possible options to save the failing pension plan, each recommending a freeze on cost of living adjustments (COLAs) for 10- to 15-years or a permanent freeze.
James E. Kelleher, a lawyer representing the retirees, told the council that the situation has echos of a legal dispute in 2003 that began when the city arbitrarily changed COLAs and other benefits for retired firefighters without going through the collective bargaining process. The city was taken to court and lost, Kelleher said. And the city did not appeal, which made the ruling a "final judgement," he said.
"One of the first things you learn in law school is you can only get one bite at the apple," Kelleher said. "[This] is an identical issue, the parties litigated to final judgement as indicated and it has been decided. It can't be decided a different way."
The mayor's plan to eliminate COLAs would be a violation of law, Kelleher said, and "the debate no longer exists here."
Kelleher said that the City Council's lawyers would likely tell them there is actually a legal route the city could take to change benefits without negotiations based on a set of Supreme Court rulings known as "public purpose," which gives municipalities the ability to break contracts or make unilateral decisions in emergency situations.
"Here, nothing could be further from the truth," Kelleher said. "If the city of New Orleans makes arrangements with its unions then a hurricane comes in and annihilates the city and removes 80 percent of its citizens, that's something that nobody could have foreseen. It was in no one's contemplation when they made the collective bargaining agreement."
But the city's local pension plan, even if it's in critical status, is "nothing new," Kelleher said. "This body has been discussing the financial burdens and financial problems regarding the city pension system at least since the 1990s."
This story will be updated.