Pawtucket panel plans 6-week sprint to solve pension problem

Pawtucket joined the pension parade on Thursday as Mayor Don Grebien’s new ad hoc panel said it would deliver recommendations for fixing the city’s underfunded pension and retiree health plans by April.

“It’s bad,” former Auditor General Ernie Almonte, who is chairing the committee, said at its first meeting this morning. “It’s a bad situation, and everyone has to give something up.” The group will likely draft a report outlining the situation and suggesting potential solutions.

Almonte said he wants to ensure Pawtucket avoids the “rather disgusting” outcome in Central Falls, where pension were cut up to 55% after the city declared bankruptcy. “There should have been a better plan on how to deal with that,” he said. “But there should have a plan 20 years ago on having the money that wasn’t there.”

“Many of our urban areas are on the brink of bankruptcy,” warned Gary Sasse, another panel member, who was former Gov. Don Carcieri’s director of administration.

Pawtucket’s annual budget was $267 million in 2010-11. The city operates two independent pension funds outside the state-run system for police officers and firefighters, and also provides retired municipal workers with medical benefits.

The first, for personnel hired before 1974, is a pay-as-you-go plan. Pension checks come straight out of the city budget, costing Pawtucket $608,519 in 2010-11. The second, for personnel hired since 1974, has an unfunded liability of $140 million and a funded level of only 30%. Taxpayers put $10.2 million into the post-1974 pension plan in 2010-11.

As of 2009, Pawtucket also had a $378 million unfunded liability for retiree health benefits, which are also paid directly from the city budget and therefore have no designated trust fund. The cost to city taxpayers was $12.5 million in 2010-11, including $6.4 million for medical and dental insurance premiums.

Retiree representatives declined to accept their appointments to Grebien’s ad hoc pension panel, saying they aren’t authorized to negotiate on behalf of their fellow Pawtucket pensioners. The committee plans to meet every Thursday at 10 a.m. in the Pawtucket City Council chambers starting March 8 and continuing to April 5.

A retired firefighter who addressed the panel criticized the group for attempting to fix “a 30-year problem” in about six weeks, particularly with contract talks between Pawtucket and its municipal unions set to begin soon.

Almonte lumped Pawtucket in with five other Rhode Island communities – Providence, Central Falls, Woonsocket, Cranston and Johnston – as having the most troubled pension systems in the state.

“I have a personal belief that we shouldn’t take forever to do this,” he said. “It’s that serious. Part of the problem is, people over the years have taken too long to solve the problem.” He said some of the proposed solutions may be long-term.

Here is a list of the people appointed by Grebien to serve on to the ad hoc pension commission, as provided by the mayor’s office:

Besides Almonte, also agreeing to serve on the panel are: Mark Boisclair, President, Pawtucket Fraternal Order of Police Lodge 4; Rosalie Darosa, President, North East Knitting Inc.; John Galvin, Chief Financial Officer, Collette Tours; Lois B. Kilsey, Vice President-Operations, Neptco Inc.; Richard Licht, Director, Rhode Island Department of Administration; David Moran, President, Pawtucket City Council; Robert Neill Jr., President, Pawtucket Firefighters IAFF Local 126; Gary Sasse, Director, Institute for Public Leadership, Bryant University; Peder Schaefer, Associate Director, Rhode Island League of Cities and Towns; and Ronald Wunschel, former Director of Finance, City of Pawtucket.

Agreeing to serve in advisory capacity to the committee were: Joanna L’Heureux, Director of Finance, City of Pawtucket; Debra McDole, Administrative Assistant, Department of Finance, City of Pawtucket; Frank Milos, Solicitor, City of Pawtucket; Antonio Pires, Acting Director of Administration, City of Pawtucket; Larry Stone, President, Stone Consulting Inc.; and a representative to be assigned from the office of General Treasurer Gina Raimondo.

• Related: 13 local pension plans worse than RI’s; Cranston, Scituate lag (Dec. 5)

(photo: Ted Nesi/WPRI)

4 thoughts on “Pawtucket panel plans 6-week sprint to solve pension problem

  1. Tell the retirees your going bankrupt, then just break the contract and pay them what you want. Apparently in Rhode Island contracts don’t mean a thing. Good luck getting any business’s to locate in a state where contracts are worthless.

  2. On the contrary OREO, once the State permanently eliminates this unsustainable pension/benefit “anchor” around it’s neck, business will flock to it as a place where excessive taxes to fund ridiculously excessive pensions & benefits will no loner be a threat and burden.

    California, Illinois, New Jersey, and a few others should take note. Seek bankruptcy and unburden your taxpayers of the fraudulent excesses in pensions and benefits promised via the collusion between the Public Sector Unions and our elected representatives more than willing tho accept campaign contributions and election support in exchange for favorable vote on pay, pensions, and benefits.

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