By Ted Nesi
PROVIDENCE, R.I. (WPRI) – The leader of Providence’s largest union leveled his toughest criticism yet at the city’s police and fire retirees this week, saying their alleged intransigence killed a potential deal with Mayor Angel Taveras to stabilize the troubled pension system and suggesting they do not understand the gravity of the situation.
“Some individuals, acting in a manner that I characterize as irresponsible, have suggested that no changes to the retirement system can occur and that we stand back and let the inevitable (city insolvency) occur,” Donald Iannazzi, Local 1033’s business manager, wrote Tuesday in a letter to his members. “Local 1033 has never acted irresponsibly and will not start today.”
Iannazzi confirmed the letter’s authenticity after WPRI.com obtained a copy. It says Local 1033’s negotiating team “agreed in principal to a tentative agreement” that would have suspended cost-of-living adjustments (COLAs) for retirees receiving less than $40,000 in exchange for no changes to medical benefits. The union’s agreement was contingent on police and fire retirees signing on, he said.
“Response from too many retirees receiving 5% and 6% compounded COLAs was that they would rather fight to the end, even if the end caused a failure in the retirement system and in the city,” Iannazzi said.
Joseph Penza Jr., the attorney representing the Providence Retired Police and Firefighters Association in negotiations with the city, disputed Iannazzi. “I have no idea where he got that information from, absolutely none,” Penza told WPRI.com. “I don’t know who he’s quoting. We’ve been negotiating with the city. … That mantra, if you will, does not come from us.”
“It has not been our position at all in the negotiations with the city that we would rather see the city go bankrupt than give up a penny,” he said. “Why would we be negotiating? I don’t know why Donald put that in his letter. You would have to ask him.” The police and fire retirees issued a statement earlier Wednesday saying they had offered concessions, but their estimated savings fell short of the city’s goals.
“We’ve negotiated in good faith with police and fire retirees to reach an agreement that protects the pensions retirees currently receive while achieving the savings needed to prevent Providence from eventual bankruptcy,” Taveras spokesman David Ortiz said, adding that the police and fire retirees’ negotiators “have not presented an offer that comes close” to the $16 million to $20 million in savings the city wants.
“If Providence is forced into bankruptcy because of a failure to act, retirees would lose much more than annual raises,” Ortiz added.
Iannazzi made a similar point in his letter, which was partly an explanation of his decision to support a pension overhaul signed Monday by Taveras that freezes COLAs for all retirees and that some police and fire representatives say they’ll challenge in court. “This is not desired legislation but rather necessary legislation and the only responsible action,” he wrote.
“As I have attempted to communicate with others, we are in the bottom of the ninth inning and failure to act NOW will result in an irreversible path that will cause adverse actions to the benefits received by our retired and active members, as well as every citizen of our city,” Iannazzi continued. He also noted that the enacted retirement ordinance removed a section that would have changed health benefits.
“Failure to act would have caused the system to fail and the city to collapse in the near future,” he added. “Inaction is not an alternative. This tough medicine is necessary; and while the retirement system will not be declared healthy tomorrow, a lasting path to wellness has been selected.”
Local 1033 will oppose the police and fire retirees’ efforts to block the retirement changes in court, “not because the recent legislation is ideal, but only because it was necessary,” Iannazzi said.
Penza, the police and fire retirees’ lawyer, said they have not yet decided what course of action to take with regard to the new pension ordinance, partly because they are preparing for a separate trial set to begin May 21 contesting the city’s push to move retirees to Medicare. The two sides both say they are still working to reach a settlement and avoid a trial.
“We don’t want to talk about negotiations publicly, but the mayor has said that his door is open,” Ortiz told WPRI.com. “A settlement on Medicare that avoids litigation and achieves the savings that Providence needs is obviously preferable to going to court.”
(photo: city of Providence)