Auditor Questions Savings In Fire Contract
Tuesday, July 26, 2011
The Providence City Council Finance Committee continued to vet the tentative agreement between the city and the firefighters union Local 799 Monday evening, with a city official raising questions about assumed savings in two parts of the contract.
Internal Auditor Mathew Clarkin called the timeframe for the coordination of benefits, which the Administration believes will result in $375,000 in savings in the fiscal year that began on July 1, “aggressive” and said that number could change if it takes longer to implement the plans.
Clarkin also pointed to $700,000 in assumed savings in fiscal years 2012 and 2013 from the elimination of four vacation days, saying that while the plan will result in savings for the city at some point, it is, “uncertain that the savings will be realized” over the next two years.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe City reached a tentative agreement with Local 799 in June, which the city believes will result in $5.7 million in savings this year. The contract calls for the union to give up a three percent raise that was set to take effect on June 30, reduces the minimum manning number from 92 to 90, alters the coordination of benefits and eliminates four vacation days.
Coordination Of Benefits Questions
Under the tentative agreement, retired firefighters and the spouses of active firefighters who have access to medical coverage from another employer are expected to use that coverage at their “active plan.” According to a July 21 memo sent by Clarkin to the Council, “the active plan is the primary police to pay medical claims. The city will pay the cost for what is not covered by the retiree’s current or active medical plan.” The same is the case for spouses.
According to Clarkin, the expected savings is based upon the assumption that 48 retirees and 100 spouses will be eligible to be shifted from the city’s medical plan to their current employers plan that that employer’s medical plan is similar in quality to that of the state of Rhode Island. He said that if the coverage is less generous, the city would have more costs to cover.
Clarkin also raised questions regarding the implementation of the plan. He said that the city wants to have it completed within two months, but that savings will be reduced if implementation takes longer.
City Director of Administration Michael D’Amico agreed that the timeframe is aggressive and said “there may be some slippage,” but noted that he didn’t believe it would take too long to implement. He said retirees and spouses would be sent an affidavit and a second one 30 days later if the original is not returned. If, after 60 days, the city has not heard from retirees or spouses, it could suspend benefits until the affidavit is returned.
D’Amico also noted the health benefits agreement is exactly the same one the Council agreed to when it approved Local 1033’s contract.
Elimination Of Vacation Days
Clarkin also questioned the Administration’s assumption that an increase in the number of personal days (from three to seven) will not add to callback costs in the department. He said the increase could counter the savings realized from the elimination of four vacation days.
Clarkin said he believes the savings will come in the long-term, but he isn’t sure the city will be able to achieve $700,000 in the 2012 fiscal year.
First Council Vote Could Come Friday
The Finance Committee will continue discussing the contract Wednesday evening and will likely vote to send it to the full Council for Approval.
If that is the case, the Council will vote on Friday evening. The contract needs to be approved twice before it becomes official.
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