NEW: Councilman Says ‘Time is Running Out’ for Warwick
Tuesday, May 22, 2012
Warwick Councilman Joseph Solomon distributed a letter from the city’s actuaries—Gabriel Roeder Smith and Company—that describes how the city’s largest municipal pension plan, Police and Fire I, meets the definition of “critical status”, at a Council meeting held Monday evening.
The term “critical status”, when referring to a pension plan, means it is dangerously underfunded according to RI General law 45-65.
According to the city’s professional actuaries, Warwick’s largest pension plan is just 22.3 percent funded and, as of June 30, 2011, had a staggering liability of $242,127,650.
Police and Fire I is not the city’s only pension plan, but it is by far the largest pension plan in the city. The other three pension plans are relatively well-funded, but when liabilities and assets are combined with Police and Fire I, the city’s four pension plans are average funded at just 51.2 percent.
Solomon warned that the city of Warwick is facing eye popping liabilities and needs to take steps to protect taxpayers and employees from the unwanted consequences of turning a blind eye. One week ago, Solomon called for the creation of a Blue Ribbon Commission to study Warwick’s financial condition and to recommend solutions to rectify the city’s problems.
“Like many of our neighbors, we in the city of Warwick face some serious liabilities. Time is running out. Warwick city leaders need to stop downplaying our significant financial challenges and start getting behind solutions,” said Solomon, an accountant and lawyer.
Solomon continued: “I would hate to think Governor Chafee was misled. I will continue to deliver the truth about Warwick’s financial condition as information becomes available to me from our actuaries and CPA auditors—even though it may not be pleasant.”
