Sudden Shift: Major Union May Sue City
Friday, July 01, 2011
Just as the Taveras administration celebrates two crucial contract agreements with Providence’s public safety unions, another major union may be preparing litigation against the city, GoLocalProv has learned.
According to an e-mail obtained by GoLocalProv, Local 1033, widely viewed as the first city union to step up to assist Taveras in his quest for cost-savings agreements, is prepared to file a lawsuit against the city regarding an article in the state budget that dramatically changes retiree health care benefits for members of the union.
E-Mail: We Will Seek Litigation
The e-mail, sent by Donald Iannazzi, the business manager for Local 1033, lays out the language of Article 12 and also suggests that while angry with the deal, he understands that other options could have been significantly more severe.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“Here is the final language adopted by the house at midnight and the senate will not make further amendments,” the e-mail reads. “Needless to say I am very upset but the alternative was much worse. We will seek litigation with or without other groups to make this not only prospective in application but also in the class it affects.”
The e-mail goes on to provide a copy of the “Medicare enrollment” section of Article 12. Iannazzi did not return multiple phone calls and e-mails requesting comment.
What Article 12 Says
City officials contend that Article 12 was by no means a last minute addition to the state budget. In fact, when Taveras delivered his budget address in May, he explained that the city was relying on the General Assembly to help provide $18 million in savings and additional revenue. The bulk of that money ($11.4 million) came from a plan that would allow the city to shift retirees who are eligible for Medicare from the city health insurance to Medicare.
The “Medicare enrollment” section of Article 12 says, “Every municipality, participating or nonparticipating in the municipal employees' retirement system, may require its retirees, as a condition of receiving, or continuing to receive retirement payments and health benefits, to enroll in Medicare as soon as he or she is eligible, notwithstanding the provisions of any other statute, ordinance, interest arbitration award, or collective bargaining agreement to the contrary.”
“Municipalities that require said enrollment shall have the right to negotiate any Medicare supplement or gap coverage for Medicare-eligible retirees, but shall not be required to provide any other healthcare benefits to any Medicare-eligible retiree or his or her spouse who has reached sixty-five (65) years of age, notwithstanding the provisions of any other statute, ordinance, interest arbitration award, or collective bargaining agreement to the contrary. Municipality provided benefits that are provided to Medicare-eligible individuals shall be secondary to Medicare benefits. Nothing contained herein shall impair collectively bargained Medicare Supplement Insurance.”
Changes New Contract
While the city never shied away from its plans to amend retiree health care benefits for city employees, the General Assembly’s decision does alter the Local 1033’s brand new contract, which the City Council approved two weeks ago.
The contract, which was viewed as the first major victory of the Taveras administration, requires that if future retirees have “equivalent healthcare coverage through a job elsewhere or through their spouse, they are obligated to take that coverage instead of the City continuing to pay for their healthcare.”
The contract mentions nothing about a shift from city health insurance to Medicare.
House Spokesman Larry Berman confirmed that Article 12 took effect upon passage, meaning the changes to former city employees’ health care could come rapidly.
City Confirms Lawsuit Is Possible
This wouldn’t be the first time a union files a lawsuit over changes to a health care benefits for retirees. In fact, the state was sued over a similar issue only two years ago, according to the city’s Government Relations Director Matt Jerzyk.
Jerzyk made a presentation to City Council members last night regarding the contract and the health benefit changes made by Article 12. When asked if the city is going to face litigation, Jerzyk pointed to the similar situation that occurred with the state and acknowledged that the union may do the same thing in Providence.
Council President: Article 12 Was Critical To Providence
Despite the potential lawsuit, City Council leaders say they support Article 12 because of its long-term implications for the city.
City Council President Michael Solomon praised the General Assembly for supporting cities and towns in their time of need.
“Article 12 was critical to the future success of Providence because it contained numerous cost saving provisions for the City,” Solomon said. “Over the course of several months the Council worked closely with the Administration to make our case to the General Assembly. It was an unprecedented effort and we had unprecedented success. We are grateful to the leadership in both houses and the Governor for their support of municipalities throughout Rhode Island. The real winners here are the taxpayers.”
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