Donna Perry: RI Should Follow The Flanders’ Road Map
Thursday, September 29, 2011
What do pension cutbacks as high as 50%, raising health co-pays, trimming a third of the workforce, consolidating police and fire functions, and eliminating overtime pay add up to these days?
If you have Robert Flanders at the bargaining table, utilizing the powerful negotiation tool of reality and not rhetoric, they may just add up to the turnaround of a broken, bankrupt city.
The five-year fiscal plan for the rescue of Central Falls, which was submitted to the Bankruptcy Court last week by Flanders as the city’s Receiver, could serve as a critically important roadmap that other local deficit ridden and bloated city governments can follow to scale back the unaffordable costs of their local services and governments.
Although the local unions’ predictable antagonistic reception to Flanders’ first round of proposed contract cutbacks and retiree pension reductions grabbed all the headlines in the early going, the Receiver’s process has stayed the course in the wake of the Chapter 9 bankruptcy filing and apparently, hard won successes can now be claimed.
The budget plan Flanders submitted last week, which will be the subject of a public hearing tonight, significantly lowers the city’s unfunded pension liability (from $49 million to $25.7 million); will save $1.3 million by instituting the across the board 20% health co-pays; and finds nearly $700,000 in savings through smarter and strategic consolidation of police and fire dispatching duty and vast reductions in fire department overtime personnel costs.
An Envious Negotiating Achievement
The agreement struck with the city firefighter’s union in reducing the overtime schemed contract provision known as minimum manning, is surely to be viewed as an envious negotiating achievement by the mayors and administrators of other struggling Rhode Island cities and towns. Flanders staff rightly revealed the minimum staffing requirement that nine firefighters be on duty 24/7 (for the one square mile city)forced the constant tapping of an off duty firefighter, resulting in the automatic overtime pay scale. That contract provision, seen in firefighter contracts all across the state, is a significant factor for why Rhode Island, the smallest state, leads the nation in overall fire service costs. Flanders and team found the provision was adding $20,000 a year in added pay, per firefighter, due to the mandatory overtime. The renegotiated agreement scales back the minimum staffing level to a more reasonable seven, resulting in a projected immediate savings of nearly $300,000 in personnel costs.
Although it’s only fair to note the dire fiscal circumstances facing Central Falls, and the prospect that having any pension at all for retirees or any paycheck for current city employees certainly helped keep city unions at the negotiating table, Flanders seems to have achieved the type of concessions, workforce reductions and budgetary overhauls that could serve as a model elsewhere.
As the potential to pare down the cost of retirement of the public sector workforce heads into the spotlight in coming weeks, Flanders work in Central Falls can serve as a critically important reminder that reducing the costs of the current worker contracts goes hand in hand with pension reform if local communities are to truly improve their fiscal outlook.
It is a remarkable achievement that the Central Falls receivership process, as led by Flanders, has transformed a broke and broken community into a blueprint for a city survival story.
One hopes that recognition is evident as the plan winds its way through the court process in the weeks to come.
Donna Perry is a Communications Consultant to RISC, RI Statewide Coalition, www.statewidecoalition.com
- Donna Perry: Road to Reform Reaches Retirees
- Donna Perry: Union Strategy: Sabotage Pension Reform
- Donna Perry: Why The Warwick Tax Revolt Matters