Narragansett Retirees Blamed For Town Financial Woes

It has become quite fashionable especially among members of the Narragansett Finance Committee to blame the fiscal woes of the town on “unsustainable retiree benefits”. Oh those evil retirees who deferred pay raises and contributed 100% to their pensions and OPEB as required. Narragansett has already realized and consumed the cost savings over more than a decade that officials failed to fund what they negotiated. What current officials fail to tell everyone is that Administrations, Councils, the Finance Committee and Auditor reports hid or deferred payments to the negotiated contractual obligations since the 1970’s and still continue to underfund them. OPEB (healthcare) was given in lieu of raises as that was politically convenient in the 1970’s while a high school was built. Again in the 1980’s as more school projects were undertaken. Healthcare benefits for employees and newer retirees have been continually reduced since 2001, an additional cost savings squandered by the Town.

Town budgets have not invested a penny since 2004, including the employee monies, into pension plan investments thus missing a period of record returns. What is “unsustainable” are not the negotiated benefits, but Narragansett’s irresponsible behavior to fund what they are obligated to pay just like any other debt, including bonds. Cost savings from lower contract costs were squandered year after year. Town administrations ignored a state report in 2006 and even Council action to begin proper funding. Eight years later political rhetoric sounds great beating up retirees who have binding agreements and the good faith and promise of Narragansett. The very people who should be looking into the mirror since they are part of the ongoing problem, need to be part of the solution but not by reneging on contracted benefits.

Narragansett is not on the verge of bankruptcy nor a financially distressed community ripe for State takeover. It has the economic capacity to right the ship without the present cutting of capital projects in such a draconian manner. The town recently received a higher bond rating with the current underfunded obligations fully disclosed. Narragansett has additional bond issues pending for voters in November. Narragansett has never come close to reaching the maximum tax cap in any fiscal year since the law was enacted. Last year the Town funded 51% of what was required to meet their pension obligation, this year 80% with promises of 100% next year. Will that actually happen? The Finance Committee needs to develop a longer term plan, not reflected in their current “scorched earth” 6 year plan, to reverse the long time neglect of the Town to meet their obligations. The current letter being distributed by the Town on behalf of the Finance Committee uses stale (over a year old) and severely flawed actuarial data to support their arguments. Narragansett’s governmental culture developed this problem over decades and it will take decades to dig out, just like a person who has only been paying minimum payments on their credit cards. Over that period of time contracts were negotiated, piggybacked by “management team members” without proper funding including COLA on 10 year pensions. Meanwhile Narragansett employees and taxpayers were deceived by political rhetoric while chest thumping about their awards for accounting excellence and low tax rates. Who is held accountable? Not one administrator or politician. Just blame the people who paid every penny required and worked years for their pension benefits. Narragansett should not look to their retirees to bail out the fiscally irresponsible behavior of administrators and officials over the years.

Almost half of the evil retirees do not receive a cost of living adjustment as touted. Many are elderly and their pensions alone would qualify them for poverty status. Just reward for years of service to Narragansett? “Unsustainable? Healthcare is their only hedge against inflation. Employees retiring since 2001 have seen their OPEB decline in successive contracts. Fire retirees since then are incorporated into Medicare. Recent contracts have further reduced even that benefit. Yes, there were actuarial studies done to generate a cost for each benefit negotiated. Each contract had calculated costs by the Town who then pocketed the savings by not fully funding their binding agreements. Great for getting votes with artificially low tax rates while providing goods and services not paid for. Retirees and union officers are not “chums”, but perhaps “chumps” for believing the good faith and credit of Narragansett would stand behind their contracts as promised. If Narragansett wants to undo those agreements, perhaps retirees should be able to undo their retirements as well returning to work if they desire.

The Finance Committee needs to play a vital role and ask some serious questions. Where is a forensic audit to see if there was criminal activity between auditors and Town officials? Did officials receive pay raises based on such performance? If everything was so stellar from an accounting standpoint year after year, how did we get here? What is the Town’s plan for making timely investments into Pension Plan Investments? What is the long range plan for playing catchup for what the Town owes to those plans? Those evil retirees, current employees and taxpayers certainly would like and deserve to know.

The Finance Committee also wants changes from retirees, but where is their integrity? Name calling and failure of the representatives elected or appointed by Narragansett to keep their word do little to encourage retirees who have already been given less than the truth to negotiate anything. The Town has the ability to pay, but not the intestinal fortitude to do so, most retirees do not have that luxury. It is time for the blame game to stop and Narragansett to honor their commitments, past, present and future with full faith and credit. Otherwise any contract or bond issue from Narragansett is worthless.

Ret. Capt. Daniel Leighton

The contributor is a 35 year veteran of Narragansett Fire and former union officer.