Target 12: Scituate, police union at odds over closing $8M pension shortfall

SCITUATE, R.I. (WPRI) - Police officers in Scituate are criticizing a plan crafted by town officials that would make officers pay more money for less generous pensions in order to help close an $8 million shortfall that opened up over the last decade.

Town leaders including the newly elected treasurer, Sharon Johnson, are grappling with how to fix one of Rhode Island's worst-funded local pension plans. A Target 12 investigation Monday revealed the Scituate Police Pension Board met just once over the past 12 years as the shortfall soared from less than $2 million to more than $8 million.

Active police officers, retirees and taxpayers in Scituate will all have to share the burden to fix the seven-figure problem, Johnson told Target 12 on Tuesday, saying she expects the town council will be forced to raise taxes.

"I think to be fair and balanced, as our president says, you really need to have all three step up and make some sacrifices and say we are all part of this and we all need to solve it," Johnson said. "It can't just be on one part of the equation."

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A funding improvement plan that Scituate submitted to state officials proposes a series of changes to the plan, but they won't take effect unless the police union agrees to them. Patrolman Todd Rich, the union's president, said his members are open to concessions but are frustrated with the initial proposal.

"All officers put in the requirements throughout the years," Rich told Target 12. "Without fail, payment was made. Unfortunately, the town didn't make their payments for whatever reason. Now they realize they have to pay to make that work. The town doesn't want to make those payments. Now they are asking for us to compromise."

The town and the police union will probably be forced into binding arbitration to resolve the pension dispute, Rich said.

The Scituate Police Pension Board is made up of five members: the treasurer, two town councilors and two officers appointed by Rich's police union. He acknowledged his members might have been better off if the board had held more than one meeting between the middle of 1999 and July 2011.

"Unfortunately, the officers trusted the town was doing their responsibility," he said. "We made payments every week in our paycheck. We assumed and trusted the town was taking care of their end and making sure the system was healthy."

The 2011 state pension law required towns with underfunded local pension plans to come up with proposals to fix them. Scituate officials want to reduce police retirees' cost-of-living adjustments from 3% to 2%; base benefits on an officer's average final salary over five years instead of one; and hike their paycheck contributions from 10% to 12%.

Rich emphasized that the police union's members are open to all three of those changes, but said there are two other significant issues related to retirement benefits where the officers and the town aren't on the same page. He declined to disclose the two issues.

The proposed changes would reduce the Scituate police plan's shortfall from $8.7 million to just under $8 million, actuaries at The Angell Pension Group estimated in November. Oddly, the proposal would actually reduce the town's pension contribution from $768,968 to $694,165 but increase how much the officers put in from $95,108 to $114,129.

Over the years Scituate taxpayers have consistently put less money into the police pension fund than actuaries said was necessary, which is one of the reasons its funding level had fallen to 28% as of July 2011.

"The town is trying to make up all of the shortfall on our backs," Rich said. "They are trying to put all the problems of the plan on the weight of the officers." He said the local police have agreed to previous pension changes and also received no pay raises in their last contract.

Johnson said she hopes town officials and the police union can come to an agreement. "The current plan is unsustainable," she said. A 2011 study by the Rhode Island Auditor General's office found Scituate's pension funding was the third-lowest in the state.

"There are going to be a lot of hard choices as to what you can do in the town, as far as funding things that you might like," Johnson said. "You have to make some very hard choices. But definitely it can be solved."

Johnson said the Scituate Police Pension Board is scheduled to hold a public meeting in March and will continue to meet regularly after that.

"It's a pension board - they need to meet regularly, at least quarterly if not bimonthly or monthly," she said. "You need to meet to discuss the problems." But, she added, "It's a funding problem. The pension board really can't fund it. They can only suggest."

The board's other four members are Town Council Vice President David Hanna, Town Councilor William Hurry, and police union appointees Richard Parenti and Donald Delaere.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi's Notes blog. Follow him on Twitter: @tednesi

Tim White ( twhite@wpri.com ) is the Target 12 investigative reporter for WPRI 12 and Fox Providence. Follow him on Twitter: @white_tim