PROVIDENCE, R.I. (WPRI) — Mayor Jorge Elorza’s administration and the Providence police union have reached a deal on a four-year collective bargaining agreement that both raises officers’ pay and increases the officers’ contributions to the struggling pension fund, which officials say will help reduce the fund’s shortfall over the long term.
The tentative contract — which still needs to be ratified by the members of the Fraternal Order of Police Lodge #3 and then approved by the Providence City Council — includes pay raises for officers of 4.5% in 2019, 4.5% in 2020, 4.5% in 2021 and 3.75% in 2022.
Officers will get back pay for the prior year raises. The previous police contract expired in 2019, and negotiations were paused for a number of months in 2020 because of the pandemic before resuming in November. The new contract goes from July 1, 2019 to June 30, 2023.
While consenting to pay increases, the Elorza administration secured from the union leaders an agreement to contribute more of their paychecks to the city’s pension fund, from 8% to 13.5%. (The contribution scales up over the four years of the contract, landing at 13.5% in 2022.)
The city has a massive unfunded pension liability, currently pegged at $1.2 billion after actuaries recently recommended decreasing the annual expected rate of return from 8% to 7%. The changes in the union contract will put a $31 million dent in that liability over time, according to Larry Mancini, Providence’s chief financial officer. (Roughly a third of the unfunded liability is for police pensions.)
The city will also see some savings in health insurance costs, with officers contributing more to their own medical plans under the new deal, and the contract creates a new other post-employment benefits (OPEB) trust where officers will contribute $200 a year toward the medical benefits they receive after retirement.
If approved, the contract would cost the city an additional $12 million over the four years, with a roughly $5 million impact in this year’s budget because of the retroactive pay raise, according to Mancini.
The city still doesn’t have an approved budget for fiscal year 2020-21, which is more than halfway over. The Elorza administration has been meeting with the City Council to negotiate the spending plan, though taxes were already approved (with no increase) and billed to residents in July.
The contract also raises the mandatory retirement age for police officers from 63 to 65.
The contract is expected to be signed Thursday by Elorza and FOP president Michael Imondi.
“This agreement achieves historic pension reform as a means for longer term financial stability for the city while making meaningful investments in the future of our Police Department,” Elorza said in a statement. “I am committed to ensuring our approach to public safety is driven by long-term thinking and approaches to public safety.”
A press release said Providence officers are currently paid in the bottom 25% of police officers in Rhode Island, and the pay raises will bring them into the top 25%.
“This agreement provides our members with the competitive wage increases and wage rates which they deserve as police officers in our capital city,” Imondi said in a statement.
Councilman John Igliozzi, the chairman of the City Council Finance Committee that will consider the contract, said hearings would be scheduled in the coming weeks once the collective bargaining agreement is formally submitted to the council.
He called the deal “very promising,” citing the pension reform.
“I’m happy to hear the police union recognizes the state of the city’s pension system and is willing to incorporate real pension reform in this new contract,” Igliozzi told 12 News.
He said he hoped there could be a “snowball effect” with other municipal unions agreeing to up their pension contributions in the future.
The Finance Committee is also expected to take up the current-year budget in the next several weeks. It currently includes a new police academy slated to hire 50 new police officers this year.