On Wednesday afternoon, Town Manager Tom Hoover, Town Council President Gary Cote, Vice President Kerry McGee and Finance Director Ted Przybyla released the actuarial valuations for Coventry municipal employee and police officer retirement plans for Fiscal Year ending June 30, 2013.
The valuations, prepared by the Milliman firm, summarize unfunded liability and ARC (annual required contribution) payments of the Town, along with fund transactions, value of assets, service costs, the impact of giving COLA disbursements to police officers, employer contributions and return on investments among other variables. A summary of the valuations shows an unfunded liability total of $62,278,681 and an underfunded ARC amount of $2,307,062 between municipal and police departments. Education employees are still in contract negotiations, therefore those figures have not been included in the current report.
Council President Cote explained that he and his fellow councilmen have attended numerous meetings in recent months with General Treasurer Gina Raimondo to take the lead on beginning to rectify the financial state that the Town of Coventry currently finds itself in after years of repeatedly not meeting ARC payments. Under RI Senate Bill 3050, the 2013 tax levy cap is 4% and according to the current actuarial study, if the Town raises taxes to the cap, enough money will be generated to only cover the ARC payment for retirement plans, leaving behind possible increases in healthcare, fuel costs to bus children to school and past contractual obligations, among other financial commitments.
The most important point that Cote and McGee wanted to impress upon residents was their obligation to present each and every decision made during executive and public Town Council sessions to the taxpayers openly and honestly.
"The taxpayers in the town of Coventry deserve to know the truth, to be given accurate information and to know what we are up against," said Cote. "The bottom line is that we have a problem and we need to face it head on, take the lead on it, work with our town administrators and financial director and play hardball with some of the hard decisions that need to be made."
"Nothing will be done behind closed doors," said Hoover. "We need residents to know that they have the ability to call Town Hall and get the answers to any questions that might have."
Despite the worrisome appearance of some figures, Cote explained that Coventry is in a better place than most communities because of two important points. All of the Town's major union contracts as well as teachers and non-union employee contracts are up for negotiation, leaving a promising opportunity for all employees to band together in an attempt to improve the economical outlook.
"We're going to offer them all a chance to be part of the solution," said Cote. "We cant do this alone and we have no choice than to sit at the negotiation table and offer them that opportunity."
The second issue that many other communities are currently facing deals with OPEB (Other Post-Employment Benefits) given to retirees that Coventry does not participate in.
Cote, along with McGee, Hoover and Przybyla, urged the community to plan on attending public budget hearings throughout the season to have their voices heard. Two hearings have been scheduled already and at least two more will be held after March to ensure that taxpayers get the opportunity to attend. (A complete budget hearing schedule will be posted on Coventry Patch as soon as it is available.)
"We not only encourage, but need input from the taxpayers," Cote said.
"I don't want to be like past administrations and sweep this under the rug until our term is up," said McGee. "We have to attack this. We're not going to solve this right away, but we're going to start."
Przybyla and Hoover agreed the situation the Town is in is not unique only to Coventry, but instead is a national phenomenon.
"The fix is going to need to be a long-term one and it is going to require an engaged Council that the community is very fortunate to have," said Przybyla.
"We're at a point where some tough decisions need to be made," Cote went on to say. "They may not be popular, but they will be the right decisions for the Town of Coventry."
Residents can find the actuarial valuations for both municipal and police employees in the attached PDF documents. An analysis of the reports will be published in the near future.