Has First Public Sector Union Domino Fallen?
21st May 2010
Sometimes reality intrudes into even the rosiest scenario.
As I posted two days ago, the City of Central Falls (whose slogan is “A City With a Bright Future”) filed for receivership, the state equivalent of bankruptcy. Rhode Island law does not allow a municipality to file for federal bankruptcy protection, but provides the state receivership alternative.
First, Central Falls’ “actuarial accrued liability” for pensions exceeds $35 million, but there are only $4 million in assets. The annual contribution required by the actuaries for 2009 was $2.7 million, of which the City actually contributed $0. No funds are available for 2010 contributions.
Second, of the $18 million budget, $6.5 million is for employees with collective bargaining agreements. According to The Providence Journal, “City Solicitor John T. Gannon said the city is in the middle of all its municipal employee union contracts. Mayor Charles D. Moreau has been trying to negotiate concessions, he said, but without success.”
May 21st, 2010 at 13:27
“First, Central Falls’ “actuarial accrued liability” for pensions exceeds $35 million, but there are only $4 million in assets.”
How in the heck can that even happen?