Change Can’t Be Done
On Friday evening, Portsmouth Fire Chief Jeff Lynch sent an email to a baker’s dozen (or so) of state legislators explaining why not a single one of the governor’s budgetary suggestions related to public-sector labor ought to be accepted. The entire letter is printed in the extended entry, below.
It would be folly to state that the chief doesn’t make some worthwhile points, but no group whose cash flow is apt to be restricted as Rhode Island adjusts to financial reality will come unarmed with arguments. There’s a reason they’ve collectively pushed our state to the precipice in the first place.
I won’t attempt a point-by-point response to Lynch’s statement, here, but a few of his comments related to benefits point to a skewed perspective that legislators ought to take into account as they gut the governor’s supplemental budget and pass one of their own making:
I know, the rest of the world already co-pay some or all of their insurance. However, when I started I qualified for food stamps. We take the low pay because we have these benefits.
I can’t speak to the wheres and whens of Chief Lynch’s first days as a firefighter, but career paths that begin within 100% of the poverty line are not uncommon. Be that as it may, a look at Portsmouth’s ’07/’08 payroll (PDF, from The Money Trail) reveals that no full-time firefighters currently face that prospect. Their compensation packages (PDF, from The Transparency Train) emphasize the point. The town’s budget for that year (PDF, from The Transparency Train) puts the healthcare costs for the department at $452,881. Lynch subsequently notes “a friend” in the defense-industry private sector who supposedly has a better deal, but individual acquaintances and long-ago pay complaints are hardly relevant to questions of parity.
Similarly with pensions:
It remains unclear whether the COLA proposed by the Governor applies to vested employees. Regardless, our contributions were based on actuarial studies that accounted for our present COLA’s. Additionally, having to wait 5 years for a COLA will essentially put the average public servant at poverty level. Assuming the cost of living increases 3% per year, which is compounding, a person retiring form a job that pays $50,000 with a 50% pension will start with a $25,000 per year pension. After 5 years that pension will be worth less than $21,250 in today’s dollars. This coupled with a healthcare co-payment of $3,800 makes the value of the pension worth around $17,450.
Put aside that public employees who retire after twenty years of service are not likely to begin their forty-year retirements without finding other jobs that put them not only above the poverty level, but well above the median household income for the state. Lynch’s hypothetical simply doesn’t apply to the men under his command.
According to their latest contract (PDF), a 1st class firefighter (who reaches retirement without becoming an officer) earns $47,587.10, and longevity is included in pension calculations, which brings the retirement-age average to $51,552.69. Retiring after 20 years, his pension payment would be $30,931.61, and after 27 years, it would be $38,148.99. With no cost-of-living adjustment, the retiree would face the undaunting necessity of saving or investing that annual cushion until actually reaching a suitable retirement age.
Again, we in the private sector are generally not in a position to snicker at that benefit. Still, the chief goes on:
Second to the love for the job, the reason we all take these jobs are for the benefits because they don’t pay nearly as well as private sector jobs for the risks we take. We make a deal when we sign up and plan our lives in accordance with that deal. To change it, and change it this drastically, is unfair to say the least. I can tell you as much as I love my job, and as much as it is going to kill me to leave it, I have advised my son that he should seriously consider another career.
Strictly speaking, union employees remake their arrangement with every contract. If Mr. Lynch is referring to a more abstract “deal” of contract-by-contract increases and perpetual insulation from the economic realities that the rest of us face, then I’d ask why it is that he believes his reality ought to be more “fair” than his neighbors’ — neighbors who have at an accelerating rate been advising their children not just to consider alternative careers, but to flee the state in which they’ve grown up altogether.
The bottom line is that nobody’s deal will survive the collapse of the state, and that is exactly what the future holds if dramatic changes are not made to Rhode Island’s method of operation.
On Jan 30, 2009, at 6:21 PM, Jeffery P. Lynch wrote:
Good Afternoon again, At the request of Representative Rice I am sending a position paper of sorts. Below is a list of articles as I understand them related to the fire service and how we feel it will affect the fire service locally. I hope this will be helpful for our meeting next Friday.
Article 41: Regionalization or the State Realignment Commission
This would create a (7) member regionalization/realignment committee to make recommendations on consolidation and regionalization of services, IT, public safety service delivery, etc. The Governor is appointing (2) labor reps (unions), (1) current or former Police Chief, (1) current or former Fire Chief, (4) legislatures and (3) state workers. The commission has to be done with this by 3/2010 with a 11/2010 election day vote.
It is my understanding that Aquidneck Island will be the test bed for regionalization. Without a plan, I wonder how this will be accomplished without county government in place. A question I ask is how the current equipment will be distributed? For example, Portsmouth taxpayers spent $700,000 for a tower ladder truck. If we regionalize do you think this truck will stay in Portsmouth? It would make more sense to put it in Middletown and replace their 20 year old ladder and have it closer to Newport that has a bigger fire load. Also, every fire chief in Newport County is saying he needs more manpower because we can not handle the calls we have now with the manpower we have. Regionalizing will not increase manpower and will not make the amount of emergencies go down. Additionally, I suspect the master plan is to do away with chief officers. None of the chiefs have any spare time on their hands so I wonder how all the work will get done? Standardizing fire alarm equipment would require business owners to spend another 5 to 6 thousand dollars to update their fire alarm systems many just installed. Creating a dispatch center to receive these additional alarms as well. Radio systems would require massive infrastructure upgrades to be able to talk throughout the county? Telephone systems, computer aided dispatch software, etc. would also need to be upgraded and built. Facilities as they are presently located would not allow for adequate response times. The Governor says there are somewhere in the order of 82 fire departments in the state. Mostly all of these departments are volunteer within the same town. In the East Bay area for example Bristol has 4 charted volunteer fire companies. While there are 4 separate charters, they all fall under the direction of the Bristol Fire Chief and there is no waste. In Portsmouth, there are essentially 3 departments, the Portsmouth Fire Department, the Portsmouth Volunteer Fire Department, and the Prudence Island Volunteer Fire Department. In reality, they all fall under the budget and control of the Portsmouth Fire Chief. In fact, the Portsmouth Volunteer Fire Department is responsible for purchasing the ambulances in town. They often receive donations that help pay for these trucks. It is actually saving the taxpayers in the town money. While perhaps it is possible that some consolidation of these smaller departments in other areas of the state will save on equipment costs, the savings would be minimal. I also question what affect this would have on the volunteers that are in these smaller departments, if they would all stay? The fire service has been regionalized for years. Through the existing Mutual Aid agreement, we routinely send apparatus across jurisdictional boundaries to assist neighboring communities. This aid covers both the need for specialized training, tools but mostly in the event the community requesting assistance has already deployed all of its resources. Combining departments would have virtually no effect on saving dollars. How would the ambulance billing monies be distributed? Last fiscal year my department alone made $425,000 for the town. Also, it is my understanding the bill earmarks $150,000 to do the study. Is this the most prudent expenditure during these economic times?
Article 43: Minimum Staffing
This would eliminate minimum staffing for Fire Departments. The article actually includes staffing for fire departments, deployment or amount of personnel a department has, stations, equipment and that we cannot bargain what type of equipment we have, etc.
People will die if we eliminate minimum manning. If this passes you can expect a fire truck with one or two guys on it that will take a hose off the truck and wet your neighbor’s house down so it doesn’t catch fire while yours burns to the ground. Firefighters have given up benefits and pay to get the minimum staffing requirements. The Providence Journal will tell you the reason is so firefighters can make more overtime. Trust me, we have difficulty getting guys to work these overtime shifts, it isn’t the overtime. NFPA, a non governmental association with no ties to labor, has minimum requirements of 4 to 6 people on a truck and 11 to 13 people to respond to a structure fire on the initial alarm (NFPA 1710 if you’re interested in looking it up.) They do because they have studied fires extensively. Additionally, if you call for a rescue and it is already on a call you will have a delayed response for one IF the neighboring community has one available. Also, Chief Byer from Jamestown has expressed concern that if minimum manning were eliminated it would put a burden on his department if neighboring communities fell below current staffing level. He fears he will be called for mutual aid to cover calls for service these departments are currently handling but could no longer handle due to lack of staffing. He also fears this would drive down the membership of his department due to the required commitment for the volunteers. Advocating for one’s own worker safety is unique to the fire service. Industrial worker safety is ensured by laws enacted by the government. What we are presently seeing in H-5019 is the government attempting to eliminate any safety rules the fire service has negotiated into labor agreements. Why is Rhode Island not an OSHA state? Why does OSHA not include the fire service. If we were protected by laws and not standards, we would not be having this conversation. Response time would also suffer. If a town does not have adequate staffing to cover multiple calls they would rely on mutual aid from their neighbors as previously stated. Those mutual aid departments would have upwards to a 20 minute response time.
Article 44: Healthcare
This act reads that no contract signed after 7/1/09 by law can include anything else but a minimum of a 25% healthcare co-payment for active personnel. This does allow for existing contracts to maintain their existing co-pay structure until they expire.
I know, the rest of the world already co-pay some or all of their insurance. However, when I started I qualified for food stamps. We take the low pay because we have these benefits. This also forces us to pay 20% in retirement this year, I’m sure that will increase too. It is believed in yesterday’s testimony given before the House Finance Committee that this co-pay will affect already retired firefighters. I believe this will affect recruitment efforts. A young person that is contemplating public service would think twice about a job that has relatively low pay with minimal benefits. I spoke with a friend who works for a local defense contractor who advised me he had a pension from his work in addition to a matching 401K product that is somewhere in the order of 6%. He co-pays 10% of his medical and gets paid a lot more money than those of us in the fire service.
Article 45: Pensions
The act makes a variety of changes to State and Private pensions by Law. Effective 7/1/09. Changes include reduction in disability pension for those not totally disabled, years of service and age limitation eligibility requirements and mandatory co-share of healthcare costs during retirement. Disability pensions will be reduced to 50% of base salary state-wide for partially disabled personnel, a law requiring co-pay of 20% of your healthcare costs during retirement and changes to age requirements making you have to stay until your either 55 or 59 years of age. This also changes how and when you receive a COLA for unvested employees and it also allows the state the ability to file suit against any municipality (private pension fund) that does not comply with this article.
Essentially there are presently just over 2,000 paid firefighters in the state. Of that number, nearly 40% can retire. If this bill passes it is likely a very large number of them will retire. In my department there are 8 members ( 1 entire shift) that can retire. It is likely at least 7 will. In addition to that I have 5 members who are nearing retirement but are still young. They are contemplating leaving now, collecting their partial pension in a couple of years, and testing for other departments and putting in another full career there. They would likely stay an additional 8 to 10 years if they didn’t have to go now. If they elect to stay most will have to work an additional 20 to 25 years. Immediate effects of this legislation will include the retirement of a large percentage of senior staff in the fire service. The fire service will no doubt continue and recover over the long term. The talents and experience of the retired senior firefighters will be replaced with a dramatically lower quality work force due to the new unattractiveness of the profession. Towns like mine who are in a private pension system, have thriving pension systems that are fully funded. The problem with the State pension system is the State, and other municipalities in it, failed to fund it for years while the workers continued to put their 6-10% of their income in to it. Also keep in mind this affects all municipal workers too, police, public works, teachers, town clerk offices, building inspection departments etc… It is our understanding that this proposal does not have a positive affect on the budget this year. In Wednesday’s hearings the Governor office did not have an actuarial report and have no idea what, if any, savings there will be with this proposal. I wonder if all the public employees this affects decide to leave where cities and towns are going to come up with the severance pay coming to everyone? For my department alone the implication is somewhere in the order of $250,000. It remains unclear whether the COLA proposed by the Governor applies to vested employees. Regardless, our contributions were based on actuarial studies that accounted for our present COLA’s. Additionally, having to wait 5 years for a COLA will essentially put the average public servant at poverty level. Assuming the cost of living increases 3% per year, which is compounding, a person retiring form a job that pays $50,000 with a 50% pension will start with a $25,000 per year pension. After 5 years that pension will be worth less than $21,250 in today’s dollars. This coupled with a healthcare co-payment of $3,800 makes the value of the pension worth around $17,450. The age requirement of 59 is just too old for police and fire. The physical demands of the job are just too great. A majority of heart related deaths in the fire service are firefighters over the age of 50. There are many members presently in pension systems that still contribute but derive no additional benefit from their contributions because they have worked beyond the maximum benefit. These workers, along with the many others who would leave pre-maturely will draw the system down very quickly and will no longer be contributing in to the system. While we will all leave eventually I believe the system was not designed for such a mass exodus.
Second to the love for the job, the reason we all take these jobs are for the benefits because they don’t pay nearly as well as private sector jobs for the risks we take. We make a deal when we sign up and plan our lives in accordance with that deal. To change it, and change it this drastically, is unfair to say the least. I can tell you as much as I love my job, and as much as it is going to kill me to leave it, I have advised my son that he should seriously consider another career. I believe that such a drastic reduction in benefits will result in substandard applicants in the future. I have always prided myself on the professional service me and my department provide. I fear that service will be substantially reduced in the future. Firefighters are aware of the state of the economy, and I dare say we would be willing to negotiate some concession to help ease the pain. I do not know the particulars of the Governor’s statement that we pay the highest per capita for fire protection. What he fails to mention is throughout the US, 87% of fire departments are either all or mostly volunteer departments. The Town of Portsmouth didn’t give me a job because they like me, there are no more people volunteering around here. Additionally, 42% of fire departments nationwide do not provide ambulance service. If that cost alone were factored in to the rest of the country I can bet RI would be substantially lower. Also, I wonder if the amount fire departments bring in through ambulance billing, plan reviews etc. is deducted from the costs? If the predicted mass exodus does take place many departments will not longer be compliant with the National Incident Management System (NIMS). This will likely make them ineligible for many federal grants many towns rely on to supplement their budgets. A point to ponder is what if 9/11 happens April 2nd and most of the command staff and half the firefighters in the State have retired to save what benefits they have?
Thank you all for your consideration in this matter and we look forward to meeting with you next Friday.
Chief Jeff Lynch
Portsmouth Fire Department
East Bay Fire Chiefs Association