ARTICLE
22 AS AMENDED
RELATING TO
SECTION 1.
(a)
Definitions. As used in this public law, the following words and terms
shall have the
following meaning, unless the context shall indicate otherwise:
(1)
“Administrative and Financial Officer” is an administration and finance officer
appointed by the Director of Revenue under
(2)
“Appropriation Payment” means for purposes of this article the State
appropriation
set forth in subsection (c)(1) of this section to fund
transition payments to Participating Retirees
(“Transition
Payments”).
(3)
“Bankruptcy Court” means the United States Bankruptcy Court for the District of
(4)
“Central Falls Pension Plan” means the so-called “1% Plan” and the so- called
“John
Hancock Pension Plan” as
restructured after the filing of the Chapter 9 petition for the City.
(5)
“City” means the City of Central Falls, Rhode Island.
(6)
“Contract Date” means December 19, 2012.
(7)
“Director” shall mean the Rhode Island Director of Revenue.
(8)
“MERS” means the Rhode Island Municipal Employee Retirement System.
(9)
“Participating Retirees” means the retirees that signed
the Settlement Agreement.
(10)
“Participating Retirees’ Restricted 5-year Account” means the federally-insured
interest-bearing account into which the City shall deposit the
Appropriation Payment pursuant to
Section 4
of the Settlement Agreement.
(11)
“Plan of Debt Adjustment” means the amended plan of debt adjustment to be filed
with the Court by the City.
(12)
“State” means the State of
(13)
“Settlement Agreement” means the Settlement and Release Agreement by and
between Receiver, the Director, the Participating Retirees,
the
Association, Inc. and the
Central Falls Firefighters Retirees Association entered into on the
Contract
Date.
(14)
“Receiver” means Robert J. Flanders, Jr. in his capacity as state-appointed
receiver
for the City, and any successor receiver appointed by the
Director under
laws section 45-9-7.
(15)
“Transition Payments” means the annual payments made to Participation Retirees
from the Appropriation Payment pursuant to the terms of
the Settlement Agreement.
(b)
Legislative Findings and Purpose.
(1)
On August 2, 2011, the Receiver filed a Chapter 9 petition on behalf of the
City with
the Bankruptcy Court. Prior to January 9, 2012, the
Settlement Agreement was executed by the
Receiver, the Director, the
Participating Retirees, the
Inc. and
the
Court entered an Order
approving the Settlement Agreement.
(2)
For purposes of this Article, the key terms of the Settlement Agreement
include,
without limitation:
(i) That the Participating Retirees’ pension benefits have
been reduced by up to fifty-five
(55%) of their
pre-bankruptcy pension payments; provided however if the General Assembly
authorizes an appropriation in the amount of $2,636,932, then
during Fiscal Years 2012-2016,
participating Retirees shall also receive Transition Payments, so
that their combined reduced
pension payments and Transition Payments shall not aggregate
to less than seventy-five percent
(75%) of their
pre-bankruptcy pension payments;
(ii)
That the Participating Retirees, the Central Falls Police Retirees Association,
Inc. and
the Central Falls Firefighters Retirees Association have
waived substantially all of their claims
against the City and the State; and
(iii)
That in the event that the General Assembly fails to appropriate a minimum of
$2,000,000 for Transition
Payments, the Participating Retirees may “opt out” of the Settlement
Agreement and have it
declared to be null and void.
(3)
For the following and other reasons, this Article shall not be deemed a
precedent that
would require the General Assembly to make similar
appropriations to any other
distressed city or town:
(i) The City alone must pay 100% of the legal fees incurred
in the litigation that
established the constitutionality of the Fiscal Stability Act (
9-1 et
seq.) and
several important bankruptcy precedents, these precedents which have conferred
a significant benefit on all
(ii)
Participating Retirees have agreed to reductions in their annual pension
benefits of up
to 55%; and
(iii)
The Settlement Agreement was approved by the Bankruptcy Court in order to make
a
Chapter 9
plan of debt adjustment feasible.
(4)
The requested Appropriation Payment which will ease the Participating Retirees’
transition to a pension benefit that has been reduced by up to
fifty-five percent (55%) is fair and
appropriate.
(5)
The Settlement Agreement is hereby incorporated into this Article by reference.
(c)
Appropriation Payment.
(1)
Appropriation Payment and Restrictions on Use. There is hereby provided to the
City
of Central Falls a one-time lump-sum Appropriation
Payment in the amount of $2,636,932 to be
used solely for the purposes and subject to the
restrictions set forth in the Settlement Agreement
to fund Transition Payment to Participating Retirees.
(2)
Deposit of Appropriation Payment and Payments to Participating Retirees. The
Appropriation Payment shall
be immediately deposited by the City into a restricted federally
backed or federally insured interest-bearing account under
the name of the City and denominated
the “Participating Retirees’ Restricted 5-Year Account.”
Within thirty (30) days after receipt of
the Appropriation Payment from the State, for fiscal year
ending 2012, the City (jointly with
either the Receiver or an Administrative and Finance Officer
for the City appointed by the
Director) shall withdraw
from the Participating Retirees’ Restricted 5-Year Account exactly the
amount required to promptly pay and distribute to
Participating Retirees the Transition Payments.
Thereafter, during the
months of July in fiscal years ending 2013, 2014, 2015, and 2016, the City
(jointly
with either the Receiver or an Administrative and Finance Officer for the City
appointed
by the Director) shall withdraw from the Participating
Retirees’ Restricted 5-Year Account
exactly the amount required to promptly pay and distribute to
Participating Retirees the
Appropriation
Transition Payments.
Any
and all withdrawals, transfers and payments from the Participating Retirees’
Restricted 5-Year Account
shall require the signature of two (2) persons, one of whom shall be
either the Receiver or an Administrative and Finance Officer
of the City after the Receiver’s
duties are completed. Participating Retirees’ Restricted
5-Year Account shall remain under the
control of the City jointly with either the Receiver or an
Administrative and Finance Officer and
that it shall be segregated from and shall not be
controlled or managed by any third party
managing the single Central Falls Pension Plan, whether
administered by the City or if
transitioned into MERS. Further, the Transition Payments shall be paid
to Participating Retirees
jointly by the City and the Receiver or an Administrative and
Finance Officer and not by any
third-party pension fund manager. Such Transition Payments shall
cease after the distribution at
the end of fiscal year ending 2016.
(3)
Relationship to Base Pension Payments. The Transition Payments shall not be
included in the calculation of the base pension benefits of
Participating Retirees for purposes of
determining a Participating Retiree’s COLA. However, a spouse or statutory
beneficiary under
(67.5%)
of a deceased Participating Retiree’s Transition Payment.
(4)
Distribution of Balance. Within thirty (30) days of the end of fiscal year
ending 2016,
the City shall withdraw the balance of the funds in the
Participating Retirees’ Restricted 5-Year
Account (i.e. the
accumulated interest and any remaining sums) and shall pay and distribute those
funds to each Participating Retiree based on the percentage
assigned to each Participating Retiree
in accordance with the requirements set forth in
APPENDIX B of the Settlement Agreement.
After all of the funds in
the Participating Retirees’ Restricted 5-Year Account have been
appropriately distributed, the City shall promptly close the
Participating Retirees’ Restricted 5-
Year
Account.
(5)
Access to Account Information and Records. The City, as overseen by the
Receiver or
an Administrative and Finance Officer, as the case may
be, shall maintain appropriate account
information and records relating to all receipts into,
maintenance of, and distributions from the
Participating Retirees’
Restricted 5-Year Account, and shall allow at all reasonable times for the
full inspection of and copying and sharing of information
about such account and any and all
Transition
Payments by and with any Participating Retiree.
(6)
Unclaimed Payments. Any money distributed to a Participating Retiree from the
Participating Retirees’
Restricted 5-Year Account and not claimed by a Participating Retiree after
the City has exercised good faith attempts over a six (6)
month period to deliver it to the best last
known address of such Participating Retiree shall not escheat
under state law, but shall be
deposited in the “Participating Retirees Wyatt Payments
Account” which shall thereafter be
distributed in accordance with Section 5.3 of the Settlement
Agreement.
(7)
Liability and Penalties for Improper Use of Appropriation Payment. Any person,
whether in his/her individual or official capacity, who uses,
appropriates or takes or instructs or
causes another to use, appropriate or take, the
Appropriation Payment, or any portion thereof, that
is not specifically used for making Transition Payments
to Participating Retirees as required
hereunder and under the terms, provisions and/or restrictions
of the Settlement Agreement, shall
be personally liable for repayment of said funds and
further shall be subject to any and all other
applicable civil and criminal sanctions and/or penalties for
such act(s).
(8)
Return of Appropriations.
Notwithstanding anything set forth herein to the contrary,
in the event that the Settlement Agreement becomes
legally void and/or of no further legal force
and effect, whether because the retirees have "opted
out" of the Settlement Agreement, or because
a party duly declares the Settlement Agreement to be
null and void pursuant to the terms of the
Settlement Agreement, or
because a court determines the Settlement Agreement to be void, then
all remaining amounts of the Appropriation Payment held
by the City shall be returned to the
State of
SECTION 2. Section 28-9.1-6 of the General Laws in Chapter
28-9.1 entitled
“Firefighters’ Arbitration”
is hereby amended to read as follows:
28-9.1-6.
Obligation to bargain. -- It shall be the
obligation of the city or town, acting
through its corporate authorities, to meet and confer in good
faith with the representative or
representatives of the bargaining agent within ten (10) days after
receipt of written notice from
the bargaining agent of the request for a meeting for
collective bargaining purposes. This
obligation shall include the duty to cause any agreement
resulting from the negotiations to be
reduced to a written contract, provided that no contract
shall exceed the term of one year, unless a
longer period is agreed upon in writing by the corporate
authorities and the bargaining agents, but
in no event shall the contract exceed the term of three
(3) years unless a budget commission or a
receiver has been appointed for a municipality pursuant to
Chapter 45-9, in which case the
contract shall not exceed the term of five (5) years. An unfair labor practice charge may be
complained of by either the employer's representative or the
bargaining agent to the state labor
relations board which shall deal with the complaint in the
manner provided in chapter 7 of this
title.
SECTION 3. Section 28-9.2-6 of the General Laws in Chapter
28-9.2 entitled “Municipal
Police Arbitration” is
hereby amended to read as follows:
28-9.2-6.
Obligation to bargain. -- It shall be the
obligation of the city or town, acting
through its corporate authorities, to meet and confer in good
faith with the designated
representative or representatives of the bargaining agent, including
any legal counsel selected by
the bargaining agent, within ten (10) days after receipt
of written notice from the bargaining agent
of the request for a meeting for collective bargaining
purposes. This obligation includes the duty
to cause any agreement resulting from the negotiations
to be reduced to a written contract,
provided that no contract shall exceed the term of one year,
unless a longer period is agreed upon
in writing by the corporate authorities and the
bargaining agent, but in no event shall the contract
exceed the term of three (3) years unless a budget
commission or a receiver has been appointed
for a municipality pursuant to chapter 45-9, in which
case the contract shall not exceed the term
of five (5) years.
An unfair labor charge may be complained of by either the employer's
representative or the bargaining agent to the state labor relations
board which shall deal with the
complaint in the manner provided in chapter 7 of this title.
SECTION 4. Section 28-9.3-4 of the General Laws in Chapter
28-9.3 entitled “Certified
School Teachers’
Arbitration” is hereby amended to read as follows:
28-9.3-4.
Obligation to bargain. -- It shall be the
obligation of the school committee to
meet and confer in good faith with the representative or
representatives of the negotiating or
bargaining agent within ten (10) days after receipt of written notice
from the agent of the request
for a meeting for negotiating or collective bargaining
purposes. This obligation includes the duty
to cause any agreement resulting from negotiations or
bargaining to be reduced to a written
contract; provided, that no contract shall exceed the term of
three (3) years unless a budget
commission or a receiver has been appointed for a municipality
pursuant to chapter 45-9, in
which case the contract shall not exceed the term of five
(5) years. An unfair labor practice
charge may be complained of by either the bargaining agent
or the school committee to the state
labor relations board which shall deal with the complaint
in the manner provided in chapter 7 of
this title.
SECTION 5. Section 28-9.4-5 of the General Laws in Chapter
28-9.4 entitled “Municipal
Employees’ Arbitration” is
hereby amended to read as follows:
28-9.4-5.
Obligation to bargain. -- It shall be the
obligation of the municipal employer
to meet and confer in good faith with the representative
or representatives of the negotiating or
bargaining agent within ten (10) days after receipt of written
notice from the agent of the request
for a meeting for negotiating or collective bargaining
purposes. This obligation includes the duty
to cause any agreement resulting from negotiation or
bargaining to be reduced to a written
contract; provided, that no contract shall exceed the term of
three (3) years unless a budget
commission or a receiver has been appointed for a municipality
pursuant to chapter 45-9, in
which case the contract shall not exceed the term of five
(5) years. Failure to negotiate or
bargain
in good faith may be complained of by either the
negotiating or bargaining agent or the municipal
employer to the state labor relations board, which shall deal
with the complaint in the manner
provided in chapter 7 of this title. An unfair labor practice
charge may be complained of by either
the bargaining agent or employer's representative to the
state labor relations board, which shall
deal with the complaint in the manner provided in chapter
7 of this title.
SECTION 6. Under
subject to the jurisdiction of a fiscal overseer, budget commission
or receiver is responsible for
payment of expenses and costs incurred carrying out the
responsibilities of the fiscal overseer,
budget commission and/or receiver. During fiscal 2011, the
State incurred and paid on behalf of
the City of
State billed the City of
Falls is responsible under
section 45-9-1 et seq., and which continue to be incurred and paid for
by the State on behalf of the city. The State intends to
bill the City of
expenses. Recognizing that the City of
to reimburse the State in full for said expenses and may
need additional time to reimburse the
State for expenses
reflected in future bills submitted by the State for such expenses, the City of
the State and billed to the city.
SECTION 7. Pathway to Retirement System
Transition. – The Office of the General
Treasurer, in consultation
with the Department of Revenue, shall develop a framework for the
City of and
retirees into the Municipal Employees'
Retirement
System and to provide retirement security for retirees. The Office of the General
Treasurer shall report its
findings and identified transition mechanisms to the General Assembly
by January 1, 2013.
SECTION 8. This article shall take effect upon passage.