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In light of the recent "Thank-you-now-please-get-back-in-your-Charter-defined-cage" letter that I received from the mayor (no doubt crafted by the city's "legal "eagle"), I address you as ....
Fellow financially-aware citizens,
You should find the just released 4 Feb 04 first-ever actuarial report of the city-wide post employment benefit liability to be eye-opening.
You will find this concise document at http://members.cox.net/cullen/Act-Stdy-PostEmp-Benefits.pdf
The previously defined $38M teacher-only liability has now ballooned to $113M since the study now covers ALL city employees.
This liability is fueled by amazing (but are you really surprised?) medical inflation rates.
The amortization schedules show an equally amazing need to throw (a brand new) $6+ Million a year at the unfunded liability on top of the "normal cost."
(Glad we have lots of unused bond debt capacity - we may need it soon).
I am sure our best municipal minds will be disclosing and explaining this issue to Newporters, and will be providing unmistakably clear leadership in addressing this "clear and hidden danger" to the city's finances. (Getting any city union to budge would also be a help).
Kudos to the city manager and finance director for being one of the first RI communities (if not the first) to undertake this study well ahead of accounting mandates. (How refreshing to see Newport not being afraid to determine the magnitude of the liability).
P.S. Given the request contained in the mayor's letter, and any strict adherence to a literal interpretation of the venerable City Charter, it would appear very difficult for the Newport Trust Investment Commission (which I chair) to accept responsibility for the investment of the new $400K from the School Committee for the 3% withheld from teachers (unless, of course, someone cares to call those funds a "scholarship trust").
The mayor's letter can be viewed at http://members.cox.net/cullen/Mayor-Ltr-Feb-2004.HTM
-- Mike "joe citizen" Cullen
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