VIDEO: 16 Rhode Island Cities and Towns Sue Over Raimondo-Approved Evergreen Contracts

VIDEO: 16 Rhode Island Cities and Towns Sue Over Raimondo-Approved Evergreen Contracts

Rhode Island elected officials announced on Tuesday their legal challenge to what they are calling the "financially irresponsible" lifetime contracts law at North Providence Town Hall. 

The law, signed by Rhode Island Governor Gina Raimondo in May, allows the automatic continuation of municipal contracts for employees, negating the need for negotiations. 

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16 municipalities, representing 55% of the State’s population, filed a constitutional challenge to the law "as an impairment of existing contracts under the state constitution’s Contract Clause, as well as a violation of the Home Rule provision of the state constitution, which grants cities and towns the authority to decide local matters."

“The lifetime contracts law ties the hands of local officials when negotiating, especially when trying to get concessions,” said Cranston Mayor Allan Fung. “As the costs of health care, pensions and retiree benefits keep rising, taxpayers will get crushed if local leaders can’t renegotiate those benefits.”

The communities filing suit include Barrington, Bristol, Burrillville, Central Falls, Charlestown, Cranston, East Greenwich, Lincoln, Little Compton, North Kingstown, North Providence, North Smithfield, Pawtucket, Providence, Smithfield, Woonsocket. Additional communities may sign on as Plaintiffs.

Cities and Towns Cry Foul

According to the joint statement released by the participating cities and towns, personnel costs typically account for 70% or more of municipal and school expenses (wages, health care, pension and other benefits), most of which are governed by collective bargaining agreements. Meanwhile, those cities and towns with locally administered pension plans face $2.5 billion in unfunded liabilities. 

The Lifetime Contracts Law prevents municipalities, they say, from negotiating fair contracts that reflect a community’s priorities and ability to pay.

 “A contract’s terms cannot go on forever. That defies logic and is financially irresponsible,” said North Providence Mayor Charles Lombardi. “If mayors and town managers can’t negotiate to reduce costs, the alternatives are going to be cuts to important services or property tax increases. We can’t allow that to happen.”

“The state imposed a one-size-fits-all solution on cities and towns,” said Barrington Town Manager Jim Cunha. “There have been only a handful of problematic contract issues in a few communities in the last ten years, and that does not justify changing the rules for the majority of cities and towns that have good relationships with their employees. State lawmakers have to serve the taxpayers and not special interests.”

The law firm Greenberg Traurig, with former Providence Mayor Angel Taveras as lead counsel, is representing the Plaintiffs.