Judge sides with Fung on Cranston opt-out case

CRANSTON MAYOR Allan Fung said he was pleased with the decision, calling it a “historic day." / PBN FILE PHOTO/MICHAEL SALERNO
CRANSTON MAYOR Allan Fung said he was pleased with the decision, calling it a “historic day." / PBN FILE PHOTO/MICHAEL SALERNO

CRANSTON – A R.I. Superior Court judge on Friday ruled against a group of retired Cranston police and firefighters who sued the city and Mayor Allan W. Fung in 2012 for cutbacks made to retirement benefits.
Superior Court Judge Sarah J. Taft-Carter in her decision wrote that the retirees, known formally as the Cranston Police Retirees Action Committee, or CPRAC, failed to demonstrate claims that the city violated the preexisting agreements, and ruled against any injunction.
“Having found that CPRAC’s contract clause claim fails as a matter of law and that CPRAC lacks standing to bring its breach of contract claim, the court finds that CPRAC has not demonstrated actual success on the merits of any claim,” Taft-Carter wrote. “Accordingly, CPRAC’s request for a permanent injunction is denied.”
The lawsuit stems from a decision made by Fung in 2012 to freeze yearly benefit increases – known as cost-of-living adjustments – for retired police and firefighters. The city’s fund to pay for the benefits, which had historically been underfunded, was headed for bankruptcy as liabilities greatly exceeded set-aside assets.
In face of insolvency, Fung overhauled the local pension system, which cutback on pre-agreed upon benefits. City workers challenged the decision before entering into a class-action settlement. But CPRAC, which formed with 75-retired public safety workers, opted out of the settlement and sued Fung and the city, alleging the changes violated contract clauses of the R.I. Constitution and U.S. Constitution.
Litigation ended earlier this year, and Taft-Carter’s decision puts the dispute to rest at the superior court level.
Fung in a statement said he was pleased with the decision, calling it a “historic day.”
“I am proud that we were the first government entity in Rhode Island to reform our troubled pension system and have our actions withstand a legal challenge after trial. This decision saves the troubled pension plan, but more importantly, ensures that we did so without unduly burdening our residents with more taxes or deeper cuts in services,” he said.
Fung added that the decision ensures the long-term solvency of the locally-administered police and fire pension system and locks in more than $6 million in annual savings for Cranston taxpayers.

The case could carry implications for a similar so-called “opt-out” case in Providence, where Taft-Carter is currently deliberating a suit between retired public safety workers and former Mayor Angel Taveras and the city.
Costs associated with local pension and other post-employment benefits are crushing municipal balance sheets throughout the state, and are underfunded in aggregate by as much as $5.6 billion.
CPRAC attorneys could not be immediately reached as to whether the group plans to appeal the superior court decision.

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