Water employees urge R.I. city to protect their pensions

By JOHN CASTELLUCCI
Journal Staff Writer

PAWTUCKET, R.I., Oct. 12, 2000 (The Providence Journal)—The Pawtucket Water Supply Board has promised that no one will be let go if a private company is hired to design, build and operate a new water treatment plant.

But employees of the existing plant are still jittery about the plan, and one of the reasons is the possibility that privatization will erode their pensions.

Allen Champagne, water production manager, said he and other plant employees are worried about becoming ineligible to participate in the Municipal Employees Retirement System if privatization of the new water treatment plant turns them into employees of a private firm.

Current plant workers who are not vested in the state retirement system might lose their right to become vested, and the workers who are vested might be frozen at their current pension levels when the management of the plant changes hands.

To protect the workers' pension rights, Champagne is asking the City Council to pass an ordinance that will help keep the water plant employees in the state retirement system.

We just feel that this is an avenue we should pursue. If we don't do it, nobody's going to do it for us, he said.

The proposed ordinance would assure the Internal Revenue Service that the Water Supply Board retains control of the new water treatment plant even if the plant is designed, built and operated by a private company.

If the IRS can be persuaded municipal control still exists, it will rule that employees of the existing plant can continue in the state retirement system without jeopardizing the system's tax-exempt status.

Without such a ruling, Champagne said, the retirement system would have to expel the water treatment plant employees.

I see no reason not to take action on what they [the employees] are asking for, City Councilor Thomas E. Hodge said.

Hodge, a member of the Water Supply Board, is chairman of the City Council's Ordinance Committee, which considered the employees' request for the ordinance last Wednesday night.

The Ordinance Committee took no vote, but it will meet again on the matter, probably on Oct. 25. In the meantime, Hodge said, he is seeking advice from Margaret M. Peggy Lynch, the city solicitor. I just want to find out what the legal ramifications are, he said.

While the existing water treatment plant is capable of producing safe drinking water, it is too antiquated to meet the new federal standards due to take effect two years from now. The plant was built in 1938.

Rather than do the job itself, the Water Supply Board has voted to hire a private company to design, build and operate a new water treatment plant, reasoning that a big company would be able to cut costs through economies of scale.

The Water Supply Board supplies drinking water to 26,000 customers in Pawtucket, Central Falls and the Valley Falls section of Cumberland.

The board has hired a consultant to help it find a water treatment plant operator and plans to solicit proposals for the project early next year.

In the meantime, the Water Supply Board has initiated impact bargaining talks with the unions Teamsters Local 64 and Local 1012 of Council 94 of the American Federation of State, County and Municipal Employees.

The talks are intended to set the terms under which the workers will be employed if the water treatment plant is privatized. The terms will be made part of the request for proposals that is circulated to companies interested in bidding on the water treatment plant project. It will become part of the contract with the company that ultimately gets the job.

Champagne said that the employees' request for the ordinance has nothing to do with the impact bargaining process. He made it clear, however, that, if employees of the water treatment plant win the right to remain in the state retirement system, a major source of union resistance to privatization will be removed.

It is no secret that the unions are skeptical of privatization. During the summer, an official of the union that represents employees of Woonsocket's wastewater treatment plant told the Water Supply Board that promises were broken and workers were kept in the dark when that plant was put into private hands.

Michael E. Connolly, president of Local 3851 of AFSCME Council 94, said that despite promises that everything, including salaries, would remain the same, there has been degradation of benefits for the 20 employees of the wastewater treatment plant in Woonsocket since the plant was taken over last year by U.S. Filter Operating Systems.

Among other things, Connolly said, Blue Cross coverage was replaced with a health plan that has fewer in-state care providers, and the municipal pension plan was replaced with a 401K plan.