Cranston, R.I., Mayor Allan Fung, who cemented a pension overhaul package for his city, said he strongly objects to the proposed settlement at the state level because it burdens municipalities.
"I'm vehemently opposed to it because of the overall money being pushed back to the communities, which did not get a seat at the table in the negotiations. I find that very troubling," said Fung, a Republican who is running for governor this year.
The proposed settlement to six lawsuits by public-sector unions challenging the Rhode Island Retirement Security Act scales back some provisions of that 2011 law, which reduced benefits for active employees by shifting them to a hybrid system combining defined-benefit and defined-contribution plans, and limited cost of living adjustments for retirees.
The settlement, announced by Gov. Lincoln Chafee and General Treasurer Gina Raimondo on Feb. 14, followed one year of mediation talks. Raimondo is running for governor as a Democrat, as will Providence Mayor Angel Taveras, who also struck a pension compromise with his city's unions.
Chafee, an independent turned Democrat, will not seek re-election.
If unions, state lawmakers and Rhode Island Superior Court Judge Sarah Taft-Carter approve the settlement, it would require state and local governments to pay more into the pension system than the original pension overhaul bill.
Cranston alone will be on the hook for an additional $1 million beginning in 2016, said Fung.
"Many other communities are still teetering on financial collapse," he said.
Fung's comments on Monday came shortly after Moody's Investors Service removed its negative outlook on Cranston.
"We're very excited. Getting this action from Moody's required a lot of hard work," said Fung. "It took a long time and a lot of effort to reach this settlement. It was an albatross around the city for years."
Under the pension deal, Cranston stands to contribute $6 million less to the police and fire pension plan than otherwise in fiscal 2014. It combines caps freezes and reduces cost-of-living increases, or COLAs, over 30 years and reamortizes the $300-million unfunded liability.
"It took a lot of time and a lot of effort to reach this settlement. This problem was an albatross around the city's finances for years," said Fung.
Moody's affirmed its underlying A2 rating on general obligation bonds issued by the 80,000-population city, Rhode Island's third most populous.
Fitch Ratings and Standard & Poor's rate them an equivalent A.
The move affects $80.5 million in outstanding GO debt. Moody's also affirmed its A3 rating on $1 million of outstanding certificates of participation and removed its negative outlook on them.
Moody's also affirmed the underlying Aa3 GO pooled rating on the Rhode Island Health and Education Building Corp.'s $6.2 million Series 2011A bonds and the A2 GO pooled rating on RIHEBC's $20 million Series 2008B bonds.
Although Taft-Carter signed off on the state's settlement plan, some retirees opted out and are suing in state Superior Court to keep their cost of living adjustments, or COLAs, intact.
