Providence faces uncertain outlook on legal challenge to pension overhaul
The Providence City Council is expected this evening to pass a freeze on pension cost of living adjustments. Supporters, like Majority Leader Seth Yurdin, are banking on a legal defense that the compelling public purpose of Providence’s financial crisis justifies the change.
But not everyone thinks the city is on a strong legal footing, as the Bond Buyer reports today:
Brian Fraser, a partner with Richards Kibbe & Orbe LLP in New York, said the city has an uphill climb legally. “Obviously that’s a breach of the collective bargaining agreements, so I think they’ll have a hard time supporting that in court,” Fraser said.
Providence already lost in court in February, when Superior Court Judge Sarah Taft-Carter blocked the city from switching public-safety retiree health plans to Medicare. Taveras said the move would have saved Providence $6 million to $8 million annually. The state’s Supreme Court plans to hear an appeal in May.
Central Falls receiver Robert Flanders lost his legal gig advising Providence after speaking in support of the municipal bankruptcy process. For his part, Fraser is thinking along similar lines as Flanders.
“Bankruptcy would not be the worst thing for them,” Fraser added. “It worked for Central Falls.”