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Cranston Police Retirees Action Committee v. City of Cranston

Superior Court of Rhode Island

July 22, 2016

CRANSTON POLICE RETIREES ACTION COMMITTEE, Plaintiff,
v.
THE CITY OF CRANSTON, by and through its Finance Director ROBERT STROM and its City Treasurer DAVID CAPUANO, ALLAN FUNG, in his capacity as Mayor of the City of Cranston, Members of the Cranston City Council JOHN LANNI, JR., DONALD BOTTS, JR., MARIO ACETO, MICHAEL J. FARINA, MICHAEL W. FAVICCHIO, PAUL H. ARCHETTO, RICHARD D. SANTAMARIA, JR., SARAH KALES LEE, and STEVEN A. STYCOAS, in their capacity as members of the Cranston City Council, Defendants.

         Kent County Superior Court PC-13-3212.

          For Plaintiff: Marisa A. Desautel, Esq. Patrick J. Sullivan, Esq.

          For Defendant: William M. Dolan, III, Esq. William K. Wray, Jr., Esq. Nicholas L. Nybo, Esq.

          DECISION

          TAFT-CARTER, J.

         This case is before the Court for decision following a non-jury trial on a Complaint filed by the Plaintiff, Cranston Police Retirees Action Committee (CPRAC), against Defendant, the City of Cranston (City). CPRAC is a non-profit corporation formed in 2012 whose membership is comprised of seventy-five retired members of the Cranston Police Department and the Cranston Fire Department who retained their right to sue the City by opting out of a class action settlement.[1] The Court is called upon to decide whether certain ordinances passed by the City violated the contract clauses of the Rhode Island and United States Constitutions.[2], [3] In its Complaint, the Plaintiff asserts that the 3% compounded cost of living adjustment (COLA) was a vested contractual right for its members, the suspension of which amounts to a violation of the contract clause. The City maintains that its actions do not violate the contract clause, that CPRAC has not met its burden to show that the City's actions amounted to a substantial impairment, and that it has presented sufficient credible evidence that the City's actions were reasonable and necessary to achieve a significant and legitimate public purpose. In November of 2015, the matter proceeded to a non-jury trial. The Court exercises jurisdiction pursuant to G.L. 1956 §§ 8-2-13 and 9-30-1.

         I Findings of Fact

         The Court has reviewed the evidence presented at trial by both parties and makes the following findings of fact.

         The City established the Cranston Police Pension fund for permanent members of the Cranston Police Department and the Cranston Fire Pension fund for permanent members of the City Fire Department in 1937. Compl. at ¶¶ 6, 7. Throughout the years, the International Brotherhood of Police Officers, Local 301 (IBPO) on behalf of the police, and International Association of Fire Fighters, Local 1363 (IAFF) on behalf of the firefighters, engaged in mandatory and binding collective bargaining with respect to all terms and conditions of employment. Id. at ¶¶ 9, 10; see also Municipal Police Arbitration Act, G.L. 1956 § 28-9.2-1, Municipal Fire Fighters Arbitration Act, G.L. 1956 § 28-9.1-1. As a result, collective bargaining agreements (CBAs) were routinely negotiated between the IBPO and the City and the IAFF and the City. Id. at ¶¶ 9, 10.

         The health of the City pension fund was examined yearly through actuarial studies and reports. Trial Tr. 61:19-22, Nov. 10, 2015 (Mayor Traficante). By the early 1990s, the actuarial reports indicated that the "appropriations [to the pension] were not keeping up with that growth." Id. at 60:16-17. As a result, Mayor Traficante prudently addressed the issue of the expanding unfunded pension liability. Id. at 61:23-62:14. To achieve the goal, he sought the assistance of the police and fire unions. Id. at 62:3-14. The first step was to ask the unions to reopen their contracts with the potential of moving the employees from the City pension system into the state pension system. Id. Initially, this notion was dismissed by the unions; however, after discussions, an agreement was reached in 1996. Id. at 62:24-63:11.

         This agreement transformed the City pension system by creating a two-tier pension system. Id. at 64:13-15, 70:18-71:1. Members of the police and fire departments hired after July 1, 1995 would enroll in the state pension system. Id. at 64:13-15, 70:18-71:1; see also Exs. 88A, Sec. 2-24-23(C)(1); 89A, Sec. 1-10-11(C)(1). Employees with less than five years of service on July 1, 1995 could elect to transfer into the state pension system or remain in the City pension system. Trial Tr. 70:7-11, Nov. 10, 2015; see also Exs. 88A, Secs. 2-24-23(B)(1), 2-24-23(A)(1); 89A, Secs. 1-10-11(B)(1), 1-10-11(A)(1). The agreement also provided, for the first time, a minimum 3% compounded COLA upon retirement with an escalator clause.[4] Trial Tr. 72:12-23, 88:12-90:6, 101:21-25, Nov. 10, 2015; see also Exs. 88A, Sec 2-24-23(A)(20); 89A, Sec. 1-10-11(A)(3). The escalator clause ensured that there would be an increase in the compounded COLA equivalent to any raise active employees received. Trial Tr. 72:12-23, 88:12-90:6, 101:21-25, Nov. 10, 2015; see also Exs. 88A, Sec. 2-24-23(A)(20); 89A, Sec. 1-10-11(A)(3). The COLA was implemented by the City at the insistence of the unions to achieve parity with the state pension system. Trial Tr. 64:8-12, Nov. 10, 2015. This agreement was ratified by the unions and codified into law by the passage of two ordinances on November 25, 1996 (1996 Ordinances). Id. at 63:1-11, 68:24-69:22, 72:10-11; see also Exs. 88A, 89A.

         CBAs[5] negotiated between the City and the IBPO after the 1996 Ordinances incorporated the provisions of the 1996 Ordinances, including the 3% compounded COLA with an escalator clause.[6] In addition, CBAs negotiated between the City and the IAFF subsequent to the 1996 Ordinances specifically included a minimum 3% compounded COLA with an escalator clause.[7]

         Prior to instituting these changes, Mayor Traficante considered many options such as accessing the rainy day fund. Trial Tr. 102:9-25, 107:24-108:10, Nov. 10, 2015 (Mayor Traficante). All alternatives were dismissed. Id. at 102:9-25, 107:24-108:10. For instance, the suggestion to secure a pension obligation bond was dismissed because it would have increased the debt service of the City. Id. at 104:21-105:7. A supplemental tax was also rejected. Id. at 108:14-109:14. Mayor Traficante felt that another tax increase would be harmful to City taxpayers who had faced no fewer than six tax increases since 1985. Id. Additionally, the privatization of the wastewater treatment plant was explored. Id. at 110:1-25. The option was deemed imprudent. Id.

         Despite these crucial changes to the City pension system, the unfunded accrued liability continued to grow. By 1999, the unfunded accrued liability reached a total of $169 million for police officers and firefighters. Id. at 100:13-15; see also Ex. 60. One of the biggest factors that drove the growth of the unfunded accrued liability was the newly-implemented compounded COLA. Trial Tr. 100:22-101:4, Nov. 10, 2015. Although the growth of the unfunded accrued liability was recognized as an issue, this administration was unable to achieve additional modifications due to the significant achievements accomplished in 1996. Id. at 101:11-25.

         The structural deficit continued to grow in the years following the Traficante administration. Id. at 116:8-16 (Mayor O'Leary). Mayor John R. O'Leary was elected and assumed office in 1999. Id. at 115:1-6, 116:1-3. During his tenure, there remained a structural deficit as well as challenges with respect to the unfunded pension liability. Id. at 116:18-117:5. In an effort to meet the City's obligations to pay retirees' pension and healthcare obligations, Mayor O'Leary, during his fourth and final year as mayor, borrowed against the pension fund which was repaid the following year. Id. at 120:8-21, 122:24-123:12.

         The issue of the expanding unfunded pension liability was confronted in 2008, when Allan Fung was elected Mayor. Trial Tr. 2:20-21, 9:19-23, Nov. 12, 2015 (Mayor Fung). As with his predecessors, Mayor Fung was responsible for overseeing the City's budget, including the City's pension plan. Id. at 2:22-4:1. The major sources of revenue for the City continued to be the tax levy, state aid, and grant money. Trial Tr. 3:19-23, Nov. 13, 2015 (Mr. Strom). These sources were substantially reduced because of the negative economic conditions developing during the initial days of the Fung administration. Among the many economic challenges encountered were the Great Recession, rising unemployment, and the devaluation of the City property assessment. Trial Tr. 13:9-17, 17:10-20, Nov. 12, 2015 (Mayor Fung). It was estimated that the property assessments decreased by one billion dollars between 2008 and 2009. Id. at 13:9-17, 17:10-20; see also Exs. YYY, ZZZ. This resulted in lower tax revenue for the City. Trial Tr. 17:10-20, Nov. 12, 2015. To compound matters, the City was challenged by two natural disasters in March of 2010 that cost the City in excess of $1.4 million. Id. at 24:17-25:5.

         Colliding with these events came a substantial decrease in state aid due to the state budgetary crisis. Id. at 19:25-20:3. State aid decreased from twenty-two million dollars in fiscal year 2007 to less than six million dollars in fiscal year 2011. Trial Tr. 11:5-12:7, Nov. 13, 2015 (Mr. Strom); see also Exs. H, I, J, K, L. The reduction in aid created a nearly five percent gap in the budget. Trial Tr. 14:5-12, Nov. 13, 2015. The overall fiscal health of the City was disabled. Trial Tr. 22:18-23:19, Nov. 12, 2015 (Mayor Fung); see also Ex. R. As a consequence, Moody's Investors Services downgraded the City's bond rating. Trial Tr. 23:20-24:14, 27:25-28:25, Nov. 12, 2015; see also Exs. R, X. There were several reasons listed to support the downgrade, including the continued underfunding of the annual required contribution and the anticipated increase in the unfunded pension liability, among others. Id.; see also Exs. R, X.

         Faced with these financial difficulties, the City undertook significant expenditure cuts and many attempts to increase City revenue. Trial Tr. 16:11-17:3, Nov. 13, 2015; see also Ex. MM. Mayor Fung began to tackle the problem through the implementation of a series of steps that included cost cutting measures. Trial Tr. 12:8-19, Nov. 12, 2015 (Mayor Fung). The administration explored cuts that included a reduction in staff and an increase in the healthcare co-pays for City employees. Id. A multi-year pay freeze was instituted to further reduce costs. Id. at 71:12-72:17; see also Ex. JJ. Public motor vehicles and buildings were sold for revenue. Trial Tr. 70:20-71:3, 144:7-16, Nov. 12, 2015; see also Ex. JJ.

         The Fung administration also reviewed the City's pension system. Trial Tr. 29:1-6, Nov. 12, 2015. The City pension system's large, unfunded liability was a result of historical underfunding as well as the high cost of the compounded COLAs. Id. at 31:4-17. By 2011, the unfunded liability totaled $256 million, with $35 million in assets. Id. at 30:6-15, 39:5-21; see also Exs. U, Y. There were approximately 480 participants and beneficiaries in the City pension system. Trial Tr. 29:7-12, Nov. 12, 2015. Of those, an estimated fifty-seven were active employees. Id. at 29:13-18. A 2011 report estimated that-with demographic and economic assumption changes-the unfunded and accrued liability actually would increase to approximately $271 million. Id. at 46:11-21; see also Ex. Y. Additionally, the City made less than the 100% annual required contribution (ARC)[8] to the pension for fiscal years 2009, 2010, and 2012. Trial Tr. 41:15-42:16, Nov. 12, 2015; see also Ex. U. With demographic and economic assumption changes taken into account, the ARC increased by several million dollars a year in fiscal year 2010. Trial Tr. 47:13-21, Nov. 12, 2015; see also Ex. U.

         The decision to act was based on a real fear of bankruptcy. Trial Tr. 81:11-19, 82:1-15, 121:18-122:2, 126:11-23, Nov. 12, 2015 (Mayor Fung). Mayor Fung had witnessed the Central Falls bankruptcy in 2011, and he recognized that bankruptcy was also a possibility for Cranston. Id. Mayor Fung noted that the Auditor General's report from 2011 detailed Cranston's pension problem and that all three ratings agencies indicated pension issues in Cranston. Id. at 82:19- 83:11. Although it was conceded that the Auditor General had sounded the alarm in its 2002 report on the City's pension system, there was a firm testified belief that the total context of budgetary crises, inherited deficits, unanticipated cuts in state aid, and the 2010 natural disasters constituted an unexpected fiscal emergency in 2009. Trial Tr. 13:3-14:24, Nov. 13, 2015 (Mayor Fung); see also Exs. HHHH, IIII, 57.

         Also occurring during this timeframe was the state's undertaking to address the status of locally administered pension plans. Trial Tr. 33:21-25, Nov. 12, 2015. Mayor Fung was a member of the Pension Study Commission charged with analyzing pension issues and formulating recommendations to the Governor and the General Treasurer. Id. at 34:1-6.

         Ultimately, the Rhode Island Retirement Security Act (RIRSA) was passed in 2011. G.L. 1956 §§ 45-65-1 et seq.; see also Ex. VVV. Under RIRSA, any municipal pension plan that was less than sixty percent funded was defined to be in "critical status." Trial Tr. 5:22-6:5, 35:1- 36:19, Nov. 12, 2015 (Mayor Fung); see also Ex. VVV. A municipality that was deemed to be in critical status was tasked with two responsibilities: (1) submitting a notice of critical status to plan participants and beneficiaries and to the general assembly, governor, general treasurer, director of revenue, and auditor general within thirty days; and (2) submitting a reasonable alternative funding improvement plan to emerge from critical status to the Pension Study Commission within 180 days of sending the critical status notice. Trial Tr. 36:7-19, Nov. 12, 2015; see also Ex. VVV. If a critical status municipality failed to comply, it faced reductions in state aid. Trial Tr. 36:12-19, 37:6-14, Nov. 12, 2015; see also Ex. VVV. If deemed to be in critical status, the City had twenty years to achieve sixty percent funding status-and thus emerge from critical status-or it would face significant further reductions in state aid. Trial Tr. 85:16-86:8, 95:4-6, 102:17-25, Nov. 12, 2015.

         The City met the rubric for critical status. Id. at 48:1-11. As a result, on April 1, 2012, the City's actuary sent a letter to the Cranston Finance Director indicating that the City was in critical status as defined in RIRSA. Id. at 48:6-11; see also Ex. Z. A notice of critical status designation was sent to all of the City pension system participants and beneficiaries as well as to the various state officials required by RIRSA on April 6, 2012. Trial Tr. 48:23-49:19, Nov. 12, 2015; see also Exs. AA, BB, CC, DD, EE, FF. The City had 180 days to submit a reasonable alternative funding improvement plan to the Pension Study Commission. Trial Tr. 87:19-25, Nov. 12, 2015; see also Ex. VVV. At the time, Cranston's pension was 16.9% funded and one of the worst in the state. Trial Tr. 61:16-20, Nov. 12, 2015; see also Ex. GG. For fiscal year 2012, the City was required to increase its ARC to pension payments by $14 million to 100% fund the plan. Trial Tr. 53:15-54:6, Nov. 12, 2015; see also Ex. GGGG. It was concluded that obtaining $14 million through spending cuts would decimate city services, eliminate parks and recreation services, and shutter libraries. Trial Tr. 57:3-20, Nov. 12, 2015; see also Ex. GGGG.

         Ultimately, it was decided that the solution involved the suspension of the 3% compounded COLA. The suspension of the 3% compounded COLA, however, was not the only option considered by the Fung administration. Trial Tr. 89:1-11, 94:9-15, 112:6-11, Nov. 12, 2015 (Mayor Fung); see also Trial Tr. 9:19-11:7, Nov. 13, 2015 (Mayor Fung). Over twenty-five different alternatives were researched and considered with City actuaries, and it was only after a long process that the ten-year suspension of the 3% compounded COLA was chosen. Trial Tr. 89:1-11, 94:9-15, 112:6-11, Nov. 12, 2015 (Mayor Fung); see also Trial Tr. 25:25-26:11, Nov. 13, 2015 (Mr. Strom). With the assistance of consultants from Buck Consulting, the City examined prudent measures to achieve a more sustainable City pension system. Trial Tr. 25:25- 26:11, Nov. 13, 2015 (Mr. Strom). Raising the employee contributions was not seriously considered because of the relatively small number of current employees and the large size of the unfunded liability. Trial Tr. 77:25-78:13. Nov. 12, 2015 (Mayor Fung). Funds in the rainy day fund were also not considered in resolving the pension crisis, as Mayor Fung thought it unwise to use those funds for a systemic problem. Id. at 120:9-17.

         Equally unsuitable to achieve fiscal readiness was raising taxes. Trial Tr. 18:6-16, Nov. 13, 2015 (Mr. Strom). The City had recently undergone tax increases and further tax increases were deemed unsustainable to taxpayers. Id. In Cranston, the assessed value of real and tangible property from 2008 to 2015 declined, whereas the net tax levy increased. Id. at 18:25-21:11, 22:2-12; see also Exs. YYY, ZZZ, AAAA, BBBB, CCCC, DDDD, EEEE, FFFF. Indeed, the City was listed by the State as a "[d]istressed [c]ommunity" for at least two years, indicating a high tax burden. Trial Tr. 22:13-23:4, Nov. 13, 2015. In fact, between 1985 and 2013, there were at least fifteen tax increases in the City. Trial Tr. 76:13-16, Nov. 12, 2015 (Mayor Fung); see also Ex. XXX. Cranston residents were paying high taxes for extremely limited services. Trial Tr. 59:2-5, Nov. 12, 2015. Any subsequent tax increases to deal with the crisis were not feasible. Id. at 76:21-23, 80:11-15. Furthermore, a tax increase would defy the state property tax cap. Trial Tr. 37:10-23, Nov. 13, 2015 (Mr. Strom). The cap prevents any municipality from raising the tax levy by more than 4% in any fiscal year. Id.

         It was clear that to avert disaster the City had to act. The primary reason that the suspension of the 3% compounded COLA for ten years appeared fruitful was to rescue the pension plan from extinction. Trial Tr. 121:20-23, Nov. 12, 2015 (Mayor Fung). The suspension of the 3% compounded COLA suspension was a measure of last resort. Trial Tr. 27:15-23, Nov. 13, 2015 (Mayor Fung). In the end, it was concluded that the 3% compounded COLA suspension would reduce the City's unfunded pension liability and ultimately reverse the Moody's Investors Service's negative outlook on the City's bonds. Trial Tr. 28:14-29:16, Nov. 13, 2015; see also Exs. X, PPP, QQQ.

         The Mayor created an alternative funding improvement plan and presented it to stakeholders through a series of meetings. Trial Tr. 59:10-15, 81:20-24, Nov. 12, 2015; see also Exs. HH, KK. The Mayor attempted to openly and transparently resolve the crisis. Trial Tr. 61:21-62:12, Nov. 12, 2015. Over one hundred police officers, firefighters, and/or retirees attended a meeting on September 13, 2012 with Mayor Fung to discuss what could be done. Id. at 63:19-64:13; see also Ex. JJ. At this meeting, Mayor Fung presented a PowerPoint slideshow that provided information as to the City's past and present financial situation, RIRSA's requirements, and a proposed funding improvement plan. Trial Tr. 64:24-70:13, Nov. 12, 2015; Ex. JJ. The slideshow attempted to explain to pension plan participants and beneficiaries why the City needed to act now, how precarious the City's financial situation was, and how the compounded COLAs impacted the pension fund. Trial Tr. 81:5-83:24, Nov. 12, 2015; see also Ex. JJ. The suspension of the 3% compounded COLA was proposed. Trial Tr. 84:19-85:15, Nov. 12, 2015; see also Ex. JJ. It was explained by Mayor Fung that the proposal would accomplish the goal of removing the City pension system from critical status within twenty years. Trial Tr. 86:9-14, Nov. 12, 2015. The presentation included a suggestion that retirees engage legal counsel to negotiate; Mayor Fung insisted that, although he had proposed a solution, he was open to considering additional alternatives. Id. at 88:21-89:11; see also Ex. JJ. Mayor Fung had a similar meeting on September 25, 2012. Trial Tr. 90:11-19, Nov. 12, 2015.

         Mayor Fung proposed two ordinances at a special meeting of the Cranston City Council Finance Committee on October 25, 2012. Trial Tr. 90:14-92:2, Nov. 12, 2015; see also Ex. NN. The ordinances would implement a ten-year suspension of the 3% compounded COLA. Trial Tr. 90:14-92:2, Nov. 12, 2015; see also Ex. NN. During this meeting, Mayor Fung made a presentation that contained much of the same information from the slideshow presented on September 13, 2012. Trial Tr. 93:19-94:24, Nov. 12, 2015; see also Ex. MM. By this time, the City and its actuaries had considered over twenty-five different alternatives and had narrowed the alternatives to four options for consideration. Trial Tr. 93:19-94:24, Nov. 12, 2015; see also Ex. MM. These options compared the effect of suspending the 3% compounded COLA with various amortization periods on ARC contributions to determine the year in which the City was expected to emerge from critical status. Trial Tr. 94:9-98:5, Nov. 12, 2015; see also Ex. MM. If the status quo was to remain, the City would be required to infuse an additional $100 million over twenty years to emerge from critical status in a timely fashion. Trial Tr. 95:11-97:7, Nov. 12, 2015; see also Ex. MM. By suspending the 3% compounded COLA for ten years, the City would emerge from critical status by 2032, within the Pension Study Commission's twenty-year requirement. Trial Tr. 97:8-22, Nov. 12, 2105; see also Ex. MM.

         On November 11, 2012, Mayor Fung sent a letter to the Pension Study Commission containing the four potential scenarios for emerging from critical status. Trial Tr. 98:9-19, Nov. 12, 2015; see also Ex. QQ. The four options included a ten-year suspension of the 3% compounded COLA, a fifteen-year suspension of the 3% compounded COLA, a permanent suspension of the 3% compounded COLA with large ARC in fiscal years 2013 and 2014, and a permanent suspension of the 3% compounded COLA with different ARC in fiscal years 2013 and 2014. Trial Tr. 99:2-100:11, Nov. 12, 2015; see also Ex. QQ.

         During this timeframe, Mayor Fung was approached by retirees as well as union representatives from the IBPO and the IAFF seeking to resolve the crisis. Trial Tr. 103:4-25, Nov. 12, 2015. In an attempt to negotiate in good faith, Mayor Fung suspended his efforts to seek passage of the ordinances. Trial Tr. 104:1-12, Nov. 12, 2015. He commenced a dialogue with the City pension system participants and beneficiaries. Id. Starting in January of 2013, Mayor Fung met with Mr. Paul Valletta, president of the IAFF; Mr. Ken Rouleau, vice president of the IAFF; Mr. Stephen Antonucci, president of the IBPO; police retiree representatives, and others. Trial Tr. 106:17-107:20, Nov. 12, 2015. Meetings between Mayor Fung and interested parties occurred on January 11, 2013; January 29, 2013; February 14, 2013; February 26, 2013; March 4, 2013; and March 8, 2013. Id. at 108:17-109:11; see also Ex. TT. Mayor Fung testified that all of these meetings were designed to provide information to retirees and engage in an open dialogue. Trial Tr. 109:9-21, 110:4-18, Nov. 12, 2015. At the meetings, over twenty different scenarios were discussed with retirees, including alternative compounded COLA suspension scenarios. Id. at 112:6-11; see also Exs. XX, ZZ, AAA, DDD, III. Ironically, one goal of holding these meetings was to avoid a court challenge. Trial Tr. 110:11-18, Nov. 12, 2015. Ultimately, the stakeholders reached an agreement. Id. at 115:11-14.

         The agreement resulted in the passage of two ordinances by the Cranston City Council on April 23, 2013 amending the Cranston City Code that governed police and firefighter retiree pensions to suspend the 3% compounded COLA for a period of ten years (2013 Ordinances).[9] Id. at 101:1-7, 116:17-117:1, Nov. 12, 2015; see also Exs. HHHH, IIII. In year eleven, the COLA is reinstated at a fixed 3% compounded amount. Trial Tr. 22:12-16, Nov. 13, 2015 (Mayor Fung); see also Exs. HHHH, IIII.

         The implementation of these changes led the Cranston Police Department Retirees Association, Inc. and the Local 1363 Retirees Association to bring suit in April 2013 against the City, alleging that the 2013 Ordinances violated, inter alia, the contract clauses of the Rhode Island and United States Constitutions. See Joint Statement of Undisputed Facts at ¶ 31; see also Local 1363 Retirees Ass'n v. City of Cranston, PC-2013-1899. The parties negotiated and reached an agreement in the summer of 2013 (Settlement Agreement). Id. at ¶ 32. Paul Valletta Jr., President of the local IAFF, was the lead negotiator for the union. Trial Tr. 2:10-3:2, Nov. 17, 2015 (Mr. Valletta). Mr. Valletta was gravely concerned with the passage of RIRSA in 2011. Id. at 6:12-21. The purpose of the Settlement Agreement was to save the pension. Id. at 12:12- 17. Prior to the Settlement Agreement, other options were explored, including increasing taxes, lay-offs, reductions in pay, and selling City assets. Id. at 13:4-15:17. It was concluded that these were not feasible or reasonable. Id.

         The terms of the Settlement Agreement included a suspension of the 3% compounded COLA on alternating years for a period of ten years; in years eleven and twelve a compounded COLA is set at one and a half percent; and for years thirteen and forward the COLA returns to 3% compounded. See Trial Tr. 115:15-116:3, Nov. 12, 2015 (Mayor Fung); Trial Tr. 23:11-19, Nov. 13, 2015 (Mayor Fung); see also Ex. JJJJ. During a fairness hearing, the Court found the Settlement Agreement fair and reasonable and approved it on December 13, 2013. Joint Statement of Undisputed Facts at ¶ 41.

         Those dissatisfied with the Settlement Agreement were afforded the opportunity to elect to exclude themselves from the Settlement Agreement. Id. at ¶¶ 36, 40. Those individuals retained the right to sue the City. Id. CPRAC is comprised of those individuals who opted out of the Settlement Agreement. Trial Tr. 51:17-52:22, Nov. 9, 2015 (Mr. Gilkenson).

         A non-jury trial was held over the course of six days, during which sixteen witnesses testified. At the close of CPRAC's evidence, the City moved for judgment as a matter of law pursuant to Super. R. Civ. P. 52(c). Trial Tr. 117:25-122:24, Nov. 17, 2015. The Court reserved on the City's motion. Id. at 127:19.

         II Standard of Review

         Rule 52(a) of the Superior Court Rules of Civil Procedure (Rule 52(a)) provides that "[i]n all actions tried upon the facts without a jury . . . the court shall find the facts specially and state separately its conclusions of law . . . ." Super. R. Civ. P. 52(a). Accordingly, in a non-jury trial, "'[t]he trial justice sits as a trier of fact as well as of law.'" Parella v. Montalbano, 899 A.2d 1226, 1239 (R.I. 2006) (quoting Hood v. Hawkins, 478 A.2d 181, 184 (R.I. 1984)). In so doing, she "'weighs and considers the evidence, passes upon the credibility of the witnesses, and draws proper inferences.'" Id. (quoting Hood, 478 A.2d at 184). Additionally, "it is permissible for the trial justice to 'draw inferences from the testimony of witnesses, and such inferences, if reasonable, are entitled on review to the same weight as other factual determinations.'" Cahill v. Morrow, 11 A.3d 82, 86 (R.I. 2011) (quoting DeSimone Elec., Inc. v. CMG, Inc., 901 A.2d 613, 621 (R.I. 2006)) .

         However, "'extensive analysis'" is not required of the trial justice. Wilby v. Savoie, 86 A.3d 362, 372 (R.I. 2014) (quoting Connor v. Schlemmer, 996 A.2d 98, 109 (R.I. 2010)). Indeed, the "'trial justice's analysis of the evidence and findings in the bench trial context need not be exhaustive . . . if the decision reasonably indicates that [he or she] exercised [his or her] independent judgment in passing on the weight of the testimony and credibility of the witnesses . . . .'" Id. (quoting Notarantonio v. Notarantonio, 941 A.2d 138, 144-45 (R.I. 2008)). Brief findings of fact and conclusions of law are sufficient as long as they squarely address and resolve controlling factual and legal issues.[10] See Broadley v. State, 939 A.2d 1016, 1021 (R.I. 2008).

         This Court, sitting without a jury, also possesses discretion "to grant or deny declaratory relief pursuant to the [Uniform Declaratory Judgments Act]" as well as discretion "to grant or deny injunctive relief as a court of general equitable jurisdiction." R.I. Republican Party v. Daluz, 961 A.2d 287, 295 (R.I. 2008); see also §§ 9-30-1 to 9-30-16; see also § 8-2-13. The Uniform Declaratory Judgments Act grants the Superior Court "power to declare rights, status, and other legal relations whether or not further relief is or could be claimed . . . and such declarations shall have the force and effect of a final judgment or decree." Sec. 9-30-1. Furthermore, "[a] decision to grant or deny declaratory or injunctive relief is addressed to the sound discretion of the trial justice . . . ." Foster Glocester Reg'l Sch. Bldg. Comm. v. Sette, 996 A.2d 1120, 1124 (R.I. 2010).

         III

         Analysis

         A

         Contract Clause

         The contract clause of the United States Constitution as well as the Rhode Island Constitution serves to limit the power of the state to modify and regulate contracts. See Brennan v. Kirby, 529 A.2d 633, 638 n.7 (R.I. 1987) (holding that Rhode Island courts "will rely on federal case authority in this area"); R.I. Const. art. I, § 12; U.S. Const. art. I, § 10. Although the contract clause appears to be an absolute bar to impairment of public and private contracts, the United States Supreme Court has not interpreted it as such. U.S. Trust Co. of N.Y. v. N.J., 431 U.S. 1, 20 (1977) (holding that the contract clause "'is not to be read with literal exactness like a mathematical formula.'") (quoting Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398, 428 (1934)); see also Energy Reserves Grp., Inc. v. Kan. Power and Light Co., 459 U.S. 400, 410 (1983).

         The apparent absolute prohibition of the contract clause has been "accommodated to the inherent police power of the State 'to safeguard the vital interests of its people.'" Energy Reserves Grp., Inc., 459 U.S. at 410 (quoting Blaisdell, 290 U.S. at 434). Central to the interpretation of the contract clause is the careful balance struck between retaining "any meaning at all" from the words of the text and "the exercise of [a state's] otherwise legitimate police power." Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 242 (1978); see also Patrick J. Rohan, 1 Zoning and Land Use Controls § 5.05[3] (1997) (noting the tension from the "conflict between the contracts clause of the United States Constitution and the necessary powers inherent in a sovereign state"). This balance furthers the "principle of harmonizing the constitutional prohibition with the necessary residuum of state power . . . ." City of El Paso v. Simmons, 379 U.S. 497, 508 (1965). Therefore, "state laws that impair an obligation under a contract do not necessarily give rise to a viable Contracts Clause claim." Buffalo Teachers Fed'n v. Tobe, 464 F.3d 362, 368 (2d Cir. 2006) (citing U.S. Trust Co., 431 U.S. at 16).

         Determining whether a state law unconstitutionally impairs the obligations of contract requires this Court to conduct a three-prong analysis. See Energy Reserves Grp., 459 U.S. at 411-13; see also In re Advisory Op. to the Governor ...


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