Group Files Suit Against Taveras and City After GoLocal Investigation

Wednesday, July 16, 2014

After a GoLocalProv investigation into the First Source program, Providence's community group DARE (Direct Action for Rights and Equality) announced that it has sued the City of Providence and Mayor Angel Taveras in Superior Court for its failure to enforce the First Source Ordinance.

The Investigation

The Stephen Beale article, INVESTIGATION: Companies Taking Millions in Tax Breaks, Loans Stiffing City for Jobs, found that companies are taking millions in tax breaks, loans, and contracts from Providence without reporting back to the city on the new jobs they are creating or attempting to hire Providence residents for those jobs as mandated by an ordinance.

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The First Source ordinance, passed in 1985 requires that any entity with more than four employees that receives $25,000 or more in public investment follow detailed procedures to ensure that Providence residents have the first opportunity to access any and all job openings. The ordinance includes “tax concessions, and/or abatements,... grants-in-aid, grants from the office of community development, office of economic development, or other federal aid programs administered by the City of Providence.” But according to the City's own reports, out of 1,110 new job openings reported by companies covered under the law, only 41 have been filled with First Source referrals.

“This ordinance has been on the books for nearly thirty years, and the City is still refusing to enforce it,” said DARE's executive director Fred Ordoñez. “They need to understand that trickle-down economics does not work, especially when they ignore the only tool we have to make the resources trickle down. Using our precious tax dollars to fund large corporations like Blue Cross and wealthy developers like Buff Chace and then ignoring their legal obligation to provide jobs for the people of this City is irresponsible, and illegal.”

How Long? Too long!

According to the lawsuit, DARE has communicated regularly with the City, including Mayor Taveras, following a similar 2006 lawsuit that DARE won. But City officials have told the community organizing group that enforcement of the ordinance is not a priority, and that the First Source Director's job does not include enforcement activity, despite specific steps the Ordinance requires of the director.

“When they get tax breaks, they promise to keep Providence residents working – that's their end of the bargain,” explained co-Plaintiff Richard Lucas, who signed up for the list in 2006 and has yet to receive a job referral through First Source. Lucas went on to describe that the City has done a poor job of informing recipients of its largesse of their obligations under the law. “Many of them don't even know about First Source.”

Responses by the City's law department to public records requests by DARE revealed that the City has no written records of any communications to employers covered under the ordinance that spell out subsidy recipients' obligations under the Ordinance, nor does it have any written records of sanctions, as required under the law. “The crime rate goes up when people don't have jobs,” said Lucas. “Many people in the city don't have jobs. They have nothing to do; they're depressed.”

The Law Suit

The lawsuit filed by DARE seeks a court-appointed monitor to make sure the City notifies employers of the law and begins to sanction employers who don't comply. “When residents don't comply with a City ordinance or regulation, even if it's something as simple as not having your recycling can filled with the right stuff, we can expect to get a citation and even a fine, whether we know about the law or not. Why does the City choose to enforce rules against everyday people but lets big business off the hook?” said Ordoñez.

Defendants named in the suit included Mayor Angel Taveras, and Director of Economic Development James Bennett. In addition to the court-appointed monitor, the complaint seeks a Temporary Restraining Order to prevent the City from issuing any new Tax Stabilization Agreements, Providence Economic Development Partnership loans, or other sources of funding covered under the ordinance, until it has improved its compliance with the ordinance.

The ordinance also requires the City to publicize the First Source List every three months, something that plaintiffs assert has not happened. And job-seekers with no regular access to computers or internet service are unable to participate in the program, since the City offers no alternative means to sign up other than its web-based registration. Rather than automatically referring qualified applicants to employers looking to hire, the program requires that applicants constantly access the website to search for new job listings, manage application materials, and upload resumes. “This just makes the digital divide worse by weeding out people who can't afford computers or internet service because they're out of work to begin with,” said Lucas.

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Related Slideshow: Companies in Violation of City Ordinance

Related Articles

• Companies in Violation of City Ordinance: See the List
• INVESTIGATION: Companies Taking Millions in Tax Breaks, Loans Stiffing City for Jobs
• INVESTIGATION: Providence’s Taveras Ignored Report on Recreation
• INVESTIGATION: Nonprofit Misspent Federal Funds, Accused of Endangering Abused Women
• INVESTIGATION: Half of State Magistrates are General Assembly Relatives, Insiders
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• INVESTIGATION: ‘What Is PPAC Hiding Behind the Curtain?’
• INVESTIGATION: RI State Agency Mismanaged $41M in Federal Grants
• INVESTIGATION: RI Did Not Properly Monitor $2.6 Billion in Federal Grants

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