Internal Auditor Matt Clarkin, who had been with the city in 2010 when he unveiled Providence’s near financial collapse, addressed his findings in a memo addressed to City Council Finance Chair John Igliozzi.
Clarkin stated that based upon “the proposed personnel changes associated with the reduction of the minimum manning requirement to 88 from 94 per shift, the decommissioning of three pieces of apparatus, and the addition of 12 battalion chiefs, it is projected that these changes will result in a net savings of approximately $9.1 million . . . the Administration projected in its fiscal note that the change to minimum manning clause would result in savings of approximately $16 million during the [five year] period of the [tentative agreement].”
It was Providence Mayor Jorge Elorza who had touted the purported contract savings in September, but the city released a statement in response to Clarkin from Commissioner of Public Safety Steven Pare — which disagreed with Clarkin’s findings.
“The administration stands behind the numbers provided in the fiscal note for the tentative agreement with the firefighters’ union,” Pare. “We aggressively disagree with the claims from the City Council and will respond accordingly.”
City Council President Aponte said that he found the discrepancy “concerning,” however.
“We went through a year of difficult times to get to a point where we could realize some savings,” said Aponte. “You weigh the short term savings and what that means with what the long term structural changes that are provided for in this contract. There are immediate questions about the length of contract that need to be answered."
“We need to ask the administration how they arrive at $16 million [in savings] and what else they didn’t consider, and what might be unknowns, before the committee moves forward,” Aponte added.
The contract was touted as signaling the end to the recent acrimony between the firefighters and Elorza (seen here).
When Elorza announced in September that the city had reached a “tentative agreement” with the firefighters, it was not over the protracted legal battle — and associated costs — but rather the tentative five-year contract reached by both parties that Elorza said would result in $15 million in savings.
As GoLocal reported on September 12:
Providence Mayor Jorge Elorza is claiming $15 million in savings over the next five years in his announcement of a newly negotiated contract with Providence Firefighters on Monday -- but refused to acknowledge the potential of over $9 million in overtime costs still in dispute, stemming from when Elorza changed the department from four platoons to three in 2015.
The following month in October, City Council Finance Chair John Igliozzi accused Elorza and the city of “backing into” the contract, having not received a fiscal note four weeks after the contract and purported savings were touted.
“What is troubling is that the administration touted a contract with all of these savings with no financial backup or fiscal note -- so what is concerning is that they seem to be doing the financial work now, after they negotiated terms, which leads one to believe they're back into these “savings,” said Igliozzi. “Which makes the whole submission of the contract suspect.”
Following Clarkin’s revelation this week, the Providence Firefighters union head Paul Doughty urged the city — and city council — to move forward on the contract.
“I think there's always going to be disagreement of the numbers,” said Doughty, who is the president of Local 799 of the International Association of Firefighters. “Don't lose sight of the fact that it is a contract that saves money regardless of which numbers are more accurate.”
“Every day we sit on this, the bill continues to grow,” said Doughty. “They worry about this, but every month [that goes by] it’s a million in back pay, and that’s [Clarkin’s] own calculation.”
“We just want an up or down vote,” he added. “In any scenario, it’s a money saving contract.”
Related Slideshow: 10 Biggest Issues Facing Providence in 2016
The battle that started last year spills over into 2016. After Mayor Elorza announced he was going to reorganize the Fire Department from four platoons to three with a condensed shift schedule, the firefighters took the battle to court — and callback costs soared with injured firefighters out on leave. Elorza said the change could save the city “as much sat $5 million” in the next fiscal year (FY17) -- but the city is currently seeing red. "Through the middle of December, fire fighter "call back" expense has been $4.7 million, which represents almost all of the $5.05 million budgeted for the entire fiscal year," reported Councilman Sam Zurier on Sunday. "Should this trend continue, the cost of this line item could exceed the budget by $5 million by the end of the year."
Now it all rides on the outcome in the courts. If it ends in a negotiated settlement, the crisis could be averted. If not, firefighter union head Paul Doughty has said that Elorza can “hand over the keys to the city" for bankruptcy.
From the West Side to the East Side, residents across the city in 2015 were organized and mobilized to demand action from the Elorza Administration on crime in the city. GoLocal reported at the end of 2015 that over half of the police department is eligible to retire — and the city still needs to get a new class of officers underway as budgeted. Tensions were high following a Dunkin’ Donuts worker writing #blacklivesmatter on a police officer’s cup (and the Black Major Movement continuing to call for a black major in the department).
Councilman Seth Yurdin announced this week that he is introducing a resolution to establish a special commission to review relations between the Providence Police Department and the community it serves. The Special Commission on Community-Police Relations will review current public safety practices and create opportunity for public input.
It’s been a mild winter so far, so perhaps at least one of the two scourges of the city will be mitigated this coming year. But addressing the conditions of the roads continues to be an issue for Providence. Last year, Mayor Elorza made a public display of commitment to addressing problematic potholes, and also pledged to respond to the rampant graffiti issue in the city that has seen the property destruction spread to private houses.
City Councilman Michael Correia recently put up a $1000 reward to find who was tagging properties in his district. Residents of the city want to feel safe, and that includes driving on roads that won’t inflict damage on their cars (or take out runners and bikers) and that their personal property won’t be destroyed. Graffiti continues to crop up, and it needs to be addressed quickly when it does.
The city’s commercial tax rate might be frozen — for now — but there are a lot of moving pieces. The $36.75 per $1000 rate on commercial properties is among the highest in the country -- a point well-known in RI circles.
“Providence has a problem with the commercial tax rate,” said developer Colin Kane. “With new construction or significant rehab -- the costs aren't supported by current rent.” The property revaluations expected shortly will shed some light how the city will move forward addressing tax rates, but in the meantime, the TSA extensions before the Council are the 600 pound elephant in the room. “The City Council is looking for nickels in the couch cushions because of the fiscal challenges facing the city,” said Kane. “And they weren't caused by this council or mayor, but by the fact that they were kicked down the road. And now we want to malign people like Buff Chace who made the city what it is?”
The owner occupied residential tax rate could be in the crosshairs as the city looks to address revenue issues in the coming year. “Everything’s on the table,” Aponte told GoLocal. And with the revaluation, things could be in flux for the current owner-occupied rate of $19.25 per $1000 .
“Suppose you had a city where there was a wild appreciation of real estate values — that used to happen here, Providence has seen 10% before. State law says you can only increase the levy unilaterally by 4 and a quarter,” said City Counciman Sam Zurier. “So supposed you have a situation where your values go up 10% and you want to collect 4 — you have to reduce the rate by 6%. "
"If values go up enough — even 5% - then the city will get additional money without raising the rate. During a [revaluation] year - you have to get into tax bills versus rates. And when you factor in commercial and non-owner occupied values and rates, it’s tricky.
Providence Schools face a tall order ahead of them. The search is on for a new superintendent following the departure of Dr. Susan Lusi. The current School Board President is stepping down at the end of the month. Providence High Schools scored among the worst in the state following the release of the first year of PARCC test scores. Current School Board member Nick Hemond is slated replace outgoing President Keith Oliveira, but question remains for the choice of the new super. Council President Aponte told GoLocal this week that stability in leadership in the school department is one of the greatest challenges facing the city moving forward. Can that be achieved in 2016?
Lights have been spotted on recently in the Superman Building - i.e. Industrial National Bank Builcing — but the fact remains that the city’s iconic skyscraper remains vacant, which former Mayor Joseph Paolino called one of the biggest issues facing the city (stating that the fact that it remains empty cost him a mortgage from a top bank for an adjacent property).
Citizens Bank is eyeing a new corporate campus somewhere in Rhode Island, and while indications point to one most likely going in the suburbs, a number of business and community leaders are hoping Superman isn’t ruled out completely. Previous efforts to get state support to turn the building into apartments fell flat, and Providence residents are gun-shy about any project looking for public support. But the fact remains that the empty anchor is an eyesore for the city, and getting a tenant — or tenants — in should be a top priority in 2016.
Providence needs more cranes. The city has seen its first one in a while by the Jewelry District with developments at Johnson and Wales, which is a good sign — but the city needs more.
“Owners and property developers want to be treated fairly and play on a level field. Providence does not have a business friendly reputation. This is why there are few cranes in the sky in Providence and very few new businesses coming to the city or planning to expand in the city,” URI Distinguished Professor of Business Edward Mazze told GoLocal earlier. So in order to get the construction equipment in — Providence has to figure out how best to lure businesses here in the first place.
Providence needs a win — or a least a path to victory. Whether that be getting a tenant in Superman, bringing in a notable business, or articulating a concrete plan to move Providence forward, residents want to feel that the city is on the right track.
The City Council recently announced that it received the results of its cluster analysis study to identify where opportunities lie — and now we need to see results. The Mayor made multiple trips abroad in 2015. He campaigned on a promise of doubling exports from Providence in five years. What results will we see from those overseas meetings? Providence wants a concrete vision moving forward.
“Absolutely not,” said City Council President Luis Aponte, as to whether the city could go into receivership in light of its current precarious financial condition.
“If the city loses, Elorza can hand over the keys, because the city will go bankrupt,” has said firefighter union head Paul Doughty regarding the firefighters legal battle over the Mayor’s platoon reduction.
Financial advisor and GoLocal MINDSETTER Michael Riley said receivership is almost a certainty.
“Essentially Providence is bankrupt and insolvent. It is only by illegally borrowing from the pension fund the last 10 to 15 years that have saved them from being sued by creditors, and the lies continue,” said Riley. “Until Providence goes into receivership nothing else can happen — no railroads, no Superman, they are sunk. I consider everything else irrelevant.”
