No Accountability for Businesses Taking City Money
Wednesday, March 16, 2011
A number of Providence businesses and nonprofits getting tax breaks and other benefits from the city are not hiring unemployed residents as required by city ordinance, according to a new report obtained by GoLocalProv.
“We have a number of companies that are out of compliance,” said former Internal Auditor James Lombardi, author of the report. “We have to get them in compliance.”
Missing information
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe report found that barely half of the 43 organizations receiving grants through the city have been following the rules. Only 16 of them had hired new employees that met the requirements of the law, known as the First Source Ordinance. Just 22 of them had filed the required quarterly reports between 2007 and 2010.
And that’s not counting all those for-profit corporations benefiting from tax breaks and other forms of financial assistance. They weren’t even on the list the Providence Department of Planning and Development provided to the city auditor.
Yesterday, city officials could not explain why.
“The Taveras administration can’t speak to why the previous administration did not provide the city’s Internal Auditor with a complete list of companies that fall under the First Source Ordinance,” said spokesman David Ortiz.
An official in the Department of Planning and Development declined comment.
'City’s conceded tens of millions of dollars to developers'
“It’s a huge disappointment, but not a big surprise, and it means that the city’s conceded tens of millions of dollars to developers over the years without getting much in return,” said former councilman David Segal.
The lapse in enforcement became such a problem in the mid-2000s that Segal and several other councilmen took former Mayor David Cicilline to court over the issue. In 2006, a Superior Court judge ruled that the city had not been enforcing the ordinance. The issue reared its head again in the race for Congress last year, which pitted Segal and Cicilline against each other in the Democratic Primary for the First District seat.
“Compliance has been an issue,” said Councilman Luis Aponte, who was among those suing Cicilline. “Whether it’s the department lacking the resources or the interest to enforce compliance, it needs to be delved into.”
Another sign the program is not working: only about 150 unemployed residents are on the unemployment list the city maintains, according to Aponte. “I think that’s probably a pretty low percentage of the people unemployed in the City of Providence,” he said.
Taveras ‘fully supportive’ of the program
Ortiz says Providence Mayor Angel Taveras is committed to stronger enforcement of the program.
“Mayor Taveras is fully supportive of First Source and believes companies that receive a tax break from the city should be required to give preference to unemployed Providence residents when making new hires,” said spokesman David Ortiz. He said Taveras is now working on ways to improve compliance and internal tracking of First Source.
Nonprofits say the city needs to improve the program
While large corporations were omitted from the list, a number of the best known local nonprofits were on it, including Amos House, the Boys & Girls Club of Providence, City Year, Crossroads, and the Providence After School Alliance. None of them had any First Source hires listed even though they received grants through the city, according to the report.
But the leaders of two of those organizations yesterday said they actually had hired numerous Providence residents.
At Amos House, more than half of the 50 staff are Providence residents, according to CEO Eileen Hayes. The issue, she said, is that those new employees were not on the city’s official list of unemployed residents. She called for the city to do a better job of letting residents and employers know about the First Source program.
Like Amos House, the Providence After School Alliance counts half of its staff as Providence residents. So why are they listed as having zero First Source employees? Executive Director Hillary Salmons says she simply wasn’t aware she had to fill out quarterly reports on the makeup of her employees—that is, until last year, when the city called and asked for copies of her reports.
She said the program could be improved if the city partnered with a nonprofit. “Let’s take the best of the private sector and the best of government and put them together,” Salmons said.
How can it be fixed?
In his report, Lombardi, who is now the city Treasurer, outlined a number of other possible improvements to the program:
■ Create a comprehensive Web site which companies can use to find out who they can hire under the First Source Ordinance.
■ Impose consequences for companies that do not file the necessary reports with the city.
■ Stop payments to companies that refuse to comply.
■ Change the rules that require companies to participate. Currently, companies with five or more employees receiving any form of aid—such as a tax break or a grant—have to participate. Lombardi says that should be changed to a minimum of 10 employees and $50,000 in financial benefits from the city.
A new commission being formed by the City Council is expected to review those recommendations—and other suggestions for how to improve the program.
