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City Doles out Raises to Top Officials Despite Deficit

Thursday, February 21, 2013

 

Providence has dished out raises to top officials, even as the city continues to battle deficits and a wide number of rank-and-file workers have gone without a pay increase for more than half a decade, GoLocalProv has learned.

Raises ranging from $5,000 to $25,000 were issued to five management-level employees between December 31 and January 7—at the same time that a new audit was released, showing the city ended 2012 with a $15 million deficit. A new report warns that the city is on track to end this year in another deficit, at about $11 million, according to one preliminary estimate.

Some of the raises have come with promotions. Topping the list is David Ortiz, the former press secretary who was promoted to communications director with nearly a $25,000 pay bump.

Second in line with a $13,000 raise is the new director of operations, Alan Sepe, a long-time city worker who once admitted to lying to investigators in Operation Plunder Dome because he “didn’t want to be a rat.” As operations director, Sepe now oversees four departments—Public Works, Parks and Recreation, Purchasing, and Public Property.

Two managers in the Providence Water Supply Board received raises in the form of 5 percent step increases but were not promoted to any new positions. Richard Caruolo and Joseph Spremulli, both deputy managers for separate divisions, each received about $5,000. A third department manager was given about $800 more, according to data provided in response to a record request. (See below table for full breakdown.)

‘Sends the wrong message’

Councilman Luis Aponte said he recognized that Mayor Angel Taveras has the authority to make decisions about spending within his budget—which is the only department budget that is not itemized—but he nonetheless questioned what message the raises sent to the rest of the city. “The question I would have is, in these fiscally challenging times with the austerity measures that have been imposed on the rest of the city employees is this the message we want to send?” Aponte said.

Councilman Davian Sanchez noted that two of the raises were among the Mayor’s personal staff. “David Ortiz and Alan Sepe both worker under the Mayor’s budget and if they’re getting raises what kind of message is that sending to the city?” Sanchez asked.

Over the past two years, pay cuts and benefit reductions have largely been the norm for the bulk of the city workforce—even as some of them have been asked to take on more responsibilities while the city confronted what was once a $110 million deficit.

Across the board, the three major city unions have made concessions and learned to live—and work—with less. The Providence police force has not received a raise in at least six years. They are due to receive their first pay hike in July. When the city firefighters struck a deal to help the city in 2011, they made concessions on minimum manning, vacation time, and pensions and gave up a 3 percent pay increase that summer. Likewise, members of Local 1033 took cuts in pay and longevity in the same year.

The city is still in the midst of winning concessions and increasing revenues. Last year, the city struck a deal with retirees on pension reform that eliminated some of the larger COLAs, but the issue isn’t settled. Retirees have until March 1 to raise objections to the deal and one additional month to opt out of it. A large number of retirees backing out could undermine the reform plan.

The city is also in the process of finalizing an agreement with Providence College that is expected to net $3.8 million in added revenues for the city.

Mayor overspent own budget

The raises for Ortiz and Sepe also stand out because both are funded through the budget for the Mayor’s office. Last year, Taveras overspent the budget for his office by $125,000, the city’s annual audit shows.

Council member Sabina Matos said it was her understanding that funding for both positions is within the budget for the current year. “I would be concerned if they were going to be hiring someone else and spending more money,” added Matos, a member of the Special Committee on Ways and Means, which oversees city spending.

Matos and Councilman Michael Correia said they could see how the raises don’t look good for the city. But both said they understood the rationale behind them. Correia said he would not have supported the raises had there been no justification for them—such as the promotions for Ortiz and Sepe.

The two Providence Water Supply Board members who received raises did not get promotions, but both have taken on added responsibilities over the past year as the department has been reorganized, according to Correia. Matos said that reorganization was actually supposed to save money.

A third council member, Kevin Jackson, also did not object to the raises, saying the funding for them was likely tied to the contracts for the positions to which the city officials had been promoted.

Third round of raises

When Taveras first took office in January 2011, he tackled the city’s staggering $110 million deficit by taking a 10 percent pay cut, making his staff do the same, and eliminating more than a dozen non-union jobs. Taveras said he wanted to lead by example.

But his message of fiscal austerity and shared sacrificed was soon put to the test when the Taveras administration doled out $236,000 worth of salary hikes to non-union workers in late February 2011, leaving some to question what kind of example was being set. At the time, city officials said the raises were promises that had already been made to individual employees under the David Cicilline administration.

Another round of smaller raises followed in the summer, again raising questions of fairness in the face of fiscal austerity.

Yesterday, Ortiz, who is the official city spokesman, did not respond to repeated requests for comment, including questions about why some raises were issued in the absence of promotions and whether the city plans to hire a press secretary.

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