City taxpayers dish out $4M for bonuses

PROVIDENCE, R.I. (WPRI) - When Target 12 revealed last summer that Providence Mayor David Cicilline had pocketed a $5,300 longevity bonus for which he may not have been eligible, the mayor quickly returned the money and blamed the oversight on payroll staff.

Now a new investigation by Target 12 reveals for the first time that city taxpayers are forking over millions of dollars every year for those tenure-based checks.

Longevity bonuses go to everyone who's worked for the city for seven years or more – and a spokeswoman for Mayor-elect Angel Taveras says once he takes office in January he plans to take a hard look at whether the city can still afford them.

Providence doled out an estimated $4.2 million worth of longevity bonuses this year to 1,045 workers in departments ranging from the mayor's office to Roger Williams Park and the North Burial Ground cemetery, according to payroll records obtained and analyzed by Target 12.

Hundreds of additional longevity bonuses went to employees of the school department, whose payroll numbers are calculated separately and were not included in Target 12's analysis.

The 1,045 checks for workers outside the schools this year ranged in size from Fire Chief George Farrell's $15,250 payout – the biggest of all – down to a modest $119 bonus for Lewis Perrotti, a retired police officer.

Cicilline's $5,306 check ranked 245th in size on the list. His predecessor, Vincent "Buddy" Cianci Jr., got a longevity bonus of about $10,000 in 2002, the year he was convicted of racketeering and sentenced to prison.

Police take nearly half

Providence hands out longevity payments as a lump sum after the fiscal year ends on June 30. The size of the bonus is calculated based on an employee’s annual salary and varies based on his or her job.

This year, almost one out of every three city workers outside the schools got a bonus check, although combined the payments accounted for only 3.3 percent of its $125 million total payroll.

The average payout was $3,978, though it was much higher – $7,933 – for the top 100 recipients. Just 135 people took home a combined $1 million worth of the payments.

The 30 largest longevity bonuses all went to police and fire personnel. Nearly half the $4.2 million in bonuses went to the Providence Police Department, whose employees collected about $1.9 million worth of the payments. Police Chief Dean Esserman’s bonus was the second-biggest in the city, at $11,759.

But while most police personnel received a longevity bonus, the same was not true of city firefighters. The fire department only collected $215,663 worth of the payments, and most of its employees did not get one, payroll records show.

Outside those departments, the biggest checks went to Parks Superintendent Robert McMahon, who got $8,288; Acting Public Property Director Alan Sepe, $8,284; and Paul Gadoury, Providence Water's chief engineer, $8,240.

'Unaffordable and unnecessary'

Longevity bonuses are coming under new scrutiny now as Providence's leaders grapple with an ongoing fiscal squeeze.

Last month, Internal Auditor James Lombardi set off a firestorm when he warned that the city government could run out of cash in the coming months because of a dwindling reserve account. Outgoing Mayor David Cicilline and a number of councilmen disputed Lombardi's conclusions.

Either way, the combination of sluggish tax revenue and limited state aid means the city's finances are likely to remain strained next year, and dealing with that "will require shared sacrifice," Arianne Lynch, a spokeswoman for Mayor-elect Taveras, said in an e-mail.

"Mayor-elect Taveras plans to review expenditures across city departments and work closely with the city’s labor unions to find solutions that are affordable and fair to taxpayers and employees," she said. "A discussion about longevity bonuses will be part of those conversations.”

The city's largest labor union, Local 1033 of the Laborers International Union of North America, did not return a message left last week asking for its opinion on the longevity bonuses.

In the past, defenders of the payments have said they benefit not only their recipients but also taxpayers, because they provide an incentive for the city's most experienced workers to stay in their jobs.

Others disagree. In an editorial last year, The Providence Journal called on state and local governments to stop paying bonuses for longevity. "It is a way for politicians and union allies to slip extra money into contracts, often to the confusion and ignorance of the public," the paper said, adding: "This nonsense must stop."

The Rhode Island Statewide Coalition, which advocates for reduced taxation and smaller government, described the bonuses as "unaffordable and unnecessary."

"Longevity pay is part of the list of additional compensation awards which are pushing the public payroll obligation for cities like Providence to the brink of financial collapse," Donna Perry, the organization's spokeswoman, said in an e-mail. "It should be eliminated."

Payments start at seven years

Providence’s city government awards longevity bonuses to employees who have worked there for at least seven years.

Police and fire personnel hired prior to 1996 receive bonuses worth 8 to 11 percent of their annual salaries, depending on their tenure. Their colleagues hired since 1996 get from 7 to 10 percent.

For other city workers, the bonuses start at 4 percent for those who have been on the job between seven and 11 years. The maximum bonus is 7 percent of salary for individuals who have worked for the city 20 years or more.

The city has been handing out longevity bonuses for decades, although officials have at times proposed eliminating or reducing them. The last time the rules changed was in 1999, when unions ratified a new contract that pushed payment of the first bonus back from five years after an employee's start date to seven.

tnesi@wpri.com