Providence extends furloughs as city offers retirement incentive to avoid layoffs

Providence

PROVIDENCE, R.I. (WPRI) — Mayor Jorge Elorza’s administration is extending city employee furloughs covered by Rhode Island’s WorkShare program until early 2021 in a continued effort to trim spending amid the pandemic.

The administration is also offering financial incentives for union employees to retire by the end of the year if they are older or have been with the city a long time.

The retirement incentive includes a cash payment, additional medical insurance for a period of time plus a payment for accrued vacation time, according to an email sent to city employees from Human Resources Director Emmanuel Echevarria.

Employees over 65 with 10 years of service with the city will get $5,000 if they agree to retire, plus accrued vacation time and four years of “preferred provider” health coverage (or two years for the employee and a spouse.) After that time the retiree would get the usual health coverage spelled out in the union contract.

An additional 45 employees with 28 years of service who are not over 65 are also being incentivized to retire by the end of the year, with a $3,500 payment, accrued vacation time and a prescription and dental plan until June 30, 2022.

The WorkShare program has also expanded beyond union employees to include management positions, according to Patricia Socarras, Elorza’s press secretary. Those in the program are furloughed for part of the week — between 10% and 50% of their weekly hours — and receive unemployment payments from the state during the time they are not paid by the city.

WorkShare was originally scheduled to go from June 1 until Sept. 5, with 500 employees on the temporary furlough program. At the start of the program employees were receiving an additional $600 per week through the federal CARES Act, but the additional payments expired over the summer. The program was extended following weeks of negotiation with union leaders.

The furloughs are now scheduled to continue until January, Socarras said.

“Thanks to this new agreement, no layoffs have been made at this time,” she added.

It was not immediately clear how much money the Elorza administration is projecting in savings between the furloughs and the early retirements.

The city is in a budget crunch due to the pandemic, its uncertainty exacerbated by the fact that the state budget for the fiscal year that began July 1 has not yet been passed. The state provides millions of dollars in aid to cities, but it is unclear if the General Assembly will maintain the same levels of aid when it does reconvene late this fall.

In Providence, state PILOT aid — which helps make up for the lack of property taxes paid by exempt institutions such as hospitals and universities — is typically sent to the city in a lump sum in July and is applied to the prior year’s budget. Without it, the city started the new fiscal year on July 1 with at least a $33 million hole in last year’s budget.

With the state running on a month-to-month budget for now, Providence’s chief financial officer Larry Mancini said the state has sent three one-twelfth payments, totaling about $8 million to the city, all of which was deposited into the pension fund. The city still owes $23.9 million to the pension fund for last year, Mancini said.

The city’s coffers have also seen lower meals taxes during the pandemic (roughly half the normal amount in July and August), plus “virtually nonexistent” hotel tax revenue, Mancini said.

Still, he told the Council Finance Committee he expects the 2019-20 budget to eventually be balanced once the rest of the state aid comes in, in addition to revenue from the recent tax sale held in August, which was related to delinquent taxpayers from the prior year.

But future revenues are still uncertain. The council is considering a proposed ordinance that would suspend the tax sale of delinquent properties for the current fiscal year, taking into account those who may not be able to pay their taxes due to the financial hardship of the pandemic.

Steph Machado (smachado@wpri.com) covers Providence, politics and more for WPRI 12. Follow her on Twitter and on Facebook

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