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A Hummel Report Investigation

Sick Bonuses

Many communities in Rhode Island offer their workers a benefit that private sector employees can only dream about: Cash payouts for unused sick time when they retire. The city of Warwick, though, takes it one step further:  paying veteran union and management workers cash bonuses for not using their allotted sick time during any given year. Despite a multi-million dollar municipal budget gap, the checks went out as usual last month – including bonuses for some managers making six-figure salaries. This week Jim Hummel sits down with Mayor Scott Avedisian to find out why.

SCRIPT

Jim Hummel: We’re in Warwick this week, where the city’s decision to pay 75 management employees bonuses for not calling in sick is raising not only a few eyebrows, but a lot of questions as well.

Warwick, like many communities, is struggling to make up for millions of dollars in lost state aid. So we wondered why dozens of managers – some making six-figure salaries – would get the extra money in such tough times.

``It’s absolutely the wrong message, ’’ says City Councilman Steve Merolla, adding that the administration missed a chance to make a statement to taxpayers. ``We’re in the worst economic recession since the Great Depression. People are losing their homes, they’re getting foreclosed on. They’re losing their jobs; they’re getting pay cuts, no health insurance. And we’re basically saying to the public – by the way – we’re giving bonuses if an employee tells the truth and shows up to work.’’

The Hummel Report found 162 people received bonuses – the lowest a couple of hundred dollars. But we also discovered dozens of high-paying managers who got the extra money, ranging from $1,600 up to nearly $2,000 each.

They include:
The head of the Department of Public Works, whose salary is $111, 000 a year.
The Personnel Director – who makes $101,000.
The Tax Collector, who earns $96,000.
And the head of the Water Department – at almost $90,000.

The total amount taxpayers gave to the 75 managers: nearly $60,000 – all of it unbudgeted.

``The sick leave bonuses have been in existence since the early 1980s,’’ says Mayor Scott Avedisian. He told us the bonuses traditionally helped make up for salary concessions by the unions when budgets were tight – and helped the city cut down on overtime in both the police and fire departments because it was an incentive for employees not to call in sick. Management employees have also been promised a bonus – but have no contractual guarantee.

Hummel: ``Couldn’t you have stepped in and said, Look $60,000. You have people, mayor, who got those bonuses – and I looked – 70, 80, 90, 100, 110 thousand dollars and they got an extra $1,800. What does that say to the guy who may be unemployed or struggling to pay that car tax, what message does that send?’’ Avedisian: ``Well, obviously it sends a bad message, when many people should be thankful they continue to have employment here. ‘’

But the bonuses are not the city’s only concern. Almost a year ago, Avedisian renegotiated contracts with the fire, police and municipal employees unions – that won him short-term salary concessions to help balance the budget – but now lock the city in on healthcare co-pays and continued sick pay bonuses.

Last year alone the fire department paid out more than half a million dollars for unused sick time– double the budgeted amount – including more than a dozen firefighters who retired, some taking a check of more than $20,000 each as they went out the door.
Avedisian admitted in our interview there is such an acute crisis in municipal budgeting these days, he has had to trade tomorrow for today.

``Think about it, every time you hit a bad budget cycle it is `I need relief from where we are today, and that’s how you end up getting additional holidays, additional benefits, additional perks,’ because there’s no cash to give out that time.’’ Hummel: ``Did you think you had leverage a year ago in February, or did the unions have more leverage?’’ Avedisian: ``I think we had more leverage last time.’’ Hummel: ``And were you satisfied with what you extracted from that contract?’’ Avedisian: ``We wanted more but it got us to where we needed to be to balance our budget for last year.’’

Mayor Avedisian tells us the next union negotiation may be sooner rather than later. He plans to approach the three unions again later this month to try and get some more concessions to help balance this year’s budget. In Warwick, Jim Hummel, for The Hummel Report.

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