The audit by Marcum LLP of Providence, issued to the city on Aug. 18 and posted on the city’s website, explains how an agreement between then-IAFF Local 2748 President William Lloyd and then-Fire Chief Edmund Armstrong created a discrepancy between how sick time was calculated.
In basic terms, the side agreement changed the timing of payments to firefighters for unused sick time. Under the 2012 contract between the city and the union, those payments were made at the end of the year and capped at 75 percent of the sick time they accumulated.
But after the 2013 side agreement went into effect, those payments were made at the end of each month, meaning that firefighters collected more than the 75 percent limit.
Marcum calculated that as a result, the city paid $385,875 more for unused sick time than it should have between 2013 and 2018. Had the city used the annual payout system, the difference would be $308,000.
The auditing firm pointed to several contributing factors that led to the discrepancy, including the fact that sick time claims were kept via handwritten logs and an Excel spreadsheet, instead of an automated process with independent oversight.
“As evidenced by the multiple errors identified during our procedures, the manual nature of the process increases the risk that errors in maintaining sick leave records will go undetected,” Accountant Jon Almeida wrote.
Marcum also found that firefighter sick time was calculated from Feb. 1 through Jan. 31 of the following year, a structure that doesn’t match either the city’s fiscal year (July 1 through the following June 30) or the fire contract.
“This timing difference creates difficulties in reconciling the budgeted and actual costs associated with the sick pay benefit to the usage of such benefits,” Almeida explained.
2018 memo: Sick pay agreement violated contracts
The Marcum audit also includes several addenda, including a 2018 legal opinion by John Harrington of Haronian, Bramley & Harrington of Warwick that the 2013 side agreement was “void and unenforceable” and violated the terms of the 2012 contract between the city and the union.
Harrington reviewed the side agreement against applicable laws governing contracts, including the state statute that identifies who can negotiate collective bargaining agreements — or, in this case, amendments to them.
Under R.I.G.L. 28-9, 1-3, only municipal officers termed “corporate authorities” can participate in contract negotiations, Harrington explained.
“A department director or department chief is not a ‘corporate authority’ for purposes of collective bargaining,” he wrote, adding that officers with “apparent authority” like the fire chief can not “bind the city to an agreement,” and citing a 2002 state Supreme Court ruling.
As a result, the new sick pay policy could only be considered a tentative agreement that required city council approval. The fact that the city council never formally approved it, Harrington wrote, “renders that agreement void.”
In reviewing the actual side agreement, Harrington noted that it “is on [u]nion stationary, is dated April 23, 2013, and purports to be an agreement between the City of Warwick and Local 2748 regarding unused sick leave.”
Harrington pointed out several problems with the agreement, specifically that it did not include the signature of then-Mayor Scott Avedisian, nor did it state that it was “subject to ratification” by the city council.
Aside from those issues with the agreement, Harrington also explains that the document changes the sick pay policies set out in the 2012 contract — something that is supposed to be done through negotiation — and that when the 2015 contract was negotiated, none of the side agreement’s terms were included in the final version.
[The late Mayor Joseph Solomon ended the sick time payouts in 2018 amid negotiations for the eventual 2019-22 contract that the city council approved in early 2020. An arbitrator ordered the city to pay a 2.25-percent pay increase for the 2018 contract year amounting to $480,000, part of an overall $3.6 million increase in city costs for the new fire contract.]
Harrington also addressed “an argument that the modification to excess sick time compensation is valid as past practice” by noting that none of the applicable laws governing past practice apply to the 2013 sick time agreement.
As a result, Harrington opined that sick time payments based on the 2013 agreement were “credited or paid in violation of the Collective Bargaining Agreements that were in effect from 2012 to 2018” and recommended that the city “pursue restitution and reimbursement for those payments and credits from the Union and/or individuals who benefited from the changes that occurred under the 2013 document.”
Council President Stephen McAllister said that city officials are considering their next steps.
“I have read the executive summary and will now be able to review the entire report,” McAllister said during a recent interview. “Once I do, we will work with the administration and the council to decide what to do going forward.”
Warwick Mayor Frank Picozzi did not respond to requests for comment on the report.
A copy of part one of the report is attached at the following link:
Warwick-Firefighter-Overtime-Report-marcum_part_1_of_2
Author: Joe Hutnak - [email protected]
Co-Founder and Editor-at-Large of Warwick Post. For Warwick Post-related inquiries or communications, email [email protected]
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