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Central Coventry Fire District says it'll cease operations by June without cash from state

COVENTRY — Leaders of the Central Coventry Fire District have notified Gov. Dan McKee that without help from the state, it will run out of money by the end of June and “cease operations.”

The public warning comes after months of behind-the-scenes communications with the auditor general, the Department of Revenue and a top official in McKee’s office, with no path toward a solution.


And it comes after nearly a decade of financial ups and downs for the district that included bankruptcy, a special master, then a return to local control with stable budgets until last year.


Read:The full letter sent by The Central Coventry Fire District

More:Attempt to reconsider firefighter OT is held for study by state lawmakers

The district is asking for $3 million of the state’s $1.13 billion federal American Rescue Plan Act allocation to backfill a deficit caused by the pandemic and to make structural changes it says are needed in response to a “firefighter overtime” law passed by the General Assembly in 2019. That law, leaders say, has resulted in hundreds of thousands of dollars in additional overtime on a $5-million annual budget, with no added services.


“It’s going to be a public safety nightmare,” Cynthia A. Fagan-Perry, president of the district’s board of directors, told The Hummel Report. “It is a financial fiasco brought on by [the state’s] unfunded mandate. And in order to right the ship, we need the ARPA money,” she added.


“The impact of that overtime statute can’t be diminished. It’s the reason we’re in the deficit we’re in,” said David A. D’Agostino, who has been the district’s attorney since 2013 and who wrote McKee outlining the district’s request in a three-page letter. He said leaders from Central Coventry put the General Assembly on notice this might happen during committee hearings on the overtime legislation in 2019.


Alana O’Hare, McKee’s spokeswoman, issued a statement on Wednesday: “The Governor has reviewed the letter and he and his team are discussing the options, however, the Governor does not believe that an infusion of one-time funding would resolve a financially unsustainable annual operating budget. It is important to note that the Central Coventry Fire District went into state control previously, and the Governor believes it is in the best interest for local voters to determine how to resolve the issue.”


House Speaker K. Joseph Shekarchi, through a spokesman, said he had not seen the letter to the governor until The Hummel Report provided him with a copy. “Now that he has been made aware, he will look into the issues more closely to determine what options may be available, in consultation with the affected communities,” spokesman Larry Berman said in an email.


While the McKee administration has proposed specifics of where it would like to see the state’s ARPA money allocated, the legislature will make the final decision. Sherkarchi said last month he had received $7 billion in requests for the $1 billion. Berman said this week that number has grown to $12 billion.


Fire district: State was warned in 2019 about fiscal impact of overtime bill 

The so-called firefighter overtime bill was introduced three years ago by Rep. John Edwards of Tiverton. His community, along with North Kingstown and Central Coventry, operated at the time on a three-platoon system. Federal labor law allows firefighters under that model to work up to 56 hours a week before overtime kicks in.

The law, which the General Assembly passed in 2019, requires districts to pay overtime for any hours worked over 42 per week, even though there is no requirement from the federal government to do so.

“We told them it was going to increase overtime to the point of at least $350,000 a year, with no change in service,” D’Agostino said. “And we did mention that it was going to have the effect of bankrupting the district.”


Lost in the discussion over changing the number of hours needed for overtime was a section at the end of the bill that considers “hours worked” to include sick and vacation time when calculating overtime. A Hummel Report investigation, published in The Providence Sunday Journal last year, found that the Warwick Fire Department ran a $1-million deficit, largely because of exorbitant overtime resulting from staffing shortages. But the investigation also found a pattern of firefighters using sick time or vacation in a given week that automatically qualified them for overtime before they stepped into the station for duty.

The Hummel Report:Code Red for Warwick fire budget as overtime soars

The Hummel Report:In Warwick, firefighters can earn overtime without working a full week

D’Agostino said he and others from the district testified in 2019, followed by a lobbyist for the firefighters union. 

“Well, it’s the same old story you’ve heard from these guys, and it’s all lies,” D’Agostino recalled the union representative telling the House committee.


The bill passed the General Assembly as presented and took effect in the spring of 2019. Central Coventry said that section of the bill costs the district an additional $70,000 a year.


Kevin McCann, president of the Coventry Professional Firefighters Local 3372, said the union is concerned about the administration’s assertion that Central Coventry might close by the end of June, but it hasn’t been included in any of the discussions between the district and the state.


“We want to remain employed and get paid every week like everyone else, so yeah, we have concerns,” said McCann, adding that he had not seen the letter that went to McKee until The Hummel Report gave it to him.

“Our job as a union board is to provide a contract for our employees, and we have one that [the district] negotiated … that’s in place until Aug 31,” McCann said. “We’re on the bus, we’re not driving it. We’re just trying to protect the town.”


District says solution lies in switch to four-platoon system

In his letter to the governor, D’Agostino details why the district is requesting $3 million, but adds that the money is not a stopgap measure; rather, he said, it will allow Central Coventry to make structural changes that would ultimately put it back on solid financial footing and not need a continued infusion of outside funds — contrary to what the governor said in his statement.

In our interview, D’Agostino said the district during the pandemic lost nearly a third of the $850,000 in revenue it receives in reimbursement from insurance companies for rescue runs because fewer people were going to the hospital. 


But the lion’s share of the money the district is requesting from the state would go to change from a three-platoon to a four-platoon system. That would drastically reduce the amount of overtime being paid, as more firefighters would be available to work a regular workweek. The district proposes bringing on 10 additional firefighters.


Fagan-Perry said closure of Central Coventry would not only affect the immediate population it serves, but also a circle of surrounding communities that receive mutual aid.


“Public safety is going to go right downhill,” she said. “Even if we get mutual aid from other departments, it’s not going to be enough. Because we’re giving mutual aid constantly to the other districts.”

D’Agostino said that assistance extends to West Warwick, Scituate, Warwick, Cranston, Exeter, West Greenwich and even Providence.


Shekarchi noted that the Town of Coventry received $10.4 million of its own ARPA funding and suggested that the district approach the Town Council for an allocation. D’Agostino said the fire board discussed that option, but concluded that asking for a third of the town’s federal funds was untenable, while asking for $3 million of the state’s $1 billion was a more reasonable request.


How did Central Coventry's budget crisis develop?

At 65 square miles, Coventry is Rhode Island's largest community. And until 2006 it had seven separate fire districts to protect the town's 35,000 residents.  All were autonomous entities, as Central Coventry is now, passing their own budgets and issuing tax bills separate from homeowners’ property tax bills. For decades the districts relied largely on a network of volunteers who, in many cases, lived or worked near their respective stations.

In the 1990s, some of the districts talked about merging. The pitch to taxpayers was a pooling of resources and eventual savings of money. So four of the seven districts — Harris, Tiogue, Washington and Central Coventry — came together into one district, serving three-quarters of the town's population.


But an analysis by The Hummel Report in 2012 showed that Central Coventry’s budget had soared by 65% over the previous five years, partially subsidized by federal grants. Tax increases also were averaging 5.5% annually, and in 2012 taxpayers said enough, rejecting a budget that had ballooned to $6.5 million.


That resulted in intervention by a Superior Court judge. Over the next eight years, the district would go into bankruptcy, which allowed it to get out of an unsustainable labor contract and reduce the budget.  A special master was appointed, and Fagan-Perry was a member of a new board of directors.


She said the district’s equipment was so bad, one of the board members became ill and called for a rescue, which broke down on Route 95 taking her to Rhode Island Hospital. EMTs had to transfer her to another rescue in the high-speed breakdown lane.


Gradually the district dug out of its financial hole, upgrading equipment and passing modest tax increases to keep pace with rising costs. That changed after the firefighter overtime bill passed.


“The bill effectively negated the savings the district had achieved,” D’Agostino said.


During the pandemic, the district was not able to hold an annual financial meeting. The state allowed the board to implement a proposed budget without taxpayer approval, but the tradeoff was a maximum increase of 4%, when the district needed to ask for more to cover the added overtime costs. As a result, the district had to ask for an 8.5% increase at last fall’s annual meeting to catch up.

Voters at the annual meeting on Sept. 13 rejected the proposal, 497 to 276. D’Agostino said the district is now facing the prospect of having to ask for a 15% increase if the state doesn’t step in.


That rejection put the budget in the red and caught the attention of the auditor general’s office late last year. Central Coventry on Feb. 3 submitted a 28-page Corrective Action Plan to Stephen E. Coleman Jr., chief of the division of municipal finance at the Department of Revenue.


But D’Agostino said the math doesn’t work without help from the state.


 “The risk of CCFD being unable to provide fire suppression and [emergency medical] services to the people of the State of Rhode Island if CCFD does not receive budgetary assistance ... is simply too great a cost,” he wrote to McKee. “Therefore, the Board requests the full weight and influence of your office in providing ARPA funding to CCFD, as allowed by law.”


Fagan-Perry said, “We’re trying to balance what’s good for the firefighters but also what’s good for the taxpayers.”

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