Double Dip?
UPDATE:RI Ethics Commission to investigate Hopkins Hill fire chief. What we know
WEST WARWICK — Town Manager Mark A. Knott last year received an income of more than $300,000, after the Town Council carved out an ordinance allowing him to earn his municipal salary and benefits - while receiving a $91,000 annual pension for his nearly three decades working in the town’s Police Department.
​
Call it a legal double dip, but Knott is the only one of the 13,962 people covered by the Municipal Employee Retirement System of Rhode Island allowed to earn a full salary from the same MERS community where he is collecting a pension. It follows an elaborate series of steps the town took two years ago, paving the way for it to happen.
Every other employee in the MERS system is guided by strict caps on how much they can earn while receiving a pension: municipal employees can go back and work 75 full days; teachers no more than 90 full days. And if you are a state employee, you can’t go back to work in any capacity without suspending your pension.
As a result, the executive director of the state’s retirement system, Frank J. Kapinski, sent a letter to Town Council President David Gosselin Jr. April 25, informing him the board had “reluctantly” approved Knott’s pension.
In an interview this week, Karpinski said Knott’s arrangement is not replicated anywhere else in Rhode Island - but the retirement board’s hands were tied because of enabling legislation passed by The General Assembly, a West Warwick ordinance approved specifically for Knott, and his contract.
“It was a unique situation that the board is not used to seeing, given what it knows about the Rhode Island General Laws,” Karpinksi said. In fact, three members of the board voted against awarding Knott his pension, and one abstained. “It had language in there that permitted this post-retirement employment; that was the driver,” he added.
Anonymous letter from Florida calls attention to Knott’s pension deal
Even though Knott was hired as town manager two years ago and the pension awarded six months ago, it flew under the public radar until town resident Alan Palazzo - a longtime observer and frequent critic of the Town Council - said he received a copy of Karpinski’s letter in the mail last month. The envelope that arrived at Palazzo’s home had no return address and was postmarked May 12 from Fort Myers, Florida.
He has subsequently talked with some retirees, upset by Knott’s deal with the town.
Karpinksi concluded his letter to Gosselin, saying: “I trust that this communication will be provided to the Town Council for review in order that the Retirement Board’s concerns are effectively memorialized and communicated should the West Warwick Town Council contemplate further similar actions in the future.”
Palazzo discovered that Gosselin had only shared the letter with Vice President Maribeth Williamson; the three other members of the council knew nothing about it.
“It’s a sweetheart deal,” Palazzo, a retired United States Navy Commander, said in an interview with The Hummel Report. “This is par for the course in West Warwick. It’s upsetting, the taxpayers don’t understand.”
'An easy choice': Only Knott was interviewed among nationwide pool of town manager applicants
Knott joined the town’s Police Department as a rookie patrolman in 1994, moving up the ranks to become chief in 2019. After Town Manager Ernest Zmyslinski’s departure, Knott was appointed acting town manager in the fall of 2020, while continuing in his role as chief. The town advertised for a new full-time manager, receiving applications from all over the country.
But the council never interviewed any of them, instead focusing on Knott - a lifelong town resident. Williamson and Gosselin encouraged him to apply for the job.
“I’ve seen town managers come, not even move their furniture in, and leave,” said Gosselin, adding that there have been eight managers during his 16 years on the council. “(Knott is) a lifetime resident of West Warwick, he’s very involved in the community, always at community events. He also has a vested interest in his pension, so he would care about what goes on in the pension (plan).”
Williamson concurred: “Mark knew the community and quite honestly the level of resume we received….I could not see the benefit of transferring someone from Ohio or from Illinois to come in and get a sense of what West Warwick was all about and be able to hit the ground running like Mark could. It was an easy choice, as far as I was concerned, and one that I would make again because he’s done a terrific job.”
In a wide ranging interview with the Hummel Report on Wednesday, Knott said he made sacrifices early in his police career knowing that a good pension would be waiting if he got to 28 years.
So when Gosselin and Williamson approached him about being full-time manager he said he wasn’t initially interested. He had looked at jobs in Massachusetts and Maryland as he neared retirement from the police department. “I told them ‘If we can find a way where I’m not going to negatively affect my pension, I’ll consider the town manager job.’”
West Warwick OKs ordinance to benefit Knott before joining state pension system
​
About the same time West Warwick was looking for a manager, its pension system was deemed “distressed” - funded between 20% and 25%. So town leaders secured enabling legislation from the General Assembly during the 2021 session, allowing it to join the state system.
​
MERS has a wide reach in Rhode Island: 69 municipalities, sewer districts and housing authorities participate, along with 53 municipal police and fire departments.
But before officially joining MERS in September, the West Warwick Town Council passed a three-page ordinance - drafted by Knott’s personal attorney - that allowed Knott to continue to hold the title of Director of Public Safety after starting as town manager, so he could continue to accrue time toward his police pension. He would reach eligibility a year and a half later, in December 2022.
“In my mind that was a pension for 28 years of dedicated police service for all of the exposure, danger and sacrifices,” Knott said, noting that the town had the lowest pay scale in the state when he started and at one point he and his young family received food stamps.
​
Meanwhile, Knott’s lawyer also drew up an eight-page contract, approved by the council in June 2021, that laid out his salary and benefit package. But it also called for the town to contribute $184,558 to “buy” time to get him to the maximum he could collect from his police pension. It called for Knot to contribute $21,627.67 - but allowed him to use “accrued and unused sick time to fund the employee contribution.”
That series of actions by the town meant that Knott’s agreement was essentially “grandfathered” in when the state accepted West Warwick’s underfunded plan into MERS on Sept. 1, 2021, trumping state law that prohibits double dipping in the MERS system. Over the past two years, the West Warwick plan has improved modestly under the state’s guidance, now 30% funded.
Knott and council leaders deflect criticism of 'double dipping'
Knott takes issue with Karpinski’s assertion that his situation is unique. “I’m not collecting a MERS pension. The state is administering our legacy plan. It’s kind of deceiving. I did everything that I thought was right and proper.”
​
Williamson said the arrangement doesn’t affect the town’s overall finances. “If Mark was sitting in the town manager’s seat in North Kingstown, that would be okay (from a pension perspective). How foolish would that be to bypass and give up that institutional knowledge that he has about West Warwick and have his talents used somewhere else?”
Gosselin added: “If the town hired Mark Knott, or if we hired Joe Schmo from off the street, the town’s finances would be almost identical. Because Mark Knott would be collecting his pension as of today, and we’d be paying another individual the same dollar amount, if not more.”
Asked whether he was concerned about the optics, Knott responded: “It’s a concern, because the perception could be that you’re double dipping. I never anticipated being West Warwick town manager. I anticipated after 28 years I’d still be young and marketable and be looking to maximize my earning potential in a community somewhere.”
​
How much has Knott received in compensation?
According to figures provided by the town, Knott last year received $193,610 in compensation as manager. The breakdown: $126,551 in regular pay; $10,500 in personal time off; $7,854 in holiday pay; $17,259 in longevity; $17,316 in vacation buyback; and $2,553 in personal time. Knott, like other town employees who worked through the pandemic, received a bonus of $1,250 from American Rescue Plan funds.
​
The town also contributed $10,327 toward a private pension plan for Knott.
In addition, the town paid $20,259 for its portion of a Blue Cross & Blue Shield of Rhode Island family plan (Knott contributed $3,300); $1,281 toward a dental plan and $400 toward a life insurance policy.
That totals $215,550 from the town plus his $91,000 pension, for a grand total of $306,5503 in 2022.
Knott began with a base pay of $145,000, which increased 3.5% percent on July 1, 2022 and will increase another 2% next month. His annual longevity payment is 11.5% of his base pay.
Why the state board approved Knott's pension, with 'reluctance'
Karpinski checked with attorneys and the Internal Revenue Service, leading up to the December vote on Knott’s pension, to make sure it was legal, but told The Hummel Report that the board had little choice other than to approve.
​
In his letter to Gosselin, Karpinski wrote: “The Retirement Board specifically voted: To approve the pension application of Mark Knott, with a corresponding letter to be sent to West Warwick expressing the board’s reluctance to do so in light of concerns highlighted by Mr. Knott’s pension eligibility. Given the remedial purpose of the legislation allowed West Warwick to join MERS, the Board wished to express its concerns to West Warwick with regard to the town’s perceived lack of transparency and actions that appear to be inconsistent with the goals of the legislation in allowing this pension candidate to become pension eligible while also working full time.”
​
Gosselin said he wanted to speak directly with Karpinski - which he has since done - before discussing the situation with the rest of the council.
​
Williamson said she, too, has spoken with Karpinski. “It’s not about the town doing anything wrong, it’s not about Mark Knott doing anything wrong and (Karpinski) vetted all of that and made his board aware of that,” she said this week.
​
“I’m confident that there’s no story here - other than that we made the right decision,” Williamson added.
Palazzo’s response: “Not many people attend the council meetings and it remained hidden. Many things in West Warwick remain hidden.”
​
The Hummel Report is a 501(c)(3) nonprofit organization that relies, in part, on donations. For more information, go to HummelReport.org. Reach Jim at Jim@HummelReport.org.