Cranston Mayor Allan Fung’s administration claims they have negotiated a contract with the firefighters union that increases wages 5 percent but will increase wage costs by only 2.6 percent a year. How is this possible?

It’s not.

Cities like Cranston will never restore school music and sports programs, improve other city services or stabilize property taxes if they negotiate labor contracts like the recently negotiated fire contract. The Fung administration wants the Cranston City Council to ratify that contract Aug. 26, claiming, in a fiscal note posted on the city’s website, that it will only raise firefighting costs by $252,277 a year by fiscal year 2017. The actual cost, however, is more than three times that much.

How could these errors be made?

The firefighters contract includes a series of raises over six-month intervals. Rather than figure what they will cost over a year, however, the Fung administration estimates their cost over only six months. This error causes the fiscal note to miraculously claim that a 5 percent salary increase only hikes wages by 2.6 percent. My analysis of the contract’s cost, because I count wage hikes over 12 months, indicates that the 5 percent raises will raise costs by 5.2 percent a year (the extra 2/10 percent is due to compounding). The Fung administration’s error understates the cost of the contract’s wage increases by $330,613 a year, plus another $52,098 in pension and payroll tax increases.

In a second error, the Fung administration overstates the savings of fire union concessions. In a major step forward for Cranston, the contract calls for firefighters to contribute $25 a month toward their health insurance in retirement, saving the city $58,800 a year. The Fung administration’s fiscal analysis is designed to determine the annual increase or decrease caused by changes in the contract. But instead of properly counting the $58,800, it credits the concession for saving $235,200 a year. The same error is made with changes in health care, a $10,000-a-year increase for the fire department’s two mechanics and other small costs. The net effect of these miscalculations eliminates $142,838 a year in concession savings.

Together the two miscalculations triple the contract’s cost from the Fung administration’s estimate of $252,277 a year by the contract’s end, to $777,826 a year.

Similar errors were made in recent cost estimates of contracts negotiated with the Laborers Union and the Teamsters Union, but the impact was far less.

My attempts to convince the Fung administration to correct their errors have so far failed. I have been told, “We’ve always done it this way,” and that I don’t know what I am talking about. Others treat my criticism as pointless bickering.

It’s important to correct these errors. When you are at the bargaining table and don’t know how much things cost, you may spend too much. We need that money to improve our schools, libraries and other public services. 

Steven Stycos is chairman of the Cranston City Council Finance Committee and worked as a business agent for the Amalgamated Clothing & Textile Workers Union in the 1980s.