But What About the Category Five Hurricane That Is Providence's Tax Burden?

When Mayor Angel Taveras took office, he discovered, very much contrary to the assertions of outgoing Mayor David Cicilline, that Providence's finances were a "category five hurricane".

Yesterday, in a Providence Journal article, Providence Finance Director Michael L. Pearis pulled down the hurricane flags.

“We turned a pretty significant thing around,” said Pearis, who was hired in late 2011. “I’m not saying there’s a pie in the sky, or a blue sky, but it’s not a Category Five anymore. It’s maybe a tropical storm, or just rain.”

No doubt, making the cuts and finding additional revenue

[Mayor Taveras] closed five schools, cut his salary, aggressively sought, and won, concessions from workers and negotiated larger voluntary payments from nearly all tax-exempt colleges and hospitals in the city

to stave off municipal bankruptcy was Job One. Mayor Taveras appears to have accomplished that, though the budget is still millions in the red. And certainly, it is a significant accomplishment.

But at the risk of appearing ungrateful or to want too much, is that where the effort ends?

Earlier this year, I pointed out that Providence's residential tax rate is the seventh highest and its commercial tax rate is the second highest in the country. In its own way, that's a category five hurricane. And remember that all of that revenue is in addition to the many millions supplied to the city every year from taxpayers around the state.

Let's review. Providence pretty much maxed out what it takes from its residents and businesses in property taxes. That still wasn't enough. Its spending, especially pension and retiree health care promises, started the city over a cliff. The current administration pulled the city back from the dive. But for Providence taxpayers, it's status quo ante the cliff: they are paying some of the highest taxes in the country.

Are those now frozen in place?

If Mayor Taveras were to say, I've done enough, let the next guy continue the job, that would be semi understandable. The problem with that, of course, is that two years remain on Mayor Taveras' term.

And let us not limit such questions only to Mayor Taveras. With state pension reform, Rhode Island's state budget was also pulled back from a cliff (though, in the absence of local pension reform, some municipalities are poised on the bankruptcy precipice). But assuming this reform stands up to legal challenges, what will our elected officials do to turn around Rhode Island's fifth highest combined state and local tax burden?

The PEDP, GLP, DC and Erasmo

Has anyone else been paying attention to the job that Dan McGowan has been doing with his coverage on the Providence Economic Development Partnership (PEDP) for GoLocalProv? It seems just about every other day, he has some other important piece to the whole puzzle and further explaining the fund and how it has been used through the last ten years or so.

He's been chronicling the program and how the money has been used. Quick primer, think EDC. For the success rate, again, think EDC. It seems that loans given out by the PEDP have a failure rate of around 60%. Dan has shown how many of these loans go unpaid for years at a time, how the PEDP used taxpayer money for lunch, and simply written off a couple million dollars in default loans. Maybe Providence is so flush with cash, they can afford to just give away a couple million?

Then today, McGowan wrote about another little nugget that he dug up. He was able to find out about Erasmo Ramirez, the same one in the video that the Providence Journal displayed on Saturday. The same one that was seen offering to sell primary ballots to an undercover investigator. The same one that was previously a volunteer for David Cicilline's campaign, was also someone who received PEDP money, while Cicilline was in office.

But less than 20 months after Cicilline took office, El Portal Family Restaurant, which listed Ramirez as its president in its corporate filing, received a $103,000 loan from the Providence Economic Development Partnership (PEDP), the controversial city loan fund which critics have called a “slush fund” for Cicilline.

Poor finances, angry firemen and police and a very poorly managed loan program. (Well, wait. Can it be called a loan program when the majority of the money never comes back?)

The hits just keeps on coming. And yet, people still believe that Cicilline deserves his promotion to Congress. Wow.

Budgeting and Spending

Stop me around the part that no longer makes any sense.

Here are some values for you. This theoretical family nets $61,000 a year in income. That's after taxes. However, they find that in spite of cutting everything they think they can cut and is unnecessary, and trying to bring in extra money through second and third jobs, they still find themselves short by about $1,800. In other words, they still have $1,800 worth of expenses that are going unpaid. Then, in spite of the fact that they have a perfectly good 20 inch black and white tv, they decide that it's time to go to the local electronics store and purchase the latest and greatest flatscreen television for $4,000. That's $4,000 that they don't have in cash or in savings anywhere, they decide to simply put that on a credit card.

Does this make any sense at all?

This is pretty similar to what Providence is doing right now. The city has a near $614M budget, and according to today's GoLocalProv.com, they have a $17.9M operating deficit. This in spite of all the cuts that the mayor has been able to negotiate through various sources, and all the extra payments he was able to get from the city's non-profits. They're still nearly $18M short of being able to pay all of their bills. So then why does it make any sense at all to ask the taxpayers to approve a $40M bond to repave some city streets?

The story here is that if you can't afford it, you can't have nice things. If you're already short on paying all your bills or doing things like:

the city’s plan to underfund its annual required contribution to the pension system by $10 million

Seeing as that it will probably take a year or so until all the roads would be completed, the timing is interesting. The Providence mayor would at that point be up for re-election or possibly to some higher post. "Hey Providence, how do you like those shiny new roads I gave you?" leaving out the part that "you paid for it...with interest."

Is it really a gift if you paid for it yourself?

Against Borrowing in Providence or Anywhere

In his Saturday column, Ted Nesi makes a point that I'd been thinking about as the week came to a close, related to a proposed $40 million infrastructure bond in Providence:

Governments should borrow to fund long-term infrastructure projects that have a higher rate of return than the interest on the bonds, but [in Providence's past] bond money was used to pay a principal’s salary and develop a restaurant. Buddy Cianci, apparently confusing borrowed money with free money, told Stycos: “This way, we can make the improvements and the tax rate doesn’t go up.” Cianci left off the crucial word “now” — because the tax rate certainly will go up eventually if the projects aren’t ones that will boost the city economy and help offset the interest costs. Taveras would do well to burnish his reformer credentials further by finding a new, transparent way to allocate bond money if voters approve the proposal in November.

That said, suppose an accurate projection finds that improved pavement would increase city revenue — through increased commerce, property values, and so on — by three percent. In such a case, even if the interest paid on the bonds were exactly the same, the city might as well borrow the money rather than save it up over the same period of time and then do the work. Residents and visitors would gain the benefit of tomorrow's new sidewalks, today.

There are good reasons to resist that argument, both in practical and in theoretical terms.

Continue reading on the Ocean State Current...

(Note: edited at 7:48 a.m., 7/30/2012, to clarify that the bond is for roads and sidewalks.)

Providence Retirement Benefit Deal Under Consideration

Lots of detail about a proposed settlement negotiated between Providence Mayor Angel Tavares and the heads of the city's employees' unions is available from WPRI-TV's (CBS 12) Ted Nesi and Tim White, including provisions like this one...

Going forward, pensions will max out based on the same equation as the COLA freeze: either 150% of the state's median household income or the salary of an active police officer or fighter in the same rank at which they retired - whichever is lower.

Providence's $5 Million Advance

According to a Ted Nesi article on WPRI.com yesterday, Providence will be receiving a $5 million advance from Johnson & Wales University (JWU) immediately. Back in February, JWU agreed to commit $6.4 million to the city over the next 10 years.

What also makes this interesting is the city's explanation on what they'll do with the money and the accounting now.

“JWU is advancing the city $5 million on their agreement because they knew the city needed cash,” Taveras spokesman David Ortiz told WPRI.com. “However, we are only recognizing $650,000 in revenue this year and for each of the next nine years, so not all $5 million goes to the budget.”

The City Council agreed to accept the cash now and budget it over time

I'm no CPA or anything like that, but shouldn't what is on the budget actually match what you're doing? If you're going to spend five million dollars, shouldn't the ledger reflect that? Plus, what happens in future years when the budget says you're spending $650,000 of the money from JWU and the money isn't there? What happens when Angel Taveras is no longer mayor and the next mayor's administration tries to make sense of this accounting? Will they simply refer to "prior administration's fiscal mismanagement?" I'm not calling it mismanagement, I just know that pols love to blame the previous guy. Well, except in Taveras' case.

I understand the reason for the advance. Plain and simply, the city will run out of money and checks will bounce without doing it. However the accounting sounds like something that's happened around here before, plugging budget gaps by using the tobacco settlement money or creating jobs and departments with one-time federal stimulus money. It works great to keep the creditors at bay for now, not so good for next year.

On another angle, what will the bond rating agencies think of this?

Matthew Stephan, an analyst at Standard & Poor’s, said this week the additional payment from Brown to Providence “could help firm up cash” for the city through the end of June.

“Given the relatively small amount of the projected shortfall and the recently agreed upon Brown University payment, we understand the city will manage its cash flow very carefully through the end of the fiscal year and does not expect to borrow for cash flow,” Stephan wrote in a note to investors obtained by WPRI.com.

“However, if the city were to experience a delay in the JWU and/or Brown University payments or if there were unexpected negative budget variances, we believe it is possible the city would need to issue short-term cash flow notes to provide liquidity through the end of the fiscal year,” Stephan continued.

This just seems like some pretty interesting accounting and I'm hoping I'm wrong on how it works. I'm just confused when the mayor says he needs a certain amount of money per year and then spends a large chunk of that in year one. What happens next year? Or is that when the heat gets turned up on Providence College, RISD and the other tax-exempts?

Councilmen Against It After They Were For It

According to multiple reports today, two Providence Councilors, John Igliozzi and Terry Hassett now are seeking to amend the ordinance that the City Council just voted on a few days ago, to now lessen the cuts by $3-4 million.

From the RINPR blog:

“I am acting in what I believe to be a much fairer manner in order to provide enhanced security for retirees while continuing to improve and stabilize the entire pension system,” Igliozzi said.

It gets better: Hassett is on the council committee that unanimously OK'd the pension changes first. Did he vote for the bill *three* times?

The only answer I can find about why the change is from Ian Donnis:

Igliozzi and Hassett say they’ve reflected on their pension overhaul vote on Monday, regret it, and don’t want to abandon hard-working police and firefighters. That’s about as detailed as they’re getting in explaining why they no longer support something that they did three days ago. Igliozzi told me:

"Regret is abundant. It’s clear that what we might have thought was good is not turning out to be what it should be. It was too draconian."

If the COLA freeze wasn't enough to fully save Providence, and now these Councilors want to move the needle backwards by $3-4 million, where will that get made up?

It may not be a problem, as Mayor Angel Taveras has vowed to veto the amendment.

I'm sure there's much more to come.

Providence Pension Ordinance in The Economist

Further evidence we're on the cutting edge of history here in Rhode Island -- The municipal pension changes proposed by Mayor Angel Tavares have already made the Economist (that's the famous British periodical, not some blogger with that handle)...

Thus this week’s ordinance, in which the city suspended the cost-of-living adjustments (COLAs) by which pensions are increased each year. Some pensioners’ payments were rising by a compounded 6% a year, bringing a fire chief who had earned $63,510 the year before he retired in 1991 to $196,813 now. With such cases in mind, the ordinance also caps yearly payouts at 1.5 times the state’s median household income, which comes to about $78,000. The changes are expected to save the city $19m in the coming year, and to reduce its unfunded pension liability from $900m (the plan currently has only 34% of the assets it needs to cover future costs) to $660m. Should the funding ratio ever reach 70%—something that will take decades under current plans—COLAs will be reinstated.

The bankruptcy of Central Falls is instructive in another sense, points out Matthew McGowan, a lawyer for the city’s pensioners, in that such proceedings are fraught with legal uncertainties. Just 19 days before the city went into receivership, the Rhode Island state legislature passed a law granting priority to bondholders over other claimants in municipal bankruptcy proceedings. Mr McGowan’s clients agreed not to challenge the law thanks in part to the promise of the one-off payment. But a challenge might well be successful. Workers and pensioners who have had their COLAs trimmed in other states have sued their governments claiming breach of contract. “We’ve hit rock bottom in this state,” says Mr Chafee. Perhaps, but a few adverse court rulings could dig Rhode Island much deeper.

Standard & Poor’s Whacks Providence's Bond Rating

Last night, the Providence City Council voted to approve substantive, though compared to the shortfall, modest, pension reform. At the meeting, an irate firefighter demanded to know

Can you tell us what the rush is?

Today, Standard & Poor's supplied the answer.

S&P lowered Providence’s credit rating to BBB, two steps from junk-bond status, from BBB+, citing the “ongoing fiscal pressure affecting the city,” and said the outlook is negative, meaning it could be cut further.

Mayor Taveras and the Retirees

Rhode Island's Twitter corps has once again provided the public with excellent as-it's-happening coverage of public developments in Providence's fiscal crisis, in this case the meeting held this morning between Providence Mayor Angel Taveras and city retirees. Here's a brief compilation that captures the flavor of the meeting...

Ted Nesi (WPRI, CBS 12):

The Taveras proposal is: 20% health co-pays for retirees under 65; Medicare + supplement plan for 65+; no COLAs till pension fund hits 70%.

Applause when D'Amico cites how judge blocked move of healthcare to Medicare for retirees

D'Amico: we have $1M against $1.2 BILLION in retiree healthcare obligations #providence

Retiree is tough to hear but basically stated Brown needs to pay and water supply board has to be part of the solution.

Sounds like selling of water supply board is an unrealistic option just being pushed on talk radio.

Taveras: 'People are looking for easy solutions to get out of this. There are no easy solutions to this problem.'

One retiree told the mayor he fulfilled his end of bargain. He had nothing to negotiate. 'You're going to do whatever the hell you want.'

Mayor: I can't guarantee what will happen when I'm not mayor but I will guarantee that if nothing is done it will be worse

Traditional news stories written by Ted Nesi , Erika Niedowski, and Ian Donnis are already available. (Note: This paragraph updated, since original post).

Also, in a replay of events from early February, former Providence Mayor David Cicilline offered a tweet of his own, as major events impacting the City of Providence were playing out in a public forum...

Reading "Horton Hears a Who." http://lockerz.com/s/189192112

Donnis Tells the World About Brown & Providence

An Ian Donnis story has been picked up by the nationally broadcast NPR programmers. The battle of the struggling city, with its socially mobile mayor, and the liberal Ivy League school is, not surprisingly, of broader interest than just to those within Donnis's usual broadcasting range.

Viewed from the other side of the political street than both the administration and the university tread, it's a fascinating dispute. Mayor Angel Tavares leveraged Ivy to climb from lower to upper class, and there's surely not a scary free-marketeer (or at least an admitted free-marketeer) among the decision makers at Brown.

The More Things Change...

I don't think that I can add much to the story in Sunday's Providence Journal about what looks like an attempt at "pay for play". Sam Zurier, the Councilman from Providence's Second Ward (East Side) is alleged to have been trying to shake down a couple of constituents for a campaign donation after he got a sidewalk repaired for the homeowners. The request for the sidewalk repair went in from the Witman family because Gary Witman had become a quadriplegic and there was a risk of his wheelchair tipping on the broken pavement. The repair took five months from the time the Witmans put in the request and cost the city $4,500. At that point is where the story turned a bit dark for the family. The first-term councilman sent the family a letter that contained:

“This Fall, I held a fund raising reception. I am grateful for the generous response of our neighbors. Everyone who promised to support my campaign followed through with a contribution –– everyone, that is, with one exception.”

Zurier reminded them how he “went to bat for you” to get their sidewalk repaired, despite a scarcity of city funds.

Additionally, the article refers to another instance where Zurier went to see the family to check on the sidewalk work and also to get the campaign donation. When he was unsuccessful, he followed up with a separate letter:

“I also was grateful for your kind and generous offer to support my political campaign. The reporting deadline is almost upon us, so I would appreciate your making your contribution in the coming week. I enclose a card and an envelope for your convenience.

Rhode Island doesn't need more instances like this. This is exactly what is wrong with politics in Rhode Island. Everyone believes that the whole government operates under a "pay for play" so when examples like this come out, it further undermines the confidence in the government.

Then with the final letter, where Zurier expresses his disappointment in the Witmans for not donating to his campaign, Mrs. Witman was taken aback at the tone of the letter she received:

The tone of the letter is astounding.… It’s an angry letter. If he is so angry because he did his job, maybe he should leave his job.”

Lastly, Zurier tells the reporter

I am saddened that I caused them distress,” says Zurier. “It is now clear that my interactions with them undermined their confidence in me as a public servant. It is my hope we can sit down and discuss this issue further, so I can regain their confidence.”

Yet again, one has to wonder, is he saddened that he caused the family distress or is he saddened that he got caught?

Let's Remember: Half of Providence's Annual Tax Take Is Owed to Pensions and Post-Retirement Benefits

GoLocalProv did some very good research last June.

Just over half of all taxes collected in Providence in 2010 were owed to pensions and benefits for all city retirees—sucking money away from basic services and adding to the property tax burden, according to new data obtained by GoLocalProv.

Now, local taxes do not comprise the entirety of the revenue funding Providence's budget. Nevertheless, if half of all taxes collected are owed to a city's past services, something is very wrong. No wonder Mayor Taveras has hit the panic button.

Providence on the Brink of Bankruptcy

As Andrew mentioned, Providence Mayor Angel Taveras held a press conference this morning and painted a grim picture for Providence unless some remedies are found to close the budget gap. Ian Donnis summarizes

– Taveras says the city is pursuing an expedited state Supreme Court review of Super Court Judge Sarah Taft-Carter’s decision barring the city from moving public-safety retirees into Medicare.

– Taveras was joined by House Speaker Gordon Fox, who said he’ll go to the wall to help Providence avoid going into bankruptcy. Fox said this could include passing legislation requiring contributions to the city by tax-exempt institutions.

– Taveras announced plans for an early March “Town Hall” with retirees at the Rhode Island Convention Center. It will also be carried online for retirees who can’t make it to the event.

– Taveras says the city is due to run out of money in June, and a decision will be made by then about whether to seek a supplemental tax increase. He called that a last resort and said he doesn’t want to solve Providence’s budget problems with a temporary fix.

Mayor Taveras' Providence-on-the-Brink Press Conference

Whether you're into Twitter or not, the best immediate coverage of Providence Mayor Angel Taveras' hastily-called press conference on Providence's dire fiscal situation came from the members of the RI media who Tweeted it as it happened.

Erika Niedowski (Associated Press):

Taveras mentions possibility of bankruptcy, saying 'everything is on the table

City of #Providence is seeking expedited review of Superior Court decision barring city from moving public-safety retirees to Medicare.

Want to suspend cost of living raises. We will reduce their benefits... Want law to collect money from tax exempts

Taveras: "We will reduce retiree benefits," either thru concessions or in bankruptcy ie C Falls. Will hold mtg w retirees next month.

Just leaving National Prayer Breakfast. Beautiful singing by Jackie Evancho & inspiring words from our President. Good way to begin the day!

Municipal Pensions as Covenant

The principles underlying debate about Providence's ability to suspend the cost of living adjustments (COLAs) of its public-sector retirees are fascinating. On one hand, we're told that they're contractual, unlike the state-level pensions, which are legislated:

Unlike state-level public employee pension benefits, which are set by state law, municipal retirement benefits are incorporated in collective-bargaining agreements. Courts in Rhode Island and across the country have ruled that contractual benefits are harder to cut.

On the other hand, Providence is facing legal difficulties because its COLAs are included in an ordinance, at least for most retirees:

In that long-running case, which the Rhode Island Supreme Court decision likened to the Dickens novel "Bleak House," the court ruled that the city could not cut COLAs granted in the early 1990s. Because a 1991 city ordinance had awarded the 5-and 6-percent compounded COLAs, the court said, they were a vested contractual right and not a “gratuity” subject to change.

Now add in the fact that the contracts were negotiated with labor unions that no longer represent retirees, and which cannot negotiate on their behalf, leaving cities and towns to negotiate with retirees one-by-one. (But let's conveniently put aside the fact that municipal contracts aren't permitted to extend beyond three years, in Rhode Island.) One begins to get the sense that COLAs are a bit to RI law what light is to physics. When declaring them inviolable requires them to be particles (ordinances), then that's what they are; when their inviolability requires them to be waves (contract rights), then they're that, as well.

In short, the retirement benefits represent contracts that never expire and that no collective interest has the authority to renegotiate. No wonder "all but 300 to 400 of Providence’s current 2,900 pensioners retired prior to" a 1995 ordinance reining in COLAs. In doing so, they boarded an ark in which the covenant of their corrupt deals could not be touched.

An Inapplicable Model

Honestly, something about Governor Chafee's fact-finding missions makes me very nervous. Consider this, from his latest trip, to Pittsburgh. It focuses on the University of Pittsburgh Medical Center (UPMC), which is attracting all sorts of federal money and expanding the prominence of the University's medical program:

Dr. Edward Wing, now dean of medicine and biological sciences at Brown's Alpert Medical School, worked 23 years at the University of Pittsburgh. He notes that the western Pennsylvania medical school — with massive collaboration, clinical-research dollars and consolidation — has since catapulted from the middle of the pack to among the nation's top-tier medical schools.

UPMC is now a $9-billion global health enterprise that operates more than 20 hospitals and 400 outpatient sites; employs more than 2,800 physicians and 54,000 employees; ranks as western Pennsylvania’s largest employer and the state’s second-largest. ...

In the midst of the tour, Wing noted, "It's very hierarchical, so they can make decisions easy. It's much harder in Providence." ...

At UPMC, it's clear that money drives activity.

So, you've got a massive, hierarchical structure fueled with giant infusions of public money and absolutely central to the local economy. That sounds extremely risky, and while I don't know enough about Pennsylvania politics to know how they're handling it, out there, I simply wouldn't trust the power brokers of Rhode Island with such an entity.

And that's if the feat would be possible to reproduce. One need only look at a map to see one way in which Pittsburgh differs tremendously from Providence: There's no urban competition in proximity. We've got Boston and New York City within easy striking distance.

The governor should turn his sights away from top-down behemoths and look toward making Rhode Island notable, in the crowded Northeast, for being an easy and inexpensive place to start and grow business. Our economic development people look to UPMC and see the flow of money that they could use to get entrepreneurs and innovators over the hump of high expenses and difficulty, in RI, when they should be looking to flatten it, instead.

Compressing the Same Workforce

What am I missing in this story?

Providence teachers on Tuesday voted overwhelmingly to approve a three-year contract that guarantees that every fired teacher will be returned to the district in exchange for substantial concessions.

But:

The unprecedented decision to fire every teacher and close five schools left teachers and parents angry and demoralized. Although the mayor later recalled three-fourths of the faculty, the remaining teachers had to apply for openings via a job fair this spring that some felt was unfair.

So the city closed five schools but is still going to employ the same number of teachers? The article mentions fewer sick days, longer school days, an end to seniority, and the union's dropping a lawsuit that had sought to prevent the end of seniority-based hiring. No doubt there are significant savings in the deal, and ending seniority is a structural change worth some negotiation. The end of seniority was coming, though, and it's probable that the long-term expenses of a too-large workforce will soon swamp the savings of a dropped lawsuit.

At the least, this is a good example of the inefficiencies of government and the lethargy with which it changes.

Compressing the Same Workforce

What am I missing in this story?

Providence teachers on Tuesday voted overwhelmingly to approve a three-year contract that guarantees that every fired teacher will be returned to the district in exchange for substantial concessions.

But:

The unprecedented decision to fire every teacher and close five schools left teachers and parents angry and demoralized. Although the mayor later recalled three-fourths of the faculty, the remaining teachers had to apply for openings via a job fair this spring that some felt was unfair.

So the city closed five schools but is still going to employ the same number of teachers? The article mentions fewer sick days, longer school days, an end to seniority, and the union's dropping a lawsuit that had sought to prevent the end of seniority-based hiring. No doubt there are significant savings in the deal, and ending seniority is a structural change worth some negotiation. The end of seniority was coming, though, and it's probable that the long-term expenses of a too-large workforce will soon swamp the savings of a dropped lawsuit.

At the least, this is a good example of the inefficiencies of government and the lethargy with which it changes.

Re: Disabled (Ha!)

Monique's already expressed a justified skepticism about this:

Former firefighter John Sauro remains permanently and totally disabled from doing his job in the Fire Department, an orthopedic surgeon has concluded after a special examination.

But the surgeon recommended additional tests to confirm his finding.

The report by Dr. Anthony DeLuise Jr. was submitted Wednesday to the city Retirement Board, which voted to have the additional tests done.

Sauro, you'll recall, retired in his late thirties with his tax-free disability pension of $45,600 and fully paid health benefits and at age 48 spends a great deal of time bodybuilding. As Monique highlights, Dr. DeLuise's conclusion was based on a physical exam, viewing of WPRI's sting video of Sauro's workout, and the decade-old medical records that won Sauro his boon in the first place.

This initial finding is just part of the process, of course — which process appears designed to delay and give politicians and bureaucrats plenty of opportunity to grant Sauro and his union a soft exit from the public spotlight. Meanwhile, in the wave of controversy and careful phrases, like "permanently and totally disabled from doing his job," the larger question is lost:

• Even if Sauro has difficulty with a very limited range of motion
• and even if the risk of further injury makes it inadvisable for him to perform active firefighter duties
• should a public-safety-job-related injury mean that the employee never has to work another day in his life even though his impairment is so minimal as to be unobservable?

Feedback and the Public Sector Exemption

A recurring theme arose when the Providence School Board voted to eliminate administrator unionization:

[Stephen Kane, executive secretary of the Association of Providence Public School and Staff Administrators] now worries that the fate of each administrator will be left to "the whim of the School Board. Of course, it's going to get personal. It's going to get political."

You can call it "whim" or "judgment," but granting responsibility throughout any organizational hierarchy is the most effective way to ensure efficiency and productivity. Whether the goal is corporate profit or public education, whether consumers react to policies through purchase decisions or taxpayers through votes, administrators must be accountable to policy makers, and policy makers must be accountable to stakeholders.

Unions certainly change the calculation a bit for their members, but not unlike resistors in an electrical circuit, they inherently distort the feedback loop by distributing some of that responsibility onto labor processes. That can have its benefits, but over the long term, it hinders the organization's ability to adjust to the interests of those it ostensibly serves.

And when the organization is a government entity, it can survive by fiat as problems fester.

Mayor Baby Daddy

Expecting politicians to act with sexual propriety is loser's bet, I know. And you can call me an up-tight, un-modern Puritan prig or whatever, but it just isn't good when the Mayor of the largest city in the state--someone who is, correctly and properly, a role model for minority youth--reveals he is having a child out of wedlock.

The baby with live-in girlfriend Farah Escamilla, a legal assistant for a Providence law firm, is Taveras' first. The due date is Jan. 4 or 5, almost exactly a year after he became the city's mayor.

He began dating Escamilla, who Taveras said is from Providence, shortly after his inauguration and subsequent break-up with [a] longtime girlfriend.... Taveras said he and Escamilla were friends for more than four years before they began dating.

Although the baby was not planned, Taveras, 40, said he and his family are "really excited." He and Escamilla don't know the baby's sex yet, and the mayor didn't say whether marriage was in his future.

Providence used as example of how "Compensation Monster [is] Devouring Cities"

Steve Malanga looks at the national problem of cities in over their heads (particularly because of pension promises) and uses Providence (and New Haven, CT) as examples:

Cities are also running out of fiscal alternatives to deal with their deficits. Like states...many cities have used one-shot revenue deals, hidden borrowing, and other gimmicks to bolster their finances. The weak economy has lasted so long, though, that these techniques have been exhausted. To balance its 2010 budget, for example, Providence, Rhode Island, borrowed some $48 million (using its fire stations and headquarters as collateral); it also drained most of its reserve fund, which shrank from $17 million to $2 million in just one year. Moody’s Investors Service and Fitch Ratings subsequently downgraded the city’s bond ratings by two notches, essentially ending its ability to use fiscal gimmicks. But Providence still faces a budget squeeze because its retiree costs amount to 50 percent of tax collections.

Local governments also helped bring on their current budget nightmares by carelessly expanding hiring and wages in recent boom years. In the decade leading up to the 2008 financial crash, the number of workers for cities, towns, and schools increased 16 percent, even though the country’s overall population grew just 12.5 percent. Wages also increased, and, of course, the hiring frenzy made those pension obligations even worse. The result: over the same decade, the total in wages and benefits that public schools paid to teachers and noninstructional staff (to take one category of public-sector worker) jumped an amazing 72 percent, despite moderate increases in student enrollment.

In and Out of the Public Sector

The conversation was mainly of Esserman and arbitration when Monique called in to the Matt Allen Show, on Wednesday. Stream by clicking here, or download it.

An Acute Example of the Broader System

If you skipped the historical essay to which Marc linked on Monday, give it a read. It concerns the making of the pension mess in Providence, and its most valuable insight, in my view, is the light that it shines on the entire dynamic created by public sector unions.

The defining statement comes from firefighter and Local 799 union President Stephen Day, who was a member of the 1989 Providence Retirement Board that then Chief of Administration John Simmons said "broke the city":

"All we did" on Dec. 6, 1989, says Day, "was vote in broad daylight and do what we had the right to do. If we had the authority to do this, we were going to do it. You can't fault someone for being aware" of the laws. "I don't regret it at all."

Of course, union leaders typically have good reason to be aware of the law, because they work so hard in such a long-term coordinated fashion. Step one was to give the unions the controlling hand on the Retirement Board:

During the 1970s, Senate Majority Leader John P. Hawkins, a former Providence firefighter himself, and other senators began advocating legislation that would add two union representatives to the city's Retirement Board, thus tipping the balance. The legislation eventually passed around 1977.

Step two appears to have been to insert some innocuous-seeming language in the city's home-rule charter, and step three was to lob a court case into the system (to a judge with who knows what motivation) to change the nature of the board's authority:

The [spring 1989] case involved a Providence police officer, Walter Bruckshaw, who, along with 100 other city employees, wanted to buy credit in the city pension system for work they had done for other government agencies. The Retirement Board denied them. The court ruled the city's home rule charter, which went into effect in 1983, granted the Providence Retirement Board control over city pension decisions.

And voila. Day and his counterpart in the police union, Richard Patterson, ran for seats on the board promising to "boost the pensions of current and future retirees. The result? Compounded cost of living adjustments (COLAs) of 3-6%, tripled minimum pensions for police and firemen, and reduced minimum years of service. As city administrators strove to control the bleeding, the unions maneuvered these issues into contract negotiations. Then came all of the individual Pension Board decisions:

In 1991, every police officer who retired in Providence –– 21 in all –– received a job-related disability pension from the Retirement Board.

Of the 53 firefighters leaving their jobs, the Retirement Board approved disability pensions for 48 of them.

So, yes, Day's statement about authority isn't without justification, but the authority ultimately comes not from the narrow scope of Providence politics and governance, but from the reality of public-sector unions in the first place. The unions get a seat at the negotiating table as employee representatives, and they get a hand in the political process that determines those with whom they'll be negotiating. That's simply the incentive structure of the system, and as becomes more undeniable with every passing month, the incentives are far too strong even for fiscal reality and inevitability to overcome.

The Labor Model Must Change with the Education Model

Both sides in the debate over educational reform at Hope High School in Providence have made reasonable points. Those associated with the school note improved scores and a vitalized environment when reforms were under way. Those associated with the district cite the need to educate all of Providence's students and a need for consistency across the city. One suspects, though, that the final sticking point was money:

... Supt. Tom Brady persuaded the state Department of Education that the Hope academic model was too costly to maintain. While acknowledging that the school had made dramatic gains, he said that the reforms called for an additional 20 to 30 teachers at a cost of approximately $2.5 million annually — an expense he said the district could no longer afford.

Although governing bodies in Rhode Island have long behaved as if it were not true, the tax base is simply not a bottomless well. Even if a particular reform can be proven to improve results dramatically, the cost is not a negligible factor.

And that, to me, illustrates an underlying problem in the way we handle the education system. Insiders like to pretend otherwise, but there's no point of separation between the education model and the labor model, and the latter allows very little room for maneuvering. Even if the employees of Hope decided that the better work environment and the chance to be part of something revolutionary justified financial sacrifice, they could not have offered it, because labor contracts are district-wide documents negotiated through a statewide union that has its eye on trends and power all the way up to the national level.

If the faculty and staff who so believed in the steps that Hope had been taking had offered to meet former Supt. Brady halfway on the increased total cost, perhaps he'd have gone for it. Those employees would have certainly been doubly invested in making the changes pay off

Comparative Budgets

I don't know Providence finances well enough to quibble with Mayor Angel Tavares's budget proposal, but in emphasis and presentation it stands in stark contrast to Governor Lincoln Chafee. Tavares led with controversial and concrete initiatives for spending reduction, while Chafee led with a massive tax increase. Maybe they'll get to the same place — if the unions and the General Assembly refuse to go along with Tavares's plan, for one possibility — but I doubt it.

The mayor's budget contrasts with others in this respect:

His budget includes raising the tax levy by 5.25 percent—one percent more than what is currently allowed by state law.

That's being touted as a major "sharing of the pain," but from the perspective of Tiverton, it's less than the average annual tax increase over the past decade. It puts things in perspective for me that a city on the brink of catastrophe considers an extreme measure to be less than our business as usual.

I guess those who've run the government, in Tiverton, haven't been as keen on "sharing the pain" as inflicting it.

Do-Nothing or Hide-it Cicilline

The report on the Cicilline Adminstration's fiscal inadequacies has dropped. The major findings, according to the ProJo:

-- "The Administration transferred funds from the Undesignated Surplus (Rainy-Day Fund) without approval of a majority vote of the City Council as required."

-- "The Administration did not provide financial information on a timely basis to the independent auditor, the City Council or the Internal Auditor."

-- "The Administration did not provide the City Council with monthly financial statements or with projections of year-end surpluses or deficits."

-- "The Administration prepared budgets based on unrealistic assumptions."

-- "The Administration was not transparent in its use of the City's Capital Assets Account."

-- "Financial reports submitted to the State were inaccurate."

-- "The City Council's checks-and-balances on the Administration were ineffective."

The City Council will consider a resolution at its meeting Thursday to investigate whether former Mayor David N. Cicilline and his administrators broke laws with financial decisions they made over the years.

Councilman Miguel C. Luna is sponsoring the resolution. It asks the council to hire a lawyer, with a background in prosecution, to "review the facts surrounding all transfers, withdrawals and expenditures of funds from reserve and real estate proceeds accounts" from 2003 to 2010," a draft of the resolution reads...."We can't just focus on the future," Luna said Wednesday. "He [Cicilline] knows what he did. He brought the city down to the knees. He wasn't doing the job of the city."

David Cicilline Explains that He is Not Delusional, Because Spending Was Reined-In In the Years that Providence's Budget Grew by 71 Million Dollars

In an op-ed in today's Projo, First District Congressman David Cicilline defends his defense of his record as Mayor of Providence, as well as defending the record itself...

Five days before my election to Congress, last November, I said that Providence was in “excellent financial condition.” Today, Mayor Angel Taveras faces a critical deficit, and people want to know whether I was delusional, not paying attention, or not telling the truth.

It was none of the above...

Finding a way to close the nearly $60 million budget shortfall that I faced on my first day was urgent, as was establishing a plan to restore the city’s fiscal health.

Within two years, we reined in spending, cut hundreds of positions from city government, negotiated concessions from unions and enacted serious financial reforms, such as requiring employees for the first time in the city’s history to contribute to their health-care insurance and initiating long-overdue pension reform.

According to the annual figures that are compiled by the RI Division of Municipal Finance, municipal-side spending by the City of Providence in the first budget of the Cicilline administration (FY2004) increased by 19.5% over the previous year. In the fiscal year after that, municipal-side spending grew by a further 3%. On the education side of the budget, spending grew by 7% over the previous year in Cicilline's first budget, then remained level in his second...

Source: Division of Municipal Affairs of the Rhode Island Department of Revenue.

In terms of absolute numbers, spending by the City Providence increased from $490.8 million in the fiscal year that preceded Mayor Cicilline's first budget to $562.3 in the fiscal year covered by his second budget. Apparently, increasing a budget by $71.5 million over a two-year period is what Congressman Cicilline refers to as "reining in spending".

And while Providence's official financial report shows that the Ciciline administration did cut almost 200 positions from the city payroll in his first two years in office, it also shows that there were 31 more municipal-side positions in Providence in Mayor Cicilline's final fiscal year than there had been at the start of his first fiscal-year...

Source: City of Providence, Rhode Island, Comprehensive Annual Financial Report, Fiscal Year Ended June 30, 2010. Page 85.

(The major gain in municipal-side personnel in the latter-half of the Cicilline administration was in the area classified as "public works, miscellaneous". Also, there are now 40+ more building inspectors in Providence than in the pre-Cicilline days, though in terms of head-count, this is cancelled out by the fact there are 40+ fewer people in the "Firefighting department").

Finally, it should be noted that Congressman Cicilline does not claim in today's op-ed that 445 positions were eliminated during his tenure of mayor of Providence, a claim which he had repeated several times after the story Providence's "surprising" financial troubles broke after Mayor Tavares' innauguration. The claim is not supported by the numbers in the city's most recent financial report -- but if the Congressman follows his existing pattern, maybe he will tell us what he really meant by this statement in a year or two.

Dependence on Corruption

Not to belabor the conversation about high-priced union executives, but certain aspects highlighted in our comment section point directly toward one of Rhode Island's major problems.

As Marc mentioned, yesterday, the head of Local 1033 of the Laborers' International Union, representing 900 municipal workers, Donald Iannazzi, makes $265,870. It's worth pointing out that the city's charter caps the salary of the mayor of Providence at $125,000. That is, the system by which Providence operates allocates more than twice as much money for the salary of an employee representative than for the person who has the responsibility of running the organization for which those employees work.

Moreover, the current mayor, Angel Tavares, gave himself a 10% pay cut. That's certainly relevant to attempts by commenter Russ to distract with comparisons of high-priced CEOs in private industry. Most private companies make their money by developing, manufacturing, or processing something. As obscene as some executives' compensation packages may be (and as representative of the need to increase other organizations' ability to compete as it is), the comparative pay of the CEO and the general workforce has to be considered relative to the value and profitability of the product.

In a labor union's case, the "product" is, in large part, the pay of the general workforce. So, it's a bit more egregious for the union leaders to coast along with their fortunes as workers give concessions. And to the extent that labor leaders are responsible for the broader well-being of their employees, they should have been the ones demanding full accounting of the pension system and, in Providence specifically, evidence that the city was in good health.

Now throw in Iannazzi's job swapping with fellow Laborers' International administrator and RI Senate Majority Leader Dominick Ruggerio. Ruggerio's son works for Iannazzi, and now Iannazzi's son pulls in $88,112 at the age of 25 as a "special assistant" to Ruggerio. For all of the talk about classes that union members foment, that's precisely what Iannazzi and Ruggerio represent: An insider class to whom economic reality does not apply.

They get away with it, though, because as Michael exemplifies with his tangential comment to Marc's post, too many people are reliant on the corrupt system. If they aren't enraptured with talk of unique rights and battle with corporate big-wigs, caught up in sweeping rhetoric that they must take an ever greater portion of taxpayer dollars in order to stand as the last bulwark of the middle class, they are dependent on union vein-tapping and persuaded that, but for the union, they'd be working for free.

Nesi: Tavares/1033 Deal "saves" 11%

WPRI's Ted Nesi has done some digging and found out more about the Tavares/1033 deal, particularly how much it has "saved":

The wages, benefits and other provisions outlined in Local 1033′s contract were projected to cost Providence’s city government about $60 million per year, adding up to $240 million over four years, according to calculations by Director of Administration Michael D’Amico sent along by spokesman David Ortiz. (For context, the entire city budget is somewhere around $638 million this year.)

So the $26 million in concessions approved by Local 1033 this week will decrease the contract’s estimated cost from $240 million to $214 million, a reduction of just under 11%.

UPDATED: The Providence Deal with Local 1033 (Cold Water Alert!)

UPDATED: Here are the actual deals (2011-12; 2012-15). The below was originally posted based on info released at Mayor Taveras' press conference as reported by the ProJo. (Thanks to commenter jparis for the heads-up).

According to the report from ProJo, here's the basic outline of the deal Providence Mayor Angel Taveras made with Local 1033:

* In exchange for "job security": 1% pay cut effective July 1; no raises until Jan 2012 June 30, 2013. Comment: That's one two year(s) without a raise. Another example of gov't speak trying to make the "cuts" look like more than they are - "The workers also forgo planned raises that were part of their previous agreement: 1-percent that should have came Jan. 1, 2011; 2-percent on July 1, 2011; and another 1-percent that was due Jan. 1, 2012." ADDENDUM: 3% raises resume July 1, 2013, with another 3% raise July 1, 2014. Glad to know we're going to be out of fiscal trouble by then.

* Increase in health care contributions from current 9.8%, depending on current salary. Those making more than $50,000 go to 16.5, 18 and 20 percent for 2012, 2014 and 2015 respectively. Less than $50,000 go to 15% in 2014. Comment: (Delayed) Reality setting in. I get the "give and take" of negotiations, but given the $70 million deficit facing the city NOW, why not impose the 20% (or 15%) NOW? ADDENDUM: Is the 20% really 20%? The calculation to determine the employee co-payment "shall not increase by more than 9.5% annually."

* 1% reduction in longevity payments, saves $1.5 million. Comment: I suppose the total removal of longevity is too much to ask for...

* Overall, $26 million saved over next 4 years, "including $2.2 million this year and $4.6 million next year." Comment: Quick math - so that means $19.2 million will be saved in years 3 and 4. Anyone else feel like that may be "on paper"?

Next year the projected deficit is $110 million. This deal is projected to save $4.6 million next year. Only $105.4 million to go.

Look, if this was 2006, this deal would be something to really cheer about. And I guess, given the past record, it still can be qualified as a positive step. But it does add to the sense that government just doesn't do a good job of expediently dealing with fiscal crisis. Again, given the past, I'm sure the union leaders and membership really feel like they've made big sacrifices here. The Mayor probably feels the same way. Like I said, welcome to 2006 guys. Too bad it's 2011.

Sensible Deal in Providence?

Fiscal sanity coming to Providence? (I only question because the devil is in the details, which will be forthcoming tomorrow.)

Mayor Angel Taveras...said in a news release that [a new] agreement [with Local 1033] saves Providence "more than $26 million over four years, including almost $7 million in savings in the next 18 months." It includes a pay cut, a three-year freeze on raises, a reduction in longevity pay, a reduction in wage levels for new hires, and increases in insurance co-payments, as well as enhancements to city services with no additional overtime.

"Local 1033 was an honest and forthright partner in this negotiation," Taveras said in the news release. "Leadership came to the table in good faith and with a realistic understanding of the difficult steps we must take to restore Providence's fiscal health.

"These are not symbolic cuts: these are real changes that will help us address the fiscal crisis we face, both short and long term. It is never easy to take a pay cut. I truly appreciate 1033's willingness to be a partner in our effort to put Providence back on solid financial footing."

From "Excellent Financial Condition" to Receivership-Ready in Three Short Months: Mayor Cicilline, Is it Possible that you Lied About and Covered Up the Financial Condition of Providence?

In predictable fashion, PolitiFarce has jumped into the matter of David Cicilline's self-serving, gross misstatements about Providence's financial condition by examining the former mayor's statement about a minor, tangential matter. (With this approach to current events coverage, if a dragon were laying waste to a town, the news team would rush in and provide extensive coverage of the iguana that was messing around in a local's garden.)

Providence's bonds have been downgraded, by Moodys a couple of days ago, and now by Fitch (accompanied by some pretty serious comments). The city's fiscal condition is such that it qualifies for receivership under Rhode Island law.

Representations made by then-Mayor Cicilline as to the city's financial condition, however, painted a markedly different picture - quite a rosy one, in fact. For the sake of PolitiFarce, we present his characterizations on October 29 during the Channel 10 debate with John Loughlin (emphasis added).

Loughlin: ...and I think that you need to come clean you need to level with us and let us know what the condition of your city is…

Cicilline: Representative Loughlin….

Loughlin: Before you start thinking about going to Washington and spending more taxpayers money.

Cicilline: Representative Loughlin, you have made the reckless claim repeatedly…

Loughlin: No, your own internal auditor made that claim.

Cicilline: Let me be very clear…

Rappleye: (Interrupting)

Loughlin: The City of Providence is broke and you know it …

Cicilline: The City of Providence has earned an ‘A’ rating from its agencies which are not, you know political campaigns, but are done by professionals externally on the city’s financial condition. I’m very proud of that. The city is in excellent financial condition and the suggestion by the city council auditor that was condemned by the President of the City Council as reckless and false. Representative Loughlin knows that.

Loughlin: Then why won’t you give him the data? Why? He had to file a freedom of information act!

Here's the point that PolitiFarce seems determined to miss and the former mayor is hoping will be overlooked. The SEC is currently reviewing Rhode Island's bond offering statements

to determine whether the state adequately disclosed the precarious condition of its pension system.

Statements by the former mayor, in fact, go beyond inadequate disclosure (i.e., the level that attracts SEC scrutiny) and enter the realm of deliberate misrepresentation. Doesn't this get dangerously close to a breach of fiduciary responsibility and, therefore, to criminality?

Providence Now Eligible for State Takeover and Suspension of Municipal Democracy

Barbara Polichetti of the Projo is reporting that Moody's has downgraded the City of Providence's bond rating. Combined with the budget deficits projected for this year and next, this means that the City of Providence now meets the conditions for state intervention specified in the"fiscal stabilization law" passed last year, ranging from the creation of a budget commission, to takeover by a receiver.

The Providence Substitute Situation and Demanding Negotiations to Correct a Mistake

Justin's post from yesterday mentioned that Providence Mayor Angel Tavares' decision to send dismissal notices to all current Providence teachers relates directly to the cost of substitutes. According to data available from the Rhode Island Department of Education website, Mayor Tavares has picked a reasonable area for reform, as the per-pupil costs of substitute teachers in Providence have for the past decade been significantly above the state average…

In terms of total dollars, this amounts to between about $6 million and $9 million more being spent by Providence per-year than would be, if substitute costs were at state average…

Putting things into a budgetary perspective, if Providence's substitute costs had been reformed in the first year of the Cicilline administration (humor me here) and brought into line with the state average, and all other school costs were held equal, the Providence education budget could have been expanded from its FY2003 level to its FY2009 level (the last year for which data is available) with less-than-1% annual increases.

This problem is more than just fiscal. Paying two to three times the state average for substitute teachers is not an "inefficiency"; it is a mistake. It makes public services more costly without doing anything to improve their quality. A school administration shouldn't have to "give something back" in order to correct an outright error that provides no value and only costs to the public.

There can be little doubt that the repeated drawing of lines in the sand by union leaders, behind which everything about a job intransigently is placed -- including practices that in no way serve the public interest -- has contributed greatly to Mayor Tavares' decision to send dismissal notices to the entire Providence faculty. His drastic, across-the-board action is no less likely to bring about change than would an effort to get union cooperation on an isolated issue, where a union is inclined to protect its economic benefits, despite no one else benefitting in any way from the current situation.

In theory, it doesn’t have to be this way. Public-sector unions could realize that their special position within government monopoly systems for delivering public services entails some responsibility for considering the public interest when determining acceptable "negotiating" goals, and that certain options that lack discernable public value need to be closed off. But I don't know that this theory will ever match up to reality.

Stephen Beale has more information on substitute teaching policies in Providence, at GoLocalProv.

Question #4 for David Cicilline on the Category 5 That's Hit Providence

Former Providence Mayor David Cicilline's statements, made to both Scott MacKay of WRNI (1290AM) and Alisha Pina of the Projo, that his administration withdrew funds from the city's "reserves" to address the city's deteriorating fiscal situation is a reversal of the basic position he had previously presented to the public.

Throughout the second half of 2010, Mayor Cicilline and members of his administration repeatedly denied that the reserves had been drawn down by $32 million, as was reported by City Auditor James Lombardi in a detailed report issued in October. On August 6 of 2010 -- before the report was issued, but after the depletion of the reserves had occurred -- Mayor Cicilline wrote this in the Projo…

Restoring the city’s financial integrity has been a top priority of my administration since I took office in 2003, after decades of corruption, waste and mismanagement. We have done that with excellent financial management, produced A ratings from all of the rating agencies, won national awards for financial reporting, built up our reserve accounts, and by tightly controlling spending.

Learning now from Congressman David Cicilline that the reserves were spent raises several questions, relevant both to how he handled his job as Mayor and how he intends to handle the job of Congressman…

• Given the timing of his statement from the August op-ed, does Congressman Cicilline believe it is possible to "build-up" a fund and spend it at the same time?
• If Mayor Cicilline believed that Providence's financial and economic situation did justify the use of the reserves, why was he unwilling to be forthcoming with his reasoning until now?
• Should Congressman Cicilline's constituents expect him to repeat the practice of not revealing policies and spending that he supports, until months after decisions that cannot be reversed are made?

Question #3 for David Cicilline on the Category 5 That's Hit Providence

The next question involves some nuts-and-bolts at the accounting level. Congressman David Cicilline, in his interviews with both Scott MacKay of WRNI (1290AM) and Alisha Pina of the Projo is now saying that his administration did spend a portion of the City of Providence's reserves to help balance the FY2010 budget. (This is a change in the Mayor's position on the use of the reserves and will be addressed in the final question).

What is casually being referred to as the "reserves" by Congressman Cicilline is actually comprised of at least two separate accounts, the "reserve contingency funds cash account" and the "capital assets account", two of the accounts that were prime subjects of Providence City Auditor James Lombardi's October report. According to the City Auditor, both of these accounts had been substantially depleted over the course of Fiscal year 2010. The reserve contingency funds cash account reached the point of being overdrawn and the capital assets account had its balance reduced from $22.3 million to $4.7 million.

Here are the real nuts-and-bolts: the "capital proceeds fund" column of the "combining balance sheet" of the "nonmajor governmental funds" page of the Comprehensive Financial Report for Providence for FY2010 contains a set of numbers that appear to match Auditor Lombardi's description of (and concern about) the capital assets account. Furthermore, it is obvious from tracking this fund across the 4 years of comprehensive reports available on the City of Providence website that a substantial change in the management and utilization of this fund occurred in FY2010:

(Source: Combining Balance Sheets for Nonmajor Government Funds from the City of Providence, Rhode Island, Comprehensive Annual Financial Reports, 2007-2010.)

The questions these numbers raise, in this case questions that can be answered either by members of the former Cicilline administration or the current Tavares administration, are...

• Was the $17.6 million withdrawn from the capital proceeds fund simply transferred to the general fund, or spent on something specific?
• Given that $17.6 million was withdrawn from the fund, should anyone be worried that the reported liability "due to other funds" increased instead of decreased?
• What source is supposed to be providing the money "due from other funds" to the capital proceeds fund and when is it scheduled to be paid?

Question #2 for David Cicilline on the Category 5 That's Hit Providence

Reflecting on the early years of his mayoralty, former Providence Mayor David Cicilline told WRNI (1290AM) interviewer Scott MacKay that "from the first time that I took office, there was always a gap between revenues and expenditures" and that he and his administration "began to chip away at that gap".

According to the annual budget figures maintained by the Rhode Island Division of Municipal Finance, the chipping-away began with a major spending increase. In Mayor Cicilline's very first budget (FY2004), municipal spending increased 19.5% over the prior fiscal year, over $40,000,000 in dollar-terms. This was a structural increase as no reductions from one year to the next would occur in the Providence municipal budget until FY2010 (see the table below the fold).

Later in the interview, now-Congressman Cicilline attributed Providence's budget problems, at least in the last couple of years, to "very, very serious cuts from the state", "this incredibly hard recession" and "the loss of federal education stimulus funds". If Congressman Cicilline believes these to be the primary factors which created the shortfall passed on to Mayor Angel Tavares, doesn't this imply that the Cicilline fiscal-management plan assumed that $40,000,000+ of annual spending, over and above the spending already in place when he took office, was going to be covered by state-aid increases and/or economic growth? If not, where was the money to pay for the permanent increase in the budget supposed to have come from?

(Anchor Rising will of course avoid asking any snarky questions about whether Mayor Cicilline planned on using stimulus funds in FY2009 and after to defray costs, when his administration decided to implement the major budget jump in FY2004).

Continue reading "Question #2 for David Cicilline on the Category 5 That's Hit Providence"

Question #1 for David Cicilline on the Category 5 That's Hit Providence

In recent interviews with Scott MacKay of WRNI (1290AM) and Alisha Pina of the Projo, and in material available on the City of Providence website, David Cicilline claimed that he reduced costs by eliminating 445 positions in Providence government during his tenure as mayor.

However, the city's most recent "Comprehensive Annual Financial Report" presents different numbers. Measured between June 30, 2002 (the last data point available in the report from before Mayor Cicilline took office) and June 30, 2010, only 222 full-time equivalents were eliminated. Measured between June 30, 2003 (where the baseline figure would include half of Mayor Cicilline's first term) and June 30, 2010, 247 full-time equivalents were eliminated. How should the official figures be reconciled with Congressman Cicilline's claim that 445 positions have been eliminated?

In addition, also according to the numbers in the comprehensive financial report, the reduction in total number full-time equivalents that occurred during the Cicilline administration occurred solely within the school department. Measured between 2003 and 2010, 278 full-time equivalents were eliminated from the school department, while 31 full-time equivalents were added to the municipal departments. Does the choice by Congressman Cicilline to use the number of city positions as a metric of fiscal and managerial responsibility, along with the actual changes in FTEs, reflect a belief on his part that the City of Providence's fiscal issues are primarily with the school-side of the budget, while the municipal side has been running at near-optimal efficiency?

Continue reading "Question #1 for David Cicilline on the Category 5 That's Hit Providence"

Cicilline on Defense

Rep. David Cicilline is in town and defending his record as Mayor of Providence, explaining to the ProJo that he cut hundreds of jobs, renegotiated benefits and took other steps to mitigate budget deficits, including tapping into the reserve fund.

If you have groceries that cost $500 a month and this month groceries cost $600 and you take $100 from your savings, you don’t have a deficit...You use some of your savings to pay your groceries; you don’t owe the grocery store more money.

The fact of the matter is that while Cicilline did take steps to cut costs it was no where near enough to what was required. He's not alone in this. Across the state and nation, political leaders took longer to adjust to the new austerity than was necessary because they hoped for magic bailouts or that things would turn around. It didn't happen and many were voted out of office because of it. David Cicilline got a promotion.

An Audit of Popularity

More news today about Providence's finances under Mayor David Cicilline:

At the time, Mayor David N. Cicilline, who was a candidate for election to Congress, vehemently denied the finding. He insisted about $30 million remained in the accounts, and charged that Lombardi was playing politics. The audit, by Braver Accountants and Advisers, of Providence, said $3.46 million was left. ...

"Because of the popularity of the previous administration, no one was willing to listen to the truth," [City Council Finance Committee Chairman John] Igliozzi declared. Cicilline and his forces "were extremely successful with their political spin machine."

Asked why the council did not do more to head off the problem, Igliozzi said part-time council members found it hard to cope with what he called deception by Cicilline and his top aides and were obliged to acquiesce to questionable labor deals and budgets despite their vocal misgivings.

Whether the accusation concerns a narrow act or a broad state of affairs, we have to acknowledge that Cicilline was only the symptom of the problem. Everybody, from the Providence Journal to politicos to voters failed the city. Too many people put something else too far above good governance — whether it's the ideology of the media, the personal greed of unions, the eagerness of social activists, or what have you. They wanted Cicilline to succeed, and so, as the article begins, nobody cared, even though "the watchdog was barking."

Everything that we're hearing, right now, is so much tail covering, all of it likely to be forgotten by the time the next election rolls around and Cicilline has to stand before the voters once again.

The Union Rhetoric and Financial Reality

You know, this sort of talk can only expand the sense of unreality between unions and the general public:

"Something is insane in Providence," [American Federation of Teachers President Randi] Weingarten said, standing on the steps of City Hall. "On a week where teachers and students were taking a well-deserved break, a secret plan was being hatched in Providence. They thought no one would be there to hear it. Fire everyone — that was their plan."

Maybe it's because my family hasn't been able to afford to go anywhere during vacations since my honeymoon a dozen years ago, but it strikes me as peculiar to assume that February vacation finds full regiments of teachers flying off to vacation spots around the globe. It seems, rather, that a better time to slip secret plans through would be just before they leave or just after they return.

Moreover, Weingarten manages to remind the general public that the protesting horde just wrapped up another full week off — a winter break, not to be confused with the Christmas break or the soon to arrive spring break. Let the kids decompress, by all means, but are Rhode Island's schools running so smoothly that there's no need to fill time out of the classroom with strategy sessions, evaluation of successes and failures, and professional development — all within scope of the enviable employment packages that teachers already receive?

In similar regard, this statement from a parent at the rally emphasizes the point:

"Mr. Mayor," said Maria Almestica, "we don't want 35 kids in a classroom. This is not OK. Our children should be learning, not worrying. You're messing with their futures."

The children shouldn't have to worry that the city in which they live will not remain financially solvent, and they shouldn't have to worry that their state cannot produce adequate employment to allow them to remain within its borders when they enter the workforce. The status quo of the Rhode Island public sector is not sustainable, and at bottom, that is what's messing with students' futures.

Taveras' Proposal - It isn't just Teachers Taking a Hit

Ian Donnis has the list of Providence Mayor Taveras' proposed cuts to deal with the budget deficit.

* Effective immediately, the Mayor is taking a 10% pay cut.
* The Mayor will submit a FY12 budget that cuts the Mayor’s office payroll by 10%.
* Effective immediately, 13 non-union positions, including several school administration positions, have been eliminated – resulting in $1.7 million in savings to the City.
* Department Directors have been instructed to submit budgets for next year that reflect at least a 10-15% overall reduction.
* Four to six schools will be closed and a number of teacher positions will be eliminated. On Tuesday, the Mayor published a timeline for the process by which schools will be recommended for closure.
* There will be an immediate review and freeze on all non-essential spending and hiring across City departments. Numerous unfilled positions will remain vacant and will be eliminated from next year’s budget. Moving forward, all hiring decisions must be approved by Director of Administration Michael D’Amico and Chief of Staff John Pagliarini.
* There will be an immediate review and renegotiation of contracts with third-party vendors.
* The City has cancelled its contract with a benefits administration company. This contract cost the City $1.4 million last year. By bringing this service in-house we have created an annual savings of $900,000.
* The City will seek to renegotiate union contracts to produce cost savings.
* The City will negotiate with tax-exempt universities and hospitals to increase support for the City.
* The City will lobby the State to fully implement the Statewide Education Funding Formula.
* The Taveras administration will accelerate the consolidation of City departments and services. This process is underway and next year’s budget will reflect efforts to cut costs while streamlining City services and making it easier for citizens to access government.
* The Taveras administration will actively pursue pension reform.
* Providence will aggressively pursue short- and long-term opportunities to work with neighboring cities and towns to make regionalization of services a reality.
* The Taveras administration will work in close collaboration with the City Council, the State and the community to pursue new ideas for reducing spending.

UPDATE:More from Nesi summarizing the report (PDF) of Mayor Taveras' financial review committe.

Nesi: Providence Deficit Similar to Central Falls

Ted Nesi notes the similarity between the Central Falls and Providence deficits:

[Central Falls'] budget shortfall was also pegged at about 17% when it filed for receivership during its 2009-10 fiscal year. But because of its small size, the actual amount of Central Falls’ deficit was only $3 million – a rounding error compared with Providence’s $110 million gap.

...Simmons cautioned against leaping to any conclusions based on this morning’s sketchy advisory, saying it’s impossible to really understand the Providence projections without knowing how the review panel defined “structural deficit.”

He also said the early numbers released by Central Falls when the city made its first, unilateral receivership filing probably understated its predicament.

Still, while Central Falls is significantly smaller than Providence, Simmons did see “common themes” between the two cities, notably a basic gap between money in and money out. But Providence is ”one of the engines of the economy activity, and having a structural balance in the capital city is important for the state as a whole,” he said.

Providence Deficits: The Legacy of Cicilline

Everything was so rosy in Providence under former Mayor David Cicilline. Remember? Now we know why. Cicilline's adminstration basically slapped an new coat of paint on a rickety jalopy and called it "new." Earlier this month, we learned that then-Mayor Cicilline's administration paid for the paint by drawing down on the rainy day funds, underfunding pensions and plain old overspending. Now, new Mayor Angel Taveras is dealing with the fallout (h/t Ian Donnis):

The Finances Review Panel delivered its final report to Mayor Taveras late Tuesday evening. The Mayor’s team will make full copies of the report available at 10AM on Thursday morning. A summary of the report is as follows:

• This fiscal year’s structural deficit is $70 million.

• Next fiscal year’s structural deficit is $110 million.

• Without immediate remediation efforts, the City is expected to end this year with a deficit of as much as $29 million.

• These figures all assume no mid-year reductions in state aid.

“The findings of the Municipal Finances Review Panel lay bare the true extent of Providence’s financial crisis,” Mayor Taveras said. “When I took the oath of office on January 3, I made a commitment to be honest with the people of Providence about the problems we face. I also promised that I would not shy away from making tough decisions to put our city back on firm financial footing. We are taking immediate actions to make the tough decisions needed to move Providence forward. Our citizens expect and deserve nothing less.”

Education Roundup

A bevy of education-related stories today. The repercussions following the Providence teacher "firings" continue, with Mayor Tavares getting attention from the New York Times. The ProJo reported that teachers fear it's the end for seniority-based retention, which is kind of a strange way to put it because, as the story also explains, that end was already foreshadowed by Education Commissioner Deborah Gist last year.

In Warwick, a review panel has recommended more transparency on the part of the School Administration, citing communication breakdowns between the City-side and School-side. According to one commission member, there was also "an air of mystery around school finances" that needed to be made more understandable. They also various scenarios for reconfiguring the make-up of the school committee. The report should be available at warwick.org some time soon. Meanwhile, the Warwick School Department unveiled an new electronic records program that will make student data available to all "stakeholders" (including parents!). Warwick also issued the contract-maximum 40 teacher layoff notices (but can only actually fire 20).

In Cranston, the School Committee is asking for $3.5 million in concessions from school unions and asked the City for more money. However, Mayor Alan Fung has already indicated he plans on level-funding the schools this year.

Providence Teacher Layoffs: The Era of Cutting Begins?

It's been explained again and again that the pink slips are a technical response to fiscal realities. Nonetheless, that hasn't stopped the hyperbolic rhetoric from continuing to flow from Providence teacher union leadership once the pink slips were issued. (I guess once we heard the Pearl Harbor reference, we shouldn't have been surprised). To act like this technical maneuver is an actual firing of 1,900 teachers is completely disingenuous, never mind saying its union busting. Both the mayor and superintendent have stated most teachers will be hired back. This is nothing more than crying wolf and amping up the rhetoric to a fever pitch. All for what? Power? I don't know.

Look, it's just a bad situation that has been allowed to get worse and worse due to myopic kicking-the-can-down-the-road on the part of union leadership and Democratic politicians in Providence for decades. Now the chickens are roosting and contemporary teachers are paying for the sins of the past. I can understand the frustration and the fear and paranoia, but private sector workers deal with those worries regularly and still manage to function as professionals.

For instance, I've heard complaints that the administration is going to cherry-pick the senior teachers--regardless of performance--to save more money. Guess what? It routinely happens in the private sector, particularly amongst the same professional class that teachers are part of. Middle-management? They are ripe for salary pruning all the time.

My point isn't that misery loves company, it's that this is the new reality. Much like the 1990's were a "vacation from history" (a la Fukuyama), unionized public employee unions have had a vacation from "economics" for a few decades. The private sector and general public paid for that vacation and have told elected officials we can't pay anymore. So, the cutting has begun.

Providence Pink Slips II

The ProJo has more on the Providence School district sending pink slips to all teachers. Basically, it was Mayor Angel Taveras' call based on economic reality and trying to have as much flexibility as possible.

The mayor said the unprecedented move was necessary because of the depth of the financial crisis facing the city and the schools....[Providence School Superintendent Tom Brady] said the mayor alerted him about the impending crisis about two weeks ago. As Taveras became more alarmed, he asked Brady to come up with a solution that would give the city and the district “maximum flexibility” to respond to the city’s financial deficit, expected to top $57 million.

The district now fills openings based on an interview process that requires teachers to submit a model lesson and a writing sample.

It remains unclear how seniority will be used when teachers are rehired under the dismissal system, however....Supt. Tom Brady said it was too soon to say whether seniority would be eliminated in its entirety. The district is still embroiled in a lawsuit filed by the Providence Teachers Union that seeks to restore seniority, although both sides are reportedly close to an agreement.

Pink Slips in Providence

Julia Steiny reminded us that it was the time of year when pink slips would rain down. Boy, did they ever in Providence where every teacher is slated to be "laid off". Well, not really--not all of the teachers will be fired. It's just a way for the Providence school district to enable the greatest amount of flexibility when it comes to budget time, as Providence School Superintendent Tom Brady explained:

We are forced to take this precautionary action by the March 1 deadline given the dire budget outline for the 2011-2012 school year in which we are projecting a near $40 million deficit for the district....Since the full extent of the potential cuts to the school budget have yet to be determined, issuing a dismissal letter to all teachers was necessary to give the mayor, the School Board and the district maximum flexibility to consider every cost savings option, including reductions in staff....To be clear about what this means...this action gives the School Board the right to dismiss teachers as necessary, but not all teachers will actually be dismissed at the end of the school year.

This is beyond insane....Let’s create the most chaos and the highest level of anxiety in a district where teachers are already under unbelievable stress. Now I know how the United States State Department felt on Dec. 7 , 1941.

Comparison: Firefighter Disability Pension Rates

Following up: So what are some of the firefighter disability rates across the country? Well, the Boston FD rate of 74% between 2005-07 is known around here. Similarly, New York City had a disability rate of 72% between 2004-2009 (62% rate in 2000, pre-9/11~and the NYPD was at 19%) while Chicago FD was at 25%. In San Jose, CA in 2009 it was reported that:

52 percent of former San Jose officers and 77 of firefighters were receiving disability pensions — rates that dwarfed those in nearby towns and other big California cities.

I suspect that most rates match the above list rather than the extreme examples given at the top (they were easily found because they were so high and caused a ruckus, after all). That being said, there is no doubt that injuries can build up over time and manifest later in career, thus making one eligible for disability pay (as Michael commented). As I replied to Michael, part of this is because a unionized pension system has a vehicle for disability retirement while the private sector 401K doesn't. Nonetheless, the 59% level in Providence still seems too high.

ADDENDUM: Also in the WPRI report was this:

As Tim [White] wrote back in 2008, “The stats for the Providence Fire Department are also affected by the early 1990s, when nearly eight out of 10 retiring firefighters were granted an accidental disability pension.” That was down to one in five by 2008.

In 1991 when I started the disability pension system in my opinion was abused. 95% of firefighters retired with disabilities. Cianci was mayor, a lot of shenanigans were going on. Those people are still collecting pensions. Over the last ten or so years the system is much better, with disabilities being awarded only after three doctors that the city chooses agree that the firefighter can no longer do the job. I don't know what the percentage is, but my guess is around 15%. The 59% comes from years past. The 15% or so that get disability pensions earned them.

59% Of Providence Fire Pensions are "Disability"

WPRI reports:

Accidental disability pensions awarded to Providence firefighters will account for more than half the $29 million the department spends on pension payments this year, according to an analysis of payroll records by WPRI.com.

City records show 438 firefighters or their families got a taxpayer-funded pension payment in January, the most recent month for which figures are available, and 258 of those were classified as accidental disability pensions – which are not taxed.

Disability pensions for former firefighters will cost the city $15.5 million in 2011 if all those payments continue for the rest of the year. That’s more than the total for every other category.

Regular fire pensions will cost $8.7 million, followed by pensions for accidental disability leading to death, $2.1 million; fire widows, $1.5 million; accidental death, $942,708; court-awarded payments, $229,719; and ordinary disability, $160,056.

In the police department, by contrast, accidental disability pensions will only make up $7.1 million of the $23.2 million total bill for pensions this year, or about 30%. A total of 639 police officers or their families got pension payments in January.

Many of us are grateful for the job our firefighters do and do not begrudge them the salary and benefits they are paid for being willing to put their life on the line. But these stories undermine the accrued goodwill. There really can be no doubt that there is fraud going on here and that wink-and-a-nod, retire-on-disability scenarios are happening. Firefighters need to realize (or more of them, anyway) that it is not OK to look the other way when somebody just happens to slip and fall on the day before his retirement. Let's hope Commissioner Pare cleans up the firehouse for the sake of the taxpayers and for the good men and women of the Providence Fire Department who play it straight.

Attention, Drunk Drivers: The City of Providence Welcomes You

Kudos to NBC 10 for exposing this.

Rossignol said the officer at the scene told her that no one was available to give the other driver a breath test.

"I couldn't believe it. And I said, 'Well, can you get someone who is certified for a Breathalyzer?' And he said nobody is certified right now who's on duty," she said.

Exactly how many officers are not certified? NBC 10 did the leg work to compare.

NBC 10 uncovered the actual number of officers certified to run Breathalyzers in communities around the state.

Warwick -- 119 officers are certified or 73 percent of the force

Cranston -- 95 officers are certified or about 70 percent of the force

Woonsocket -- 53 officers are certified or 58 percent of the force

East Providence -- 42 officers are certified or about 50 percent of the force

Pawtucket -- 65 officers are certified or about 40 percent of its department

In the state's largest city, only 20 Providence officers are certified to run Breathalyzer machines. With about 477 officers, it's about 4 percent of the force.

Four percent. In the capital city. Charming.

It should be noted that Michael Morse over at Rescuing Providence (H/T this expose) has been squawking about this from the front line for years. Apparently, the city's approach has been: no matter how stumbling drunk someone appears at an accident scene, pack 'em into the ambulance and dust your hands.

Let's be clear that this is a failure of leadership (the mayor, the city council, the police chief), not of rank and file police officers to do their job.

Let's also be clear, on a more pragmatic level, that the solution is not more money for additional f.t.e.'s - it's getting more members of the existing force properly trained and certified.

The more I think about this, the more egregious it strikes me. Our capital city essentially has zero enforcement of d.u.i. Could this be a deliberate policy to further some terribly misguided goal, like encouraging the restaurant and night life business in the city? Nothing worse than a d.u.i. citation to dampen the enthusiasm of a potential repeat customer!

The Current Administration and the Mayoral Candidates on Which City of Providence Accounts are the Reserve Accounts

I contacted Karen Watts, the communications director for the City of Providence, to ask which city accounts should be counted as the reserve funds that the Cicilline administration claims contain $30 million, given that the City Auditor claims there are only $4.6 million in the reserves and provided specific account numbers and balances in support of that claim. Ms. Watts responded that...

The total of the City's reserves as of June 30, 2010 is a little over $30 million. The Council's Internal Auditor's statement regarding the City's reserves is incorrect.

Independent Providence Mayoral candidate Jon Scott responded to the questions on the auditor's report and which city accounts constitute the reserves with the statement that...

I am not certain that the two accounts in question - the reserve contingency and capital asset accounts- are the sole accounts that comprise the city's reserve funding. I am certain that both the internal auditor. Mr Lombardi and the external, Braver Assoc, have been stonewalled by the current Mayor as they sought answers to their questions which were along the same lines.

If the accusation of political hijinks that the Mayor alleges is possible then it is also possible that the Mayor has been trying to hold off on the reports of those numbers until after the election.

My opponent had an op ed in Sunday's ProJo saying that he would continue to build on the city's economic strength and credits Mr Cicilline with that strength. I would hardly call the depletion of on account by 80 percent and the negative numbers in an account that recently held 14.4m "economic strength".

"...it appears the city of Providence is bankrupt or close to it and that you are deliberately hiding this fact..."

The following letter, dated yesterday, was in my in-box this morning.

I have some questions.

The City Auditor had to file a Freedom of Information request with Mayor Cicilline in order to obtain basic information about the city's finances?? Why wouldn't the mayor just give it to the auditor, seeing that he's ... well, the auditor?

Didn't Mayor Cicilline specifically state during one of the WPRO debates, and possibly elsewhere, that the pensions are funded?

Also, how is it possible to have a reserve fund with a negative balance?

Dear Mayor Cicilline:

I am writing to you today because it appears the city of Providence is bankrupt or close to it and that you are deliberately hiding this fact from the people of Rhode Island. I am concerned that for political reasons your campaign for Congress is causing you to act in such a way as to conceal the budget problems facing the city of Providence, making them worse in the process.

According to City Auditor James Lombardi, you have refused his requests for financial information for the past six months. As a result, he has had to resort to filing requests under the State Access to Public Records Act (APRA). This is an extraordinary set of circumstances because as you know the good functioning of government depends on transparency and accountability. By not making information available when requested, you are acting in a manner that is antithetical to good government.

What little information the Auditor has obtained causes him grave concern. Specifically, he said that $18 million of the regularly scheduled pension payment of $38 million for the last fiscal year was never paid. He also said the city’s reserve contingency funds account – the so-called “rainy day fund” – went from having a balance of $14.4 million on July 1, 2009 (the start of the last fiscal year) to NEGATIVE $187,736 on June 30, 2010 (the end of the last fiscal year).

Based on this alarming information, I am concerned that the city cannot make its way through the current fiscal year without a tax increase, severe budget cuts, or both. I am calling on you to immediately disclose to the taxpayers of Providence and the people of Rhode Island the full extent of the city’s current financial situation by releasing to the Auditor’s Office and the public at large a balance sheet and a cash flow analysis showing the current state of the city’s finances.

It is time for you to set aside concerns about how the city’s deteriorating fiscal condition will affect your campaign for Congress. You need to set aside concerns about your political career and level with the people of Rhode Island.

Sincerely,

John Loughlin

State Representative John J. Loughlin II
RI House Minority Whip
Candidate for US Congress, RI -01
PO Box 244
Adamsville, RI 02801

Which City of Providence Accounts are the Reserve Accounts?

Philip Marcelo's story on Providence City Auditor James Lombardi's memo expressing "grave concern regarding the financial stability" of Providence is running in today's Projo. The memo addresses several issues, one of which concerns the reserve fund that the City is supposed to maintain. According to the memo, the balance in the “reserve contingency funds cash account” has gone from $14.4 million to minus-$187 thousand, and the balance in the “capital assets account” has gone from $22.2 million to a $4.6 million. The implication of Mr. Lombardi's memo is that these two accounts make up reserves which have gone from $36.6 million dollars at the end of fiscal 2009 to “approximately $4.6 million” at present, because the city has used them to pay operating expenses.

According to both Philip Marcelo's story, as well as Stephen Beale's story on the same subject in GoLocalProvidence, the Cicilline administration denies that the reserve fund is below the level it is supposed to be at. Here is the Projo version...

The city is also required to maintain a reserve equal to about 5 percent of the city budget, or about $30 million, he said. (Karen Watts, the mayor’s spokeswoman, said the city’s reserves are currently at about $30 million.)

If the Cicilline administration disputes that the sum of these two figures fully accounts for the city's required reserves, they should be able to make a straightforward refutation, by providing either 1) the account numbers and balances of other accounts that should be counted as part of the "reserves" and/or 2) details of other transactions (including source and amounts) that have replenished the balances in these two accounts since the reports were generated.

And Let's Not Forget the Mayor's Prior Check Incident

Under my post about the new check situation involving the mayor, Tommy Cranston reminds us of the first, infamous check matter, this one also with the City of Providence triangulated in but starring both of the Cicilline brothers.

the 75K check

Yeah. Remind me: did that get paid back to the city?

Right.

Now, regardless of Attorney General Patrick Lynch's helpful whitewash finding of no criminality in this matter (it's amazing all of the wrong-doing he's failed to see during his tenure; he's kind of like a professional wrestling referee in that regard), isn't this money still owed to the city?

Yup.

Would this state of affairs - the blithe non-repayment of these funds - be tolerated if the check had been tendered by anyone other than a family member of the mayor?

I didn't think so.

And David Cicilline wants a political promotion?

You really are kidding me.

Who Approved the Providence Mayor's Unauthorized Raises?

From ABC6.

Providence's Internal Auditor is telling City Council Finance Chairman John Igliozzi that Mayor Cicilline has been overpaid for the last four years.

The internal memo written by James Lombardi explains that the city's Home Rule charter caps the Mayor's salary at $125,000 annually but that since 2006, the Mayor has been taking home more than that. Cicilline currently makes $132,000 annually, in violation of the charter.

The amount of overpayment comes to about $20,000 since it started.

Sure, he was 100% complicit in, not to mention the 100% beneficiary of, raises not contemplated by the City Charter. But unless Providence's disbursement procedures are terribly, possibly criminally, disfunctional, Mayor David Cicilline does not actually give the order as to payee or amount when checks are issued. (Please note that only through grinding teeth do I point out that Mayor Cicilline is not solely responsible for this situation.)

The question is, who does? Who signed off on these ... "erroneous" check amounts? 'Cause s/he is the one who should have said "Nuts" when the request came, directly or indirectly, from the mayor for these unauthorized raises.

Additionally, where has the recipient of this memo, which has been conveniently released one week before the primary, been for the last four years? In his capacity as Finance Chair, how did John Igliozzi miss these unauthorized increases? Who else missed it who should have seen it? And what other ... "erroneous" check amounts have all of these people missed?

Signature Coverage of Jon Scott, Independent Candidate for Mayor of Providence

Jon Scott is running for Mayor of Providence, an office that is open in this election cycle due to current Mayor David Cicilline's decision to run for Congress...

Anchor Rising: You can make the case that the job of city mayor involves a more intense combination of the administrative aspect of governance and the pulling-people together aspect of governance than does any other political office. How would you say the current occupant of the Providence Mayor's Office has done in these areas?

Providence Mayoral Candidate Jon Scott: "City politics, it's very much in tune with the people. It's very much in touch with the people. The people understand that, if the stoplight at the end of their street doesn't work, they call the Mayor's office and the Mayor makes the stoplight work..." (Audio: 0 min 40 sec)

"But this really, all of the sudden, has become a 30,000-foot job. It has become about 50 million dollars in budget deficit next year, and 100 million in the next year [after]. It's become about 556 million dollars in bond liability. It's become about 108 million dollars in unfunded pension liability. We are talking about a city that's in debt, almost a billion dollars..." (Audio: 1 min 15 sec)

"...the operational part [done by the current Mayor] has been poor, but the big part for him is the 30,000 foot-level that has been poor. Everything he does, he does in the background..." (Audio: 0 min 52 sec)

AR: Speaking of everyone have input into making decisions, on your website is a proposal for changing Providence to having an elected school committee. Would you like to talk about that a bit?

JS: "Having a school committee that's appointed by the Mayor does a couple things very well. It allows the administration to move very quickly. That's a good thing if in fact we are doing that. But we've had status quo, for so long, that we're just kind of floundering out there...we have schools where rain is dropping through the roof onto classrooms. I don't care how good teachers are or how bad teachers are, let's not even get into that, a kid can't learn if rain is dropping on his head..." (Audio: 1 min 1 sec)

"Now an elected school committee, on the other hand, answers to the people, it doesn't answer to the Mayor. And that, in this city, is a big bonus. School committees, ultimately, should answer to the constituency, the parents. We wonder why parents aren't involved. Well, parents aren't involved because it's so far removed from them, the process is so far removed from them, that they feel like they have no say..." (Audio: 1 min 17 sec)

Management-Union Friendship and Money Seeking

Linda Borg's Sunday Projo article, "In Providence, more collaboration than conflict," weaves a tale of cooperation between the the city's schools superintendent and its teachers' union leadership:

Call it a tale of two cities.

While the superintendent and union president have been going at it in Central Falls, Brady and Smith have worked together on a plan to radically reshape five of the state's lowest-performing schools.

Her Saturday article, "Providence teachers face job uncertainty," gives some indication as to why. First of all, Providence has already effectively experienced the "turnaround model" that has Central Falls roiling:

Teachers, however, had to reapply for their jobs, and only 50 percent of the existing staff chose to do so. What made Hope High School successful was that, in the end, the teachers who stayed were committed to making radical changes, from moving to longer class periods to spending more time planning instruction.

Union President Steve Smith credits "the faculty" with initiating that idea, but whatever behind-the-scenes maneuvering there may have been, it was ultimately a difference in the union's behavior, not the district's plan. Further along in the same article, we find a clue that might explain the two sides' inclination to cooperate (emphasis added):

But for teachers to embrace dramatic change, they want the district — and the state — to give them the resources they need to get the job done, Smith said. He is bringing those concerns to School Supt. Tom Brady so that the School Department can push for federal monies to pay for additional support, whether it's creating alternative classrooms for disruptive students or remedial classes for students who are performing below grade level.

Let's take as given that the cooperation in Providence is desirable, whatever its motivation. We still should consider such evidence as the newly proposed funding formula. Providence has been underfunded, and no doubt stands to drink deeply from any pool of Race to the Top federal money that comes to the state. The Department of Education has determined that Central Falls, by contrast, is already receiving much more state money than is "fair."

In summary, the Providence union has already acquiesced to the sorts of changes that the Central Falls union is fighting, and education leaders on both sides of the negotiating table in Providence have reason to expect their good behavior to be rewarded mightily.

Let Them Throw Coins in the Water

Mike, of Assigned Reading, laments that union old-liners and their allies have taken the opportunity of hard times to smash positive education reforms:

Hope High School in Providence has been a beacon in Rhode Island school reform. It was undoubtedly the worst school in the state just five or six years ago. But with RIDE intervention, Hope has turned around. No one can deny the dramatic gains made by the students and teachers at Hope.

The city, however, according to the Journal, is seeking to significantly alter the academic model that was instrumental in Hope's success. Bureaucrats want to curb the autonomy granted to the school, and eliminate the block schedule that has brought teachers together and established a much needed school community. School leaders want continuity among schools, and claim they cannot afford the additional costs of the Hope model.

That last point, additional costs, rears its head in Mike's subsequent post:

Today, the Providence Journal reports the city has allocated $112,000 to restore the Henry Bowen Anthony Fountain. This fountain is located at the head of Blackstone Boulevard in the affluent East Side neighborhood, with the extravagant homes of some of Providence's wealthiest residents.

The same turn of events prompted the following reader email:

This just reminds me of the terrible things I used to hear about the Soviet territories in grade school, where the local political leaders would put themselves into lavish properties while presiding over hunger and poverty, all in the name of 'serving the workers'. Here is the most upper-class, liberal, educated neighborhood in Providence, a city full of crumbling infrastructure, awarding itself a monument (in the name of 'better neighborhoods' and 'fiscal stimulus'). The irony of the fountain being shut down thirty years ago to help close a budget hole does not escape me. The park's main recurring event is the new uber-expensive upper-class farmer's market, which I suppose will now be accompanied by the delightful sound of the entirety of two dozen households' tax dollars percolating through polished marble.

The takeaway for those of a reformist bent is that the governing power base in the city and state has no concern that Rhode Islanders can muster the will to turn them out. Perhaps we can rebrand the fountain as a "citizen request kiosk." Tying wishes to coins is as apt to turn the state around as following the due processes of local government.

Objectivity Isn't Always the Best Approach

Like fairness, objectivity is a generally positive principle that needn't be — shouldn't be — the guiding principle in every circumstance. One circumstance in which a degree of subjectivity is appropriate, applied to a collection of objective criteria is the hiring of teachers, whatever their argument might currently be in Providence:

The union claims that Brady's hiring practice "eliminates in its entirety impartial and objective decision-making" because it requires the district to offer only an "adequate explanation" for teacher assignments.

So, as we've heard before, standardized testing is inappropriate because of all of the intangibles of teaching (i.e., it must be measured subjectively), and the hiring methodology of most of the rest of the economic world is inappropriate because it isn't sufficiently objective. Is Rhode Island done falling for this stuff, yet?

False Emergencies, Real Dollars

Mayor Cicilline has repeatedly expressed concern for the burden of the taxpayer. I'm sure I speak for taxpayers everywhere when I say "thanks".

My question is, does his concern manifest itself anyplace other than the expired firefighters' contract?

Let's be clear. I'm the first to ask for a fair contract between municipality and valued public worker. Commenter and firefighter advocate Tom Kenney said something nice under this post. Loathe though I am to introduce a slightly discordant note, even temporarily, he probably wouldn't be too happy about my likely stance on the terms of the contract now in contention between the mayor and Local 799.

At the same time, the budget for the Providence Fire Department is 6.5% of the city's total budget (FY 2008, PDF ). Does the other 93.5% of the budget get the exacting attention that the Fire Department has received, lately and for the last five years?

What got me thinking about the bigger budget picture is this nonsense, far from the first such incident reported by Michael Morse at Rescuing Providence. More important than dollar cost is the potential human cost of such a diversion of resources. Did someone wind up more seriously injured or worse while Rescue Taxicab One was attending to this woman? At the risk of stating the obvious, public services are provided for use, not abuse and for need, not greed. This woman and everyone who has done likewise should get an invoice - a complete invoice, labor and equipment - for the ride.

Now we have to ask: is this sort of thing going on with other city services? Are city ambulances called like taxicabs reflective of how the city - more specifically, the tax dollar - is managed overall?

Kudos to the mayor for his extreme concern about the firefighters new contract. At the risk, however, of sounding a tad ungrateful (really, I'm not), every budget dollar counts, not just the dollars expended on a department that accounts for 6.5% of the city's budget. And a dollar saved from an abused city service is a dollar that can go back into the budget ... or, in the most dire case, back into the taxpayer's wallet.

Re: Nothing Egregious About This Picket Line

Without coming down on either side of the particular issue on the table (which, whatever else its effects, has helped to highlight the multiple dumbnesses of Rhode Island politics), I have to express an objection to something that Andrew wrote earlier today:

... Vice-President of the United States of America is not a union job. Vice-President Biden's decision not to attend the conference is a purely political one and it is ludicrous to assert that people should self-curtail their rights of free expression and assembly, because the VP of the US needs to be protected from having to make political decisions.

The consideration that's missing from this analysis is that the Providence firefighters should and do have a more direct and more substantial interest in the well-being of Providence and of Rhode Island. It costs Biden next to nothing — and lesser federal functionaries even closer to nothing — to skip the convention. He's in office; he's just started in office. Indeed, bowing out arguably helps him to burnish union bona fides and illustrate independence from political leaders who happen to share the Democrat brand.

He's a politician, and he'll behave politically. Saying that the firefighters' union should not consider the consequences of its actions because they are filtered through the proxy of a politician's decisions is like saying that a dog owner shouldn't seek to protect his pet from having to resist biting guests. In the context of a dinner party, teaching the dog is not the focus; protecting one's associates is. In the context of rallies and national conventions hosted in Rhode Island, the Vice President's development and stagecraft shouldn't be the focus of those whose actions might repercuss in the state; the local community should be.

One could argue that the union's stunt will not have substantial consequences. It would also be reasonable to argue that things played out in a way that the union couldn't have foreseen, and its own political considerations required it to persist. But the general principle that a person or group's responsibility does not extend to anticipating the likely actions of others is not a notion that it is wise to promote.

Nothing Egregious About This Picket Line

I guess I'm to the left of Bob Kerr on this one. I agreed with him in 2007 (and thought he wrote the best single item on the subject) when he wrote that the Providence Firefighter's Local 799 threat to picket a statewide disaster drill, which could have shut down the drill, was wrong. I was glad when the union altered its plans and opted for an informational rally instead.

But the circumstances are different this time, for at least two reasons...

1. A statewide disaster drill is fundamentally different from a mayor's conference. Stuff happens at a large-scale drill that cannot be simulated anywhere else. Had the drill not gone on, there's no guarantee that an adequate replacement could have been put together anytime soon after and the opportunity for coordinated training and learning would have been lost.

   A mayor's conference is no disaster drill. The main activity at a conference is talking and (hopefully) listening. While there is value in getting public officials to talk to one another face-to-face, they will have plenty of other chances to communicate with one another on issues they believe are important. Or, if you prefer a more colloquial expression of this idea, politicians will be able to find other opportunities to talk.

2. Whatever I may think of the principle of union members respecting one another's picket lines, the fact is they do, and it was unfair of union leadership to potentially disrupt the drill by forcing firefighters to choose between their professional responsibilities and their union.

   However, Vice-President of the United States of America is not a union job. Vice-President Biden's decision not to attend the conference is a purely political one and it is ludicrous to assert that people should self-curtail their rights of free expression and assembly, because the VP of the US needs to be protected from having to make political decisions.

Campaign Contributions: Bready to Cicilline

Under Marc's post concerning the lawsuit filed by former Providence Tax Collector Robert Ceprano against Mayor David Cicilline et al, commenter Damien Baldino observes

I don't know if Richard Bready is a generous contributor to the City, but he is a generous contributor to Mayor Cicilline.

Indeed. Richard and Cheryl Bready have made the following contributions to David Cicilline's mayoral campaign.

Richard

June, 2002: $1,000

September, 2003: $500

September, 2004: $1,000

June, 2005: $1,000

March, 2006: $1,000

Cheryl

September, 2004: $1,000

June, 2005: $1,000

March, 2006: $1,000

For a grand total to date of $7,500. The question is, did these contributions, which had reached $5,500 by June, 2005, influence Mayor Cicilline's decision in 2005 to waive the interest that Mr. Bready owed on an unpaid real estate tax bill?

Addendum - More Contributors, More Interest Waived

Under comments, Damien Baldino directs us to a January post on his blog, RI Republican, in which he has compiled the campaign contributions of five additional people. Not just any people but

... some of the people David Cicilline helped with their tax problems. Not surprisingly, all of them are regular contributors to Cicilline's campaign, which currently has an ending balance of more than $600,000.

Listed below are the five individuals mayor Cicilline so graciously helped, including a list of their contributions to Mayor Cicilline and a link to their contribution history at ricampaignfinance.com.

Well, well, well. Five more generous contributors. Five more dollops of interest waived. Coincidence? Or pattern?

Cicilline's Scapegoat Fights Back

Be wary of who you throw under the bus. Like, say, a city tax collector who may know some things (via 7to7):

Fired tax collector Robert P. Ceprano....Ceprano alleges that Mayor David N. Cicilline pressed him in 2005 to waive back interest on unpaid property taxes by Richard Bready, the CEO of Nortek. According to the 86-page lawsuit, Ceprano refused to accept a $25,000 check from Bready in 2005 for two properties that were facing a tax sale for unpaid taxes. The reason: because the check did not include interest, which Bready was asking be waived.

When Ceprano refused, his lawsuit says, Bready instead delivered the check directly to the mayor. The mayor, through then-chief of staff Michael Mello, then ordered Ceprano to remove the properties, at 145 Benefit St. and 24 Stimson Ave., from the tax sale.

According to the lawsuit, Mello told Ceprano that Bready was "a generous contributor to the city.'' Ceprano subsequently wrote a note in city tax records, attached to the lawsuit as an exhibit: "At the request of Mayor Cicilline & Chief of Staff Michael Mello, interest will not be charged on this account.''

Speed Reading License Plates

Matt Allen asked a good question this evening: would this be acceptable if it does, in fact, focus solely on cars involved in real crimes?

The Police Department is going to try out a new gizmo installed on its cruisers to automatically read motor-vehicle license plates and give officers a quick read-out of whether a plate is on a "hot list."

The technology, manufactured by ELSAG North America Law Enforcement Systems, is supposed to give officers an advantage in knowing what they may be up against before they get out of the cruisers during a vehicle stop.

ELSAG's proprietary software searches criminal and motor vehicle databases and alerts an officer to any violations or crimes associated with that plate number.

Let us emphasize, conversely, that if the device is to be utilized as some imaginative minds have projected - to identify delinquent parking ticket recipients - it needs to be deployed in a completely non-discriminatory manner. Let no one be excluded from its watchful eye. Not city employees. Not relatives of the Mayor.

In these matters, egalitarianism is a beautiful thing.

Nick Gorham, North Westconnaug Needs You!

The conventional wisdom is that Nick Gorham lost his seat in the Rhode Island House of Representatives because of his support for regionalizing Exeter, Foster, Glocester, Scituate, West Greenwich and part of Coventry into a single town of Westconnaug, offending the delicate parochial sensibilities of his constitutents.

I wonder what Mr. Gorham's former constituents from Foster think of former Providence Mayor Joe Paolino's plan, published in today's Projo, to fold the town of Foster into a new Super-Providence…

The Providence County I envision would include Providence, East Providence, North Providence, Cranston, Johnston, Foster and Scituate — 36 percent of the state’s population at present, hardly enough to take over the state.

Providence needs a much larger, growing tax base to launch additional renewal campaigns in the city.

The new Providence County would be created by a “merger of equals,” rather than by an annexation of the other cities and towns by the capital city.

But if Joseph Paolino and others think that annexation of cities and town is a legitimate bargaining chip in the regionalization discussion, just think how they're going to act towards those (former) cities and towns, when they have taxation and other formal powers over them!

Government as Pension Program

Here's an eye-popper: Cranston spends more than a fifth of its total budget on pensions (not including teachers). Nine municipalities spend over 10%.

While Rhode Island's political leaders wrestle with state pension reform, there's another big pension headache out there — the soaring cost of municipal pensions.

A new study by the business-backed Rhode Island Public Expenditure Council reports that the amount of money that communities spend on pension costs has increased nearly 50 percent in the past five years, from $101 million in 2004 to $149 million in the current fiscal year ending June 30.

But the raw amount, the exclusion of teachers, and the addition of state employees is not all:

The study found that locally administered pension plans were able to fund only an average of 45 percent of their obligations as of June 30, 2006, with an unfunded liability of $1.6 billion. That encompasses quite a wide range, from a Coventry police pension plan that is only 7.9-percent funded, to the Jamestown police pension plan, which is over-funded, at 123.9 percent.

In other words, as much as they're spending, many cities and towns ought to be devoting more resources to pensions.

That's if you look at it as a funding matter. If you look at it as a practical and moral matter, they ought to be devoting less to pensions. It's time to bring public workers back to the real world.

The Mayor's Supplemental Budget: Not Necessarily Better Late than Never

On the one hand, the concessions requested by Mayor Cicilline from 5,000+ city employees sound reasonable and necessary given the constraints on both local and state revenue faced by budgeters. [Side note: Local 1033, the city's largest public labor union, is to be applauded for signing on.]

An increase in the health insurance co-share to 15 percent for union personnel, and 20 percent for non-union workers.

•An immediate wage freeze, effective up to and including fiscal year 2010.

•An increase in the retirement age from 55 to 60 years for employees with less than five years of experience and 62 years for new employees.

•An increase in the number of years of service before an employee is eligible to receive full pension benefits to 30 years.

•A decrease in the allowance for disability pensions from 66.67 percent of salary to 50 percent of salary.

•Elimination of a paid holiday.

Cicilline is also mandating two furlough days for non-union staff and said he does not intend to fill 22 vacant firefighter positions and 8 police officer positions.

The only question as to substance would be the intent of the mayor with regard to applicability to the school side of the budget, including specifically staffing levels.

On the other hand, Providence has never been awash in revenue. The Mayor and the City Council have been fully cognizant of this fact all along, of course. At the risk of sounding ungrateful, if this is good and responsible budgeting in 2009, wouldn't it have been better and even more responsible, say, five years ago?

For some reason, fiscal problems that were serious in nature were viewed as too premature to act on. Only when a situation arose that bordered on crisis did it become appropriate to formulate a responsible budget.

Yet if the Mayor and the City Council had, indeed, acted sooner

1.) the crisis could have been partially or largely averted;

2.) tax dollars would have been saved;

3.) the city would have been in a much better position to tackle the economic downturn that was headed its way.

In short, it isn't enough to say, look, we've finally formulated a responsible budget. Timing is also an intrinsic facet of responsiblility.

Meanwhile, in Providence...

Combining Randal Edgar's story in today's Projo on the likely next step that follows the inability of the parties(*) in Cranston to agree upon a new police contract via negotiation…

After watching a tentative contract go down to defeat, the police officers union is taking its case to a new venue that could ultimately cost taxpayers far more — binding arbitration…

The [rejected] contract, retroactive to July 1, 2008, provided no raises — apart from longevity increases — until January 2010, when officers would have received a 1.5 percent raise. They would also receive a 2.95 percent raise at the start of year three.

The City Council, which has cast a critical eye over Mayor David N. Cicilline’s spending choices in light of a deficit approaching $16 million this year, has more to consider in its opposition to pay raises for high-ranking police officers and the mayor’s hiring of a Washington, D.C., lobbying firm…

The council maintains that it never authorized Cicilline’s administration to give pay raises retroactive to two years to the officers, some of whom are now retired. Cicilline’s administration has said that the retroactive pay for the nonunion officers matches those awarded to police union members in arbitration in the last fiscal year.

(*) And just so there's no confusion, I am including the City Council in the definition of "parties" in this post; there was some concern at Monday's meeting that the meaning of "parties" didn't include the City Council in the context of contracts with the City.

The End of Education in Providence

What kind of a school system would let this sort of thing happen? It's sure to be the end of quality public education as we know it (emphasis added):

Starting this fall, teacher vacancies in four Providence schools — Hope High School, Veazie Street Elementary School, Lauro Elementary School and Perry Middle School — will be filled based on whether the applicants have the skills needed to serve students in those particular schools. The principals of the district's two new schools — Nathan Bishop Middle School and the Providence Career and Technical Academy — will have the authority to hire their own teachers. The entire school district will move to this new plan at the beginning of the 2010-2011 school year.

For anybody who missed my sarcasm, I'll restate: What kind of school system would allow itself to decay so greatly that such a basic organizational practice seems like a radical innovation? Unbelievable.

Last Word on the Flag Incident

The official last word - what, if any, disciplinary action the Providence School District will take against Mr. Robert Perkins - is now a week overdue, hopefully because the district is reconsidering a bad initial decision.

In the meantime, David Quiroa had a pretty balanced take in Tuesday's ProJo.

First and foremost I have to make clear that I believe that every flag that represents the people of a country must be given the utmost respect because it’s the reflection of the soul of a nation. By now everyone reading this note may be aware of the incident that took place at Roger Williams Middle School, in Providence, the other week when Assistant Principal Robert Perkins allegedly stepped on a flag from the Dominican Republic. I do not condone the action of stomping on any national flag — yes, including our beautiful red, white and blue.

After reading all the reports about this issue in The Journal and hearing the extensive testimony by Mr. Perkins on WPRO’s Dan Yorke Show, I have come to the conclusion that Mr. Perkins did need to give a sincere apology. However, everyone else should let the school authorities wash their own clothes and there is absolutely no need to have the U.N. issue a resolution.

I have five kids and I can tell you that if my kids are running around our living room breaking things and having a food fight and they happen to be holding a Guatemalan flag I would probably take the flag and throw it on the floor — not out of hate to the flag but out of stress. We must analyze every situation in its proper context for justice to prevail.

DAVID A. QUIROA

Newport

Mayor David Cicilline Declares for Re-election

... in the following press release issued at 3:08 pm today.

Dear Friend,

You have been an active supporter of the important work we have taken on together, and I want you to be among the first to know about an important decision I have reached. In these particularly difficult economic times, I am more certain than ever that it is the right one. Today I am declaring my candidacy for reelection as Mayor of our great city.

We have achieved a great deal in the past six years -- maybe more than many of us expected -- but the job is not done and we are in the midst of a serious financial crisis. It is not a time to change focus. I hope you will take a few minutes to review the statement I recorded about my decision by clicking the link or image below. As always, thank you for your devotion to our important work on behalf of Providence.

Providence Middle School Flag Brouhaha

Can someone please explain:

- the flags of which countries are subjugated to rights of free speech and which are not;

- how, when faced with a "situation" in the City of Providence, to determine if it requires a careful, six figure investigation or if it qualifies for an off-the-cuff snap judgment.

Another (Potentially) Huge Development

Here comes another historic, philosophical battle, this time in Providence:

Education Commissioner Peter McWalters has ordered the city schools to begin filling teacher vacancies based on qualifications rather than seniority, an order that could fly in the face of the teachers' contract.

McWalters, in a no-nonsense letter yesterday to Supt. Tom Brady, said the district hasn't been moving fast enough to improve student achievement and that it was time to intervene in a much more aggressive fashion.

Dare we hope that we're seeing the beginning of a revolution of sanity? (And dare we hope that it'll arrive before we reach the utter bottom?)

Municipal Fines: Their Purpose Clarified

... by the administration of Mayor David Cicilline.

Some city officials think Caprio and the three other Municipal Court judges might be a little too forgiving to those who come before them, and it is costing the city money.

Mayor David N. Cicilline’s director of administration, Richard I. Kerbel, says the court — which deals with traffic and moving violations and some misdemeanor offenses — is not on pace to meet the city’s revenue estimates.

So, in not so many words, he is asking the courts to step it up.

Additionally,

The city has not been able to increase its parking-officer staff as fast as it would have liked because of delays in passage of this year’s budget. As a result, the additional revenue has not materialized, and now the city is expecting about $9.5 million from the courts by the end of the fiscal year. It’s a relatively small piece of the city’s $641-million budget, but with all the other financial difficulties facing the city, every dollar counts.

Just so we're clear, then, traffic and parking regulations pertain to something other than public safety and free-flowing traffic.

My objection to any judicial leniency is from the other angle completely. There is no provision in the law for being four minutes late back to a parking meter. Two hours is two hours. As for extenuating circumstances or personal economic hardships, not only do most of us have them but most of them aren't contemplated by the law, either. Why should some people get off while others have to pay?

Alas, the mayor's administration did not cite the slightly loftier basis of a desire for equitable enforcement of laws and regulations but the more questionable goal of a steady revenue stream. As a caller last evening to the Matt Allen Show pointed out, the city is literally banking on the failings of their citizens and visitors.

Former Tax Collector Speaks out; Mayor Responds In Advance

Former Providence Tax Collector Robert Ceprano talks about his termination and events leading up to it in today's front page ProJo story by Mike Stanton. And below is the text of a press release issued yesterday by Mayor David Cicilline responding to the story ahead of time.

Two items stick out from Stanton's story. One is the contrast between the curriculum vitae of Robert Ceprano and David Cicilline, the former notably heavy in the areas of military and public service. The second is this item, about half way down:

But weeks and months passed, the taxes remained unpaid and Cicilline remained elusive. Ceprano, who learned from the city’s lawyer that Cicilline didn’t have sufficient money in his account, enlisted the mayor’s then-chief of staff, Chris Bizzacco, and another aide, Rita Murphy. Both tried without success to collect the money. A few times, Ceprano and the lawyer, Scott Hammer, wanted to cash the check, to force Cicilline’s hand, but Bizzacco passed the word through Murphy that they should hold the check.

[Press Release issued by Mayor David Cicilline at 8:37 pm last night]

Dear friends,

I wanted to let you know about a story that will be featured in tomorrow’s Providence Sunday Journal in which the City’s former Tax Collector Robert Ceprano and his attorney, Artin Coloian, seek to make a case in the press that his original termination last September was not based on performance.

It is not a pleasant thing to discuss someone's substandard job performance publicly, but public trust is critical to effective government and these allegations of inappropriate termination need to be addressed openly and immediately.

The Finance Director has forwarded the information below, which is a summary of the factors that led to his official request for the Tax Collector's resignation on September 15th, 2008:

Upon taking office in October 2007, Finance Director Bruce Miller determined that the Tax Collector's Office was lagging far behind national, and State of Rhode Island, best practices. Deficiencies included:

- inefficiencies due to poor use or non-use of technology
- internal control gaps that rendered the City vulnerable to error and fraud
- inefficient operational practices
- lack of effective policies and procedures

Finance Director Miller initiated a process to bring the Tax Collector’s office from a level of mediocrity to a level of excellence. This began with a discussion of the deficiencies that Mr. Miller had outlined and his request that a plan be developed to correct them. The Tax Collector repeatedly refused to create the plan or initiate the improvements.

After roughly nine months of working with the Tax Collector to make these improvements, Director Miller saw no improvement in the operations of that office. The Tax Collector's failure to act was clearly leading to disciplinary procedures against him, so Director Miller sought to pursue an outcome that might avoid termination. In July and August of 2008, several options were discussed:

Continue as Tax Collector while complying with all the stated expectations, understanding that if expectations were not met then termination would proceed.

Because the Tax Collector had difficulty meeting the expectations of the Finance Department, perhaps another City department would be more suitable. Reassignment to the Police Department was discussed.

The Tax Collector could choose to resign. He was interested in this option and a discussion of the conditions regarding this option ensued.

Finally, last September, the Tax Collector agreed to resign. On September 15th, 2008 Director Miller formally asked for his resignation by email.

This unfortunate episode reflects my view that the citizens of Providence have a right to expect something more than the mediocre performance they were getting from the Tax Collector during his tenure. While operating in a nearly complete absence of standards or procedures might have worked under previous administrations, my view is that it is an invitation to precisely the kind of corruption we were burdened with under previous administrations. The Tax Collector’s unwillingness to raise his performance to a level of professionalism that the taxpayers have a right to expect led, regrettably, to his inevitable resignation.

Our efforts to clean up Providence and set things right will continue.

As always, please feel free to contact me with any further questions or concerns.

Sincerely,

David N. Cicilline

Mayor

Paid for by The Cicilline Committee. Per Rhode Island State Law, individuals may contribute a maximum of $1,000 per year. Business and corporate checks are prohibited. Note: In keeping with Mayor Cicilline’s pledge to not accept campaign contributions from employees and vendors of the City of Providence, any contribution from an employee or vendor will be returned.

The Leadership Dance

Part 2 of Tim White's investigation into misuse of public resources and time in the Providence Sewer Department mainly concerned supervisor Algot Abrahamson's use of a city truck for a spin to a known gambling house. More intriguing, in my opinion, is the similarity in some of the supervisor's phrasing to that of Mayor David Cicilline on White's related Newsmakers show. Says Abrahamson:

What I'm saying is a picture doesn't convince me there is any wrongdoing here, you'd have to speak to the director. I know the men, they are two of the best workers I have. ... Yeah, well, I guess I'm responsible for a certain amount of it, yes. I have so many guys, I can't follow everybody everyday.

And says the mayor:

The city of Providence has about 6,000 employees. We have extraordinary leaders in each of the departments in city government, and I would say without question that what you just saw was an aberration. ...

[Talking about issues in the Providence tax office:] Ultimately, the responsibility for that office, and all of the city offices is mine, but in any organization you have a director of administration, or any government, you have a director of finance who ultimately direct supervises.

Compliment one's workers, accept nominal responsibility, pass the blame down.

Cicilline dodged Arlene Violet's persistent questioning of why it took Tim White to discover abuse, and how he (the mayor) could possibly assert that the workers caught were in no way representative of a larger problem. Referring back to the transcript of White's report, I see that arguably the most egregious of the abuses uncovered — the backhoe traveling across the city with a load of publicly owned sand for the foreman's house — occurred on the very first day of surveillance.

Quite a coincidence.

A Penny Taxed, a Penny Wasted

Channel 12 reporter Tim White did some surveillance of the Providence Sewer Department and in part 1 revealed some observations that certainly wouldn't seem to have involved isolated incidents, this one in particular:

His name - Anthony Cipriano, Jr. Records show Cipriano is a heavy equipment operator for the sewer department, and a shop steward for the local 1033 laborer's union. We also caught him misusing a city truck.

Target 12 cameras capture Cipriano miles away from work, running errands in city trucks for hours; all against city policy.

We catch him: twice taking the city truck into Cranston to pick something up from his second job at a security firm; stopping at a Cranston bank;and several times driving to a North Providence hair salon and staying for more than an hour.

On this day, Cipriano arrives at work at 10:30 in the morning. Two hours later, he leaves and arrives at a Cranston dentist's office. More than an hour later, he departs.

Thinking he's heading back to work, we get in front of him. We're wrong.

"Oh burger king... Burger king."

Apparently, now it's lunch time.

On this five-hour work day, Cipriano spends nearly two hours on personal business.

According to the Transparency Train, sponsored by OSPRI (PDF), Cipriano's total compensation in 2007 was $77,299, including base pay of $46,006.88 and $8,084.93 (the rest being the cost of benefits). The other sewer employee caught in impropriety in the segment, foreman Anthony Greenwood received $85,199.14, with salary and overtime of $55,453.75 and $5,292.38.

Part 2 airs tonight, and the preview highlights supervisor Algot Abrahamson, whose remuneration was $82,715.38, with salary and overtime of $63,913.71 and $4,793.54.

Losing That Old-Time New England Feel

Damien Baldino worries that Obama "stimulus" largesse may spell disaster for Providence's character:

Once Barack Obama is sworn in as President of the United States, his first priority will be a stimulus package to help the economy. I've seen amounts ranging from $600 billion to $1.3 trillion, but the most common estimate seems to be around $800 billion. The money would be used to finance transportation projects, green energy projects, and rennovation/rebuilding schools. Massive amounts of money will be funneled to cities and states to complete infrastructure projects that are in the planning stages. ...

I fear that the money would be used by the city to implement the ideas published in the DeJong study.

If you're not familiar with the DeJong study, it is essentially a study championed by David Cicilline and Donnie Evans which addressed the condition of Providence's educational facilities and how the system could be reconfigured and improved (link below). To summarize, the study had a strong bias toward rennovating historic schools and favored demolishing historic buildings and replacing them with new buildings that will probably be as awful as some of the City's other new schools. Many of Providence's schools are a mess, and they do need major rennovations, which I strongly support. What I oppose is demolishing historic buildings that could become functional and beautiful at a cost that is likely equal to, or below the cost of new construction.

I'm not very familiar with the personalities involved in Providence, but Rhode Islanders in general are a conservationist lot. Although, we also have a talent for extracting losses from win-win circumstances. (By which I most certainly do not mean to suggest that pouring taxpayer money into misguided "stimulus" packages — or politician-and-public-sector wish lists — is a win by any stretch.)