Elorza’s borrowing plan for the Providence pension system
Back in January 2020 – before the pandemic was on the radar – Providence Mayor Jorge Elorza warned against complacency about the city’s underfunded pension.
At the same time, after his pitch for monetizing Providence’s water supply was DOA at the State House, Elorza outlined plans just for small tweaks to the pension system.
So why did the mayor wait more than a year – until last week – to unveil his proposal to shore up the pension system by borrowing $700 million?
“Mayor Elorza proposed the $704 million Pension Obligation Bond only after an extensive due diligence period and thorough analysis of the transaction by the City’s Finance Department and independent financial advisors,” Ben Smith, a spokesman for the mayor, said via email. “During this time, the City negotiated increased employee contributions from the Fraternal Order of Police Lodge #3, reducing the long-term pension liability by at least $25 million, and took advantage of historically low borrowing costs by issuing a $140 million bond for school improvements as well as a first-of-its-kind $24.75 million bond through the Providence Redevelopment Agency to capitalize the Providence Housing Trust Fund and stimulate affordable housing development. The City’s improved finances and track record of prudent debt management allowed for an increase in the size of the housing bond issue on the day of pricing, resulting in over $6 million additional program funding. Following these transactions and given the continuation of the current low-interest-rate environment, Mayor Elorza and the City’s finance team decided that this was a transaction that needed to be developed and explored.”
On the plus side – if everything goes right – this gambit could raise the pension’s funding level above 60 percent, from the current 22 percent, and avert a situation in which the cost of funding the pension would devour other city services. Plus, the cost of borrowing money is low now.
But the returns on Providence’s pension have been less than dazzling, and it remains unclear if the legislature will sign off on the mayor’s proposal. Elorza talked up the concept with House Speaker Joe Shekarchi when Kamala Harris was in town back on May 5, although a follow-up meeting has yet to take place. And while Senate Whip Maryellen Goodwin (D-Providence) said she plans to introduce related legislation, many questions remain.
Then there’s the context of how Elorza is among a field of Democrats expected to run for governor next year. Even if his latest pension pitch goes nowhere, the mayor can say he tried to do something.
As to how another looming gubernatorial candidate, General Treasurer Seth Magaziner, assesses Elorza’s borrowing plan, spokeswoman Rosie Hilmer tells me, “The treasurer has requested an in-depth briefing from the Providence administration on this plan, and will withhold judgement until that briefing occurs. Pension obligation bonds have a mixed track record, but the treasurer will be able to better evaluate the proposal once he has been fully briefed.”
Nine people were wounded in a shooting last Thursday in the Washington Park section of Providence, in what police say they believe is the largest shooting in the city’s history. The shootings underscore the widespread presence of guns, an uptick in gun violence in Rhode Island’s capital city, and what community leaders describe as a need for more opportunities for young people.
“Violence like this is not the disease, it is the symptom,” Harrison Tuttle, executive director of the BLM-RI PAC, said in a statement. “Communities in Providence and across America need investment in food, housing, healthcare, and jobs that will prevent violence in the first place. Poverty is a result of the crime. Without addressing the cause of poverty we cannot begin to address crime in our city. We must work together to create long-term solutions and not simply continue the cycle of crime and incarceration in communities that are hurting now more than ever.”
The RI Democratic Party’s move to hire Kate Coyne-McCoy in March as chief strategist reflected a change. She wouldn’t have gotten the nod if Nicholas Mattiellowas still speaker. Yet some progressives are less than happy with the party’s direction under Coyne-McCoy (for more on that, see item No. 6).
Meanwhile, here’s how Coyne-McCoy, via Political Roundtable, describes the underlying logic of some of the highly variegated elements that made up the RIDP: “For me, it’s about representing your constituency. Doc Corvese, who I don’t agree with Doc Corvese on one thing that I can think of,” she said, referring to Rep. Arthur Corvese, the socially conservative North Providence Democrat, “but he represents his constituency. He is elected by his constituency. Whoever the most sort of liberal member of the House and the Senate – they represent their constituency … For me, it comes down to letting the voters decide and running a straightforward campaign with all the resources and tools at your disposal, so that you can mobilize the voters who can get you elected.”
Former Fall River Mayor Jasiel Correia has been found guilty in 21 of the 24 counts against him.
As Ben Berkereports, “More than 30 witnesses testified during the four-week trial, which was the first high-profile case heard in Boston’s federal court since the coronavirus pandemic began. Collectively, the testimony offered a detailed account of Correia’s rise from 20-year-old shoe salesman to a mayor who made history two times over: in 2016, as the youngest mayor in Fall River’s history; and again in 2019, when Correia was recalled from office and re-elected to replace himself on the same ballot. Correia’s criminal trial opened with arguments about the management of SnoOwl, a company Correia founded shortly after graduating Providence College in 2013.”
Sentencing is slated for later this year.
Remember when Gov. Dan McKee put the kibosh on a fundraiser to be hosted by Jerry Zarrella, the co-chair of Donald Trump’s RI re-election campaign in 2020? The news broke two weeks ago Sunday, a long time in Rhode Island-news years.
Suffice it to say that despite some upset among local Trump supporters, this is not a big issue for most Rhode Islanders. McKee faces a political test in navigating the busy field gearing up for the September 2022 Democratic gubernatorial primary, and Trump supporters will not decide that contest.
Still, the start and stop of the Zarrella fundraiser did not go unnoticed by RI’s donor class, and it raises the specter of potential unforced errors on the way to next year’s election season. Then again, McKee has good timing, as evidenced by how the state will have $324 million more than expected to complete the next budget.
Some RI progressives are up in arms about the contract that the RI Democratic Party wants them to sign to get access to Voter Action Network (VAN), the software crucial for running a campaign.
During her Political Roundtable appearance, Kate Coyne-McCoy said the criticism is off-base. While critics don’t like the idea of the state party having access to their own campaign files, Coyne-McCoy said a firewall will guard against the removal of that data and that only a data director will have access to the system’s backend for maintenance.
“There’s an absence of trust between the party and some progressive folks,” she said, “but there are a lot of progressive folks who are happy about the fact that they’re going to get a better product at a cheaper price that will afford them many more tools than they currently have.”
Sen. Sam Bell (D-Providence) has been among those critical of the state party’s approach on VAN, so I asked him for a response to Coyne-McCoy’s comments.
Here’s what Bell said: “It is disappointing that Coyne-McCoy chose to attack progressives as liars in a ‘Trumpian world’ instead of addressing our concerns about the party machine trying to seize all Democrats’ personal campaign data. The contract language is unambiguous. It says, ‘any survey responses activist codes or other data entered into the VoteBuilder system becomes the property of the RIDP.’ Coyne-McCoy’s statement that personal campaign data will not be taken ‘off the voter file’ is meaningless. The voter file does not contain personal campaign data. The candidates’ campaigns have the personal campaign data, not the voter file. So, of course, the personal campaign data will not be taken from the voter file. As the contract says extremely clearly, the personal campaign data will be taken from candidates’ campaigns to become the legal property of the party machine.”
It’s not every week that the law office of the speaker of the Rhode Island House burns down. Joe Shekarchi ascended to the top of Smith Hill with many friends and few enemies. For now, questions about the cause of the fire remain unanswered.
During an almost three-hour debate last week, GOP state representatives pressed a series of arguments against the IGT-Bally’s contract. But 62 representatives, including Rep. Barbara Ann Fenton-Fung (R-Cranston), supported the bill, reflecting strong backing for a measure meant to maintain the state’s third-largest revenue source.
The Rhode Island Advisory Committee to the U.S. Commission on Civil Rights has a new report on licensing barriers to jobs for the formerly incarcerated. The key findings include how a disproportionate number of Black and Brown people have criminal records, including some eligible for expungement and some who were arrested but not convicted. The report describes unemployment as a key cause of recidivism, and it found little awareness of how neighborhoods are policed and how arrests are made.
The federal government last week announced approval of the nation’s first utility-scale offshore wind farm.
Via Ben Berke: “Vineyard Wind, a joint venture between a Danish investment firm and the Basque utility Iberdrola, indicated it could be sending electricity to Massachusetts’ grid as soon as 2023. Vineyard Wind CEO Lars T. Pedersen called the approval ‘not about the start of a single project, but the launch of a new industry.’ The project could generate as many as 3,600 local jobs, according to Pedersen — many of them geared toward the assembly and installation of turbines whose parts are manufactured in Europe. Vineyard Wind plans to assemble its turbines on a terminal built with public funds on New Bedford’s waterfront. Pedersen says manufacturing could eventually move to the U.S. if the federal government approves more offshore wind farms. New Bedford Mayor Jon Mitchell said he’s been waiting for the project’s approval for ten years. He called the experience a ‘classic American approach to a new thing. We are sometimes slow to pick up on an opportunity but once we get our arms around it, we really make things happen,’ Mitchell said. ‘I think what we’ll see here in the next 10 years is a ramp up of the industry that will be far faster than what the Europeans were able to pull off in the ’90s and the earlier part of this century.’”
Brown University reports that some of its scientists, working with the BrainGate research collaborative, have made it possible for an implanted sensor to record the brain’s signals associated with hand-writing. As Jon Hamilton reports for NPR, this is considered the latest success in efforts to link computers with the human brain.
The idea that Rhode Islanders don’t trust their elected officials is … not exactly surprising.
In a new poll, the Hassenfeld Institute for Public Leadership found that 48 percent of voters do not trust elected officials to spend federal stimulus money wisely – although 41 percent do trust them to get that done.
According to the Hassenfeld Institute, “Voters are divided on whether to prioritize ARP funds on one-time capital projects or daily government operations, with a plurality (38 percent) supporting capital improvements, 26 percent supporting daily operations, and 27 percent unsure. 50 percent of voters were opposed a future tax increase to keep operational programs going once ARP funds are depleted, compared to 43 percent who would support a future tax increase. 62 percent of Democrats were willing to support a future tax increase, compared to just 33 percent of Independents and 15 percent of Republicans.
“At the state level, over 50 percent of voters thought it was somewhat or very important for ARP funds to be spent on providing grants and loans for small businesses (76 percent), jobs training and re-skilling programs (60%), and reversing pandemic-caused student learning losses (58 percent). At the local level, over 50 percent of voters thought it was somewhat or very important for ARP funds to be spent on enhancing public school programs (63 percent), one-time infrastructure projects (54 percent), and expanding services for seniors (53 percent). Regarding capital improvement projects, over 50 percent of voters thought it was somewhat or very important for ARP funds to be spent on repairing roads and bridges (61 percent), modernizing school facilities (59 percent), and investing in climate resiliency and renewable energy (53 percent).”
Jessica David shares word of her involvement with a new nonprofit, Local Return, which is focused on helping Rhode Island small businesses to recover from the downturn of the pandemic. The group is hosting a workshop series with community economist Michael Shuman on Local Investment 101, on how local spending can make a bigger impact.
Catherine Taylor, who came close to winning a 2010 race for secretary of state, has been named as the new director of the RI chapter of AARP. She will succeed Kathleen Connell, RI AARP’s only state director since 1999.
Via AARP: “Taylor most recently served as executive director of Age-Friendly RI, an initiative of Rhode Island College. There, she led a broad-based statewide coalition of state and community agencies, social service and health care providers, businesses, academic institutions, advocacy and faith-based organizations and individuals of all ages committed to healthy aging. To support isolated older adults during the pandemic and beyond, she spearheaded development of a statewide Virtual Community Center and BeKindRI.org, an online platform to match volunteers with people in need of food delivery. As an aging and dementia policy expert, advocate for older adults and people with disabilities and seasoned administrator, Taylor has spent her entire career in service to the people of Rhode Island.”
Zachary Cunha, chief of the civil division in the U.S. attorney’s office, has gotten the recommendation from Sens. Jack Reed and Sheldon Whitehouse as RI’s next U.S. attorney. Cunha has been a federal prosecutor since 2005. He has degrees from Brown University and George Washington University Law School.
Back in January 2020, Mosaic, the immigration podcast of The Public’s Radio, profiled Murray Kaplan, the owner of the last Jewish bakery in Rhode Island. Now, as Gail Ciampa sadly reports, the Rainbow Bakery in Cranston is joining the pantheon of bygone RI food institutions.
Former ProJo reporter Dan Barrywrote the ultimate book on the PawSox – “Bottom of the 33rd: Hope, Redemption and Baseball’s Longest Game” – so who better to catch the mood as the WooSox opened their season last week: “The team’s new owners introduced themselves to Pawtucket by saying they wanted to leave. They announced a proposal to move to a stadium that would be built, largely at taxpayer expense, in Providence — an egregious overreach, and a profound misread of the current Rhode Island mood. The plan died a quiet death, but still. ‘It ripped the heart out of us,’ [Pawtucket Mayor Don] Grebien, 53, said.’”
Ian Donnis is the political reporter for The Public’s Radio. He can be reached at [email protected] Follow him on Twitter (@IanDon).