By Ted Nesi
PROVIDENCE, R.I. (WPRI) – Rhode Island cities and towns owe their current and former workers more than $5 billion in retirement benefits with no money set aside to pay for them, a new state study has found.
By Ted Nesi
PROVIDENCE, R.I. (WPRI) – Rhode Island cities and towns owe their current and former workers more than $5 billion in retirement benefits with no money set aside to pay for them, a new state study has found.
Three of Rhode Island’s major candidates for governor this year – Treasurer Gina Raimondo, Cranston Mayor Allan Fung and Providence Mayor Angel Taveras – have all struck deals with union members and retirees over the last two years to reduce the shortfalls in the pension funds for which they’re responsible.
So how much did they save?
In dollar terms, Raimondo obviously achieved the highest savings: a $3.9 billion cut in the state’s unfunded liability under the terms of last week’s proposed settlement, compared with a $186.4 million reduction from Taveras’s settlement and a $37.4 million reduction from Fung’s settlement. But that’s not really a fair comparison, since the two mayors were dealing with significantly smaller total liabilities.
After a rough couple of news cycles, Cranston Mayor Allan Fung has finally gotten some good news.
In a short investor note issued last week, Moody’s Investors Service analyst Vito Galluccio praised a Jan. 9 ruling by R.I. Superior Court Judge Sarah Taft-Carter allowing Cranston to suspend pension COLAs biennially and cap them at 3%, calling the decision a “credit positive” for Rhode Island’s third-largest city.
The changes to the Police and Fire Employees’ Pension Plan of the City of Cranston (PFERS) are “credit positive for Cranston because it reduces the city’s pension liabilities, lowers the annual required contribution (ARC) to its pension plans and forces the city to fully fund its ARC in future years,” Galluccio wrote.
According to Moody’s, the changes will reduce the large shortfall in Cranston’s pre-1995 police and fire pension plan by about 10% to an estimated $261 million. By comparison, Treasurer Gina Ramondo’s 2011 state pension law reduced the state’s unfunded liability by about 41%, and Providence Mayor Angel Taveras’s settlement with city retirees reduced the capital’s shortfall by about 22%.
By Tim White
CRANSTON, R.I. (WPRI) – A former Cranston police officer should be awarded an accidental disability pension for post-traumatic stress and anxiety stemming from on-the-job harassment, a Rhode Island Superior Court judge has ruled.
By Ted Nesi
PROVIDENCE, R.I. (WPRI) – Rhode Island cities and towns are all over the map when it comes to the investment performance of their independent pension plans and how much they pay to manage the money, with some places failing to track basic data about their assets, a Target 12 investigation has found.
The police pension fund in Tiverton posted the worst investment performance in Rhode Island during the 10-year period ended June 30, 2012, with an annual return of just 3.45% after fees. Tiverton’s return was only half as high as the state’s top performer, Providence, which posted a 6.9% return over the same period.
Tiverton’s track record was weaker than its neighbors even though the town paid more to invest its pension money than almost any other municipality during the 2011-12 fiscal year: 0.96% of the assets in its pension fund. The only town that spent a larger share of its money on investment fees was Lincoln, which spent 0.97% of assets. The state spent 0.62% of assets.
“Obviously, we’ve been concerned about this,” former Tiverton Town Administrator James Goncalo, who retired earlier this month, told Target 12 before his surprise departure. He acknowledged, however, he wasn’t aware that Tiverton’s performance was the worst in the state until he saw the results of the Target 12 investigation.
“I just had a feeling that it was lower than it should be because our goals were much higher,” Goncalo said. The town has set an annual investment target of 7% on the advice of its investment adviser, Bank of America, he said. “I understand that there was a big drop in 2008 but I just felt we should have recovered more since then than we have,” he said.
A Bank of America spokesman did not respond to multiple requests for comment on its work in Tiverton. Goncalo said the town is in the process of finding a new investment adviser.
Tiverton is one of 24 Rhode Island cities and towns that manage independent local pension plans for their municipal workers. Target 12 spent the last five months tracking down and compiling data from each community about their investment strategies – and in a few cases found that municipalities were unable to locate any of the information requested.
“I’m surprised at that,” Robert Cusack, an investment manager at WhaleRock Point Partners in Providence and a former East Providence city councilman, told Target 12. “To meet your fiduciary responsibilities as a member of a [pension] board, you should know those numbers. The data that you just mentioned should really be at your fingertips.”
The 17 cities and towns that were able to report how much they spent on investment fees said they paid financial firms a combined $6.6 million to manage their pension investments during the 2011-12 fiscal year.
The information about local pension investments collected by Target 12 has apparently never been compiled by the state and is either unavailable or difficult to find on municipal websites. It is not reported in communities’ annual financial audits or pension studies. The local pension study commission created by the state’s 2011 pension overhaul has obtained only cursory information about the investments.
Two places – Coventry and West Warwick – were unable to provide any of the fee or performance data about their pension investments that Target 12 requested. Both of those communities’ pension funds are in “critical status,” which means they are significantly underfunded, according to the state.
A Target 12 investigation in May revealed Coventry officials had washed their hands of responsibility for one of their three pension plans, alarming state leaders. WPRI.com reported last year that West Warwick’s pension fund was on track to run out of cash within five years without major changes.
Three other communities – Johnston, North Providence and Scituate – couldn’t provide data on how much they spent to invest their pension assets.
North Providence is the only city or town whose pension plan lost money over the last five years. In Scituate, a recent Target 12 investigation revealed officials there charged with overseeing its police pension plan held next to no meetings for more than a decade as its cash shortfall quadrupled.
Some local officials are in over their heads, Cusack said. “Ideally what you’d want in one of these plans is to have a good, well-informed retirement board, and then you’d want to have a good investment process, and then you’d like to have good investment people executing it,” he said. “Often you don’t have that. Sometimes you do, but often not.”
Over the last 10 years, all but two local pension plans trailed the 6.6% average annual return earned by the state-run pension system. The two exceptions were Providence, which earned 6.9%, and Warwick, whose municipal and new police pension plans earned 6.7%.
Providence Mayor Angel Taveras has said that although he’s pleased with the city pension plan’s strong investment performance, he’s concerned about how much the capital is spending on investment fees: $2.16 million in 2011-12 alone, or 0.8% of assets, among the highest levels in the state. He has asked the city’s advisers to find cheaper options.
Warwick officials said one of its five local pension plans – the one for school personnel other than teachers – is managed separately from the city’s four plans for municipal workers, even though Warwick taxpayers are responsible for all five. The school plan earned just 5.19% over the last 10 years, significantly less than the four city plans.
Tiverton’s Goncalo said the town’s police pension board is made up of the town administrator, the town treasurer, the police chief, a member of the police union and a member of the town council. Since they lack investment expertise, they rely on Bank of America’s advice to invest the nearly $7 million in its police pension fund.
“They are the people in the know,” he said. “They know more about investments than we do, so we have taken their advice.”
Goncalo said he would prefer to have Tiverton merge its police pension fund into the state-run Municipal Employees’ Retirement System, but was told by state officials that the pension plan would need to be fully funded in order to do that. The Tiverton plan was just 51% funded, with a $6.5 million shortfall, as of June 2012.
“I think the general treasurer’s office and the [state retirement] board probably has more expertise than the local level in these areas,” he said.
Cusack said the Providence and Warwick cases show that in some cases communities can do a better job managing their pension funds than the state can. “I think if it’s well-run there are advantages to having independent plans,” he said. “It’s not automatic that they should all be put with the state plan.”
In addition, Cusack said some cities and towns with solid pension returns may actually be masking deeper problems, “because you might still get returns inadvertently for a period.”
When he was in East Providence, Cusack said, “I looked at the portfolio and I said, ‘Congratulations on these returns. Things are really great here. You’ve done really well. However, because of the risk you have, it’s so high that you’ve been lucky. You’ve just been lucky.’” The town lowered its portfolio’s risk prior to the 2008 crash, he said.
• Interactive: See all 24 municipalities’ pension investment returns and fees (WPRI.com)
By Ted Nesi
PROVIDENCE, R.I. (WPRI) – Rhode Island’s biggest cities are among the slowest-growing in the nation, and one of them is actually losing population, as weak population growth continues across Southern New England, according to new U.S. Census estimates released on Thursday.
By Ted Nesi
PROVIDENCE, R.I. (WPRI) – Cranston Mayor Allan Fung signaled Thursday he’s likely to throw his hat into the race for governor next year, adding his name to the list of those preparing to challenge independent Gov. Lincoln Chafee.
Hours before firefighters planned to picket her fundraiser, Treasurer Gina Raimondo reminded them that she opposed efforts last year by Governor Chafee, Providence Mayor Angel Taveras and others to pass legislation suspending pension cost-of-living adjustments in their contracts.
“I do think it’s important to point out I was a staunch advocate in support of protecting and respecting collectively bargained-for agreements for those firefighters, and I still stand by that,” Raimondo told WPRI 12′s Nicole Estaphan on Monday at the State House.
Raimondo also took the opportunity to defend “the long process” that led to the pension law, and suggested Chafee is going the wrong way by holding closed-door talks with union leaders to discuss a possible settlement to end their lawsuit against it.
“Before the General Assembly passed this historic legislation they had dozens of hours of hearings and give and take and a lot of back and forth and negotiation at the time that led to the final passage of the bill,” she said. “Having said that, at some point as part of this process if the courts asks the parties to sit down and mediate we will do that in good faith.”
“I don’t know if [lawmakers] have ever spent more time on any other piece of legislation,” Raimondo added. “They held a special session. They looked at every possible scenario. The labor leaders were present for every part of the discussion.”
• Related: Firefighters organizing pension protest at Raimondo fundraiser (Dec. 10)
• Update: Raimondo says she respects union pacts
Treasurer Gina Raimondo will have some uninvited guests at her fundraiser in Providence tonight.
Paul Valletta, president of the Cranston firefighters union, confirmed to WPRI 12′s Tim White that his members will be picketing outside a campaign fundraiser Raimondo is holding Monday night at Rick’s Roadhouse to coincide with the Patriots’ appearance on Monday Night Football.
“It’s just our way to say that we haven’t forgotten what the general treasurer did to many state workers, police officers, teachers and firefighters,” Valletta told White on Monday. “It hasn’t been forgotten that people’s lives have been changed negatively when they didn’t have to be.”
Valletta famously argued during last fall’s debate over the new pension law that Raimondo had “cooked the books” by getting the Retirement Board to change investment and actuarial forecasts in ways that worsened the pension fund’s finances. Raimondo said the new numbers were more accurate.
The R.I. State Association of Fire Fighters has asked all off-duty members to join the protest, writing in an email that it’s “very likely that she will be making a run for the governor’s seat next election.” Valletta said some police officers may show up, as well, but they don’t want to cause “a mess on the street.”
“One of the issues we are focusing on is the age issue: with the change to the pension you are going to have firefighters stay into their 60s and 70s to get a full pension,” he said.
Echoing an argument gaining steam of late, Valletta said Raimondo should have negotiated changes to the pension system at the bargaining table with organized labor rather than having state lawmakers approve the changes unilaterally.
Fixing Rhode Island’s local pension plans is going to make the state overhaul look like a cakewalk.
The 36 locally run pension plans, many of them underfunded, have become a growing burden on municipal taxpayers and a source of concern for retirees thanks to years of shoddy management. Last fall the General Assembly ordered the communities to study the problem and deliver solutions to a new commission, but Democratic state legislators have refused to sign off on cost-of-living freezes, citing labor contracts.
In the long run, shifting troubled locally run plans into the state system would address many of the issues that got the plans into trouble in the first place. Retiree benefits would have to match those of other cities and towns in the state-run system, and cities and towns would have to make full “annual required contributions” each year to replenish low fund balances and keep up with annual payouts.
But as some members of the Locally Administered Pension Plans Study Commission noted Monday, forcing such moves would raise a host of potential problems. …
[T]he prospects for getting all of those plans adopted, and in some cases negotiating concessions from local unions, is far from certain.
“What we’re trying to figure out is what happens if that doesn’t work,” [commission Chairman Rosemary Booth Gallogly, director of the state Department of Revenue,] said. “Are we just going to keep meeting for the next five years and saying, ‘Well now you’re not 30 percent funded you’re only 22 percent funded, well now you’re not 22 percent funded you’re only 16?’ At some point we have to make people do something.”
To understand why Gallogly is concerned, look no further than Cranston, where Mayor Allan Fung wants the City Council to reduce benefits before its 18% funded pension plan runs out of money; Treasurer Gina Raimondo has suggested he should consider “a buyout scheme.” Yet lawyers for the retirees say the city can’t do what Fung is proposing, Mark Schieldrop reports for Patch:
The City Council met behind closed doors last night to talk with city lawyers about the mayor’s plan to cut pension benefits for police and fire retirees. …
The plan offers four possible options to save the failing pension plan, each recommending a freeze on cost of living adjustments (COLAs) for 10- to 15-years or a permanent freeze.
James E. Kelleher, a lawyer representing the retirees, told the council that the situation has echos of a legal dispute in 2003 that began when the city arbitrarily changed COLAs and other benefits for retired firefighters without going through the collective bargaining process. The city was taken to court and lost, Kelleher said. And the city did not appeal, which made the ruling a “final judgement,” he said. …
If the council acts, Kelleher warned, retirees would seek a Superior Court injunction ruling the City Council was in violation of a court order based on the Judge Daniel Procaccini’s ruling earlier in the decade that states any change to retiree benefits must be accompanied by collective bargaining.
It hasn’t gotten a lot of attention, but another Rhode Island pension battle is brewing in Cranston, where Mayor Allan Fung is pushing the city’s finance committee to take unilateral action on its underfunded, closed pension plan for pre-1995 firefighters, Paul Davis reports for The Providence Journal:
Now Fung wants the city’s Finance Committee to approve his cuts to benefits at a special Oct. 25 meeting. …
Cranston, he says, can no longer afford the locally administered plan, which costs more than $20 million a year — nearly 20 percent of the city’s budget, excluding school costs.
In a bid to save money, the mayor wants the city’s retirees to forgo an annual cost-of-living increase for the next 10 years.
He also wants to cap all cost-of-living adjustments, or COLAs, at 3 percent after the 10-year freeze. Retirees now get a minimum 3-percent increase but can earn more if current employees get more.
• Related: Slideshow: Mayor Fung’s warning to pensioners in Cranston (Sept. 18)
You never know what will get Rhode Island into the paper of record. Jess Bidgood reports from Cranston:
The members of the parent-teacher organization at Stadium Elementary School had no idea that the father-daughter dance they were planning last spring was, in fact, against the law.
But a complaint from a single mother about the event led to a renewal of a ban on such dances here, a move that has, in recent weeks, become a fiercely debated political flash point. …
It is not the first time Cranston has crossed paths with the civil liberties union. The city and the schools owe about $150,000 in legal fees after losing a lawsuit brought by the organization over a prayer banner that hung in Cranston High School West. The A.C.L.U. said displaying a prayer was inappropriate in a public school.
Among Rhode Island’s 36 locally run pension funds, few are in more trouble than Cranston’s plan for police officers and firefighters hired before July 1, 1995. The plan has $55 million in assets to cover a total liability of $311 million – only about 18% of what it needs.
Mayor Allan Fung says retirees’ COLAs need to be suspended to resolve the plan’s funding problems and, in Angel Taveras fashion, he went to them directly last week with this presentation:
Cranston Patch’s Mark Schieldrop has firefighter union chief Paul Valletta’s reaction.
• Related: Allan Fung: ‘Listen: pension reform … has to happen’ (March 28)
The list of Rhode Island politicians seriously considering a run for governor in 2014 is getting longer.
Cranston Mayor Allan Fung, former candidate John Robitaille and Moderate Party founder Ken Block all suggested in interviews with WPRI.com Tuesday that they could make a bid for the state’s highest office.
They join three Democrats – Treasurer Gina Raimondo, Providence Mayor Angel Taveras and former Auditor General Ernie Almonte – on the list of individuals who may be on the ballot in 2014. (Almonte has already launched his campaign.) And of course there’s also incumbent Gov. Lincoln Chafee, an independent who says he expects to run for a second term.
Republican Fung, mayor of the state’s third-largest city, has a bigger campaign war chest than anyone else in the GOP and is running unopposed for a third term this November.
PROVIDENCE, R.I. (WPRI) – Providence Mayor Angel Taveras has invited city retirees to a forum early next month where he’s set to ask them to accept cuts in their pension benefits.
Taveras’s office sent an invitation on Feb. 15 to the event, described as “The Mayor’s Town Hall with Providence City Retirees.” The forum will be held Saturday, March 3 at 10 a.m. at the Rhodes on the Pawtuxet banquet hall in Cranston. The event will also be streamed online.
The invitation says Taveras and Michael D’Amico, his director of administration and acting chief of staff, will first deliver a half-hour presentation on Providence’s financial situation; the deep cuts in pension benefits made in Central Falls; “proposed reforms”; and “how you can help.” Taveras will then answer questions for an hour.
The city will spend about $6,500 to rent Rhodes on the Pawtuxet for the retiree forum, an amount that includes $2,000 to rent the room, about $2,500 to rent chairs and nearly $2,000 to pay for a police and fire detail in Cranston, Taveras spokesman Michael Raia told WPRI.com.
That was one of the riddles in the governor’s budget. My colleague Steve Nielsen tracked down the answer:
If you really want to dig in, check out the state law definition of a “distressed community.”
One editorial – “A Brave Stand in Rhode Island” – is explicitly about events here, offering support for Jessica Ahlquist in her fight to get rid of Cranston West’s prayer banner. ”The kindness, friendship and other values the prayer champions are universal, but a statement of religious belief has no place in a public high school auditorium,” The Times declares.
The second editorial – “Turning the ‘Buffett Rule’ into Law”- is national in scope but centers on the effort by Rhode Island’s U.S. Sen. Sheldon Whitehouse to require millionaires to pay at least 30% of their income in taxes, which it calls “only the beginning” of efforts to change federal rates.
“Republicans are certain to filibuster Mr. Whitehouse’s bill in the Senate or try to ignore it in the House,” the paper says. “But explaining a tax code that allows the wealthiest to escape their responsibility is getting much harder to do.”
By Tim White
A case of a police department apparently cooking the books is being obscured from view thanks to a sloppy translation of Rhode Island’s public records laws.
In October, The Providence Journal’s Amanda Milkovits ran a superbly reported story on police misconduct complaints in Cranston that were essentially tucked away, seemingly to do nothing more than collect dust. The report points out the previous police chief, Col. Stephen McGrath, had touted a sharp decline in police complaints in a 2007 annual report. But that might have been nothing more than a sleight of hand, according to an internal investigation.
Here are the findings from Milkovits’ article in a nutshell:
… according to an audit ordered by current Police Chief Marco Palombo Jr., the real reason the number of complaints dropped was that instead of logging all of the complaints, the department’s internal-affairs unit was diverting some into a “file report,” where they vanished from the log-book, statistics, and, apparently, investigations.
Milkovits wrote four excruciating paragraphs detailing why everyone and their lawyers couldn’t, or wouldn’t, explain why data on officer complaints vanished into a virtual drawer.
By Ted Nesi
PROVIDENCE, R.I. (WPRI) - More than half of Rhode Island’s 39 cities and towns have an independent pension plan that’s not part of the state-run system, but only one of those plans is funded above the 80% level experts say is adequate.
The 36 locally run plans spread across 24 cities and towns are the next big battleground in Rhode Island’s pension fight after they were largely excluded from the overhaul approved last month. A WPRI.com analysis of their financial health shows 13 of the 24 communities’ local plans are in more dire straits than the state retirement system was before the new law.
Unlike the dozens of pension plans in the state-run Municipal Employees Retirement System (MERS), which are required to be funded and are mostly in good shape, two-thirds of the independently managed so-called “non-MERS” pension plans are classified as “at risk” by the auditor general’s office.
The healthiest locally run pension plan is Jamestown’s police plan, which is 99% funded, followed by Middletown’s plan for most employees hired before 2001, which is 78% funded.
After Central Falls’ two plans, which are being restructured in bankruptcy, the worst-funded are in Cranston (16% funded), Scituate (23%), Coventry (25%), West Warwick (26%) and Johnston (27%).
By Tim White
PROVIDENCE, R.I. (WPRI) – Retirees in Warwick get the biggest average monthly pension checks in the state, with Cranston and Providence pensioners taking second and third place, a Target 12 comparison of town-by-town pension data reveals.
The average pension pays $2,979 a month in Warwick, $2,383 in Cranston and $2,373 in Providence, according to financial records obtained and analyzed by Target 12.
By comparison, the average monthly pension for a state employee is $2,157 – excluding judges and state police retirees – according to testimony before the Senate and House Finance Committees.
Target 12 compiled pension data from every city and town pension plan, including those managed the state – known as the Municipal Employee Retirement System, or MERS – to calculate each one’s average payment. The data includes police and fire retirees as well as city workers, but excludes teachers.
• Interactive: Town-by-town map of pension payouts across Rhode Island (Nov. 15)
CRANSTON — The Rhode Island Rehabilitation Center’s facility looks nothing like a hospital.
Its building on Route 2 was a Toyota dealership before the physical-therapy center took it over in 1993. Next door are a CVS, a Walgreens and a Cumberland Farms. Nobody’s going to rechristen the area a “Knowledge District.”
But the Rehabilitation Center employs about 60 people at seven locations in Rhode Island, and that’s one reason Congressman Jim Langevin visited there Thursday “to see how we can help businesses in the health care field.” CEO Henry Sisun founded the for-profit Rehabilitation Center in 1988, and it’s a minnow in the Rhode Island medical industry compared with huge providers like Rhode Island Hospital parent Lifespan, the state’s largest private employer, which had $1.5 billion in revenue in 2009.
The Wall Street Journal’s David Wessel has a fascinating column today about the lessons Europe can learn from how the U.S. and Brazil dealt with “tensions between sharing a currency and a central bank while pursuing largely independent fiscal policies” – basically, the Greece vs. Germany problem:
For months, Europe has been hamstrung by what one seasoned observer of the global economy describes as three “No’s:”
• No devaluations, meaning neither Greece nor Portugal can leave the euro to depreciate their currencies to regain competitiveness.
• No defaults, meaning holders of government debts must be paid in full.
• No transfers, meaning taxpayers in rich countries like Germany and France won’t bail out southern European spendthrifts.
Wessel’s solution: the European Union should use “the restructuring of state government debts to impose a measure of fiscal discipline and to bolster the power of the central government.” He points to two examples: Alexander Hamilton’s decision in 1790 to have the United States assume the states’ $25 million in Revolutionary War debts, and Brazilian President Fernando Henrique Cardoso’s similar move in that country a decade ago.
Reading this led my thoughts back to Rhode Island. Could something like that be part of the solution to the crisis in many of the state’s locally-run pension plans?
There are 23 plans run by 18 municipalities – about half the 39 cities and towns – that “are considered at-risk” because of underfunding, former Auditor General Ernest Almonte told the pension advisory group Wednesday. They include Providence, Warwick, Cranston, Pawtucket and East Providence – the state’s five largest communities and key parts of its economic engine.
This fall’s special legislative session on pensions is unlikely to do anything to address those local plans, focusing instead on the ones run by the state. But Almonte and Cranston Mayor Allan Fung warned of dire consequences if the independent plans’ problems aren’t addressed soon, and Governor Chafee proposed the MAST Fund partly due to those concerns.
Almonte and Fung suggested the plans could be moved into the state system “on a go-forward basis,” meaning just for new workers. But you have to wonder whether the day will come when the state government is forced to assume some responsibility for the local pension liabilities, as a way to avoid more situations like Central Falls. Most of the locally run plans are more poorly funded than the state one.
Almonte and Fung offered other suggestions, as well: requiring benefit cuts until a local plan’s funding level improves; establishing permanent limits on the generosity of benefits that mirror the state rules; abolishing double-dipping, the purchase of service credits, and benefit enhancers; auditing each independent plan; and exploring the possibility of buying out pensioners in troubled plans with a lump sum payment.
Forcing Barrington taxpayers to bail out Pawtucket retirees would be an unpopular move, to say the least – tough measures, including benefit reductions, would probably have to be a part of any deal. Yet it’s hard to see how Providence, for example, will ever be able to cover the retirement promises it’s made without assistance.
How difficult is it to terminate a teacher for poor job performance in Rhode Island?
That’s the question examined in tonight’s exclusive Target 12 investigation. Tim White will have the story at 10 p.m. on Fox Providence and 11 p.m. on WPRI 12.
We asked all 36 school districts in the state to provide the number of teachers who were terminated or who resigned during each of the last 10 years. Tim explains what we found in his WPRI.com story:
The majority of school districts in Rhode Island have not fired a single tenured teacher for job performance in the last decade, a Target 12 review of public records reveals.
Of the state’s 36 school districts, 32 provided Target 12 with data stretching back 10 years. In that time, 37 tenured teachers were terminated for cause, 16 of those in Providence alone. There were just over 11,000 tenured teachers in the state in 2010. The numbers show 21 of the 32 school districts never fired a tenured teacher in the last ten years.
The comprehensive review of termination data comes at a time when the state Department of Education is rolling out a new set of teacher evaluation standards. School officials have often complained that it’s difficult to terminate a tenured teacher for cause.
One of the comparisons that stuck out to us when we reviewed the data was the different approaches taken by Rhode Island’s second- and third-largest cities, as I explain in my companion WPRI.com article:
Warwick and Cranston are neighboring cities, but Target 12 has discovered that the two districts took very different approaches over the last 10 years when it came to terminating teachers for poor job performance: Warwick fired seven, while Cranston fired none.
Rhode Island’s 64-year-old law protecting public-school teachers awards them tenured employment status once they complete three years on the job. After that, the law says a tenured teacher cannot be fired “except for good and just cause.”
In Cranston, a principal who wants to terminate a teacher must make a formal recommendation to the superintendent’s office. Raymond Votto, the school district’s chief operating officer, said he was not aware of any termination requests that had been made in his seven years working there.
Want to know what your school district did? Check out our database with details from the 32 of 36 that responded to our public records request.
Cranston Mayor Allan Fung took to the pages of The Providence Journal this morning to offer a tough critique of Governor Chafee’s proposed MAST Fund. The headline: “A colossal stealth property-tax hike.” Fung said MAST will only make cities and towns’ financial situations worse unless it’s paired with legislation allowing them to cut pension and retiree health benefits.
I talked with Fung this morning to get a better sense of his concerns and what he wants from the governor. The transcript has been lightly edited for clarity.
Aren’t you blaming Governor Chafee for something that’s Cranston’s fault? He didn’t force the city to promise generous benefits and then fail to fund them.
It’s not just a funding problem. I think this is indicative of all pension plans, whether it’s local, state or even the federal plans that we have right now. It’s a combination of the sins of the past, not only from a failure to fund them, but also the problem of generous benefits. And what I was saying in my editorial was, look, we cannot – cannot – just see this as a revenue problem, where all you’re doing is raising taxes to meet your obligations, because all you will do is crush the taxpayers. There has to be some corresponding reforms of those generous benefits, to peel them back so it’s not as burdensome on the taxpayers.
Have you approached your own unions there in Cranston about that and tried to bargain with them? I know Mayor Taveras is looking at that in Providence.
In the past I have. For instance, one of the big successes that I had was with my Teamsters. I think that was probably one of the first unions in the state that has agreed to move new employees out of a defined-benefits plan and into a defined-contribution plan, and I was able to get the enabling legislation passed last year so any new Teamsters – and they’re all the municipal City Hall employees – are now no longer in a pension plan. So that’s one of the big first steps that we have to move towards.
How about the other unions? Have you tried with them?
Yes. It’s difficult, because with the police and fire we were in concession discussions. Pension discussions did come up, and they will still come up; in fact, I’ve sent letters to them because of the governor’s MAST proposal to try to initiate discussions to peel back on some of those benefits if possible.
But the difficult question it comes down to is about those that are vested and retired: Who represents them? That’s one of the difficulties that we’re going to encounter because for some, the unions may not represent them. And that’s always been this question that’s been hanging out there.
Borders has granted a reprieve to its Cranston store less than 24 hours after placing it on the list of locations the bankrupt bookseller planned to close, WPRI.com confirmed earlier today.
“The landlord came back to us and was willing to negotiate some more, and we made the decision this morning,” Borders spokeswoman Roslyn Thompson told me in a short phone interview a few minutes ago.
She also said Borders employees at Garden City can rest easy. “Cranston will not go back on the list,” she said.
As for the other local Borders locations, Thompson made it sound like they didn’t have too much to fear now that they’ve survived two rounds of cuts.
“We’re continuing to work with our landlords, but we don’t anticipate a lot more [closings] coming out – certainly not in a bunch like this,” she said, referring to the 28 stores added to the closure last Thursday. The determining factor will continue to be whether landlords give the company breaks on its current lease agreements, she said.
Borders hopes to be out of bankruptcy before the holiday shopping season, Thompson added.
Update: Borders in Cranston has won a reprieve. The company took the Garden City store off its list of locations to be closed Friday morning, less than 24 hours after it was put on the chopping block. (That list was removed from Borders’ website today.) The original post is below.
Update #2: A Borders spokeswoman tells me Garden City agreed to a new lease that will allow the company to stay put.
The bankrupt bookseller added 28 more locations this evening to the list of stores it plans to close, and Cranston was on the expanded list. The company said the Garden City store will close by late May.
“We reached the determination about these stores after a further review of their ongoing economic viability,” Borders spokeswoman Mary Davis said in a statement quoted by Reuters.
The Cranston store had 30 employees as of 2009, according to R.I. Economic Development Corporation records. Borders had another 45 employees at Providence Place mall and 30 at Warwick’s T.F. Green Airport, according to the EDC.
Borders initially announced Feb. 16 that it would liquidate about 200 locations. At that point, no local stores were slated to be shuttered.
Borders filed for bankruptcy in February following years of sliding sales and a failure to capitalize on the rise of e-bookselling.
The company’s other local stores – at Providence Place and T.F. Green, and in North Attleboro, Mansfield, Taunton and Swansea – are still scheduled to remain open under the company’s current plans.
Garden City Center, which opened in 1948, has lost two other major anchor stores since the recession began in 2007: retailers Circuit City and Linens n’ Things also closed there after their own bankruptcy filings. Garden City is managed by The Wilder Companies of Boston.
HousingWorksRI is out with a new report this morning on the foreclosure crisis in Rhode Island. The study is full of grim statistics, but here’s one that stood out to me – more than one in 10 mortgaged homes in Central Falls fell into foreclosure over the last two years.
In all, 117 of Central Falls’ 1,045 mortgaged homes entered foreclosure between January 2009 and December 2010, according to the report – 11.2% of the city’s mortgaged housing stock.
That’s way ahead of the next three: Providence (7.2%), Woonsocket (5.7%) and Pawtucket (4.6%). In 10 of the state’s 39 municipalities, the total was under 2%. Central Falls has a myriad of problems, but the fact that it’s an economic basket case has been a key contributor to the city government’s insolvency.
Perhaps unsurprisingly, the report also found that the foreclosure problem is concentrated in four of Rhode Island’s biggest cities: Providence, Warwick, Cranston and Pawtucket accounted for just over half of the state’s 4,738 total foreclosures in 2009-10.
The report also contains this striking chart, showing just how frothy Rhode Island’s housing market got – and just how far prices have fallen since the bubble burst, particularly for multifamily homes:
It’s a banner day for Yushin America, a robotics company that has 60 employees on Kenney Drive in Cranston.
The wholly owned subsidiary of Japan’s Yushin Precision Equipment was featured prominently in a New York Times story today about the various business tax breaks included in the Obama-GOP tax deal currently making its way through Congress:
At Yushin America, a Rhode Island company that makes and maintains robotic manufacturing equipment, executives say that the business tax breaks would allow them to invest in new machinery, new employees and even a new roof.
“It’s a chance for us to put it back in the business and grow,” said Michael Greenhalgh, operations manager of the company in Cranston, which employs 60 people and has annual sales of about $21 million.
Tax cuts intended for businesses are a relatively small part of the $858 billion tax bill scheduled for a final vote in the Senate as early as Tuesday.
The Joint Committee on Taxation estimated that about $75 billion of the tax breaks in the plan were aimed at businesses, including $13 billion for a two-year extension of the coveted research and development credit, which helps cover the cost of wages for employees involved in research. The proposal also commits $22 billion for accelerated depreciation, which in 2011 would allow businesses to write off 100 percent of their capital expenditures immediately instead of over several years.
I called up Greenhalgh, who’s worked at Yushin for 10 years, to ask how his company wound up making it into the article, and he said it was probably thanks to the tax consultants who helped the firm’s management figure out how they qualified for the research-and-development tax credit.
Yushin makes robotic equipment that other companies then use to manufacture their own products. Consumers don’t buy Yushin’s products – “they’re going to buy the thing that my thing touches,” Greenhalgh said, from phones and computer keyboards to medical products like drains and IVs.
This is the first time that 22-year-old Yushin America applied for the R&D credit, Greenhalgh said. “The rules have been relaxed,” he said. “Before you had to be NASA and run around with leather binders documenting everything.” Now companies like Yushin can conduct a sample of their engineers’ work to extrapolate how much of what they do qualifies for the tax breaks.
Yushin sent in its materials for the tax credit early this fall, but Greenhalgh said the company is still waiting to receive its checks from the government.
(image credit: Yushin America)