Providence may not be the only city with a hotly contested mayoral campaign next year.

Former Pawtucket City Council President Henry Kinch Jr. told WPRI.com on Tuesday he’s “strongly considering” running for mayor of Rhode Island’s fourth-largest city in 2014. The Democrat is currently clerk of the Providence County Superior Court.

Kinch ran in the 2010 Democratic primary to replace retiring Mayor James Doyle, losing to Don Grebien 64% to 37%. Grebien was unopposed for re-election last year.

Grebien spokesman Doug Hadden declined to say if the incumbent will seek a third term. “The city faces a lot of daunting contractual and budget challenges,” Hadden told WPRI.com. “He’s focused on that. He has not made a statement at this time one way or another. He’s focused on working hard for the residents of Pawtucket.”

Grebien had $6,065 in his campaign war chest as of Dec. 31, while Kinch’s old campaign account was inactive.

Kinch’s father, Henry Kinch, was mayor of Pawtucket from 1981 to 1987.

Update: In a follow-up email, Grebien told WPRI.com he’ll definitely be in the race:

I will be running for re-election as mayor of Pawtucket in 2014. The city’s problems are bigger and more extensive than anyone could have anticipated and I am committed to staying and getting the job done. We have already made significant financial progress but much remains to be done. As a parent of two young children, I am committed to a better future for them and for our city.

(photo: Marc N. Belanger/Wikipedia)

By Ted Nesi

PAWTUCKET, R.I. (WPRI) – A New York company that provides remote health-monitoring services is planning to expand in Rhode Island by opening a call center that will employ 250 people over the next two years, WPRI.com has learned.

Read the rest of this story »

Former Auditor General Ernie Almonte delivered a 20-page report on Pawtucket’s pension and retiree health plans to Mayor Donald Grebien on Thursday, eight months after Grebien asked him to lead an ad hoc commission studying the issue.

“The City of Pawtucket has a seriously underfunded pension system and an unfunded OPEB (other post retirement employee benefits, e.g., health insurance),” the report says. It lists a long list of options for dealing with the problem, including larger contributions from the city and suspending pension cost-of-living adjustments (COLAs) until the plan is 80% funded.

Grebien described the report as “impressive in its scope and depth,” and said he will review its findings “with his administration and finance directors, in conjunction with union leaders, to determine options and recommendations that will be sent to the City Council for approval as required by the state.”

Click here to download the full Pawtucket pension report as a PDF. (Under last year’s pension overhaul, Rhode Island cities and towns are required to submit plans for shoring up their pension plans by next month.)

• Related: Pawtucket panel plans 6-week sprint to solve pension problem (Feb. 23)

Every vote counts – particularly when almost nobody casts one.

Longtime Pawtucket Rep. William San Bento appears to have eked out a victory in the tighter-than-tight House District 58 Democratic primary. Monday’s fourth recount – and fourth different result – gave him a one-vote lead over two-time candidate Carlos Tobon, 544 to 543.

At first glance, it looks like the people in District 58 are split right down the middle between San Bento supporters and Tobon supporters. But we can’t really say that, because only 1,087 of the 6,900 people who were eligible to vote last Tuesday actually cast a ballot – an anemic 15.8% turnout.

On top of that, the winner of the Democratic primary is running unopposed in November – two independents who pulled papers didn’t make the ballot – meaning last week’s election was the only time District 58 voters will get a choice this cycle. When you add in the 404 Republicans who couldn’t vote in the Democratic primary, just 7.5% of the district’s 7,304 voters will have chosen San Bento as its next representative.

By Ted Nesi

PAWTUCKET, R.I. (WPRI) – The atmosphere was more like a family reunion than a campaign event Monday morning when Congressman David Cicilline and his predecessor Patrick Kennedy stopped by Leon Mathieu Senior Center to appeal for votes.

The event’s big focus wasn’t even there: Kennedy’s baby boy, four-and-a-half-month-old Owen Patrick Kennedy. Senior after senior, mostly women, asked Kennedy to pull out a well-worn printed photograph of the smiling infant. “He’s got those Irish eyes,” a beaming Kennedy declared.

Kennedy told WPRI.com that during a visit Sunday to Woonsocket’s John F. Kennedy Manor he promised voters there he’ll bring Owen along when he’s back in town to campaign for Cicilline – a little “October surprise” just in time for the November election.

And what if Owen someday decides he wants to go into the family business and run for office himself? “Well, God bless him,” Kennedy said. “I think politics will look a lot different by the time he’s on the ballot.” There’s plenty of time: Owen only just learned to roll over on his side.

(more…)

Ted Nesi is on assignment.

By Jason P. Becker

At the center of Woonsocket’s spiral into fiscal uncertainty is a massive deficit at its public schools that seemingly emerged from the ether this winter. The school system wound up short almost $10 million over the last two years despite having a business manager repeatedly declare that the schools were running a surplus.

Faced with a massive deficit and the demise of a supplemental tax increase at the hands of the city’s legislative delegation, an already underfunded school system is looking to cut even further. Some in Woonsocket have been asserting that a lack of state support for the Woonsocket Public Schools has led to its precarious budget situation. Indeed, the city has joined Pawtucket in a lawsuit seeking to force the state to accelerate the planned funding increases to Woonsocket as part of a new education aid funding formula enacted in June 2010.

Is it true that Woonsocket schools can blame a lack of state support for its insufficient revenues?

(more…)

Bob Ryan – whose Boston Globe column will be dearly missed after he retires this summer – traveled to Pawtucket last week for the ceremony honoring the late Ben Mondor, who saved the PawSox in the 1970s. The resulting column is a must-read for Rhode Islanders:

PAWTUCKET, R.I. – He did not want the stadium named after him, and he more than likely would not have been too thrilled about what they were doing to perpetuate his memory now, but when you leave so many people behind who loved and respected you, the issue is out of your control.

That is why visitors to McCoy Stadium will now find a life-sized statue of the truly beloved Ben Mondor just outside the left-field foul pole, adjacent to what is known as the “Mondor Gardens.” At the base of the statue is an oft-heard Mondor passage that sums up his outlook on being involved in baseball:

“We’re blessed to make our living playing a little kid’s game on a field of freshly cut grass under God’s blue sky.”

Read Ryan’s entire column here.

• Related: Pawtucket celebrates birthday at former mayor’s stadium ‘folly’ (Aug. 23)

John Kell reports for Marketwatch:

Total pay for Hasbro Inc.’s HAS -0.99% President and Chief Executive Brian Goldner declined 67% to $7.6 million in 2011 from the previous year, according to a filing with the Securities and Exchange Commission.

While the toy maker has reported impressive growth in many international markets and even notched 7% worldwide top line growth last year, results underperformed the company’s internally set performance targets, resulting in falling values for Goldner’s stock and option awards. …

Total pay for Chief Financial Officer Deborah Thomas dropped 5.5% to $1.8 million, while the figure slid 20% to $4.7 million for Chief Operating Officer David Hargreaves.

• Related: WSJ looks at how Angry Birds is hurting Pawtucket’s Hasbro (Dec. 17)

There’s more grim news from Rhode Island’s beleaguered newspaper industry.

R.I.S.N. Operations Inc., which owns nine daily and weekly newspapers in Rhode Island, recently eliminated seven full- and part-time jobs at the Kent County Daily Times and its sister papers, WPRI.com has confirmed.

The employees worked in several different departments, publisher Nanci Batson told WPRI.com. “The restructure was a business decision based on the current economic climate,” she said in an email. “We value the welfare of all our employees and we’re especially sensitive to those who lost their jobs as a result of this restructuring.”

“We appreciate the positive contributions they made to our newspaper team and their presence will be sorely missed,” Batson added.

R.I.S.N. Operations paid $7.6 million to buy the Daily Times, the Woonsocket Call, the Pawtucket Times and the Wakefield-basked Southern Rhode Island Newspapers group of weeklies from the Journal Register Co. in 2007. R.I.S.N. is incorporated in Marion, Illinois.

The layoffs come as R.I.S.N.’s papers face more competition. In addition to Edward A. Sherman Publishing Co.’s South County Independent and the Breeze Publications papers, AOL’s hyperlocal Patch network has created websites for Coventry, East Greenwich, Narragansett and South Kingstown, North Kingstown and Woonsocket.

The Valley Breeze reported last month that multiple reporters and other employees were recently laid off at R.I.S.N.’s Pawtucket and Woonsocket papers, as well.

• Related: Publisher: Kent County Daily Times staff down 28%, not 75% (Jan. 17, 2011)

(photo: Echo Media)

Read all about it:

PAWTUCKET, R.I. (WPRI) – Hasbro laid off 55 employees in Rhode Island on Tuesday as the local toymaker shrinks the size of its North American operations, WPRI.com has confirmed.

The company is terminating about 170 workers worldwide in light of annual losses by its U.S. and Canadian divisions, which are under new leadership, Hasbro spokesman Wayne Charness told WPRI.com.

Pawtucket joined the pension parade on Thursday as Mayor Don Grebien’s new ad hoc panel said it would deliver recommendations for fixing the city’s underfunded pension and retiree health plans by April.

“It’s bad,” former Auditor General Ernie Almonte, who is chairing the committee, said at its first meeting this morning. “It’s a bad situation, and everyone has to give something up.” The group will likely draft a report outlining the situation and suggesting potential solutions.

Almonte said he wants to ensure Pawtucket avoids the “rather disgusting” outcome in Central Falls, where pension were cut up to 55% after the city declared bankruptcy. ”There should have been a better plan on how to deal with that,” he said. “But there should have a plan 20 years ago on having the money that wasn’t there.”

“Many of our urban areas are on the brink of bankruptcy,” warned Gary Sasse, another panel member, who was former Gov. Don Carcieri’s director of administration.

(more…)

East Providence’s state-appointed budget commission voted this week to stop offering health insurance to members of its City Council as of Nov. 1, which is expected to save nearly $50,000 a year. Do most Rhode Island communities give their elected officials health benefits?

The answer is no – or at least it was as of July 2006, the last time the state published a survey of salary and fringe benefits offered to municipal elected officials. East Providence was one of nine cities and towns that offered health insurance to their local councilors at the time, the results showed.

Another of the nine was Central Falls, where receiver Robert Flanders ended health benefits for the City Council last June, shortly before the city filed for bankruptcy. The other seven that offered councilors health insurance in 2006 were Burrillville, East Greenwich, Johnston, Newport, Pawtucket, Providence and Warwick.

The generosity of the plans ranged from a “fully paid” family health insurance plan for Burrillville councilors to an annual cap on coverage of $2,700 a year in East Greenwich. All nine cities offered councilors dental coverage, too, and some of them also offered vision coverage, life insurance and retirement benefits.

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Rhode Island’s largest public-sector union declared victory Friday in a lawsuit against Pawtucket, just hours before the mayor revealed the city is running an unexpected $2.3 million deficit.

Superior Court Judge Sarah Taft-Carter ruled Jan. 5 that Pawtucket cannot force retired school employees to start sharing the cost of their health insurance premiums because they are entitled to the benefits stipulated in the contract that was in effect when they retired, according to Council 94.

The contract guaranteed all retired school employees age 58 or older family health insurance coverage from Blue Cross & Blue Shield of Rhode Island until they became eligible for Medicare at age 65.

A spokesman for Grebien was not available for comment on the suit. Rhode Island’s municipalities owe $3.5 billion in retiree health benefits to their employees. Providence is awaiting a decision by Taft-Carter in a different suit on whether the city can move retired employees to Medicare when they reach age 65.

(more…)

Hasbro won glowing praise from the business press for its movie-focused strategy back in March 2010, when Barron’s Magazine declared: “This isn’t your father’s Hasbro.” It was a proud moment for the 88-year-old Rhode Island company, which is No. 21 on the EDC’s list of the state’s largest employers (and No. 12 among businesses).

Less than two years later, Barron’s sister publication The Wall Street Journal is singing a different tune. In a story on the front page of its Marketplace section Thursday – headlined “Hasbro Falls Prey to ‘Angry Birds’” – reporter Ann Zimmerman explains why investors are concerned about the Pawtucket-based company

(more…)

On Saturday night, I visited the websites of every city and town in Rhode Island – all 39 of them – to report on their responses to Hurricane Irene for WPRI 12 and WPRI.com. It was an eye-opening and frequently frustrating experience that ended with me putting up this tweet:

That was possibly the biggest mistake some municipalities made (though far from the only one) in trying to communicate before and during the storm. Having to download, find and open a PDF can be confusing, particularly for people who aren’t very tech-savvy. Plus, they’re not easy to read on many cell phones, which was all a lot of people had left when their power went out. PDFs are not a good way to share evacuation notices and other vital information.

Maybe it’s because I’m a news guy, but I was also surprised by how many communities “buried the lead,” as we say in the media. The vast majority of people visiting a municipal website on Friday and Saturday were probably looking for information on Irene, yet some of them posted it in sidebars or far down on their sites, without even changing the font color. Others scattered information between their main page, their police page, their EMA page, etc. Not helpful.

With Irene gone and local officials preparing postmortems, let’s take a look at some of the places that did a good job using the Web to inform the public – and some that didn’t. Consider it constructive criticism. If you want to find your community’s website, RI.gov has a collection of links.

(more…)

Today’s Wall Street Journal has a fascinating, contrarian article that suggests merging two fiscally troubled cities – like, say, Central Falls and Pawtucket – might actually cost more money in the long run:

For starters, small governments tend to have fewer professional—and higher-paid—employees, such as lawyers. Studies show small governments generally rely more on part-time workers, who receive fewer long-term benefits such as pensions and health-care coverage.

Another reason: When small governments merge, they often “harmonize” services and employee benefits to the highest level among the combining units. In other words, the consolidated city finds it politically expedient to take on the more-expensive version of everything. Employees at the city with lower wages get raises and residents of the city with fewer services get more.

“If the rationale [for a merger] is cost savings, you’re going to be disappointed,” said Enid Slack, director of the Institute on Municipal Finance and Governance at the University of Toronto.

It’s easy to see how that could wind up happening in Central Falls. For instance, as Tim White reported recently – and PolitiFact confirmed yesterday – Central Falls’ firefighters’ base pay is among the lowest in the state. If they joined the Pawtucket Fire Department – and IAFF Local 1261 – the union would understandably push to get their wages harmonized upwards.

Read the whole WSJ story here. Thank you to the reader who sent it my way.

Also, we need a shorthand nickname for a potential Central Falls-Pawtucket combo. Central Fawtucket? Pawtucket Falls? Deficit City?

(photo: Elise Amendola/AP)

Pawtucket Mayor Donald Grebien will throw out the first pitch at McCoy Stadium tonight as the PawSox host a celebration of the city’s 125th birthday. What the revelers may not realize is that the place where they’re gathering was initially seen as the biggest boondoggle in the city’s history.

The stadium is named for former Pawtucket Mayor Thomas P. McCoy, a powerful Democratic boss and an ally of Governor T.F. Green in Rhode Island’s “Bloodless Revolution” of 1935. McCoy won the mayor’s office in 1936 after three years as party boss in the Depression-decimated industrial city, and he quickly decided to make the baseball park his legacy project – leading critics to dub it “McCoy’s Folly.”

” ‘McCoy’s Folly’ was either the vision of a great mayor with bull-headed tenacity or the work of a corrupt political machine bilking the City of Pawtucket out of hundreds of thousands of dollars for a baseball field built in a swamp,” Chuck Arning and Kevin Klyberg, two local National Park rangers, wrote in a 2000 retrospective: (more…)

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.

(photo: Wikipedia)

President Obama has a warehouse in Charlestown he’d like to sell you.

And an office building in Pawtucket. And an acre and a half in North Kingstown.

The United States government has 12,000 buildings and structures designated as excess property, so the Obama administration is trying a modern tack for selling them – an interactive map on WhiteHouse.gov.

“The Federal Government is the biggest property owner in the United States, and billions of taxpayer dollars are wasted each year on government properties that are no longer needed,” the site notes.

The White House says there’s more than 24 million square feet of property available nationwide, including 10,691 right here in Rhode Island.

The largest local property shown on the map is a 6,391-square-foot former Social Security Administration building in Pawtucket. There’s also a 4,100-square-foot building in North Kingstown, described as “Quonset Hut – Building 336.”

(h/t: Ezra Klein)

Pawtucket toymaker Hasbro tripled CEO Brian Goldner’s pay to $23 million in 2010 and Providence conglomerate Textron paid its CEO Scott Donnelly $8.4 million, new SEC filings show.

Goldner

At Hasbro, Goldner’s total compensation jumped from $7.8 million in 2009 to $23 million in 2010 as the company awarded him nearly $19 million worth of stock and stock options, according to WPRI.com calculations based on its SEC filing. The CEO’s base salary also got bumped from $1 million to $1.2 million.

Goldner, 47, has been with Hasbro for 11 years and became the company’s president and CEO in 2008. He signed a new contract with Hasbro’s board in March 2010 that provided him with additional stock awards as an incentive for him to remain with the company through 2014.

Among Hasbro’s other executives, Chief Operating Officer David Hargreaves earned $4 million in 2010; Chief Financial Officer Deborah Thomas earned $1.8 million; Global Chief Development Officer Duncan Billing earned $1.9 million; and Global Chief Marketing Officer John Frascotti earned $1.9 million.

Hasbro said it “seeks to have the large majority of its overall executive compensation program comprised of variable performance-based elements, reflecting a commitment to pay for performance,” and noted that $21.4 million of Goldner’s pay package was made up of company shares.

Hasbro said former chairman and CEO Alan Hassenfeld was its highest-paid board member, earning $388,000 as a director in 2010, including $261,254 in cash. Hassenfeld is considering a run for U.S. Senate against incumbent Sheldon Whitehouse next year. Hasbro Chairman Al Verrecchia earned $245,073.

Donnelly

At Textron, CEO Donnelly’s total compensation doubled from $4.1 million in 2009 to $8.4 million in 2010. That included his $1 million salary; stock and stock options; and benefits including an annual physical examination, parking and the $10,200 cost of training a Textron employee to help fly Donnelly’s personal Cessna Caravan.

Donnelly, 49, joined Textron in 2008. He’s been the company’s president and CEO since 2009 and its chairman since last September. Although Donnelly does not have a fixed-term contract like Goldner, his employment agreement calls for him to get “separation benefits and excise tax protection” if he gets fired, Textron said.

Among Textron’s other executives, Chief Financial Officer Frank Connor earned $3.8 million in 2010; Chief HR Officer John Butler earned $2.2 million; and General Counsel Terrence O’Donnell earned $2.2 million.

Textron and Hasbro are Rhode Island’s second- and third-largest public companies by revenue; CVS Caremark in Woonsocket is largest of all. CVS’s now-retired CEO Tom Ryan earned $15.5 million last year, but additional one-time compensation brought the final total to $124 million, according to Dow Jones Newswires.

(more…)

It’s been more than 15 years now since Dan Barry left The Providence Journal for The New York Times, but he’s never lost his love for telling stories about Rhode Island.

Since 2007, Barry has used his “This Land” column to tell readers about a graveyard in Narragansett; Buddy Cianci’s radio career; Nicky Pari’s deathbed confession; the Camp Runamuck tent city under I-195; and North Providence’s corruption scandal. He stopped by Fall River in 2009, too.

Barry’s latest Rhode Island tale in The Times recalls the legendary longest game in pro baseball history, the 1981 PawSox-Red Wings matchup immortalized on those plastic soda cups McCoy Stadium used to sell (and perhaps still does).

Here’s how Barry begins:

FORT MYERS, Fla. — Our planning went no further than to meet at the ballpark. Simple in theory but madness in practice, given the thousands of others with similar plans. My only hope was to find a white-haired man exuding boyish wonder; who looked as if he was about to see a baseball game for the 10,000th time — and for the first.

There! In the red shirt and sunglasses: Joe Morgan, the former Boston Red Sox manager, whose baseball credentials date to the 1940s, when wily pitchers in New England’s old Blackstone Valley League would snap off 12-to-6 curves to teach the college kid not to be too impressed with himself.

Hey, Joe!

And just like that, our continuing baseball conversation picked up where it left off, as naturally as if we had been interrupted by a cough and not a year. No time for idle banter; just instant ruminations about the rules of the game, the historical data, the personalities come and gone.

Read the rest here.

Apparently Barry has a lot more to say about this bit of sports history, too – he has a new book about it, “The Bottom of The 33rd: Hope, Redemption, and Baseball’s Longest Game,” coming out April 12. I bet he’ll be making his way here for a book signing at some point soon.

Update: Had my Joe Morgans mixed up earlier; thanks to Steve Kumins for very politely setting me straight.

(logo: Pawtucket Red Sox)

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:

Pawtucket’s new mayor, Don Grebien, sounded less than enthusiastic about the prospect of his city annexing Central Falls during this morning’s “Newsmakers” taping, Tim White reports in a new WPRI.com story. Somehow I’m not surprised.

You can watch the show online now or set your DVR to catch the TV broadcast at 5:30 a.m. Sunday on WPRI 12 and Fox Providence. While Grebien was in the studio, I also talked with him briefly about the city’s snow cleanup, which he said was solid during the actual storm but has left a lot to be desired in the days since. You can hear his comments during tonight’s newscasts.

Central Falls’ state-appointed receiver made a splash last week when he suggested the city should merge with neighboring Pawtucket to deal with its financial problems. Critics have questioned how much good that would do, considering neither city is a picture of fiscal health.

That point was underlined yesterday when Fitch dropped Pawtucket’s credit rating two notches, from ‘BBB+’ to ‘BBB-.’ That’s the lowest rating the firm could give without sinking Pawtucket into junk territory, and its official outlook for the city of 73,000 remains negative.

Pawtucket isn’t Central Falls yet, but Fitch’s analysts said its “extremely limited financial flexibility” and chronic deficits raise concerns about whether the bond market will continue to lend the city the money it needs to fund its operations.

The report will make grim reading for Mayor-elect Don Grebien, who will succeed James Doyle next month. The city’s budget reserves have been declining for three years – “primarily” because of state aid cuts, Fitch said – and “future budget balancing appears even more challenging” as both the city government and the school department struggle to hold down spending.

Right now Pawtucket is working with state officials to craft a plan to address the ongoing deficit problems. The city wants to borrow $8 million to finance its deficit without raising taxes further, plus another $6 million next March to fund short-term operations. The city’s budget totaled $277 million in 2008-09.

Then, as always, there’s the pension problem. Pawtucket has only put aside enough money to cover a “very low” 30% of its long-term pension obligations, although steps are being taken to shore up the system. No money has been put aside to cover its “very large” $378 million unfunded liability for other retiree benefits, primarily health care.

The positives Fitch sees are Pawtucket’s low debt levels, its diverse tax base, and the state’s involvement in solving the deficit issue. Its biggest employers are Memorial Hospital, with 1,733 workers; toymaker Hasbro, with 1,511; and Gateway Healthcare, with 800.

On a related note, Central Falls Councilman James Diossa – who has allied himself with the receiver rather than Mayor Charles Moreau – offered a cogent argument against the Pawtucket annexation idea in a Rhode Island’s Future post today:

While Mr. Pfeiffer’s recommendation sounds dramatic, it doesn’t really address the structural issues identified in his comprehensive report, mainly unsustainable personnel costs and reduced revenues, including state aid. At the same time, an annex would only make Pawtucket’s own fiscal crisis much worse. …

The problems in Central Falls were not created overnight and will require more than a quick fix. They will require political will and difficult decisions on the part of local and state leaders who must understand that the Central Falls budget crisis is merely the opening act of a municipal funding crisis that affects all of our state’s cities and towns.

It’s hard to argue with that last point, considering the troubles facing Providence and Lincoln Chafee’s concerns about other places like Woonsocket and West Warwick.

(Photo: Marc Belanger/Wikipedia)

Central Falls High School

The financial woes plaguing Central Falls will have to be tackled by state government, and merging the city with Pawtucket is unlikely to provide the solution, Gov.-elect Lincoln Chafee said Friday.

“I think it’s a state issue. I really do,” Chafee told reporters after a budget summit at Rhode Island College organized by his transition team. He was responding to a report issued Thursday by Judge Mark Pfeiffer, Central Falls’ state-appointed receiver, which suggested the city should be annexed by Pawtucket.

Central Falls is not Pawtucket Mayor-elect Don Grebien’s “first choice for a partner,” Chafee said, adding: “Pawtucket’s got its [own] budget difficulties.”

Once Chafee takes office his administration will start “looking at how we can help” alleviate the problems in Central Falls. He suggested the Department of Transportation could help with the upkeep of the city’s roads or the state police could assist the local fire department. State taxpayers have been funding the Central Falls School District’s operations since 1991, the last time the city faced a major fiscal crisis.

Chafee also expressed concern about the financial situation in other communities, naming Providence, Woonsocket and West Warwick as places he is keeping an eye on. “We’ve got to find a way that these communities don’t fail,” he said.

Chafee pointed out that on top of its financial difficulties, the Central Falls school system is also continuing to falter, with reports this week that as many as 15 percent of the city’s teachers are absent on any given day.

“I’m very concerned and alarmed,” the governor-elect said.

(image credit: City of Central Falls)

Hasbro, the venerable Pawtucket-based company, has been undergoing a transformation in recent years that has changed it from a traditional toy maker into – to use the company’s phrase – “a branded play company.”

The most visible manifestation of that has been a series of hit movies based on Hasbro toys, like “Transformers” and “G.I. Joe.” The company will take another step down that road on Sunday, when it launches a new cable station called The Hub in partnership with Discovery Communications.

The investor magazine Barron’s took a look at the new Hasbro back in March:

But Hasbro [shares] could well have more upside, as it morphs from a U.S.-focused toy maker into a global outfit that reaches consumers via stores, TV, the Web, movies, electronic games and even iPhones. “People don’t appreciate the business-model transformation that’s going on,” says analyst Byron Penstock of RS Investments, which has a Hasbro stake.

All very interesting. In my opinion, though, even more interesting is one of the perks Hasbro provides its roughly 1,000 employees here in Rhode Island: half days every Friday, all year.

Yes, you read that right. At Hasbro, last Friday was a half day. Today was a half day. Next Friday will be a half day. And the Friday after that. And the Friday after that, too. It’s right there in black and white on the company’s list of employee benefits.

I called up Gary Serby, Hasbro’s spokesman, to make sure my eyes hadn’t deceived me, and indeed he confirmed that the company has offered employees half-day Fridays for several years. Is it a popular policy? He laughed. “What do you think?” (Now I understand why Gary’s been with Hasbro for 18 years.)

Gary also took the opportunity to crow a bit about his employer. “Hasbro is all about flexibility,” he said. “People here work very, very hard. This is a way of thanking our employees. Receiving that flexibility is something people want and deserve, and it’s worked quite well for us.”

(For the record, Hasbro did not pay me to write this post; I was planning to write about The Hub anyway, and found the Friday thing so astonishing that I couldn’t pass it up.)