​By Dan McGowan

WARWICK, R.I. (WPRI) – T.F. Green Airport has lost more than two million annual passengers since 2005, but Rhode Island Airport Corporation interim CEO Peter Frazier on Tuesday said he is “cautiously optimistic” that the airport could see a spike in traffic in 2013.

Read the rest of this story »

• Related: Will an expansion reverse TF Green’s 32% drop in passengers? (March 26)

Local leaders are worried as Washington barrels toward the edge of the fiscal cliff.

Providence Mayor Angel Taveras and Warwick Mayor Scott Avedisian joined 147 of their fellow mayors from across the country last week in sending a letter to congressional leaders that urges them to reach a budget deal which would avoid the deep budget cuts that are otherwise coming thanks to “the sequester.”

“Discretionary spending has already been significantly reduced in recent years,” the letter [pdf] says. “As our local metro economies – which drive the national economy – continue the struggle to recover from the worst national recession in decades, we cannot bear the financial burden that additional discretionary spending cuts would require just to meet the most emergent needs of our constituents.”

In addition to major cuts in defense spending, the sequester would reduce non-defense discretionary spending, a category that includes education, housing and urban development, health, the environment, worker training and public safety. The mayors said Congress should instead pair “spending cuts with additional revenue from sources such as tax code reform and closing unfair corporate tax loopholes.”

State Sen. Rhoda Perry isn’t pleased that her colleague Michael McCaffrey is suggesting she’s the reason his Senate Judiciary Committee hasn’t taken a vote on legalizing same-sex marriage.

During a debate Friday on WPRI 12′s Newsmakers, McCaffrey was asked why his committee has never voted on the issue. He replied: “The same-sex marriage bill has been heard by the Senate Judiciary numerous times, and Senator Perry – I assume – has done a headcount of the committee, has done a headcount of the Senate, and said: ‘I may not have the votes for this.’”

Moderator Tim White then asked McCaffrey, who’s chaired the Senate Judiciary Committee since 2003: “Why not bring it up for an up-or-down vote and find out?” He replied: “That, I have no problem – my position is I believe that marriage is between a man and a woman.”

Within two hours, Perry issued a statement through the pro-legalization group Marriage Equality Rhode Island criticizing McCaffrey, a Warwick Democrat (and potential successor to Senate President M. Teresa Paiva Weed) who differs on the issue from his primary challenger Laura Pisaturo.

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Supporters offer a lot of reasons for backing the proposed runway expansion at Warwick’s T.F. Green Airport. Surging passenger traffic isn’t one of them.

The total number of passengers at T.F. Green plunged 32% over the last six years, dropping from 5.7 million in 2005 to 3.9 million in 2011, figures from the R.I. Airport Corporation show:

Patti Goldstein, T.F. Green’s vice president of public affairs, blames the extended slump on the recession. But she thinks the new runway, which got the green light last month from the Warwick City Council and the quasi-public Airport Corporation’s board, could be just as crucial as an economic recovery for the airport.

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Warwick Mayor Scott Avedisian is quashing rumors that he’s distancing himself from longtime friend and ally Gov. Lincoln Chafee. “There’s no rift at all,” Avedisian told WPRI.com on Monday.

Local observers’ eyebrows rose last Thursday when Avedisian stood at the edge of the group and stayed silent at the high-profile press conference where Chafee unveiled a package of bills to help cash-strapped cities.

Avedisian said he did so because it was more important that the mayors of the four cities defined in the bill as “highly distressed” – Providence, Pawtucket, Woonsocket and West Warwick – spoke at the event, though others including Cranston Mayor Allan Fung, Johnston Mayor Joseph Polisena and East Greenwich Town Manager Bill Sequino also offered comments.

Avedisian served on Treasurer Gina Raimondo’s transition team and sided with her rather than Chafee last fall in the heated dispute over whether locally run plans should be included in the new state pension law. But if Raimondo decides to run against Chafee for governor in 2014, the Republican mayor will support the independent governor.

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By Tim White

WARWICK, R.I. (WPRI) – Thousands of alumni from Bishop Hendricken High School have received letters advising them of a pending bankruptcy case against the congregation that once ran the school, and setting a deadline for those who plan to file a sex abuse claim.

The first letter, signed by the president of the high school, was sent to Hendricken alumni who graduated between 1972 and 2011, when the Congregation of the Christian Brothers operated the all-male Catholic school.

“A federal court ruling pertaining to the allegations forced Bishop Hendricken’s administration to release our alumni list for the aforementioned years,” the Dec. 29, 2011, mailing stated. “You will be receiving a letter concerning allegations brought against some members of the congregation.”

Several months later alumni received an ominous form letter from a U.S. Bankruptcy Court in New York. It states The Christian Brothers Institute and the Christian Brothers of Ireland, Inc., filed for Chapter 11 bankruptcy protection on April 28, 2011. The letter then informs the reader of a deadline for those thinking of suing the Christian Brothers.

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The “pension lady” is expanding her portfolio.

Treasurer Gina Raimondo penned an op-ed for The Providence Journal on Tuesday calling for the Warwick City Council to drop its opposition to an expansion of T.F. Green Airport’s runway:

As treasurer, I am responsible for managing the state’s bond offerings to investors and managing the state’s debt. Next month, I will be hitting the road to talk to financial analysts and potential investors about Rhode Island’s bonds. It is important to be pro-active in selling our strengths and articulating why people should invest in the Ocean State.

Improvement of our infrastructure through projects such as the T.F. Green runway expansion will be viewed positively by rating agencies, potential investors and businesses already engaged in, or considering doing business in, Rhode Island. …

Now is the time to show Rhode Island’s potential investors — whether they are contemplating a business expansion or a move of their business operations to the Ocean State, or considering the purchase of our bonds — that we are serious about continuing to move forward on our path to prosperity. Extending the runway at T.F. Green Airport is one important way to do just that. It is time to make this happen.

Considering Raimondo is still just the treasurer, parts of the op-ed seem like a stretch; is the creation of an investor-relations portal really linked to the expansion of an airport runway? Raimondo would likely respond that she’s using her high profile to help push Rhode Island in a more prosperous direction.

Still, for political observers watching for signs of whether Raimondo will run for governor in 2014, her decision to take a public stand on a major issue outside her jurisdiction is noteworthy – especially since it comes a day after Governor Chafee called the Warwick City Council to lobby on the project’s behalf.

• Related: Raimondo ‘not ruling anything out’ on 2014 bid for higher office (Jan. 27)

(photo: Ted Nesi/WPRI)

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 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.

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• Interactive: Town-by-town map of pension payouts across Rhode Island (Nov. 15)

Treasurer Raimondo has taken a lot of heat for pushing to do little about the 36 municipal pension plans outside the state system as part of the sweeping reform bill poised to pass this week. But last week the treasurer put forward a strong case on WPRI 12′s “Newsmakers” for why her reservations are valid rather than politically expedient.

Mayor Taveras and his allies have made a compellingly simple argument for expanding the Raimondo-Chafee bill’s proposed COLA freeze to encompass the so-called non-MERS plans, too: If the state is going to fix its pension shortfall in part by suspending COLAs, why shouldn’t the cities and towns do the same?

Raimondo’s response has been that they haven’t done the necessary work yet to prove the need for a COLA freeze. And that sounded disingenuous even to some of the treasurer’s fans. After all, umpteen reports have been issued examining the locally run plans. Funding levels are below 20% in Cranston and Coventry, and not much better in Providence. How can Raimondo possibly argue they aren’t in enough trouble to warrant a COLA suspension?

But that’s not what she’s saying. Here’s how Raimondo explained her position on “Newsmakers”:

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By Tim White

WARWICK, R.I. (WPRI) – Warwick Mayor Scott Avedisian was in Turkey when a massive 7.2 magniutude earthquake rocked the region on Sunday.

Avedisian was far from the epicenter, according to Chief of Staff Sue Baker, and was unhurt. Baker said she texted the mayor as soon as she learned of the disaster and received an immediate response.

Avedisian was in the southern province of Diyarbakır for an Armenian remembrance, Baker said. She was not sure if the mayor felt the ground shake, but published reports indicate the southeastern province he was visiting did experience the tremors.

The mayor is expected back in Rhode Island on Tuesday.

Gov. Lincoln Chafee, Lt. Gov. Elizabeth Roberts and Warwick Mayor Scott Avedisian visited the shelter at the city’s Veterans Memorial High School this evening as they continued monitoring Hurricane Irene. Warwick has ordered low-lying coastal areas to evacuate.

On a lighter note, the high school’s team name is the Hurricanes, which allowed the trio to take this photo with a Red Cross representative from Florida – the sign is rather apropos considering the circumstances, no?

(photo: Stephen Kavanagh/governor’s office)

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)

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.

So I’m continuing to slog my way through Governor Chafee’s budget proposal. At this rate, I’ll be done just in time to start reading his 2012-13 one.

This afternoon I got to page 34, which describes his idea for creating a new MAST Fund – short for Municipal Accountability, Stability and Transparency - which would funnel some revenue from the sales tax to cities and towns, starting at $18.2 million in 2012-13.

The catch? To get the money, municipalities have to meet a series of requirements related to “fiscally prudent” budgeting and pension funding. The budget document states:

Cities and towns will be given a maximum of 5 years to achieve 100% of their Annually Required Contribution (ARC) or their Annual Pension Cost (APC), whichever is higher. Municipalities shall be required to make their ARC in accordance with generally accepted accounting principles promulgated by the Governmental Accounting Standards Board (GASB).

Failure to follow the rules set out for the MAST Fund will cause cities and towns to get docked some of their state aid starting in 2013-14. You can read the Chafee administration’s summary of the proposal here.

But wait! I thought as I read that. Warwick doesn’t follow the GASB rules for its massively underfunded pre-1971 pension plan for policemen and firefighters. The city is using a 40-year funding plan, and GASB only allows 30-year ones, as Mayor Scott Avedisian explained to me last month.

And who put that 40-year plan in place back in 1995? None other than then-Mayor Lincoln Chafee.

Now here was a story! I could already envision the headline: “Chafee pension plan bars… Chafee pension plan.”

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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:

I mentioned Friday that Warwick Mayor Scott Avedisian’s Projo op-ed had ducked the biggest problem facing the city pension system: its massively underfunded pre-1971 plan for police and firefighters.

I spoke with Avedisian about that yesterday, and he reminded me that the city is 15 years into a 40-year program for shoring up the plan, which is known as Police/Fire I and had 470 active and retired participants as of 2007.

It was actually then-Mayor Lincoln Chafee who put in place the 40-year payment schedule back in 1995, with contributions set to continue until 2035. (Avedisian said Joe Walsh also studied the idea when he was mayor in the late ’70s and early ’80s, “but it never got off the ground.”)

The auditor general’s office says Warwick hasn’t been putting in its full annual required contribution to Police/Fire I over the last few years, but Avedisian said that’s because the 40-year period is longer than the 30-year one used by both the auditor general and the Governmental Accounting Standards Board, or GASB, which governs these things.

For those well-versed in the world of pension law, here’s how Warwick explains its 40-year plan to bondholders (emphasis mine):

The City’s annual contribution to the plan [is] … based upon a funding policy which provides for the payment of the annual cost plus an amount which will amortize the July 1, 1995 unfunded actuarial accrued liability as a level percentage of payroll over a 40-year period ending June 30, 2035, plus 20-year amortization of experience gains or losses, method changes, assumption changes or plan changes since July 1, 1995, as a level percentage of payroll. This funding policy is based on the City’s pension ordinances.

The funding policy does not comply with GASB Statement No. 27 that requires the annual required contribution be determined using an amortization period not in excess of 30 years. GASB Statement No. 27 also required amortization payments in a closed plan, such as this one, either be based on a level-payment approach or reflect the expected decrease in future payroll for the closed active group.

It’s easy to get lost in all this legal minutiae, but we’re talking about real money here: Warwick taxpayers contributed $12.6 million to Police/Fire I in 2009 alone, and almost $55 million in the five years before that. And it’s just one of five city pension plans they’re funding; the others needed another $9 million or so in 2009.

With that in mind, I asked Avedisian if he really thinks Warwick will be able to keep making the required payments all the way until 2035.

“Yes,” the mayor replied. “That’s why we went to the 40-year plan.”

“However,” he continued, “one of the issues here is when you have changes in administration, a new administration may decide they’re not going to put in what the actuaries advise it.” That, of course, would throw the whole 40-year plan out of whack.

Avedisian and his aides have therefore been looking for ways to basically tie the hands of future city leaders so they will continue with the 40-year schedule. But “you can’t really constrict what the rights are of the mayor and a council in the future,” he acknowledged. “People say it’s just a power grab.”

Unfortunately for Avedisian, it also looks like he’s chasing a moving target.

From 1997 to 2007, the assets Warwick had set aside to cover Police/Fire I rose 41%, from $54 million to $76 million. So far so good.

The problem is, Pension/Fire I’s long-term liabilities didn’t stand still while its assets rose; those grew, too, by 27% – from $220 million to $279 million. I’m no actuary, but that seems like bad news.

Warwick Mayor Scott Avedisian, who is weighing whether to challenge U.S. Sen. Sheldon Whitehouse next year, says a Republican candidate would need to throw his hat into the ring by June if he wants to mount a competitive bid.

“I’m assuming sometime around June you would have to probably jump in, to be competitive,” Avedisian told me this morning. He and former Gov. Don Carcieri are widely seen as the G.O.P.’s top prospects to win back the seat Whitehouse took from the party when he defeated Lincoln Chafee in 2006.

Avedisian acknowledged he is seriously exploring whether to run for Senate in 2012 but declined to say more. He would presumably have the support of Governor Chafee, a close friend and longtime political ally, not to mention his predecessor as mayor of Rhode Island’s second-largest city.

Ken McKay, who is running for chairman of the Rhode Island Republican Party, had little to say on “Newsmakers” last week when asked whether Avedisian – star of the party’s moderate wing – would make a good candidate against Whitehouse. “I don’t know,” McKay said. “You’d have to see how that falls out. I’m not gonna sit here and handicap what’s good or bad for Republicans.”

Avedisian said he has met with both McKay and the other candidate for chairman, Patrick Sweeney, but won’t be making an endorsement ahead of tomorrow night’s Warwick Republican City Committee meeting. But he did have advice for the eventual winner.

“We need to get out of the business of fighting with one another and we need to start concentrating on winning elections,” Avedisian told me. “You can say, philosophically I want to do A, B or C – but if you don’t win, you don’t get to do anything.”

As an example, Avedisian pointed back to the unorthodox Rhode Island Republicans who won office in the 1970s, ’80s and ’90s, name-checking Claudine Schneider, Ron Machtley, John Chafee, Lila Sapinsley, Susan Farmer and our own Arlene Violet.

“They didn’t argue philosophically among all of them – they went out and won elections,” he said. “And that’s what I’ve been talking to the two of them about.”

Warwick Mayor Scott Avedisian took to the pages of the Projo today to talk up his pension reform proposal and remind everyone that most of the pension system’s problems were baked into the cake decades ago:

It took in excess of 50 years for the original police and fire pensions to get to the point where they are currently, and there is more than enough responsibility to go around for not dealing with the issue as it has developed. However, we must continue to look forward. The pension reform legislation is a good place to start to ensure that the mistakes of the past do not continue into the future.

The problem for Avedisian and other well-meaning mayors is that, even as they look forward, they still need to look backwards and figure out how to deal with the fiscal sins of the past.

Warwick is, in fact, a perfect example. As Avedisian rightly points out, previous administrations in Warwick (including Lincoln Chafee’s) managed to stop the bleeding by creating new pension systems to replace the city’s unfunded pre-1971 police and fire plan.

When you add together Warwick’s five separate city pension plans, they are about 59% funded, with $330 million in assets to cover $555 million in liabilities. That’s almost the same ratio as Rhode Island’s state pension system.

This chart, though, shows just how much the old pre-1971 plan’s liabilities dwarf those of the healthier new ones:

The question, then, is what Warwick is going to do about the $200 million gap between its pre-1971 plan’s assets and liabilities. It’s plans like those which the Rhode Island League of Cities and Towns’ Dan Beardsley suggested to me the other day could be the source of litigation as cities unable to fund them move to take away benefits promised in the past.

Avedisian, for his part, was largely silent this morning about the pre-1971 plan (emphasis mine):

Overall, the city’s pension plans are in better shape than those of many other municipal or state systems. Nevertheless, in Warwick, the biggest unresolved issue are the original police and fire pension plans. Today, they are funded at only 27 percent of what is needed. So, while people can suggest that the city has failed to do what is right, they instead should be asking the original creators of the pension systems why there was no leadership when the plans were created. Had even a small amount been contributed annually in those years, the unfunded liability today would be very small.

Well, sure – I suppose we could call up Raymond Stone or Horace Hobbs to ask why they failed to make pension contributions in the ’50s and ’60s. (Actually, we can’t; Hobbs died in 1999, Stone in 2004.) But that’s not going to yield a solution to Warwick’s $200 million pension gap.

Avedisian and his fellow mayors may have inherited this problem – but it’s still theirs now.

More: Warwick’s 40-year plan to fund its pension system (Feb. 22)