Chafee, Taveras lay out city’s financial crisis for rating agency

Governor Chafee joined Providence Mayor Angel Taveras and a phalanx of other officials on Tuesday for a conference call with one of the big three ratings firms, as Wall Street keeps a wary eye on whether Rhode Island’s capital city may follow Central Falls into bankruptcy.

Chafee, Taveras and Michael D’Amico, the mayor’s acting chief of staff, explained the city’s financial situation by phone from City Hall to analysts from Fitch Ratings in New York, Taveras spokesman David Ortiz said. Last year, Fitch blamed the city’s problems on “imprudent budgeting” and “rapid” spending growth.

“The folks from Fitch asked a lot of questions about the state of the city’s finances, and the mayor and Michael D’Amico answered their questions honestly,” Ortiz told The rating agencies asked for briefings after Taveras warned Feb. 6 Providence is on “the brink of bankruptcy.”

Also in attendance for the Fitch call were Michael Pearis, Providence’s director of finance; Rosemary Booth Gallogly, the state’s revenue director; and Maureen Gurghigian, a managing director with First Southwest in Lincoln who advises the government on bond financing, Ortiz said.

All three major rating agencies – Fitch, Moody’s and S&P – downgraded Providence last March after an emergency review panel uncovered a $180 million two-year structural deficit. Moody’s expressed concern earlier this month about Providence’s strained finances.

Taveras will meet Wednesday morning with Brown University’s president to continue negotiations on an increase in the tax-exempt school’s payments to the city, the AP reported. The mayor will discuss the same issue Friday with the CEOs of hospital groups Lifespan, Care New England and CharterCARE.

• Related: Chafee to attend Taveras’s State of the City address tonight (Feb. 13)

7 thoughts on “Chafee, Taveras lay out city’s financial crisis for rating agency

  1. Mayor when are you going to realize that at least two of the past 5 mayors have put you between a rock and hard place? You better realize what has to be done is file chapter 9. Let someone like Judge Flanders come in and do his job. Don’t even look to Linc to make you the receiver. You won’t make the necessary cuts. You like being mayor, you like getting free government money, that is how you grew up, other always taking care of you. Now you have to put on your big boy suit, go to federal court and file chapter 9. The taxpayers need a break from these ridculous contracts. You may not have written them but now you are the one who has to have them broken. You may want to have the state police or the Feds investigate Buddy Cianci, David Cicciline, past and present city councilmen, appointed directors again past and present. There should be many people who worked in city hall that should be in jail for those outlandish contracts. These people named if found guilty should have to make restitution from their asessts or estates if deceseased. Embarrass the families of all of these people. That is something all these people involved are afraid of, jail doesn’t bother them, embarrassment does.

  2. Why doesn’t Providence and East Providence just file for bankrupsy. Let the garbage pile up. The stink will match the crooked pension stink. Wouldn’t it be wonderfull if everybody who wasn’t fortunate enough to know somebody so they couldn’t get a state or city job could move out of RI and let all the state and city workers pay each others pensions. You would see them all fighting with each other because one crook made more than the other. They make me sick. Half of these pensioners and government workers didn’t work but they get big pensions and whine like babies.

  3. Ms. Storm – please seek help. Here’s an idea, educate yourself and apply for a state job. Don’t just sit around lazy and dumb complaining about “I didn’t know someone” BS.

    • Oreo, why don’t you find a job a job for which you are skilled in the private sector. It is time for you and your brethern to get a job where you are a productive member of society. Instead you think you are owed an over generous compensation and benefits package.

      • Ed – I’m in the public sector, Law sector. I don’t think I’m owed anything. I do think union members are owed everything they signed up for. Yes, SIGNED! CONTRACT! Think about it Ed, if you cannot make your car payment what happens?? You don’t go to court and say sorry can’t pay so I’m out of my contract? I do think there are many people you out there, like yourself that want to LYNCH every union worker because they have done better than you and have followed the LAW. You and your lynch mobs don’t care about the Law of the land. All you care about is “get them; they are doing better than me”!! Very jealous Ed! Ed I don’t know how things work in Houston but up here the Law will be enforced.

    • Oreo, Those contracts were signed under a “gentlemens agreement” or I look at duress against the taxpayers. When the city goes bankrupt and takes chapter 9 those contracts will be null and void. I am not jealous I don’t like seeing the game rigged for a select group of people. When public sector employees are getting sweetheart deals eventually something is going to give and it is going to be the cities. You better realize where is the money going to come from there are no businesses relocating to the state. Companies pay most of teh taxes. If the homeowners get hit with an excessive tax bill,what do you think they are going to do when they can’t sell the house? I am ready to give my keys of my house back to the bank. Yes it may hurt my credit rating but as you know it takes the house off the tax roles when it is in foreclosure. How about 2-3K people do the same in RI? What will that do to the finances of the city? You better think about if a contract is realistic and if it is sustainable.

  4. Most if not ALL of the “sweet heart deals” do NOT include any union members, NONE! Union members avg. just over 30K a year and most have a higher education degree. You did buy into the “unions are the problem” BS. Providence will NOT go bankrupt, there’s plenty of money.

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