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Arthur Schaper: Grand Theft Auto Cicilline

Friday, April 18, 2014


Providence’s fiscal mismanagement falls squarely on Cicilline, believes Arthur Schaper.

Last night my car broken into Christmas gifts, my briefcase, I-pad and my wallet. Really sucks! Family very understanding about gifts. Rep. David Cicilline, via Twitter

From East Side of Providence representative to Mayor to Congress, Rep. David Cicilline is unremarkably “ The Prince of Providence”. GoLocal MINDSETTER™ Don Roach uncharitably depicted the former mayor as an absentee landlord type, who blamed unions, the economy, or anyone else rather than taking charge and enlarging Providence’s fortunes. Roach then repeated the $110 million shortfall reproach of Legacy Cicilline, which outgoing (or rather fleeing) Mayor Taveras had announced (not so much addressed) on his first year in office.

Despite his royal status, Christmas 2013 was not so merry for Cicilline, who tweeted that someone had broken into his car, a symbol of sorts for the city’s crime rates, which continued upwards after his tenure as mayor. City-data.org reported a sharp increase in murders from 2008-2009, along with robberies, assaults, and rapes. Violent crime was roaring, even as property were crimes were going down. Then again, even auto thefts rose toward the end of Cicilline’s mayoral tenure.

The former mayor’s holiday tragedy represents another fallout: Providence’s dire financial problems, which came to light after Cicilline’s 2010 Congressional win. Of course, one could blame such bleak statistics (crime and money) on the 2008 Housing Crisis, followed by the Great Recession, but the larger car-jacking remains in the drivers’ seat: the fiscal state of the city of Providence, which Cicilline was responsible for from 2003-2011.

Still mayor of Providence when he got elected to Congress with a bare 51% of the vote in 2010, Cicilline had assured votes that his city would see a surplus. Despite Republican National Committee efforts in 2012 blasting the Providence pol as one of the ten most corrupt representatives in Washington, he won again.

What role did Prince David play in leaving Providence a negative legacy, a city which lawmakers claim needs a massive dose of its namesake to stay fiscal solvent?

Shortly after the disturbing revelations that Providence financial straits had increased from a Category 3 Hurricane to a Category 5 (per fellow Dem Angel Taveras), Congressman-elected Cicilline refused to see reporters or discuss anything about the matter. The hollow talking points followed: recession, state aid cuts, end of Obama stimulus, and failure to adequately fund the city’s pension funds.

Right from Cicilline’s lips, that last part was de jure Prince David’s responsibility, yet he duffed it off as just another item justifying his silence on Providence’s improvident fortunes. About the pension issues, however, and even more interesting, Politifact reported that Cicilline adequately funded the city’s pension, even though the early years never passed 90%.

What’s going on, then? The pensions were adequately funded, but not really? And how does that exonerate Cicilline?

Even during his 2010 campaign against John Loughlin, Cicilline turfed blame to state aid cuts:

“With Governor Carcieri trying to balance Rhode Island’s budget on the backs of our cities and towns, the City of Providence faced deep cuts in state aid.”

Leadership includes responding to crises, not lamenting the lack of leadership higher up.

Confirming this tenet of executive authority, The Providence, Rhode Island Internal Auditor’s Report from April 2011 issued a damning summation leveled at Cicilline, not Carcieri’s administration:

[T]he prior Administration did not recommend the necessary decisions to avert a fiscal crisis. . .

The report blasted Cicilline for not having any long-term plan in place to preserve the city from the incoming fiscal problems facing the city. Indicting the dysfunctional relationship between the city council and the Administration, the report outlined some disturbing and perhaps illegal trends which took place from 2009-2011, including the following:

1. The Cicilline Administration transferred funds from the Undesignated Surplus without City Council approval. Was David robbing Roger to keep the city books balanced?

2. Cicilline and company frequently missed deadlines to provide information or respond to requests from the Independent auditor about the city’s financial status. Was Cicilline too busy running for Congress to make sure that his city was still afloat?

3. The city council did not receive outlined, scheduled monthly updates regarding whether the city was headed toward surpluses or deficits the following year. Every working family assesses current income to determine future sending on a weekly basis, but the prior Cicilline Administration didn’t even bother?

4. While the former mayor could blame the state government for cutting off funding in response to the Housing Crisis, his administration insisted on projecting unrealistic revenue streams, like $2.8 million from Interests-Investments, which in fact brought in barely a tenth of the anticipated amount.

Then this statement stood out in the preliminary report:

Financial reports submitted to the State were inaccurate.

So, loose accounting led to lost accountability, with scrubbed balanced sheets. The whole debacle sounds like a fiscal Benghazi in New England. Later Bloomberg News reported in 2012 that Providence may seek bankruptcy protection, i.e. no resting under the wings of the Most High (not Buddy Cianci!)

Providence’s fiscal mismanagement falls squarely on Cicilline, who for all his royal pretensions and self-defense pleas, more likely played his city like a video game from hell.


Arthur Christopher Schaper is a teacher-turned-writer on topics both timeless and timely; political, cultural, and eternal. A life-long Southern California resident, Arthur currently lives in Torrance. Follow him on Twitter@ArthurCSchaper, reach him at [email protected], and read more atSchaper's Corner and As He Is, So Are We Ministries.


Related Slideshow: Providence Pension Liability

A new report shows that Providence’s pension fund—even after the recent reform—is still in trouble. The below slides break out the key numbers for the pension fund, including the unfunded liability, the assumed and actual rates of return, the current level of benefits, and how long it will take the city to pay off the unfunded liability. Figures are current as of July 1, 2013 and are taken from the new Jan. 31 actuarial report from Segal Consulting.

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Unfunded Liability in 2013

Total Liability: $1.2 billion

Actuarial Assets: $380.4 million

Unfunded Liability: $831.5 million

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Unfunded Liability in 2011

Total Liability: $1.2 billion

Actuarial Assets: $380.4 million

Unfunded Liability: $831.5 million

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Percent Funded in 2013

Funding Ratio: The ratio of the amount of actuarial assets to the amount owed.

Funding ratio in 2013: 31.39%

Percent unfunded in 2013: 68.61%

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Percent Funded in 2011

Funding Ratio: The ratio of the amount of actuarial assets to the amount owed.

Funding ratio in 2011: 31.94%

Percent unfunded in 2011: 68.06%

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Rate of Return

Former Assumed Rate of Return: 8.5%

New Assumed Rate of Return: 8.25%

What the state’s assumed rate of return is: 7.5%

What Moody’s Investors Service says the assumed rate of return should be: 5.5%

What investor Warren Buffet says the assumed rate of return should be: 6%

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Actual Return on Investment

Actual Market Return in FY 2012: 1.49%

Actual Market Return in FY 2013: 11.35%

Current Assumed Rate of Return: 6.42%

Average Market Rate of Return for FY 12 and FY 13: 8.25%

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Impact of Lower Rates of Return

$72 million:The city unfunded liability increased by this amount when the city lowered its assumed rate of return by a quarter of a percentage point, from 8.5% to 8.25%

$506.2 million: The estimated increase in the unfunded liability were the city to use the 6% assumed rate of return recommended by Moody’s Investors Service.

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Retiree Pay – Fire and Police

Number on Active Duty: 834

Average Annual Pay: $61,325

Number of Retirees: 587

Average Retiree Age: 65.3

Average Retiree Annual Pay: $40,512

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Disability Pensions – Fire and Police

Number on Disability: 418

Average Age: 64.8

Average Annual Pay: $59,028

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Retiree Pay – Other City Workers

Number of City Workers: 2,164

Average Annual Pay: $38,687

Number of Retirees: 1,453

Average Retiree Age: 72

Average Retiree Annual Pay: $18,252

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Disability Pensions – Other City Workers

Number on Disability: 88

Average Age: 66.8

Average Annual Pay: $18,684

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Current Cost of Pension Fund

For 2013

City Contribution: $58.1 million

Employees Contribution: $10.9 million

Net Investment Return: $18.1 million

Cost of Retiree Benefits: $95.4 million

Note: Net investment return is the return on investments after investment and administrative fees have been paid.

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Cost of Pension Fund in 10 Years

Normal Cost: $9.8 million

Additional Cost Because

of Unfunded Liability: $84 million

Total Annual Cost: $94.3 million

Note: Total figure for the year includes a small second payment for the deferred liability.

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Cost of Pension Fund in 20 Years

Normal Cost: $13.9 million

Additional Cost Because

of Unfunded Liability: $118.5 million

Total Cost: $132.4 million

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Paying Off Unfunded Liability

Average annual increase: 3.5%

Number of additional years to pay off: 27

Fiscal year unfunded liability to be paid off by: 2040


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