Tuesday, May 26, 2015

Elorza 5 year forecast GIGO Garbage in Garbage out

                   How in the world did Mayor Elorza think the 5 year forecast for Providence wouldn't include paying off a $62 million dollar swindle of the pension plan plus interest owed,. The answer is likely that he didn't disclose those facts to the company he hired. If those facts were not incorporated the five year forecast isn't valid and not useful. It also adds to the growing roster of providence Officials releasing misleading financial data to taxpayers, and municipal Bondholders. I am sure this wasn't the Mayors self guide idea and project and most likely the city official who worked with PFM on this project was well aware of the Auditor Ruling re a false asset on the Pension funds book of $62 million dollars.The auditor says this is due by June 30.2015 or the asset will be "written off.and Providence pension liability will immediately increase by $62 million dollars, In addition once this "loan/asset is written off there is the question of interest owed to the pension fund for having illegally annually commandeering at least $50 million  dollars in order to finance city operations. The interest owed to the pension would be the Discount rate used by the Pension fund of 8.5% compounded. The incredibly stupid plan of the mayor borrowing from its own pension fund at 8.5% for a decades is ample evidence that Providence is broke and being operated by thieves.
              Shortly after Mr Elorza issued this misleading report from PFM ,we called them and asked if they had considered the $62 million due in 45 days as part of the money due in the the next 5 years  or were they even aware of the  fact the Auditor found the city had created a false asset. We asked the same question regarding the interest owed to the pension fund which could be another $100 million. We were told that they could not speak to us without the permission of their client:Providence,
              So if a municipal bondholder read that report issued by Elorza and authored by PFM it would constitute yet another effort to mislead municipal market participants and ratings agencies as to the true Financial health of Providence.

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