Today is November 20,2018. Providence has not yet released its final pension Plan performance numbers for the month of October 2018. Based on a recording of the meeting on the City website we are expecting a significant loss of at least 4% which wipes out any gains for Fiscal 2019 and Calendar 2018. this is a very concerning development given the stated low funding ratio of 25% ( our estimate is 16%).
Of particular concern , from a transparency standpoint, is the absence of Actuarial Valuations of the pension plan which were completed every year for 50 years by Buck Consultants who was fired by Mayor Angel Taveras during his minor and ineffective pension reform of 2013-4. After Bucks firing the City hired Segal Company who ultimately agreed that the City was overstating assets in the pension plan an adjustment was made of approximately $60 million dollars.
The City of Providence and new Mayor Jorge Elorza openly mocked calls for bankruptcy and funded 2 studies that highlighted enormous structural deficits and huge pension funding issues. At this point it is more likely that the pension fund becomes solvent than Mayor Elorza moves or asks for State Receivership. Mr Elorza, since 2015 and after admonition by the Auditor General Dennis Hoyle, has vowed to pay pension contributions on time( within the same fiscal year they are due) The city has never paid pensions contributions on time the under previous Mayors David Cicilline, Angel Taveras and now under Jorge Elorza. Mr Elorza ,despite misleading taxpayers and mis-directing pension contributions for other use , was re-elected in a landslide to two more years as Mayor of Providence on November 6th.
In my candidacy for State Treasurer of Rhode Island , I have been extremely critical of Providence and its woeful accounting and have demanded that Providence undergo an outside forensic Audit of its finances and its Pension plan. I have no confidence that Providence has accounted for pensions correctly nor that they are distributing the proper benefits to the appropriate recipients.
I twice accused the City of fraud and asked the Rhode Island Attorney General to investigate. I have also reported my theories to the Securities Exchange Commission and MSRB . Thus far there has been no response from the SEC and AG Peter Kilmartin responded that potential Municipal fraud or Misleading Municipal bond investors were not part of his jurisdiction. Similarly I reported evidence of insider trading in the Infamous RIEDC 38 Studios bonds , Mr. Kilmartin also told me he would not investigate as it was not in his jurisdiction. (side note Mr Kilmartin was a senior Democratic legislator when 38 Studios loans were made)
More recently ,it has come to my attention that the city is for the first time no longer posting or paying for an annual actuarial Valuation of the pension plan. The last actuarial valuation posted on its "transparency site" used 2015 numbers. This is intolerable. Citizens should demand the Mayor and Town Council update the Actuarial Valuation of the pension plan.
http://www.providenceri.gov/wp-content/uploads/2018/05/Employee-Retirement-Sys-City-of-Providence-July-1-2016-Actuarial-Valuation.pdf
The City of Providence signed a new 3 year agreement with Segal in October
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