Elorza’s State of the City Draws Mixed Reaction
Kate Nagle, GoLocal News Editor
Elorza’s State of the City Draws Mixed Reaction
“Providence has great bones and our city is ready for its resurgence,” said Elorza during his nearly thirty minute speech. “The foundation has been built and we are poised to see great growth.”
Read Mayor Elorza's Speech HERE
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTFocusing on jobs and education, including $20 million over two years for school repairs, Elorza took credit for “taking action” when faced with an $85 million structural deficit by 2021 — including reiterating the claim on Tuesday his fire department restructuring will save $5 million a year.
Paul Doughty, President of the Firefighters Local 799, said following the speech that he was surprised Elorza was still touting that number, in light of recent developments.
“I base that on the testimony that [City of Providence Finance Director] Larry Mancini just gave last week that there were no savings, and they were running a $3.6 million deficit in the fire department,” said Doughty. “So I’m not sure how [Elorza] squares those two comments.”
The firefighters are still locked in a legal battle with the city over the platoon changes put forth by Elorza last year — with numerous grievances filed by the union pending in arbitration.
Neighborhoods - and Tax Breaks - in Focus
At at time when the city is considering tax break extensions for a number of properties —and after the Finance Committee recently turned down one such request — City Council President Luis Aponte said that “shining skyline and vibrant downtown” weren’t enough to make the city great.
“I think the Mayor’s speech really in my mind harkened back to what we need to do to make the city great - we really need to focus in on the basics,” said Aponte. “Great schools, predictable tax base, and reassure residents we’re working as hard as we can to resolve the difficult financial challenges that our city faces.”
“The tone [was] that Providence is still a city of strong neighborhoods, and we need to remember that and invest accordingly. People want to live in cities that have strong neighborhoods that are clean, safe, [where the] streets get plowed and garbage is picked up,” said Aponte. “We need to reinvest in neighborhoods. If we want to become a world class city, it’s not simply because we have a shining skyline or vibrant downtown. It’s because we have safe, attractive, desirable neighborhoods for anyone who wants to come to the city.”
Keith Fernandes with the Providence Apartment Association, who has been an outspoken critic of tax breaks — and tax break extensions — responded to the Mayor’s speech on Tuesday.
“I think what the Mayor said is right — it needs to be a city that works for everybody, not just downtown,” said Fernandes. “He didn’t talk about raising taxes. If you want to do that, you have to stop extensions and tax stabilization agreements that don’t create jobs. “
Looking Ahead
Elorza spoke to how he tackled the city’s structural deficit during his first year, which included: buying streetlights from National Grid to save $15 million over ten years; renegotiating the contract with Roger Williams Parks Zoo to save $9.5 million over 20 years; expanding revenues by $2.5 million per year without raising taxes; negotiating “two-cost neutral contracts” with city unions for FY16; and the promise of $5 million in savings from the fire department changes.
“I’m excited about the prospects of the 195 land. But what we didn’t hear is how we’ll address our short term budget deficiencies,” said City Councilman David Salvatore. “And while I’m a strong advocate of a long term fiscal and economic strategy, until we address our short term obstacles, we’re never going to make it ten or fifteen years out.”
“I think everyone, as consistent with four years ago, has to come to the table. These aren’t easy decisions, it will take political leadership to do so,” said Salvatore. “And the state should be part of the discussion when creating solutions around our finances.”
City Councilman Kevin Jackson said he was optimistic however about the city’s finances going into Fiscal Year 2017.
“I was just talking with the City Auditor today, there were optimistic discussions about potential surpluses in FY17,” said Jackson. “There’s no ‘one time fixes’ like we saw in recent budgets. I don’t know what the total will be, but we’ll get the nuts and bolts soon.”
10 Biggest Issues Facing Providence in 2016
#10
Firefighters, Con't
The battle that started last year spills over into 2016. After Mayor Elorza announced he was going to reorganize the Fire Department from four platoons to three with a condensed shift schedule, the firefighters took the battle to court — and callback costs soared with injured firefighters out on leave. Elorza said the change could save the city “as much sat $5 million” in the next fiscal year (FY17) -- but the city is currently seeing red. "Through the middle of December, fire fighter "call back" expense has been $4.7 million, which represents almost all of the $5.05 million budgeted for the entire fiscal year," reported Councilman Sam Zurier on Sunday. "Should this trend continue, the cost of this line item could exceed the budget by $5 million by the end of the year."
Now it all rides on the outcome in the courts. If it ends in a negotiated settlement, the crisis could be averted. If not, firefighter union head Paul Doughty has said that Elorza can “hand over the keys to the city" for bankruptcy.
#9
Crime
From the West Side to the East Side, residents across the city in 2015 were organized and mobilized to demand action from the Elorza Administration on crime in the city. GoLocal reported at the end of 2015 that over half of the police department is eligible to retire — and the city still needs to get a new class of officers underway as budgeted. Tensions were high following a Dunkin’ Donuts worker writing #blacklivesmatter on a police officer’s cup (and the Black Major Movement continuing to call for a black major in the department).
Councilman Seth Yurdin announced this week that he is introducing a resolution to establish a special commission to review relations between the Providence Police Department and the community it serves. The Special Commission on Community-Police Relations will review current public safety practices and create opportunity for public input.
#8
Grafitti and Potholes
It’s been a mild winter so far, so perhaps at least one of the two scourges of the city will be mitigated this coming year. But addressing the conditions of the roads continues to be an issue for Providence. Last year, Mayor Elorza made a public display of commitment to addressing problematic potholes, and also pledged to respond to the rampant graffiti issue in the city that has seen the property destruction spread to private houses.
City Councilman Michael Correia recently put up a $1000 reward to find who was tagging properties in his district. Residents of the city want to feel safe, and that includes driving on roads that won’t inflict damage on their cars (or take out runners and bikers) and that their personal property won’t be destroyed. Graffiti continues to crop up, and it needs to be addressed quickly when it does.
#7
Taxes - Commercial
The city’s commercial tax rate might be frozen — for now — but there are a lot of moving pieces. The $36.75 per $1000 rate on commercial properties is among the highest in the country -- a point well-known in RI circles.
“Providence has a problem with the commercial tax rate,” said developer Colin Kane. “With new construction or significant rehab -- the costs aren't supported by current rent.” The property revaluations expected shortly will shed some light how the city will move forward addressing tax rates, but in the meantime, the TSA extensions before the Council are the 600 pound elephant in the room. “The City Council is looking for nickels in the couch cushions because of the fiscal challenges facing the city,” said Kane. “And they weren't caused by this council or mayor, but by the fact that they were kicked down the road. And now we want to malign people like Buff Chace who made the city what it is?”
#6
Taxes - Residential
The owner occupied residential tax rate could be in the crosshairs as the city looks to address revenue issues in the coming year. “Everything’s on the table,” Aponte told GoLocal. And with the revaluation, things could be in flux for the current owner-occupied rate of $19.25 per $1000 .
“Suppose you had a city where there was a wild appreciation of real estate values — that used to happen here, Providence has seen 10% before. State law says you can only increase the levy unilaterally by 4 and a quarter,” said City Counciman Sam Zurier. “So supposed you have a situation where your values go up 10% and you want to collect 4 — you have to reduce the rate by 6%. "
"If values go up enough — even 5% - then the city will get additional money without raising the rate. During a [revaluation] year - you have to get into tax bills versus rates. And when you factor in commercial and non-owner occupied values and rates, it’s tricky.
#5
Schools
Providence Schools face a tall order ahead of them. The search is on for a new superintendent following the departure of Dr. Susan Lusi. The current School Board President is stepping down at the end of the month. Providence High Schools scored among the worst in the state following the release of the first year of PARCC test scores. Current School Board member Nick Hemond is slated replace outgoing President Keith Oliveira, but question remains for the choice of the new super. Council President Aponte told GoLocal this week that stability in leadership in the school department is one of the greatest challenges facing the city moving forward. Can that be achieved in 2016?
#4
Superman
Lights have been spotted on recently in the Superman Building - i.e. Industrial National Bank Builcing — but the fact remains that the city’s iconic skyscraper remains vacant, which former Mayor Joseph Paolino called one of the biggest issues facing the city (stating that the fact that it remains empty cost him a mortgage from a top bank for an adjacent property).
Citizens Bank is eyeing a new corporate campus somewhere in Rhode Island, and while indications point to one most likely going in the suburbs, a number of business and community leaders are hoping Superman isn’t ruled out completely. Previous efforts to get state support to turn the building into apartments fell flat, and Providence residents are gun-shy about any project looking for public support. But the fact remains that the empty anchor is an eyesore for the city, and getting a tenant — or tenants — in should be a top priority in 2016.
#3
Lack of Development
Providence needs more cranes. The city has seen its first one in a while by the Jewelry District with developments at Johnson and Wales, which is a good sign — but the city needs more.
“Owners and property developers want to be treated fairly and play on a level field. Providence does not have a business friendly reputation. This is why there are few cranes in the sky in Providence and very few new businesses coming to the city or planning to expand in the city,” URI Distinguished Professor of Business Edward Mazze told GoLocal earlier. So in order to get the construction equipment in — Providence has to figure out how best to lure businesses here in the first place.
#2
Leadership
Providence needs a win — or a least a path to victory. Whether that be getting a tenant in Superman, bringing in a notable business, or articulating a concrete plan to move Providence forward, residents want to feel that the city is on the right track.
The City Council recently announced that it received the results of its cluster analysis study to identify where opportunities lie — and now we need to see results. The Mayor made multiple trips abroad in 2015. He campaigned on a promise of doubling exports from Providence in five years. What results will we see from those overseas meetings? Providence wants a concrete vision moving forward.
#1
Bankruptcy
“Absolutely not,” said City Council President Luis Aponte, as to whether the city could go into receivership in light of its current precarious financial condition.
“If the city loses, Elorza can hand over the keys, because the city will go bankrupt,” has said firefighter union head Paul Doughty regarding the firefighters legal battle over the Mayor’s platoon reduction.
Financial advisor and GoLocal MINDSETTER Michael Riley said receivership is almost a certainty.
“Essentially Providence is bankrupt and insolvent. It is only by illegally borrowing from the pension fund the last 10 to 15 years that have saved them from being sued by creditors, and the lies continue,” said Riley. “Until Providence goes into receivership nothing else can happen — no railroads, no Superman, they are sunk. I consider everything else irrelevant.”
