Riley: Simple Questions in Need of an Answer by Providence Officials

Michael G. Riley, GoLocalProv MINDSETTER™

Riley: Simple Questions in Need of an Answer by Providence Officials

Not only did Providence default on a $62 million dollar loan to the Police and Fire pension Plan Pension Plan on June 30, 2015. They will borrow $71.5 million dollars at 8.25 % in 2015 and 2016.In other States and Cities across the United States cash flow problems like the nearly insolvent city of Providence has are addressed by Tax Anticipation Notes. Yet Cicilline, Taveras and currently Elorza (a former accountant) borrow at 8.25% from their own pension plan when Tax anticipation notes are much cheaper. This has been going on for decades. This behavior is just one of 50 signs of distress in Providence Rhode Island and indicative of insolvency.

If you are a citizen of Providence or a reporter in the media here are some simple questions for the Mayor or Councilman Igliozzi.  
    •    Did Providence Default on an approximately $62 million dollar loan due June 30 2015?
    •    Does Providence borrow money from its own Pension fund?
    •    What rate of interest rate does Providence pay on its “timing difference”  for money due to pension plan that is paid late in October?

Those are simple Questions that every Providence Councilman, Treasurer and Mayor should know the answer to. Yes or no.  The same question should be asked of our State Treasurer, Auditor General and Governor. There is something very wrong if they can’t or won’t answer these simple and very relevant questions. I recently produced a report contending Providence has borrowed regularly from the pension fund without knowledge of the investment commission. Providence has paid and continues to pay over 8% for the use of these funds when Tax anticipation notes would suffice an could yield only 2 %. My report shows that Providence has been purposely and materially misleading bond investors, taxpayers, ratings agencies and pension beneficiaries for at least 10 years and as a result violated federal securities laws.

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Recently, a Providence resident and supporter called the city hall and whoever answered the phone said the city had “no Knowledge” of a loan default. All I need is to get that person s name on the record. It’s clear that main stream media such as wpri, wpro, projo  etal can’t afford to be cut off from City Government and its news flow so the tough questions will  have to be asked by the citizens who are paying the freight.

Read the report and then contact Providence Officials if you are concerned.
 
Here is the email address for Finance Chair Igliozzi: [email protected].  Here is the Phone Number to town hall ask for the Mayor or Finance Director if you can’t ask them directly ask them using their voice mail. We will tabulate and publish how many taxpayers ask these three questions  and don’t get an answer through emails and phone calls.   401.421.2489     https://www.providenceri.com/mayor/contact

Michael G. Riley is vice chair at Rhode Island Center for Freedom and Prosperity, and is managing member and founder of Coastal Management Group, LLC. Riley has 35 years of experience in the financial industry, having managed divisions of PaineWebber, LETCO, and TD Securities (TD Bank). He has been quoted in Barron’s, Wall Street Transcript, NY Post, and various other print media and also appeared on NBC News, Yahoo TV, and CNBC.    

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