Category Archives: Finance

Providence and the Non-profits

Posted on by Kiersten Marek

Reblogged from On Politics:

  Once again, Providence politicians are looking to the city’s private colleges for money to help shore up the city’s poor finances. RIPR political analyst Scott MacKay says these non-profit institutions shouldn’t be seen as cash cows for the city. There has been more rhetoric than reality in the latest dispute between Brown University and Mayor Angel Taveras and his city council allies. With city government awash in red ink, the pols are hungrily eyeing the tax-exempt Brown property on College …

Scott MacKay considers the question of whether Brown University should pay more to the city of Providence.

David Korten Frames the Issues for Occupy Wall Street

Posted on by Kiersten Marek

This is an excellent video from an erudite scholar of our economy.  David Korten is the author of When Corporations Rule the World and is here to tell us that we don’t need Wall Street in its current form.  It is just messing up the economy with corruption and financial warrior tactics to protect and further enrich the elite.  We need local banks and local economies.  The notion is radical — what will we all do with our 401K’s if there is no Wall Street?  Go back to having a savings account and earning 3% interest a year. Actually that doesn’t sound half bad.  The problem is banks are paying less than 1% interest right now.

News from Steve Stycos, Cranston City Council Ward One

Posted on by Kiersten Marek

Some important updates from Steve Stycos:

OPENNESS IN GOVERNMENT

In my first months on the City Council, I have pushed for more openness in handling of claims against the city and hearing of tax assessment appeals.

Upon the recommendation of Assistant City Solicitor Evan Kirshembaum, the Claims Committee approved a proposal by Ward Four Councilman Robert Pelletier to limit the public discussion of claims against the city by a 4-1 vote. I chair the committee and was the one vote against the proposal.

Later, the Providence Journal reported that City Solicitor Anthony Cipriano reversed Kirshembaum’s recommendation and declared the information should be public. Most claims are minor, like mailboxes hit by plows or tires flattened by pot holes. I agree that discussions of legal strategy, like how much to offer claimants, should be in private session. But when the council votes to spend money, the public should know what is happening. This has yet to be resolved.

Meanwhile, I learned that the Board of Tax Assessment Review had been holding deliberations in private. Under state law, taxpayers have a right to challenge their tax assessment before a three member board appointed by the City Council. The board taped its meetings, but only the portion when taxpayers made their pleas for lower assessments. Board discussion of whether to grant appeals were in not recorded. After I raised the issue, the board began keeping minutes of the entire meeting.

I also learned that board members were being paid in violation of city ordinances. Board members are paid $50 for each meeting they attend, but the city code limits them to five meetings a month unless the city council president or chair of the Finance Committee give written permission. In 2010, however, the board met 124 times without receiving permission for extra meetings. When I raised the issue, the board chairman, Rory Budlong, said the board was unaware of the notice requirement.

Shortly afterwards, the board held its first meeting with written minutes. It lasted 28 minutes, but the city code says meetings must last at least an hour for board members to be paid. At the last council meeting I stated that the board should not be paid for the meeting, but Mayor Fung’s top administrators and Robert Pelletier disagreed.

Meanwhile, Councilman Pelletier, as chair of the Finance Committee, has given the board permission to meet more than five times a month.

Based on this record, I have no confidence in this board and will be pushing to correct the situation. The amount of overpaid meeting fees is not huge, but I believe these three people owe the city money.

JUVENILE HEARING BOARD

Cranston’s Juvenile Hearing board hears minor offense cases, like fights and vandalism, referred by the police department. In an effort to keep teenagers out of the court system, the board usually resolves cases by requiring community service or an essay.

For years, Judy Pelkey served on the board, but when she was not reappointed, the seven member board became all male. Judy argues that it is important, especially for women and girls, for the board to contain women. I agree and have sponsored an ordinance to require at least two members of each sex serve on the board. The proposal ran into some opposition at its first hearing and I agreed to continue the issue so we could gather some additional information.

I need some women to support it. Please let me know if you are able to testify in favor of the proposal. The Ordinance Committee will hold a hearing on it and other items Thursday March 17 at 7 PM at City Hall.

The actual proposed ordinance is at http://web.cranstonri.org/clerkdocs/2011Ordinances/Proposed/Juvenile%20Hearing%20Bd%20Composition%20Diversity.pdf

ZONING REFORM ORDINANCE

In response to the Cranston Zoning Board of Review approval of variances for CVS and Stop and Shop, Ward Two Councilman Emilio Navarro and I have sponsored a zoning reform ordinance to improve the zoning review process. The ordinance seeks to make the board pay more attention to the zoning code and improve the public’s opportunity to participate in decisions that change their neighborhoods. A Providence Journal editorial printed on 3/10/11 discusses the problem. A hearing on the proposed ordinance will be held in April.

The ordinance incorporates suggestions from leaders of the West Bay Land Trust and Respect4Edgewood. Currently the zoning board pays little attention to our zoning code, choosing instead to work out deals with developers late at night after most of the public has gone home. In both the CVS and Stop and Shop cases, stores were granted sign variances by insisting they needed much more than allowed by law, and then at the last minute “compromising” to a lower amounts that was considerably more than permitted by law.

In the Stop and Shop case, 300 square feet of signs were permitted, but the store wanted 450 square feet. The zoning board granted 375 feet with almost no discussion of whether the agreement complied with legal guidelines for granting variances. Instead they made a quick deal, with none of the city’s planning department staff present. At that point only Stop and Shop lawyer Robert Murray, one member of the public and I were present.

In an attempt to get zoning board members to pay more attention to the zoning code, the reform proposal requires them to take an oath before the City Council to uphold the law.

The reform proposal also requires the board to make decisions when the public is still present. Currently the board holds public hearings on all cases on the agenda and then, often late in the evening, makes decisions on each case. The reform proposal requires them to hear the first case, then make a decision before hearing the second case. This would allow members of the public to watch the deliberations and learn the outcome without sitting through every little case about a mother-in-law apartment. The change is also business friendly because it allows lawyers to go home after their client’s case finishes, reducing hourly billing for time spent waiting for a decision..

Another reform provision requires developers to submit two sets of plans: one in compliance with the code, and one with the variance they are seeking. This would allow the zoning board to review alternatives. The reform proposal also requires plans be submitted a week before the hearing, to give time for public review. CVS changed its plans hours before one meeting, making it difficult for Respect4Edgewood to intelligently analyze them. Other provisions would require plans be submitted in “pdf” files and for site plan review meetings to be held after work hours.

Finally, the reform ordinance bars the zoning board from soliciting or accepting testimony after the public hearing is closed. During the Stop and Shop hearing, attorney Murray was allowed to make comments during the board’s deliberations.

I also would like to limit the board’s ability to make last minute “compromises” with developers, but have yet to settle on a specific plan. Important zoning decisions need to be made carefully, not late at night by scrawling notes on a set of plans.

The hearing on the reform ordinance will be held Thursday April 14 at 7 PM in City Hall before the Ordinance Committee. We will need public support to win passage.

Clearly, Steve Stycos continues to fight for better government, and hopefully will be setting a new precedent for conducting meetings more ethically. I also appreciate his calling attention to the issue of increasing female representation on the juvenile hearing board.

Do Providence Teachers Have to Apply to Be Rehired or Not?

Posted on by Kiersten Marek

It’s understandable that teachers are feeling anxious and afraid in Providence. But let Mayor Taveras reassure you — he is not out to bust the unions, so that solves that question. Whew, glad the Mayor is still the moral, union-supporting person that I thought he was. Still, a lot of other unanswered questions linger about the changes that teachers in Providence face due to the termination notices they received.

The biggest unanswered question in my mind is whether every teacher will need to go through the hiring process in order to have a job. Along with this being a tremendous insult to people who have poured their lives into their jobs, it will also be extremely expensive to carry out all of those interviews. Note to Mayor’s office — Think: interviews = expensive, like money that could be spent to keep teachers. But perhaps we don’t have to worry about that, as according to a Business Week article published today, teachers will not have to reapply and be rehired. From the article:

There are echoes in this week’s move of last year’s decision in nearby Central Falls, where every teacher at the high school was fired. Those firings, however, were the result of the school’s poor performance, not because of money. And unlike Central Falls, where a compromise was struck and all the teachers were rehired, teachers in Providence won’t have to reapply to keep their jobs. [bold mine]

And yet, in today’s Projo,

But David V. Abbott, the state’s deputy education commissioner, said the difference between layoffs and dismissals is this: When a teacher is laid off under state statute, he or she is put on a recall list. Although that teacher is no longer working and no longer paid, that person exists in an employment “limbo.” The teacher hasn’t been actually dismissed.

If a job becomes available for which that teacher is qualified, that person must be rehired based on seniority.

“If you are laid off, you have the right of recall,” Abbott said Friday. “You still have one stick in your bundle. If I’m dismissed, I’m out of work and I need to be rehired.”

In effect, every teacher who is terminated has to re-apply for his or her job as would any new teacher entering the system.

So which is it? You’ll forgive me if I’m still a little confused, and feeling some angst for the teachers in Providence. Yet, perhaps it’s not worth worrying about because it’s just a power play in a political game that is going to take months to play out. As the Business Week article put it, “The decision to send the notices was seen by some as another signal to public sector workers that government officials are ready to play rough to win changes to labor contracts.”

Kmareka Predictions 3 for 3

Posted on by Kiersten Marek

Well, my far more prescient and wise co-blogger Nancy was responsible for the first two correct predictions, and I can make claim to the third — predicting that Central Falls would be laying off some teachers in the New Year. I’m not sure I should be given any fortune-teller points for this, though. Some things are fairly easy to call.

As for Nancy’s prediction that the Dow would surpass 12,000, that one indeed came true, with a near 500 point cherry on top. But now it looks like now we’re seeing a pullback. Note that Nancy didn’t make any calls on whether the Dow would drop back down below 12,000 after hitting this mark. So, buyer beware as to what comes next after the initial Kmareka predictions. Mayor Taveras in Providence is talking about closing some schools. Wonder if Central Falls will also be thinking in that direction, given that their city is in receivership. I hope all these empty school buildings will be put to good public use, though I doubt there will be a quick turnaround. And if they’re building new schools, they better make sure they aren’t building on former superfund waste dumps. I wonder how the Race to the Top money for charter schools will play into this equation.

Tell your Friends in Cranston’s Ward One about Steve Stycos

Posted on by Kiersten Marek

What is Steve Stycos about? Independent analysis, common sense energy and conservation efforts, and increased clarity on what we are spending money on in Cranston and whether we are getting our money’s worth. We desperately need Steve’s skills on the Cranston city council:

When news broke that Councilman Terence Livingston wouldn’t be seeking re-election in Ward 1, whispers began over who would throw their hat into the ring. But perhaps no candidate caused more of a stir than longtime School Committee member Steve Stycos.

No one was as surprised as Stycos himself.

“I didn’t expect to run,” he said of his 11th hour decision. But after a series of land use discussions (including decreased lot sizes in western Cranston and the Warwick Avenue Stop & Shop) that troubled the Edgewood resident, he decided the empty seat was reason enough. “I was sitting there saying, ‘I have the opportunity to try and make sure these things don’t happen.’”

It was 10 years ago when Stycos first broke onto the School Committee, after a previously unsuccessful run. And since then, he has carved out a reputation as an outspoken, albeit unobtrusive, advocate. Always soft-spoken in demeanor, he has subjected his colleagues to extensive questioning on matters ranging from curriculum to contracts.

Voters can expect the same on the Council.

“I’m not interested in going along because a majority wants to do something,” he said.

If that means coming up against opposition from entrenched incumbents, Stycos isn’t scared. As a freshman committee member, his opinion was often overlooked.

“I felt for a number of years no one was listening. The attitude was, ‘he’s off the wall,’” Stycos recalled.

In his early years in public service, Stycos’ colleagues killed several of his pet projects. During negotiations with the teachers’ union before the most recent contract, Stycos voted to table the contract because it had not been costed out.

He did not receive a second to the motion.

When it came the City Council’s turn, however, they passed an ordinance to ensure that never happened again.

Stycos thinks those kind of protections are common sense, as is making the budget accessible to taxpayers, which was another priority for him.

“I felt that the budgets in general were inflated and you couldn’t understand them. I think there’s still a problem with understanding them,” he said.

Read more: Cranston Herald – Stycos ready for a change of scene

Fed to Prop Up Economy

Posted on by Kiersten Marek

I guess propping up is better than no help at all. The Fed says it will prop up the economy, and things should be better in 2011:

JACKSON HOLE, Wyo. — The Federal Reserve chairman, Ben S. Bernanke, said Friday that the central bank was determined to prevent the economy from slipping into a cycle of falling prices, even as he emphasized that he believed growth would continue in the second half of the year, “albeit at a relatively modest pace.”

So things are looking up, unless you listen to people like James Howard Kunstler who say that we’ve peaked and the new normal is going to be scaled way back from the kind of luxuries we enjoy now.

KUNSTLER: The peak-oil problem means that we can no longer expect to run an economy based on never-ending growth, which means ultimately that we can’t service our debts at any level — personal, corporate, governmental. We’re comprehensively broke. The securitization of mortgages was one of the so-called products that allowed the financial industry to swell from around 8 percent of our economy thirty years ago to over 20 percent just before the crash of 2008.

The commercial-real-estate sector, which accessorizes the suburban-development pattern by providing strip malls and big-box stores near suburban neighborhoods, is now imploding, as well. Unfortunately in the last several decades we’ve gotten rid of our manufacturing economy and replaced it, not with a postindustrial economy or an information economy or any of these other bullshit economies we think we created, but with a suburban-sprawl-building economy. We built more suburban tract houses, more strip malls, more highways, and more chain stores. That system has now entered a state of terminal decline.

Sometimes it’s hard to know who to believe.

The Smartest Guys in the Room

Posted on by ninjanurse

Remember Enron, The Smartest Guys in the Room? The California energy corporation that stole and mismanaged piles of money, subjected California to rolling brownouts, laughed at the people they were robbing? Remember their poor brainwashed, fired employees whose retirement funds of Enron stock was only good to line the catbox?

We hear Enron traders laughing about “Grandma Millie,” a hypothetical victim of the rolling blackouts, and boasting about the millions they made for Enron. As the company goes belly up, 20,000 employees are fired. Their pensions are gone, their stock worthless. The usual widows and orphans are victimized. A power company lineman in Portland, who worked for the same utility all his life, observes that his retirement fund was worth $248,000 before Enron bought the utility and looted it, investing its retirement funds in Enron stock. Now, he says, his retirement fund is worth about $1,200.

Michael Lind at Salon remembers. His post today is a 101 on how we got into this mess…

Beginning in the 1970s, Democrats and Republicans alike dismantled the regulatory systems that a previous generation of Democrats and Republicans had constructed in the 1930s and 1940s. In electricity generation and distribution, airlines and trucking, as well as finance, the conservatives and neoliberals of the last generation dismantled New Deal-era regulations. Entranced by a naive Econ 101 view of markets, the champions of deregulation promised market miracles that did not happen while failing to foresee disasters that did.

The Republicans in Congress have united to filibuster finance reform. They are the same party that pushed deregulation with evangelical zeal, and for thirty years have been constructing the myth of virtuous bankers and brilliant financiers who will save us all if only we don’t ask questions or trouble them with rules.

Let’s revisit a true crime story, and let the Republicans go on record as a party united to defend ‘too big to fail’. The Democrats don’t have clean hands either, and they need some serious pressure from ‘we the people’ because money talks louder than a bunch of people writing blogs. Vote and make it count.

Is Greed An Alien Concept?

Posted on by David Jaffe

According to British scientist Stephen Hawking, E.T. and his alien compadres are somewhere out there in the vastness of the universe and presumably possess the soul of an investment banker. If you thought complex derivatives and other financial weapons of mass destruction were scary, just wait until the aliens arrive to plunder the planet for personal profit. Like Bear Stearns or Lehman Brothers, the Earth will go belly up, and we’ll all be homeless. Well, everyone except the crafty folks at Goldman Sachs, who bet against the planet’s survival. And maybe the citizens of Arizona, who don’t take too kindly to illegal aliens.

Anyway, here’s what Hawking had to say:

Aliens may exist but mankind should avoid contact with them as the consequences could be devastating, British scientist Stephen Hawking warned Sunday.

“If aliens visit us, the outcome would be much as when Columbus landed in America, which didn’t turn out well for the Native Americans,” said the astrophysicist in a new television series, according to British media reports.

The programmes depict an imagined universe featuring alien life forms in huge spaceships on the hunt for resources after draining their own planet dry.

“Such advanced aliens would perhaps become nomads, looking to conquer and colonise whatever planets they can reach,” warned Hawking. [link]

Just Wondering…

Posted on by David Jaffe

• Why senior staff members at the Securities and Exchange Commission, who were found to be “surfing Internet pornography when they should have been policing the financial system,” weren’t satisfied with viewing the naked greed of bankers screwing the American people?

• Whether Senator John McCain, who is facing “a tough primary challenge from former radio-talk-show host and blowhard congressman J. D. Hayworth,” was actually the recipient of “the world’s first full-face transplant”?

• If privacy is, like, so 20th century?

• How it came to be that Jon Stewart, the satiric host of The Daily Show, demonstrates greater journalistic daring and integrity than much of the mainstream media?

• Now that Archie comics will feature a gay character, whether Batman and Robin will come clean about their relationship?

• Why my three cats (two of whom are shown below) fail to understand the concept of the weekend and insist on meowing and scratching at my bedroom door at 5:30 in the morning?

Caboodle and Zooey relax on the couch