Warwick, RI – With five days left till the Sept. 9 primary, Republican mayoral challenger Stacia Petri elaborated on her campaign points during a brief break in speaking with residents at Sparrows Point Apartments Thursday.
During a mayoral primary debate hosted by WJAR 10 and the Warwick Beacon at Pilgrim Senior Center Aug. 22, Petri alleged Warwick’s combined debt is $800 million. Mayor Scott Avedisian said the number is actually $46 million, if you rule out bonds taken out by entities such as the Sewer Authority, which are paid by rate-payers.
Ratings agencies do not factor that kind of debt into their assessments.
On Thursday, Petri said debt accumulated by agencies such as the Sewer Authority, resulting in additional bills for taxpayers are within the Mayor’s influence despite the board’s autonomous nature.
The Mayor can wield that influence through appointments to the Sewer Authority Board, she said.
According to the Water Sewer Authority Board website, that power is actually distributed among several City officials. Four of the Mayor’s five appointments to the board are selected from two lists created by the Warwick Democratic and Republican chairmen, two from each. The mayor is allowed a fifth appointment without regard to political parties. All of the appointments must also gain the confirmation of the Warwick City Council.
“I think once again, she didn’t do her homework,” said Avedisian when questioned about the appointment process. He said he’d expect someone criticizing his influence on the Water Sewer Authority Board to have a better understanding of the process.
During the debate, Petri also countered the recent confirmation of a AA bond rating from Standard & Poor’s with a reference to last year’s downgrade of the city’s bond rating by Moody’s Rating Agency from Aa3 to A1. (Moody’s still considers Warwick’s obligations upper-medium grade and a low credit risk)
On Thursday, Petri said she was not concerned that Standard & Poor’s assessment of the city’s bond rating was more recent than the less favorable rating she cited from Moody’s.
“The Mayor will continue to bring up anything that makes it look good,” Petri said. She was not able to detail the differences between the two rating agencies’ assessments of the city.
On Thursday, Avedisian said Moody’s reasoning has to do with the oldest of the city’s pension funds, Police/Fire Pension 1, now 18 years into a 40-year payment plan. The total liability stands at $242 million according to Moody’s.
That plan was started before the state’s other municipalities began taking under-funded pension plans seriously, he said, so it’s not on a standard 30-year plan, which is where Moody’s takes issue with Warwick’s pension debt.
Avedisian said he consulted with State Department of Revenue Auditor General Dennis E. Hoyle about whether to transfer the pension fund into a 30-year plan, but he said that would start the clock on the payment plan at zero, adding eight years to the final payment date. They agreed to keep the pension fund on the 40-year track, Avedisian said.
Avedisian said his office attempted to argue the point with Moody’s but they refused to change their minds. Their position, he said, is that the city should be on a standard 30-year payment plan for the fund.
The City’s remaining pension funds are the only ones in the state considered “Tier 1″: Municipal Pension Plan: 70% funded; Fire 2 Pension Plan: 83% funded; Police 2 Pension Plan: 81% funded.
Avedisian said Moody’s is expected to update their rating of Warwick’s debt soon, but he doesn’t expect them to change their minds on the Police/Fire Pension 1 plan.
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