Providence City Council approves June special election for pension bond proposal

THE PROVIDENCE CITY COUNCIL on Thursday approved a resolution for a special election on June 7 to let voters weigh in on a proposed $515 million pension obligation bond. / PBN FILE PHOTO/MIKE SKORSKI PROVIDENCE

PROVIDENCE – Providence voters will get to weigh in on whether the city should borrow $515 million to shore up its pension fund in a June special election.

The Providence City Council on Thursday approved a resolution calling for the June 7 election on the proposed $515 million pension obligation bond. The 12-1 vote, with Councilman David Salvatore casting the sole vote of opposition, solidifies plans for the non-binding ballot referendum, which the council announced plans for earlier this week.

The election was originally proposed for May, but changed to a date in June because the later date does not require the R.I General Assembly’s authorization, according to Jeffrey Dana, city solicitor.

The council and Mayor Jorge O. Elorza have already thrown their weight behind the proposed $515 million pension obligation bond, which aims to solve the mounting crisis posed by an underfunded city pension. 

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The proposal was first put forth by a working group of city leaders and community representatives who have concluded it was the best – and only – option to shore up the city’s $1.3 billion unfunded pension liability. If issued, the bond would boost the city pension above “critical status” of 60% funded by fiscal 2029 while contributing to its annual payments, which are rising faster than the city revenue, according to the Providence Pension Fund Working Group report.

Letting voters weigh in through a special election was one of the conditions the working group included in its recommendation. Others included capping the interest rates at which the city can borrow and setting a minimum annual contribution the city must continue to make toward its pension obligation.

State lawmakers must also sign off on the bond, which exceeds the amount of debt relative to assessed property value that state laws say a municipality can take on. Bills were introduced in the General Assembly earlier this month by Senate Majority Whip Maryellen Goodwin and Rep. Scott Slater, both Providence Democrats, but have not been scheduled for hearings as of Thursday.

Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.

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  1. The GA has to stop this. It is another 38 Studios fiasco in the making.
    The only way this POB should be approved by the GA is if the POB is fully secured by a first lien on the assets in the pension plan.