Commission welcomes Google windfall, cautions it’s not a cure-all

Commission welcomes Google windfall, cautions it’s not a cure-all


EAST PROVIDENCE — Among other money matters discussed at its Thursday, Jan. 17, meeting, the East Providence Budget Commission acknowledged the impact of the recent release to the city of some $49 million in Google case settlement money, though also cautioned it was not a cure-all to its unfunded pension ills.

Commission Chairman Diane Brennan confirmed the United States Department of Justice had freed up $49.2 million of the $60 million available to the city as part of compensation for work done by the East Providence Police Department on a federal investigation of the internet company. Goggle was found to have illegally advertised the sale of prescription drugs imported from Canada.

The money the city is to receive is earmarked solely for the purpose of paying down its large unfunded police pension liability, which is over $50 million. East Providence remains in a multi-multi-million dollar hole in regards to its obligations to the retirement plans of its other municipal employees.

“It’s certainly a good thing, but it doesn’t solve all of our problems,” Mrs. Brennan said of the Google cash infusion. “But we’re certainly happy it came.”

When questioned by members of the public about the budgetary impact, Mrs. Brennan did not have exact figures available Thursday.

She acknowledged, however, the Google money did help the city achieve the minimum 60-percent funding of pensions, which is part of the state’s formula in determining so-called “distressed” municipalities. She was also non-committal as to the impact of the Goggle money in regards to how much the city needed to fund its Annual Retirement Contribution (ARC) payments.

Mrs. Brennan also noted the Moody’s rating agency, upon hearing of the decision by the feds to release the Google money to East Providence, has deemed the move a “credit positive outlook” for the city.

“We’re moving in the right direction,” Mrs. Brennan added. “I would like to thank the police department for its efforts on this.”

Cash flow

As he has recently, East Providence Finance Director Malcolm Moore gave the Commission an upbeat update on the city’s coffers, telling the state appointees cash flow has steadily improved in recent weeks and months.

“Every time we talk it seems to keep getting a little bit better,” Mr. Moore said.

The finance chief said because of the current cash flow, the city has the option to split its upcoming $10 million Tax Anticipatory Note (TAN) into two, $5 million withdrawals, which could save the city some on interest. Cash flow should also allow East Providence to push back its date to seek another $10 million TAN to April instead of March as has happened in the recent past.

Tax appeals

The Commission foreshadowed its intention to overturn three of four decisions made recently City Tax Board of Review, which granted appeals on properties owned by the East Bay Community Action Program (EBCAP).

The Commission was in agreement with the recommendations of Tax Assessor Steve Hazard, who deemed only the EBCAP property located at 386 Willett Ave. as deserving of its appeal. The property would be exempt some $17,000, according to Mr. Hazard.

EBCAP properties at 100 Bullocks Point Ave., 138-140 North County Road and 70 Turner Ave. did not qualify. The Bullocks Point property is taxed at approximately $99,500, again according to Mr. Hazard’s figures.

In stating his opposition to the appeals, Commission member Michael O’Keefe said, “If they (the properties) don’t meet the (state) statutory standard, then they are not exempt.”

Tax Offset update

Commission member and City Manager Peter Graczykowski provided his peers with final totals for the calendar year 2012 from East Providence’s participation in the state-operated Tax Refund Offset Program, which ties debts owed to the city by residents to their income tax returns.

For 2012, East Providence received roughly $2.5 million from the program, which, according to Mr. Graczykowski’s notes, represents approximately 23 percent of the nearly $11 million in delinquent accounts at the start of the year.


  1. From what I’ve read the only other group of employees with a pension in trouble is the firefighters. They are in the exact same pension as the police. That was why the DOJ didn’t want to allow the money to be used for the pension. How do you make sure that the google money only goes to the police and not a firefighter in the same pension? I believe that the rest of the city workers are in the MERS system which is not in trouble.