Ted Nesi’s Saturday Morning Post: Dec. 5


Happy Saturday! Here’s another edition of my weekend column for WPRI.com – as always, send your takes, tips and trial balloons to tnesi@wpri.com, and follow @tednesi on Twitter.

1. The Providence Journal’s new executive editor, Dave Butler, has already had a distinguished career in the newspaper business. So what made him decide to leave his perch in San Jose and move across the country to take a job in Rhode Island? “I wouldn’t have gone to just any place,” Butler said on this week’s Newsmakers. “The Journal has a reputation as a very good newspaper. It has high ambitions and always has.” (He singled out state government, investigations and public service as areas where the paper’s coverage still shines.) Butler was recruited by Journal publisher Janet Hasson, herself newly installed last year after GateHouse Media bought the paper, and someone Butler has known for a long time. “She wanted an experienced editor rather than some whiz kid,” he said. “She has an experienced staff. She thought that somebody with a fresh set of eyes would bring some energy and help the staff see things maybe a little differently.”

2. The Journal’s challenges are no secret. Weekday circulation was down to about 67,000 copies as of Sept. 30, with the lucrative Sunday edition down to roughly 89,000; five years ago those numbers were 96,000 and 137,000, respectively. That has caused a steep drop in revenue, which has led to sharp cuts in staff. None of those problems are unique to The Journal; midsize metro dailies nationwide are facing the same headwinds. On NewsmakersDave Butler said he has no interest in scrapping seven-day print the way some papers have done, calling the results of those experiments mixed at best. But he certainly is thinking about what needs to change. “I think like most larger newspapers, as the staff has been reduced it’s tried to continue doing everything but maybe not everything as well as it did,” Butler said of The Journal. “And I think newspapers have to make touch choices on where they focus their resources.” Management’s hope, he added, is that he “can rally the staff to do even better work and [can] offer some suggestions, both in the digital area and in print.”

3. One of the most interesting comments Dave Butler has made since arriving in Rhode Island was when he told his new paper that reporters needed to do a better job with time management. On Newsmakers, he gave the example of a reporter heading out to cover a meeting who first writes 12 inches of background in advance, then comes back and adds 3 inches of news. (Story length is measured in inches.) “So the story really should be about 3 inches because nothing happened, but because we already put this effort into it we end up with a 15-inch story that is 3 inches of news – or non-news – and 12 inches of background,” he said. “And we just don’t have the resources to do that. There are a lot of stories that could use much less background. I mean, reporters always want to do the very best on every story. On some stories, we’re just going to have to say, this is good enough – investing another day or six hours, not only does it make the story better, but it prevents you from doing another story. And those are tough decisions. There’s no formula to doing that. I think reporters and editors just have to ask themselves on every story, what is it worth?”

4. The city of Providence’s finances are still in very rough shape.

5. The announcement that a major corporate citizen is planning a 500,000-square-foot campus in your state isn’t usually seen as bad news. Nevertheless, Citizens Financial Group’s plans have to be a little bittersweet for Governor Raimondo after she and others spent months unsuccessfully trying to convince the newly independent bank to take over the Superman building. While nobody at Citizens has ever commented one way or the other on the Superman idea, it seems unlikely the bank would have any interest in the skyscraper if it’s already making a major investment to house 4,000 employees on a corporate campus in the suburbs. Joe Paolino, an avid Citizens-Superman supporter, told my colleagues this week he still thinks the best bet for the bank would be an “urban corporate campus,” perhaps with a skybridge between the Superman building and another building across the street. But it doesn’t appear Citizens wants to go in that direction. So what is going to happen to the Superman building?

6. House Minority Leader Brian Newberry is many things – savvy, acerbic, generally libertarian – but a bomb-thrower isn’t one of them. Hence why so many reporters took notice this week when he lobbed a grenade of a statement at Governor Raimondo over her refusal to appoint a Republican lawmaker to the panel scrutinizing Rhode Island’s education funding formula. He expanded on the critique during an appearance on this week’s Newsmakers: “This administration has been demonstrating more and more as time goes on their absolute arrogance. What happens here is they made a mistake … but they don’t like to admit mistakes, so they refused to admit the error. And then they got backed into a corner because they figured I wasn’t going to complain about it.” (Raimondo’s team counters that the panel is already bipartisan thanks to the participation of Warwick Mayor Scott Avedisian.) Newberry also argued his Democratic colleagues – and Speaker Mattiello – feel the same way he does. “They keep all their information tight, they don’t talk to anybody else, they kind of assume because it’s a Democratic administration that the Democratic legislature will just follow along. … You see that arrogance starting to seep out the longer this administration goes on, and it’s really not a good sign for future relations with legislators.” Ouch. Those who want to share their thoughts on the education funding formula can attend the panel’s next open meeting on Dec. 10.

7. Connecticut officials reportedly don’t think Rhode Island is in the running for GE’s headquarters, just New York and Massachusetts (along with Connecticut itself).

8. It was overshadowed by a lot of other news, but Treasurer Magaziner’s primer on public debt in Rhode Island was an important contribution to the discussion about state finances. Arguably the biggest headline: the official figures, which show $11 billion in government debt, could be missing an unknown amount of additional borrowing, because an unknown number of entities in Rhode Island have the authority to issue bonds or other notes; Magaziner’s staff counted more than 100 such entities, but acknowledged they were unable to find a complete list. What to do? Magaziner is a Democrat, so it’s perhaps unsurprising that his three recommendations to lawmakers did not include reducing the number of entities who have borrowing authority. Another one of his ideas – requiring that the unelected Public Finance Management Board sign off on all borrowing that hasn’t been explicitly approved by lawmakers or voters – could be controversial with municipal officials who don’t want their powers usurped. Then again, past practice in Woonsocket (see next item) may make lawmakers less sympathetic to such arguments. And shining a light on Rhode Island’s public balance sheets is never a bad thing.

9. God bless The Valley Breeze’s Sandy Seoane for her thorough article on Woonsocket’s pension meltdown this week. Even in the context of Rhode Island’s recent pension woes, the problems in Woonsocket stand out as particularly bad. Don’t take it from me – read the quotes in Seoane’s story. City Council President Albert Brien: “This is a disaster.” Pension Investment Board Chairman Richard Lepine: “I want to call it a nightmare.” Indeed, the way Woonsocket has handled pensions over the last decade and a half offers a vivid cautionary tale for other communities. Back in 2002, city voters decided to float a $90-million bond and use the proceeds to fill the hole in the pension fund. In theory that could work out to taxpayers’ advantage, so long as once the money got placed in the pension fund it earned more than it cost in bondholder payments. Unfortunately, that’s not what happened. After the portfolio took a huge hit in the financial crisis, city leaders did what every financial planner will tell you not to do – they locked in the losses by moving the remaining money into more conservative asset classes, rather than riding the eventual market upturn when it came. In July 2007, the pension fund’s assets totaled $94 million; by July 2013, they were down to $48 million. So now Woonsocket’s again-depleted pension fund is earning only about 5% on money that it borrowed at 6.2%, according to the treasurer’s office. This story should rank right up there with the 1991 Providence pension decree and 38 Studios when it comes to Rhode Island financial disasters.

10. Providence officials report the 1st Circuit Court of Appeals granted its motion in the legal fight against Backpage.com this week, effectively accepting the amicus brief the city submitted.

11. Here’s a new tack for recruiting in law enforcement: the Pawtucket Police Department has created a slick documentary-style video featuring interviews with a few of its officers explaining why they joined the force and encouraging others to apply. It’s an effort by the Grebien administration to drum up interest ahead of a Dec. 31 application deadline.

12. One way for Rhode Island to boost transportation funding without tolls: shake more money out of Washington. That was the news the congressional delegation trumpeted this week, with Jack Reed’s office reporting the new federal transportation bill will boost Rhode Island’s average annual highway funding by about 10%, or almost $21 million a year. A notable provision that made it into the final draft: the Nationally Significant Freight and Highway Projects program, an idea Senator Whitehouse has been pushing for a long time to steer extra federal money into projects on key interstate thoroughfares. Think federal matching funds worth up to 80% of the cost of a project like the Route 6-10 Connector.

13. Senator Reed and Senator Whitehouse voted this week to kill the Obamacare “Cadillac tax,” as did 90 of their colleagues. Here’s some background on that debate.

14. Andy Posner’s Capital Good Fund, the nonprofit lender that provides loans to “underbanked” Rhode Islanders, continues to be innovative and interesting. The latest: the group is taking advantage of an exemption in the 1933 Securities Act that allows nonprofits to do debt offerings without going through full SEC registration. Capital Good Fund is aiming to borrow $4.25 million from investors, with plans to use the money to expand. Posner filled me in about the unique idea – and how to invest in it – on this week’s Executive Suite.

15. Set your DVRs: This week on Newsmakers – Providence Journal executive editor David Butler; House Minority Leader Brian Newberry. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive Suite – Invenergy executive John Niland on the Burrillville power plant proposal; Capital Good Fund CEO Andy Posner on its $4.25-million debt offering. Watch Saturday at 10:30 p.m. or Sunday at 6 p.m. on myRITV (or Sunday at 6 a.m. on Fox). Catch both shows back-to-back on your radio Sunday nights at 6 on WPRO-AM 630 and WEAN-FM 99.7. And you can subscribe to both shows as iTunes podcasts – click here for Executive Suite and click here for Newsmakers. See you back here next Saturday morning.Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He hosts Executive Suite and writes The Saturday Morning Post. Follow him on Twitter: @tednesi

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