RI House GOP Warns of New Convention Center Lease Lessons

Thursday, May 28, 2015

Kate Nagle, GoLocal Contributor

 

The House GOP Policy Group continued its review of the Rhode Island Convention Center Authority (CCA), releasing a 19 page report on Wednesday detailing RICCA [under]utilization rates and high paying employee benefits, management and marketing, and warned of future pension obligations -- and offered suggestions as to how to address cost-cutting measures.

  The final report comes after warning of lease agreement structures ("$450 Million Spent on Convention Center Red Flag for PawSox Deal," "Convention Center Contracts Warning Sign for PawSox Deal") as the first Providence baseball stadium proposal was floated -- and Governor Raimondo and new PawSox ownership are expected to broker a second one.
"The big takeaway is that from the beginning, the issue is that the CCA has been managed poorly -- and the root cause is that the lease takes all accountability off their shoulders," said Representative Patricia Morgan.
"We don't want to tear it down, we just want it to be better," continued Morgan,  "They just haven't been working up to their potential.  It's empty 60% of the time."
The policy group said at the outset that its goal reviewing the CCA lease deal has been to: research spending issues and reveal wasteful practices; encourage the state’s management to operate effectively and efficiently; encourage reform in areas where resources are currently being used poorly or fraudulently; encourage a stronger economic environment and reduce taxes for our beleaguered taxpayers and increase voter knowledge of important state issues and promote civic participation
In its report released on Wednesday, the RPG found private CCA management company SMG has "several collective bargaining agreements, which expire at various dates through December 2016, covering approximately 71% of SMG’s labor force."

RI Convention Ceter

"Collective bargaining agreements expiring prior to June 30, 2015 cover approximately 19% of SMG’s labor force.  This provides an opportunity to reduce overhead and costly work rules," wrote the policy group. "Additional CBA concessions might include the elimination of duplicative work assignments, sharing of personnel across venues wherever possible, realigning pay and benefit compensation to be commiserate with private sector employees."
   Moreover the RPG cautioned that the CCA -- which has seen $450 million invested in it by the state -- might be on the hook for the pensions of the private management company's employees.
“The Authority’s legal counsel has determined that it is reasonably possible that the Authority could be responsible for funding the unfunded pension obligations attributable to SMG’s labor force, past and present, who are beneficiaries of the union-sponsored multi-employer defined benefit plans to which SMG contributes."
Representative Robert Lancia said that while the state needs to identify waste, fraud and abuse, that there needs to be a call to action.
"We had to issue recommendations -- you can highlight all the problems you want, but we need tools, the taxpayer needs to know where we can cut and do better," said Lancia. "We had a series of situations over the years, from the Foundry, the banking crisis, where ultimately it doesn't go well for whatever reason -- but it ultimately it costs the taxpayer.  Those involved say, 'We hear what you're saying, we're sorry, that won't happen again.' But that's not enough anymore.""I think the problem for the average person while they're trying to live their lives, they don't have a clue what's going on, all the while being good citizens, paying taxes," said Lancia.  "When I see this, this is heartbreaking.     You can highlight all the problems you want, but we need tools, the taxpayer needs to know where we can cut and do better."