Decision on Google 'Windfall' Will Pull Pension Plans Off Critical List
The U.S. Attorney General ruled last week that East Providence can use $49.2 million of the Google settlement cash for its unfunded police pension liabilities.
The decision came in the early afternoon last Friday, Jan. 11; by 3:30 pm, a press conference was set up in North Providence by Rep. Jack Reed, Sen. Sheldon Whitehouse and Gov. Lincoln Chafee to announce the decision.
The decision: East Providence can use $49.2 million of its $60 million Google windfall for the unfunded liabilities of its police pension fund.
“It’s very specific,” said East Providence Mayor James Briden, who was invited to the press conference about 30 minutes before it took place. “It allows us to apply $49.2 million to the police pension.”
Sen. Whitehouse said U.S. Attorney General Eric Holder “made an exception based on the unique facts presented,” Briden said. “It brings closure to our appeal.”
East Providence had been turned down twice in its effort to use the asset forfeiture distribution money that was obtained in a settlement with Google Inc. for the work done on the case by the police department against the Internet search giant for import violations related to Canadian prescription drugs.
North Providence got the same answer. The cities joined forces to approach Holder.
“It was a very pleasant, if sudden, announcement,” said Briden. “It is central to the city’s long-term fiscal stability that will benefit East Providence taxpayers.”
East Providence Finance Director Malcolm Moore said the $49.2 million will bring up the police pension to 100 percent funded. It will pull the combined police and fire pension funds off the critical list, according to state standards.
“We’’ll be up to 64 or 65 percent funded,” Moore said. “Anything under 60 percent is considered critical.”
The city must now make some decisions on the remaining $10.8 million of the Google money.
City officials, including Police Chief Joseph Tavares and City Manager Peter Graczykowski, have said many times that were waiting for a decision from Holder before considering the use of the remaining cash.
Briden said he would favor a "smart and conservative use that would help to hold the line on taxes."