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Mayor Leads RI Capital City Out Of Financial Peril

By ERIKA NIEDOWSKI

PROVIDENCE, R.I. (AP) â¿¿ Angel Taveras knew he'd be inheriting bleak finances when he became Providence mayor in January 2011, so he reached out to union leaders right after his election with a message meant to lay the groundwork for future concessions: I'm going to need your help.

It turned out he needed a lot more help than he thought. Taveras soon learned that Rhode Island's capital was facing a worse-than-expected $110 million deficit that he called a "Category 5 fiscal hurricane" and warned could force a municipal bankruptcy.

A little more than halfway through his first term, the 42-year-old Democrat â¿¿ a possible candidate for governor in 2014 â¿¿ has walked the city back from the brink in a state that has struggled for years with one of the highest U.S. unemployment rates.

He cut spending across nearly every city department, closed schools, shaved 200 workers off the city payroll, and raised taxes and fees. He extracted millions more in voluntary payments from the city's tax-exempt organizations, including Brown University and its hospital systems. And he negotiated settlements with unions and retirees over an unpopular 10-year pension freeze and other cost-saving benefits changes, fending off costly litigation.

"I think you build trust. You do that through open communication. You do that by being honest with each other," Taveras said of his approach to governing and negotiation. "I try to put myself in the other person's shoes. I think that that helped a lot."

Superior Court Judge Sarah Taft-Carter ruled in March that the agreements the city reached with the unions and retirees are fair and reasonable, and she is expected to lend the court's final approval April 12.

Taveras has generally won praise for his approach to the pension overhaul, which the city says has reduced its unfunded liability by $178 million, from more than $900 million, and which along with Medicare changes is saving Providence $18.5 million in the current fiscal year.

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