Copyright by WPRI - All rights reserved Mayor Jorge Elorza (left) and former Mayor Angel Taveras (right).

Copyright by WPRI - All rights reserved Mayor Jorge Elorza (left) and former Mayor Angel Taveras (right).

Dan McGowan, WPRI.com Reporter - PROVIDENCE, R.I. (WPRI) – Eight days after he lost the Democratic primary for governor last year, Providence Mayor Angel Taveras pledged he'd do "everything I can" to help Jorge Elorza become the next mayor of Rhode Island's capital city.

Until that point, Taveras had steered clear of backing a candidate to be his successor, noting that he had strong relationships with several of the Democrats vying to replace him. But after the gubernatorial primary he said he wanted the city to remain "free of corruption" — a goal threatened by the possibility of controversial former Mayor Buddy Cianci returning to City Hall.

The rest of the story is well known. A coalition of East Side residents and young liberals citywide catapulted Elorza to victory over Cianci, who won eight of the city's 15 wards but lost every precinct from Fox Point to the Pawtucket line. Taveras got his wish.

But the relationship between Elorza and Taveras has swiftly deteriorated since last November's election, as the new mayor warns Providence is facing budget problems while the former mayor defends the legacy he left behind after a single four-year term.

Their game of finger-pointing had largely played out behind the scenes until this past weekend, when Elorza's office claimed Taveras's final budget "relied on a number of one-time fixes that were unrealistic and did not come to bear," and Taveras fired back that the new administration "should focus on the choices it has made since taking office" to figure out why the city ran a $5-million deficit last year.

"Running a city like Providence is difficult," Taveras told WPRI.com. "The choices an administration makes on a daily basis certainly have a significant and immediate impact on city finances and our future."

The back-and-forth between Taveras and Elorza comes amid mounting concern about Providence's ever-shaky financial health. Last week, R.I. Auditor General Dennis Hoyle wrote Elorza's team to formally ask that they "adopt and comply with a realistic plan" to eliminate Providence's $13.6-million cumulative deficit.

But the growing feud between the two mayors dates back much further, to even before Elorza took office -- and much of it revolves around the city's budget woes.

Days before Elorza took office, Taveras aides filed a report with the state claiming the city's $678-million budget for the fiscal year that would end June 30, 2015, was on track to stay balanced. At the same time, the report projected that the city was on course to run deficits rising to nearly $18 million by 2020.

It didn't take long for Elorza to disagree. On Jan. 26, his office filed a new report with the state claiming Providence was presently on pace to end the year with a deficit of $3.6 million, and outlining how he intended to balance the budget.

The projected shortfall stemmed from "potential revenue shortfalls, unrealized expenditure-savings, higher than budgeted public safety call-back and overtime costs, and higher than budgeted medical expenditures due to claims utilizations," Larry Mancini, the city's finance director, wrote in a letter to the state.

"The Elorza administration is taking proactive steps to address the projected deficit from the previous administration, and to identify budget vulnerabilities for the coming fiscal year and beyond," Evan England, a spokesman for Mayor Jorge Elorza, said at the time.

Those close to Taveras said privately he was disappointed that Elorza's office appeared to be pinning the potential budget deficit on him. But publicly Taveras praised the new mayor for hiring Michael D'Amico, Taveras's former director of administration and chief of staff, as a consultant on budget and labor relations issues.

As Elorza settled into office, his top aides moved away from publicly criticizing Taveras. When he was asked about financial condition of the city he inherited following his first budget address, Elorza told WPRI.com, "I thought it was going to be worse."

Soon enough, it was.

On May 21, Elorza announced plans to dramatically overhaul the fire department after he received an independent review of the city's finances that showed Providence could face a $19.1-million deficit by 2021. (The numbers were similar – but not identical – to those in the five-year report Taveras sent the state before leaving office.)

In July, Elorza's office sent a letter explaining to the state that despite inheriting a budget shortfall, it now projected the city had finished the fiscal year just $27,000 in the red - essentially a balanced budget. (Top Elorza aides explained that about $10 million in unexpected savings and revenues from a bond refinancing and a federal grant helped close the gap.)

"Through strong leadership and proactive management, the Elorza administration was able to virtually eliminate the projected deficit," Mancini, who worked for Taveras and was retained as finance director by Elorza, wrote.

Two months later, however, Mancini disclosed to the City Council that the deficit was more likely to come in vastly higher — at $5 million — thanks to larger-than-expected medical expenditures and back taxes coming in more slowly than officials anticipated.

The $5-million shortfall means Providence has now run up a $13.6-million multiyear deficit, a figure that can only be reduced by using cash reserves or by running annual surpluses. (City financial records show the city hasn't had any reserve funds since 2011.)

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It was the disclosure of that $5 million shortfall that prompted the letter from Hoyle, the auditor general. That's when England, the mayor's spokesman, pointed out the flaws in Taveras's budget, including about $6.25 million in expected one-time revenues from the sale of the Urban League headquarters and the Flynn School that never came to fruition. The city also failed to reach an agreement on lease extension with Triggs Memorial Golf Course and received only half of the $500,000 it expected to earn for the naming rights on the downtown ice rink. (The new budget still includes the sale of the Urban League property.)

This time, Taveras fired back. "Providence should not have finished fiscal year 2015 with an operating deficit and the July 28, 2015 report suggested as much," the former mayor said Sunday.

If the story of one Providence mayor clashing with his predecessor sounds familiar, it's because it is.

In 2010, just before Taveras was elected, Mayor David Cicilline, then a candidate for Congress, said Providence was in "excellent financial condition." Shortly after he took office, Taveras announced Providence was facing a $110-million structural deficit.

While Taveras rarely criticized Cicilline in public – and even endorsed him for re-election in 2012 – his closest aides were quick to craft a narrative blaming the former mayor for the city being on the brink of bankruptcy. That infuriated those close to Cicilline, who has deep ties among residents of the city's wealthy and politically influential East Side, where Taveras needed to maintain his own support.

To a large degree, the Taveras strategy worked. The threat of bankruptcy led public-sector unions to make concessions and forced nonprofit hospitals and colleges to contribute more revenue, improving Providence's finances enough to make Taveras a credible candidate for governor last year.

"It's the first rule of politics," WPRI 12 political analyst Joe Fleming said. "You blame your predecessor. You can't wait too long, but you can do it in the first year."

Taveras no longer works in politics. A lawyer by trade, he took a job after leaving City Hall with Boston-based Greenberg Traurig, LLP, where he focuses on municipal restructuring and pension litigation. He no longer lives in the city of Providence.

Still, he admits he's sensitive about any criticism of his handling of the capital city. Fleming said Taveras is protective of his reputation as someone who "stopped the bleeding" in Providence. "Angel wants to preserve his legacy, which was that he turned the city around," he said.

It didn't take long for some of the other key architects of the 2014-15 fiscal year budget to push back against Elorza's criticism.

Michael Solomon - who served as City Council president while Taveras was mayor, before losing last year's Democratic primary to Elorza - said the new mayor needs to "stay on top of the budget."

"It's insulting," Solomon told WPRI.com. "When you look at the finances of the city four years ago, I think we did a damn good job for four years."

"Why would I kick the can down the road if I thought I would be at the helm?" he quipped.

Councilman David Salvatore, who was charged with vetting last year's budget as chairman of the Ways and Means Committee, said "management of any budget is a critical aspect that is necessary for our city to succeed."

"I would strongly encourage the administration to embrace proven tactics as they relate to effective budgetary practices, which we demonstrated in fiscal years 2013 and 2014," Salvatore, who is no longer a member of council leadership, told WPRI.com.

Meanwhile, Fleming said, Elorza may be setting the table for the difficult decisions he has to make in the coming years. Elorza's first budget held the line on all city taxes, but an increase is likely next year. He will also have to ask the governor and General Assembly for more state aid, Fleming said.

"Remember, Providence has longstanding financial issues," he said. "This problem didn't happen overnight."

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