November 28, 2014
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Mayor to balance $288.8M budget with reserves, 23-cent tax increase

Faced with declining commercial tax revenues, increases in debt and pension expenses and an objective to sustain financial stability going forward, Mayor Scott Avedisian unveiled a $288.8 million budget yesterday that will slightly increase taxes and, for the first time in recent years, dip into city reserves.

Avedisian is calling for spending $3.6 million from the city’s reserves of $11.8 million. The mayor said yesterday his recommendation didn’t come easily.

“I thought long and hard about taking more out of the surplus in order to have no tax increase at all,” Avedisian writes in his budget message.

He goes on to say in the end, his fiscal advisors convinced him “the 23-cent [residential property tax increase] was the fiscally prudent thing to do to ensure the continued fiscal health of our community.” That increase, if approved by the City Council, would result in a $43.85 increase in the tax bill of a home valued at $190,647.

While use of reserves can relieve the pain of taxes in the short term, it can create a structural deficit that places increased burden on successive budgets.

The mayor said he wrestled with that issue, but concluded that a projected surplus of $1.2 million in the current year plus stabilization of commercial tax revenues, as well as their growth with new development, would ease the burden. In addition, he pointed out that an $800,000 appropriation in the proposed budget would not be a recurring expense. That money is to provide a $1,000 bonus to every full-time Warwick employee as of July 1, 2013. The bonus comes during a three-year no salary increase contracts with city employees that ends as of June 2015. As the money is considered a bonus, it does not affect the salary schedule on which cost of living adjustments is based for retiree pension benefits. The result has been a reduction in the city’s unfunded pension liability.

The budget juggling didn’t come without disappointment to some department directors and is certain to be the topic of hearings starting May 29 at 5:30 and continuing the following day – a Friday – at the same time. The final hearing is scheduled for Saturday, May 31 starting at 8:30 a.m. All the meetings are in City Council Chambers.

That final meeting may be the most contentious, as the mayor’s plan for the city to level fund schools for another year at $119 million is expected to come under fire. Avedisian is recommending a $158.5 million school budget. That amount is a $1.3 million increase from current expenditures representing projected increases in state and other sources of funding.

Nonetheless, it is a stretch from the $159.7 million approved by the School Committee.

City department directors other than schools requested an additional $7 million in funding that the administration cut dramatically. The mayor budgets $40.4 million for public safety, an increase of $1.6 million that will be used to fund a portion of the salaries of four police officers now paid under a federal grant, which is expiring, and increase the overtime budgets for both fire and police.

Despite a proposed increase in taxes, the city will actually collect less in revenues than was projected for the current year. The reason is a decline in commercial property valuations resulting from settlements and court cases coming out of the statistical revaluation completed two years ago. Avedisian couldn’t say the number of valuations contested following the revaluation completed by Vision Appraisals, but the outcome is a $2 million reduction in commercial tax revenues.

The mayor is thinking with the next valuation that the residential and commercial aspects of the program should be bid separately.

Avedisian said debt expenses would increase $791,763 to fund bonds for school and city building improvements and construction of the Potowomut fire station and a new Mill Creek bridge on Tidewater Drive.

Avedisian praised his staff for the preparation of the budget, noting that this is the first budget in many years where Diane Brennan, financial reporting analyst, was not involved. Brennan, who worked in the finance office and closely with the City Council, has retired.

Avedisian was asked if there was anything “new” in the budget in terms of programs or innovative services.

“We didn’t allow for any fun,” City Finance Director Ernest Zmyslinski quickly chimed.

After a pause, the mayor said he left $450,000 in the public works budget for the repaving of roads. He also left contributive support for non-profits unchanged from the current budget.

Overall, the budget is a $6.8 million increase from the current year. The proposed tax rates are $20.02 for residential and $30.03 and $40.04 for commercial and industrial, respectively. The motor vehicle tax rate of $34.60 is unchanged, as is the $2,000 exemption.


Comments
28 comments on this item

Perhaps someone can answer the following: Is it really 50% more likely that police and fire will be needed at a commercial property, and twice as likely that they will be needed at an industrial property vs. residential, to account for the dramatic difference in rates? Might this further account for Warwick being a less than desirable place to locate a business?

How about losing the police "overtime"? We most certainly do NOT need to pay police officers $50-90/hr to direct traffic! There are plenty of civilians willing to do the exact same job for much less money!!! I don't know HOW many times I have driven past a "traffic detail" recently only to see the detail officer sitting in his car looking down (most likely texting or surfing) instead of doing the job he or she is being paid for! I think if most taxpayers knew how much money these officers were actually being paid for standing around, they would be outraged!

Falina, detail money is paid by the company doing the work not the city.

The Mayor is quoted " I thought long and hard about taking more out of the surplus to have no tax increase at all."

How about "I thought long and hard about where we were going to cut the cities spending since we have less money this year". Funny, how every year the budget gets higher, taxes get raised, and the city takes in less revenue. The mayor and council know if they just keep raising taxes we'll grow our way out of this. Stupid stupid stupid.

SteveD, that cost is passed on to the customers which is us. Some details make perfect sense, others do not. Those that don't truly need a cruiser and officer are a theft of taxpayer money that could surely be better spent.

Last year the mayor and fire chief Armstrong, along with past fire chief Sullivan stated that with the hiring of the new 20+ firefighters, the department would be at its full compliment thereby eliminating overtime. Why then did we incur 1.8 million in overtime this year?

we feel should feel honored breathing the same air as these gov't aristocrats We should happily pay our share so none of them have to work much past 50 as they might throw a hissy fit.

The porker crossing guard at aldrich deserves a nice pension and free healthcare for life for the more than 120 minutes she works a day.

Patientman,

When I go to cvs to buy gum they the cost of the CEOs mansions gets passed on to us. Where does it end. It doesn't. Fenceman, a lot of the fire overtime is from a federal grant that was used for training last summer. Again not paid by the city.

Steve D doesn't understand how the free market works......we have a choice when we shop at CVS .......if we object to the so-called CEO mansion we can shop at Walgreens etc. but the fire dept with their outlandish overtime, gold plated benefits don't give us a choice. Hey Stevie how about letting a private co run the rescue dept and let's compare.

How about the fire chiefs now retiring who will be getting from the hard working taxpayers with healthcare benefits over $ 1 miilion dollars in less than 10 yrs. Why don't you talk about that Stevie.

Reality,

The rescues bring in millions for the city every year that is not put back into the dept. it's put into the general fund. Why would you want to privatize something so profitable for the city. You can shop at Walgreen and support that millionaire. They are all rich and wish to see us bottom feeders stay where we are. I'm not rich, I work multiple jobs because I have to.... No boat, small house, etc...

Im not a chief and I'm not retiring.

SteveD, By your logic no matter how unneeded a police duty is at a project the taxpayer should shut up and pay for unneeded work. And, that is why there is conflict between the workers and the people that pay their salaries.

At what point did I imply that? The comment was made about detail pay and I simply responded be stating that the city does not pay that money. Good job putting words in my mouth. I'm sure there are plenty details that aren't needed and I'm sure there is some law somewhere that says its necessary. Also reality your comment about chiefs retiring, we also have guys dying one and two years after they retire. It goes both ways.

SteveD, I wonder who wrote and lobbied for the laws that make those patrols mandatory. By acknowledging that there is waste in the way we pay for unneeded police on some street projects you may have just alienated all of your brothers and sisters in the police union. Speaking truth to power can be very dangerous. Good luck. That's why some of us choose an alias.

What you fail to realize patient man is I pay taxes on my house, car, food, etc... Just as much as you. The fact that you believe we are all fat lazy money grubbing losers is why you are ignorant and need to use your alias. You will never state what line of work you do I'm sure. You had your option to do mine, but you chose not to.

The cops don't make $50-$100 per hour on details so stop that myth. Details paid by private companies for liability reasons and to create a presence to slow down crazy drivers and protect the construction crew. Also, details paid by city of warwick directly are paid at an hourly rate often LOWER than officers normal duty rate!

No SteveD I realize that. I for one don't think cops or firefighters are the things you said. Stop putting words in my mouth. I think we have laws that mandate a lot of wasteful spending. BTW, I'm in lifestyle management.

Bubba when I see a crew working with both ends of the street blocked off and closed and a cop on his phone at each end in a 25mph residential neighborhood, that's waste.

Just to give an example. What if a driver drives through a street that's blocked off going "25 mph" because no one usually drives faster. If they smoke the work crew , the first thing the media and some people are gonna say is "why wasn't there a police detail?"...

What if the driver hits and kills an officer because he's too busy looking at his phone? The first thing people are gonna say would be was wasn't he paying attention and doing his job. The second thing people would say was why was there even a cop there? Travel around the country and you will see road construction being done on interstates with no police protection. That's not right either. Liability doesn't seem to be an issue for companies there. What we have here is a fraudulent system. It's not feasible to have a police escort for every bicycle on the road, but it sure would make it safer to bike on the streets.

A compromise. Legislation that would allow for cameras to be posted so if there is a reckless driver they can be prosecuted. Officers could get more rest and be even more effective at their real jobs. Traffic duty is below them.

Stevie D,

If you read the budget you would realize that your comment that rescue services bring in millions of dollars is completely incorrect.

Go away Bob....

So your telling me the rescues DONT bring in money?

I see Rob didn't want to answer that in fact in the budget it clearly shows on the revenue side that the rescues DO bring in 2,200,000 a year. Nice research though Captain....

Bubba, as a relative of a police officer, I can assure you they certainly do.

Patient, I like your compromise, especially seeing as how we are all pretty much under constant surveillance. Another option is to have the construction work done at night when traffic is lighter, as other states do. An off duty cop on his phone for a traffic detail started late afternoon, to guarantee maximum overtime earned by both the detail officer, city, and utility company employees, is just not necessary! (Unless we eliminate daytime road construction all together and have work crews make repairs strictly at night)

Maybe the captain moved to Florida because I haven't heard from him....

no big deal now we all know what is going to happen.

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