By ETHAN HARTLEY About 100 people joined together at the Warwick Public Library on Thursday to discuss Mayor Joseph Solomon's budget proposal for the upcoming fiscal year 2020, which begins on July 1. The city kicks off budget hearings today at 4 p.m.
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About 100 people joined together at the Warwick Public Library on Thursday to discuss Mayor Joseph Solomon’s budget proposal for the upcoming fiscal year 2020, which begins on July 1. The city kicks off budget hearings today at 4 p.m. and will continue them at the same time on Wednesday.
The meeting, sponsored by the Warwick Financial Crisis Committee, featured presentations from Warwick citizen watchdog Rob Cote and former school committee and city council member Bob Cushman, who dove into line items they found questionable and opined about the long-term health of the city, while also encouraging everyone possible to show up to the budget hearings.
“Our goal is to entice you to please show up,” Cote told the crowd. “If everybody in this room shows up on Tuesday night at the budget hearing, you're going to make a big difference and your voices will be heard.”
Starting off, Cote was critical that the city had missed deadlines regarding fiscal audits that are supposed to commence 90 days following the closing of a fiscal year and a complete audit that is due six months after the start of a new fiscal year. Neither of those reports are complete, meaning the city cannot forecast numbers with the traditional and expected level of certainty as in years prior.
As an example, Cote pointed to how the budget proposal includes year end projections, that are labeled as being unaudited, that are many millions off of what was budgeted, including $46 million in unaccounted spending from the school department and about $37 million unaccounted in money received from state aid. All told, Cote said there is $83 million in unreconciled money in the budget proposal.
“When we look at these numbers, I think everybody in the room would agree we don't know where we are, correct?” he said. “So, how do we know where we're going? We don't.”
City Council president Steve Merolla, in an interview last week, said that not having an audit was certainly not a good thing, but that the council has no choice but to move forward with the budget process as mandated by city law.
“No, it's not an ideal situation to be in,” he said. “As far as the council is concerned, we have an obligation pursuant to the charter to move forward. I would certainly like audited numbers, I want the numbers to be accurate, I don't want to be thrown numbers that are inaccurate.”
Merolla said that there was “room for error built into every budget,” so that the city can adjust for the unanticipated.
However, it is this same point made by Merolla that Cushman and Cote took issue with Thursday night.
For example, they pointed to the city’s budget for road paving, which included a $5 million allotment in the current year budget. At the time the line item was discussed last spring, Cote vowed that the city would have to receive perfect weather from May to December (when the asphalt plants are open) and spend $210,000 every week to use up that money, which he called “impossible.” Regardless, the city included the full $5 million in the budget, and praised it as a long overdue investment.
“They only spent $2 million,” Cote said, referencing the city’s projected expense of that line item for the end of this fiscal year. Cote wondered aloud where the other $3 million in that line item went within the budget, and further criticized Solomon’s decision to try and allocate another $4.5 million this year for road paving.
“We know it's physically impossible and we're not going to spend it,” he said. “To me, that's a slush fund.”
“In my opinion, that should be cut,” Cushman said of the road paving budget, indicating that the city should level-fund the $2 million that they were able to spend this year. He said that the public needs to demand transparency on where extra money, like the $3 million leftover from road paving, goes when it is unused. So-called “transfer resolutions” are supposed to be utilized to show how money moves within the budget prior to the fiscal year ending, but so far none have been released publicly this year.
“We want to see the transfer resolutions because we want to see where you're pulling the money from to fill these holes,” he said. “In my opinion, if you're consistently doing that, it never should have been budgeted that amount.”
On road paving, Merolla said that the council invested 20 times the $100,000 that former mayor Scott Avedisian had budgeted in his so-called “maintenance budget” that was left with Solomon when he departed the city’s highest office last May.
“It's funny, because you're damned if you do and you're damned if you don't,” Merolla said on spending money for road paving. “I wish personally we could have done more paving, but we did 20 times more than we did in the past.”
Cushman turned his attention to how the city has treated the school department over the past 15 years, pointing to charts he constructed that show how, of the roughly $77.4 million in new property tax revenue the city has collected between 2004 and this upcoming budget year, the city side has received $51 million (66 percent), while the schools have received the remaining $26.3 million (34 percent).
More shocking is Cushman’s chart that demonstrates how, of $36,868,613 new property tax revenue since 2010, the city has taken 99.96 percent of that, while only $13,996 (0.04 percent) has gone to the school department.
He stated that, although Solomon proposed allocated an additional $508,000 to the school department in his budget, that money is actually coming from an increase in state aid and does not represent an authentic increase in funding.
Cushman said that, “Over the last 10 years, the city council has been level funding the school department,” and that the schools have consolidated school buildings and cut down on staffing – he showed how they have cut about 237 positions from 2011 to this proposed budget year – to stay afloat.
Despite this effort, the per pupil cost in Warwick has skyrocketed from around $11,000 per student in 2004 to just under $20,000 in the proposed FY20 budget. This, he says, can be directly attributed to the high salaries for teachers. This opinion is backed up by a fiscal audit performed by the schools, which showed that Warwick teachers are compensated at a higher rate than most other Rhode Island districts, and that if they were paid according to contractual terms set forth in neighboring Cranston, the city would save between $7.5 and $9.5 million in salary costs.
“When you look at this, this is unsustainable,” he said of the rising per pupil cost. He said that the failing of the city side has been that, rather than sit down and work out a long-term plan with school officials to reduce the high cost burden, they choose to point fingers and use them as a scapegoat for the city’s financial ailments.
“The problem I have with the way that the city treats the schools is that nobody communicates with anybody. The city uses the schools as a punching bag,” Cushman said. “There's no strategic thinking in this budget.”
Cote brought up various issues with the fire department budget, including how the city budgeted $1.2 million for overtime this year, but the projected cost of that line is coming in at $3.5 million, almost triple what was budgeted. Solomon has proposed infusing that line with $4 million this upcoming budget, indicative of his strategy to not hire firefighters until their contractual issues, including the tiered pension system, are worked out or are decided through arbitration.
Cote also railed against a budget proposal to fund medical evaluations for the fire department, which is a line item that was deemed as unnecessary by the council’s legal representation in the past, and has a spotted history in terms of actually being utilized. The city council rejected a request to fund the line item earlier this year, and yet the budget request includes $70,000 for this line item.
Cushman was critical of $1 million being allocated for contractual obligations, which is a contingency placeholder in case the city comes to an agreement with the firefighters for a new contract and they need to pay out salary increases.
Cushman said that, when he was on the school committee, the city council refused multiple times to fund similar attempts by the school department, saying they would not fund “theoretical raises.”
“What is this?” Cushman asked of the contingency line item. “These are theoretical raises. Let's ask the mayor to be consistent, and this should be cut.”
Between his suggestions to cut $2.5 million from the proposed $4.5 million in road paving and the $1 million contingency for hypothetical raises to the fire department, Cushman made the case that the $3.5 million drawdown from the city’s cash reserves would be wholly unnecessary.
“Is it a great idea to be pulling out $3.5 million more [from reserves] when the administration doesn't even know what the surplus number is?” he asked, referencing how the city won’t know the exact amount it has in free cash until the audit is completed.
Ward 2 Councilman Jeremy Rix was the lone member of the city council to attend the meeting, and answered questions at the conclusion. He said that there is no one “silver bullet” to solve all of the city’s problems, to which a few members in the audience shouted that bankruptcy might be that option.
“Bankruptcy is not fun,” Rix said. “It takes away ability to make any decisions.”
He was asked what the city would do about retiree costs such as pensions and healthcare, which is what over 51 percent of the new spending proposed in the FY20 budget would go towards, according to one of Cushman’s analyses.
“There are going to have to be some changes because it is unsustainable,” Rix said.
Merolla has shared that opinion often in the past as well. Prior to voting against approving contracts for the police department and municipal workers last summer, Merolla spoke at length about how benefits were unsustainable. Last week, he did not get into specifics on how those long-term costs could be addressed by amending the budget that will be before him and the council this week.
“I think it's best left to the floor to see what the responses are,” he said.
Cushman urged all members of the public who showed up to the meeting to follow through and make their presence known at the budget hearings.
“If we can get together as a taxpayer group and start demanding that politicians make these changes, it might be worth staying in this city for another 10 years,” he said.
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enoughalready
“Bankruptcy is not fun,” Rix said. “It takes away ability to make any decisions.”
No kidding!
That is exactly why bankruptcy is the only solution to this mess. It takes away the ability to make any decisions from the very people who created the mess.
Tuesday, May 28, 2019 Report this
wwkvoter
WHY was the audit not done yet? WHO is doing the audit? HOW far along is the audit? WHAT the hell is going on here?
Tuesday, May 28, 2019 Report this
Former User
I've heard Bob Cushman on Dan Yorke's program, and read many of Rob Cote's comments on this website, and it appears that they thought everything would change after Avedisian left -- meaning the same city councilors who allowed the current financial situation to happen would suddenly agree with them.
Clearly, going by Solomon's proposed budget and the council's reaction to it so far, that's not the case.
Except for blaming Avedisian, the current mayor and city council have done nothing to actually address the problems them had a hand in creating -- and very likely created another mess with the poorly-conceived idea of using pension contributions to balance the current school budget: https://warwickpost.com/school-pension-withdrawal-jeopardizes-funds-tax-exempt-status/
We're one month from the end of FY19 and the school budget is still $4 million in the hole. The mayor and council have not done anything approaching a responsible plan (which Messrs. Cote and Cushman have been advocating) to address that issue.
As the article explains, the city council went to mediation and accepted the opinion of Vincent Ragosta that the pension contributions could legally be withdrawn -- apparently without having a city attorney review the proposal before they signed it.
Again, Solomon, Merolla, and the rest failed to do their own due diligence about a critical financial matter in the city -- and again, they're trying to blame other people instead of accepting the blame for seeking a politically easy solution over doing their homework.
While I respect Cote and Cushman for their efforts, it looks like their faith in the current administration and city council is completely misplaced.
Wednesday, May 29, 2019 Report this
Tim
I get a lick out of all this , Mayor Avedesion has been gone for almost two years, When does the current administration start taking responsibility he has been on the council for over 18 year so hasn't Merrolla. You rin from your record.
Warwick is a weak Mayor form of govt
Wednesday, May 29, 2019 Report this
JamesBruder
The warwick taxpayer group had ZERO people there tonight. So much for being tough
Wednesday, May 29, 2019 Report this
wwkvoter
So, the schools are short 4 million for THIS year which ends June 30th, and short 8 Million for next year which starts July 1st, and the city side cant pay its retirees their promised health insurance for life and retirement even as pay-as-you-go. Pay as you go will and has baloon the costs so now that has run its course.
Looks like state intervention on the RI Fiscal Stability Act law is our ONLY workable path forward.
Thursday, May 30, 2019 Report this
Former User
crazycouncil, as far as I know, the state intervenes only after certain things have happened, like a bond rating being lowered; the possibility of missing a bond payment; and a need to exceed the state cap on tax increases, among other situations.
A couple of years of big tax increases actually counts against the city, since it proves that Warwick can simply raise taxes to cover its bills. All they need is a bill to pass the General Assembly to exceed the state cap.
What Solomon and the council are trying to do is give themselves political cover for past decisions they made that have resulted in the current financial situation.
At least from what I'm seeing on this website, most people aren't falling for it.
Thursday, May 30, 2019 Report this
wwkvoter
Hal I believe one of the criteria for state intervention is missing audit deadlines. No time now to go look but that seems to ring a bell. We have badly missed audit deadlines now... (for some reason)
Thursday, May 30, 2019 Report this
Former User
wwkvoter, I did not know that.
But you're right, the 2018 audit that was due Dec. 31 has still not been released, as far as I know.
So far Solomon and the council's entire M.O. seems to be wrecking the city financially and blaming it on Avedisian.
I really hope I'm wrong about this, but it looks like they're delaying the audit as another way to get the state involved and argue that Avedisian is at fault.
(Never mind that they passed a budget two years ago without a tax increase, despite Avedisian's warnings. And never mind that they used the surplus two straight years to cover the deficit budgets they passed. And never mind that they failed to read contracts that were presented to them. And never mind that they level-funded the school budget for decades while city costs exploded. And never mind that they never properly addressed the city's pension liabilities while agreeing to an illegal plan to raid a school pension to balance the school budget.)
Thursday, May 30, 2019 Report this
Daydreambeliever
West Warwick and Hal your both spot on. They are up to something and it's going to cost us all dearly. If it's a vendetta to nail Avedesian to what lengths will they take us?I
So!omon, Medulla and Ladocuer have been running the show for to long. Next election they have to go along with others.
Thursday, May 30, 2019 Report this
wwkvoter
I disagree that Avedisian is blameless. Was he shouting from the bully pulpit? No. Was he open and forthcoming with concerned citizens? Quite the opposite. Did he vociferously oppose and unsustainable path? Nope. I could go on. Listen to him on Valicenti last week, and be intellectually honest about what his deal is. Politician. Mayor for a very long time. We're now essentially bankrupt and raiding pension funds to get by for barely one more year. Show me where he not only didnt support that path, but meaningfully tried to stop it.
Sunday, June 2, 2019 Report this