Mayor Joseph Solomon says his desk is cleaner than it has been for weeks, although that was hard to tell from papers stacked on it Tuesday.
Now that the $322.9 million budget is in the hands of the City Council, Solomon can get to filing all the paperwork that went into his plan calling for a 3.46 percent increase in the tax levy and a $3.5 million draw down of reserves.
In the big picture, Solomon’s budget provides funding to carry on the road repaving program he championed as the City Council president; virtually level-funds schools and provides for contracted increases in benefits of municipal employees other than firefighters, which have been without a contract since last July 1.
What’s difficult to calculate is the impact the Solomon budget, or for that matter the budget approved by the City Council, will have on individual property taxes as a result of the recently completed citywide revaluation. Generally, across the board, property valuations increased by 15 percent. But the revaluation does not evenly distribute the growth in values, as homes previously valued in the range of $180,000 to $220,000 led the hot seller’s market of the past two years. Many of these properties saw 30 percent and higher increases while homes valued at $400,000 and higher, that weren’t in demand, saw minimal increases, if any.
How this all shakes out remains to be seen, although the revaluation spawned the Warwick Financial Crisis Committee that now is following the budget and is expected to have a major presence when the City Council opens budget hearings at City Council Chambers on Tuesday at 4 p.m.
The proposed tax rates all show declines, as values overall have increased. The proposed residential rate is $18.73 per $1,000 of valuation; $28.10 for commercial and $37.46 for personal property. The automotive tax is frozen at $34.60 by state law.
In his budget message, Solomon acknowledges the revaluation won’t evenly impact homeowners. He also expresses his frustration in being handed situations from the prior administration for which he had no control and the departure of key finance personnel soon after winning the election last November.
In an interview on Tuesday, he emphasized that, contrary to those forecasting financial Armageddon, he has put together a budget that doesn’t call for the maximum 4 percent tax levy and maintains the current level of services.
Yet there are gaps and uncertainties. The 2018 Fiscal Year audit that by state law was due Dec. 31, 2018 has not been completed (the city has been given an extension to June 30). Solomon cannot say for certain the status of city reserves, although the budget for the current and next year depends on them.
Further clouding the financial picture is the unsettled firefighter contract that has been the subject of interest arbitration. Solomon had hoped to reach an agreement that would have resolved the current as well as next year’s contract. While the union leadership went along with no pay increase for the two years, the rank and file didn’t.
In his message, Solomon expresses his disappointment saying firefighters “chose not to join with their police and municipal employee brethren who understand and have shared my belief that sacrifices needed to be made.”
In Tuesday’s interview, Solomon explained additional funding for the Fire Department is based on the premise that overtime costs will increase since he has put a freeze on filling department vacancies.
The tentative agreement Solomon had with the union leadership would have resolved the Tier II pension system that applied to police and municipal employees hired after 2015. Firefighters challenged their inclusion in the plan for reduced benefits although their inclusion was intended and believed legitimate. An arbitration ruling favored the firefighters.
Solomon did not say whether he intends to appeal the ruling, but he added until Tier II is resolved he wouldn’t be hiring additional firefighters.
According to firefighter union president Michael Carriero, the department ranks stand at 188, or close to 30 down from the planned manning of 212.
“Obviously, staffing is a big concern. Hopefully, it doesn't have that much of an impact, but I know it will,” he said.
Although staffing reductions will result in higher overtime costs, Carriero notes it does save money over hiring recruits.
“It'll put a burden on the members and definitely impact them and, hopefully, we'll get a resolution soon and be able to make some new hires soon and lessen the burden on the city with the overtime,” he said.
Meanwhile, as the offer was rejected by the membership, interest arbitration talks are projected to resume next month, said Vincent Ragosta, who is representing the city. He expects sessions to continue through the summer and that they could be wrapped up by this fall.
The ruling will apply only to the July 1, 2018 to June 30, 2019 year. It will retroactively apply to the current fiscal year and could further impact city reserves.
As Ragosta observed, ongoing arbitration does not preclude the sides from resuming talks and either narrowing the unresolved issues or arriving at a contract.
“I think the mayor has good concepts in mind,” said Ragosta.
He added, however, that Solomon is faced with defending proposals made by the prior administration.
(With reports from Ethan Hartley)