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There is no need for the personal attacks here.

I agree with Roy regarding the unfunded liabilities. And I am going to demonstrate to you by presenting facts, why they need to be considered in terms of the effect these liabilities will have not only on future budgets and taxes, but on Warwick employees.

If you choose to ignore them so be it. It’s your future raises, benefits and retirement plans that will be affected. Many of us can chose to leave the city and the state for that matter. Who will pay the bills then?

First point: Simply stating financial numbers from one year to the next doesn't give a true picture of the financial condition of the city. In fact it allows politicians in the city (Mayor Avedisian) to manipulate you and paint a far different picture of what is really happening financially in the city. To get a clearly picture you must identify and examine the past to see the trends that have developed in the city. You do this by studying past budgets and actuarial reports.

Here are some facts to ponder.

Fact: Examining financial statements over the last 5 years it shows that city liabilities continue to increase while overall assets decrease.

Fact: From 2007 to the 2013, local tax dollars allocated to the city budget have increased 52.8 percent (from $63.9 million to $97.7). Warwick school budget has increased only $5.5 million or 4.9 percent overall.

Fact: In 2007 63.9 percent of the budget was allocated to schools and 36.1 to city budget. Today the ratio is 55 percent to schools, 45% to city.

Conclusion: Continued property tax increases in the City of Warwick can be directly attribute to city spending, not schools.

Fact: Since 2007 - $27.8 million in additional revenue has been allocated to the city budget. Here is the breakdown of where that money has been spent:

Employee Benefits $21.6 million or 77.7%.

Physical Resources(DPW), $2.6 million or 9.3%.

Public Safety $6.4 million or 23%.

Executive & Administrative -1.7 million or -6.1%.

Social Service -1.1 million or -3.9%.

Conclusion: Almost 80 cents of every new tax dollar collected pays for employee legacy costs.

Fact: Actuarial Accrued Liability for all pension plans is $628,776,187. For OPEB(Healthcare) it is $283,220,644 for a combined total of $911,996,831. Factoring outstanding bonds puts the figure over $1 BILLION.

Fact: According to projections in the most available published actuarial reports, taxpayer contributions to just the pension plans will increase from approximately $23 million in 2012 to $46 million in 2013. Retiree healthcare costs are predicted to increase over 75% over that same time period.

Conclusion: In order to fund these liabilities more and more areas of the budget will either be level funded or cut. Property taxes will continue to rise with a majority of the money allocated to pay for these liabilities. This is already occurring and is an undisputed fact.

What does that mean to the city and school employees? Consider this. In the past year the school budget was level funded yet property taxes increased. Police, fire and municipal employees did not receive a raise and pay more for healthcare. So what areas of the budget was the new tax dollars spent? That question was answered above.

For the next two years city employees will not receive a raise. Does anyone believe we will not receive a tax increase this year? Why, to pay annual required contributions associated with pension and healthcare liabilities.

What is the philosophy of the administration to reduce pension liabilities? Is it to suspend COLA for retired employees? That answer is NO! So is it fair that active employees receive no raises for the next three years, pay more for healthcare co-pays while retired employees in some plans receive 3% compounded COLA’s and free healthcare?

Read this excerpt from a report submitted by the city actuarial experts to the City Finance Director on November 8, 2012:

“One factor that is expected to help dampen the growth of the liability is a recent agreement for minimal to no salary increases for current active members for the next three years. If the three-year pay freezes are realized in future valuations, the City contributions (taxpayers) into all of its pension plans could be lower by as much as $5 million per year when compared to current projections”.

Translation: if the mayor can continue to give no raises to active employee, we can take the additional tax dollars collected to pay retired employee liabilities.

If this doesn’t cause you to be concerned and outraged, then nothing will.

So instead of ridiculing people like Roy Dempsey and Fedup, stop, look at the facts because the bottom line is that the current people in office will be long gone when these ticking time bombs go off.

My offer stands to meet anyone interested in reviewing this information. I will buy the first round.

From: Mayor touts city's financial position

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