October 20, 2014
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$1,000 bonuses back in budget
Mayor scores budget amendments in veto message

Mayor Scott Avedisian put his political capital on the line and it paid off.

As of press time last night, it appeared the City Council did not have the six votes needed to override Avedisian’s veto of its budget. The overall spending package of both the mayor’s and the council’s budget at $288.8 million were virtually the same, each calling for a 23 cent increase in the residential tax rate.

But last week the council eliminated elements of Avedisian’s plan, including a $1,000 bonus for every full-time city employee and a level-funded school appropriation. The $800,000 the bonuses cost was reduced from what the council would have appropriated from city reserves, while additions the council made for schools and road repaving came from departmental cuts including $607,929 from health insurance coverage. The council was unable to override the vetoes of both of those amendments by a 5-4 vote, meaning the bonuses will go through and cuts won’t be made in healthcare premiums. Voting to sustain the veto were Council President Donna Travis, Camille Vella-Wilkinson, Charles Donovan, Joseph Gallucci and Steven Colantuono. Voting to override were Joseph Solomon, Steve Merolla, Ed Ladouceur and Thomas Chadronet.

On Friday, the mayor released a six-page veto letter to the City Council, giving an overview as well as line-by-line rational of his action.

He opened his remarks saying he takes pride in his public service and in balancing budgets in difficult economic times.

“As such I do not take governing lightly. It is serious business and we owe it to those we represent to take it seriously,” Avedisian writes.

In remarks last night Solomon called the mayor’s veto “a travesty to the taxpayers.”

In his letter to the council, the mayor said the budget approved by the council would leave the city with a deficit. The options, Avedisian said, would be to direct department directors to develop contingency plans or to use reserves at the end of the year to cover the deficit. He said neither of the options are “representative of responsible government.”

As for the council’s efforts to boost funds for repaving, Avedisian disclosed that he intends to submit a resolution calling for a $5 million capital improvement bond that he feels would “result in a long-term, sustainable solution rather than a knee-jerk reaction resulting in irresponsible budgeting.”

He said the addition of $597,929 to the $450,000 he budgeted for repaving is “not sound fiscal policy and is subject to undue political influence on spending.”

He said general obligation bonds would enable taxpayers to vote on plan to undertake a road network improvement plan in an effort that is “transparent, objective and equitable.”

Ladouceur disagreed last night. He favored budget allocations rather than bonding for road repairs. And Merolla maintained if the road work was to be bonded actual repaving wouldn’t start until 2017.

“Roads, schools and education are not priorities in the mayor’s budget,” he said.

The mayor defended level funding schools at $119 million as he has done for the past several years. In its budget, the council increased city funding of schools by $400,000.

Avedisian pointed to the continual decline in school enrollment since the 1980’s and how consolidation of schools was accomplished on the elementary level. He went on to outline how the department has looked at consolidation at the junior and senior high levels and that he has pledged to allow the department to keep any savings it generates though consolidation. Further, he pointed out that under state law defining the city’s maintenance of effort, the city could lower its contribution based on dropping enrollment and that based on enrollment as of October 2013, the city could have reduced its contribution to schools by $3 million.

“In my opinion the School Department does not have a revenue problem, it has a spending problem. Until and unless the School Department addresses these and other systemic deficiencies presently faced, $119,082,424 is enough at this time,” he writes.

As of press time, the council was still voting on each amendment and had not come to the school appropriation.

In his line-item-by-line-item response to actions taken by the council, Avedisian underscores his logic for a $1,000 one-time payment to full-time city workers. He said the city’s three collective bargaining units and non-union full-time personnel agreed to three years of zero pay increases. This has enabled the city to post surpluses to the reserve fund that is now at $11.8 million. In addition, since police and fire retiree pension increases are linked to the wage of current employees, Avedisian said the city’s pension fund advisor has calculated the pension fund liability has been reduced by more than $32 million.

In eliminating the bonuses from its budget, the council applied the savings to the $3.6 million the mayor recommended be taken from the reserve account. He justified the action on the basis that it would have been a one-time expense and the city is projecting a $1.2 million surplus in the current year.

As for the logic of the $1,000 per full time employee, Avedisian said, “It is only fair and equitable that the gains enjoyed by the taxpayers due to the prudent and selfless actions of the city employees be shared so all benefit justly.”

Avedisian offers reasons why he disapproves of each of the council’s budget amendments that include: $100,000 cut in insurance premiums; $40,000 cut in building maintenance; $40,00 reduction in the contingency account for the finance department; $75,000 cut from the salary account for the Planning Department; the elimination of $15,000 in professional services for the Finance Department; the elimination of $100,000 from the Legal Department at a point contract negotiations are to start and outside consultants are needed in hearings before the Tax Assessment Board of Review and the elimination of $20,000 in salaries from management information services that is to be used for a change in salary scale based on a department re-organization.

(With reports from Kelcy Dolan)


Comments
17 comments on this item

The mayor wouldn't know responsible government if it smacked him in the head. $1,000 bonuses are a slap in the face to taxpayers. I am in no way against the city unions, nor do I spend much time bashing them. However it would be foolish not to cite that part of the reason this city was in the hole to begin with was because of the lavish contracts city employees were given . The state has trimmed its workforce, reduced pension benefits, increased health care contributions in a massive way. This city has had zero meaningful reforms. The city's "pension reform" as the mayor calls it only effected new hires. Which means the actual reforms won't be seen for years and years.

On the school side yes the school department has a spending problem. The spending however is on the administration side, and the mayor doesn't have the stones to come out and say that. No one has a vision for education in this city. The vision of closing schools is incredibly short sighted. Sure the folks in favor of consolidation will say that is the reason we do not have all day K or a middle school model in this city. The truth is we have made no effort to implement either to this point, and to say that not consolidating secondary schools is the reason is far from the truth.

As far as his stance on road repairs the mayor ought to be embarrassed. If you took a poll of Warwick voters I'd imagine that a strong majority of them feel roads ought to be a priority. Roads are an essential part of responsible government. The people pay taxes and at the very least, deserve to drive to work everyday without having to worry about hitting a pot hole that costs them $200 or more to fix. For the mayor to say we should let the voters approve bonds...find me a voter who wouldn't be in favor of road repairs? Instead we're going to punt road repairs 3 or 4 years into the future.

The city council members who voted to sustain this veto ought to be out front and very public on why they made this decision. They owe a big explanation to the taxpayers of this city. The mayor should be ashamed of himself too. The political rhetoric he uses about "responsible government" obviously never entered his mind when he was taking $3.5 million out of the general fund. Taxes go up, the general fund gets depleted, the unfunded pension liability remains massive and unsustainable, but hey...at least city employees get their $1,000 bonus.

He can keep his $600 bonus. I don't want his charity....

He is being more than reasonable regarding the schools. The School Committee is in a bind with an interim superintendent who does not know how to lead and, with Healey, keeps facts unclear. What a sham they have made of any creative movement that could be accomplished. And the sadest reality is that students are caught in the middle of their mediocrity.

I agree with the Mayor regarding the School Department and I don't think 1000 bonus for City employees is unreasonable. City employees have not received an increase in 3 years and a one time bonus is makes sense financially, rather than a percentage increase. Everyone will be receiving the same amount from the least paid to the highest paid. It isn't going to pan out as very much money to the employees after they are hit with "bonus" tax. SteveD. is probably accurate in saying it will end up being 600.00. The rest of it sounds responsible, but I don't know enough about it to say it is responsible....And I assume that the City Council doesn't either. Throwing 400k to the school department with no accountability is financially irresponsible and I think it is a political move on Council's part, to shut up voters who support the school department. "here now, shut up and go away!"

Maggie city employees have NOT received a raise in 3 years, that is correct. However, how many times over the 2 decades plus when things were not going well did they receive a raise? I don't blame them, they are simply negotiating for themselves and their families behalf. I do blame the mayor, because he should have (and probably) did know better. Ironically he is the one who suddenly has affection for what "responsible government" looks like. He's the same guy who mocked the councils $600,000 added money in road repairs, when he only allotted $400,000 to begin with. If he's so confident in his idea for roadwork bonds than why did he allocate $400,000 in the first place? He did it because he knows the roadwork bonds will take years, and rather than get criticized for having nothing in the budget to fund road repairs, he put a small amount of money in just so he could say he did it. The mayors budget takes no courage at all. It's always somebody else's fault, other than his own. When tax notices were mailed to people they shouldn't have been mailed to it was the new computer system, with the schools being level funded for years it's their fault or declining enrollments fault, with the car tax it was the states evaluations not his. Even though he's done nothing to solve the car tax problem. The mayor talks about the great shape this city is in, and the whole thing is a mirage. Unfortunately Maggie, it sounds like you have fallen for it.

Regarding the $1,000 bonus plan...'When is a deal not a deal?" When you can't afford it...The fact that Warwick appears to be following Cranston's financial path from 15 years ago is surreal. Throw in the goings on up at the State house, more business as usual, and an electorate that votes on name recognition and the distribution of walking around money, legislative grants, rather than a failed voting record, and I don't to see how the ship of State is going to be righted...We same to have a firm grasp on being rated #1 in a multitude of dubious categories. Personal responsibility has fled the State, and the up and coming generation is fleeing as well to find opportunity and work. Fix that, and RI may have a chance as most everything else is a bunch of spending rubbish.

I did mean NOT receive a raise in 3 years....I do my best editing after I hit send (LOL). I still stand by statement that I don't think it is unreasonable. That is just my opinion. As far as road work goes, all I know about road work is it needs to be done, not how it should be done. As far as the rest of the budget disputes, sadly I admit that I don't know enough about it to comment on it or have an opinion.

I hope the citizens are fully aware of the status of the fire engines and ladder trucks the city is using. Four of the front line engines are broken and not in service. Apponaug near city hall is currently using an engine from west warwick because all the reserve trucks are broken. I just pray a member of the public or city employee isn't killed because of faulty or severly damaged equipment. Engine 4 in Bayside often won't start and is over 20 years old. The city has no desire or does it have a plan in place to replace this extremely aged fleet. I am well aware of the money issue the city is facing but if a plan is not developed to replace one every year or so the taxpayers are gonna be on the hook to replace 5 at one time...

SteveD that is eye opening information so is the fact that the Fire Chief made $122691.00 last year $6000.00 less than the Gov. and the same amount more the AG of the state. The fire department is just as mismanaged as any Dept. in the city and form what you write they are knowingly risking the life’s of the citizens of Warwick and more importantly the life’s of fire fighters.....

I guess what I have been saying for years and have been mocked for, is finally impacting the resident of Warwick.

This is why we have no tax dollars to repair roads or buy new fire equipment.

City Retired Employee Expense in 2004, $18,563,658. In 2014 $33,468,060. Increase of 80.2 percent

City Active Employee Expense in 2004 $54,267,721. In 2014 $67,583,478. Increase of 24.5 percent

City All other Expenses in 2004 $22,909,641 In 2014 $23,741,107. Increase of 3.6 percent.

Read that last line again. In 10 years spending for every other line item in the city budget combined increased less than a million dollars, while employee retired benefits increased by $15 million.

Keep in mind school budget has been practically level funded since 2008 so you can't blame them for taking more new tax dollars.

Conclusion: New tax dollars will continue to be poured into retireed employee costs at the expense of everything else in the city unless real reforms that cut retirement costs immediately occur.

Under Mayor Avedisian's leadership that will never happen and the city will continue to rack up more debt while roads, school building and public safety equipment fall apart.

Maggie123 if you want to learn more about what is causing the problems in Warwick, paste this link in your browser and watch the video.

http://youtu.be/fo09rhcIkjQ

Bob if the school enrollment has been reduced year after year they shouldn't need more funding. If I owned a company and there were less and less people being serviced by my company why would I need more money? Less students = More $$$ ? I don't get it.

Not argueing your point. Schools are not receiving increaes in new tax dollars, city is even through Warwick's population dropped over 5 percent in the last decade. One of the largest drops of any city. Wouldn't you agree then references your point about schools that less population should mean less city spending and not new record spending each year?

Technically speaking yes Bob it should be less with less population. But when you have less students you can consolidate classes close schools, etc... You can't shut down roads, you still need to pave and plow the same amount even with less population. You can stop the police and fire responses maybe if the population was a 50% decrease yes less police and fireman. Schools are different. The cities drop was large because we are a large city. Comparative speaking it's quite small compared to other states and towns. I only mention the fire truck issue because that issue is quickly getting out of hand with no plan in place.

Population may have declined but Fire/EMS runs increase every year. Approx. 16,000 calls for service last year no? This city wouldn't have received a new truck since 2007 if it wasn't for the hard work of rank and file firefighter who've gotten us millions in grant money for: a million dollar ladder, engine 3, several rescues, breathing apparatus, radios, RIT training, Thermal Imaging Cameras, Firefighter escape ropes oh and 17 COMPLETELY FREE FIREFIGHTERS FOR 3 YEARS!!!!! All while taking no raises for 3 years, giving up holiday pay and agreeing to substantial increases in healthcare costs. This cities firefighters have done their part and continue to do so day in and day out. Even with those trucks paid for by the Feds, this FD fleet is in woeful condition. Something has to give.

The City is going to raise taxes on the homeowner and will give $1,000.00 bonuses to every City employee. In times past, that would be called STEALING and would be condemned and the Mayor should be tarred and feathered. Why just a thousand, make it ten thousand next year.

But if you continue to have very poor school leadership - D'Agostino and Healy - how can you expect to see growth or constructive movement. There should be a realistic plan developed with appropriate input (needs assessment) and not a group that was never given realistic guidelines and leadership. The word leadership is key to getting the school district back to where it once was. And the other word is communication. How do parents and staff feel about the superintendent's responses (or lack of responses) to them, and how do the Mayor and Superintendent communicate with each other? These are key to good leadership - there's that word again.

@TheDeal - your statement regarding needing Federal funds to purchase much needed equipment and hiring employyes verifies my contention that legacy cost in the city are unsustainable and all citizens, school children, public safety workers, municipal employees, school teachers and people who travel throighout Warwick on pot hole filled roads are finally feeling the imapct of deverting millions of dollars in new tax dollars from services that need to be provide today by existing employees, to services that were provided decades ago by former employees.

Let me repeat those figures from the last 10 years.

City Retired Employee Expense in 2004, $18,563,658. In 2014 $33,468,060. Increase of 80.2 percent

City All other Expenses in 2004 $22,909,641 In 2014 $23,741,107. Increase of 3.6 percent.

Unless chaanges are enacted soon the situation is going to get worse. Tapping the surplus for $3.6 million to balance the 2015 budget when all bargaining units are not getting raises and the school practically level funded is another sign of big problems to come.

What is going to happen were new contracts are signed giving much derserved raises to all employees including teachers? How will we pay for the cost of hiring new firefighters reimbusement with federal dollars, once those funds run dry? Pension and healthcare costs continue to explode, where's those funds going to come from?

Now the mayor wants to borrow money for 15 to 20 years to repair roads that won't even last that long!

If the city leaders as well as the union leadership finally realize that Warwick needs to reduce the impact of the cost of legact benefits, the millions of dollars in saving can be re-invested back into each city department to purchase needed equipment and compensate active employees with annual cost of living increases in pay.

Or we can continue down the current path that will one day result in massive tax increases, a continued loss in population, business flocking away from Warwick and catastrophic cuts in benefit to both active and retired employees.

Sign of Warwick death spiral have finally begun. It could take another 5 to 10 years for the impact to escalate out of control.

The question is, does anyone want to stop it.

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