As the ranks of municipalities faced with severe budget shortfalls grow weekly – it was Woonsocket last week – Warwick is headed for finishing the fiscal year in the black, according to a memorandum issued to City Council members by finance director Ernest Zmyslinski.
According to the analysis of the first eight months of the fiscal year, expenditures are at 52.62 percent of the total budget. This is down from a customary 67 percent for this point in the year, Zmyslinski reported.
Nonetheless, revenues are running 67.32 percent of the projected $273.9 million for the year. Of that total, the largest source is property taxes, accounting for $212.8 million. As of Feb. 29, $145.5 million in taxes had been collected.
“On the financial side, the eight month report was indeed good news,” Mayor Scott Avedisian wrote in an email yesterday.
Asked how he saw city finances going forward, Avedisian pointed out that the budget process has started as well as talks with the city’s three major unions – fire, police and municipal employees.
“As we begin the next round of negotiations with the unions, we seek to protect the good bond rating and balance the costs effectively. And since we are in fact in the process of putting together a budget for next year, it is a welcome sign that this year’s budget is doing well and that there is no draw down on the surplus this year,” he said.
The analysis gives an overview of expenditures by key departments, showing that the Police and Fire departments are slightly ahead of their budget for this time, as is the automotive division of the Department of Public Works because of an encumbrance for gasoline.
As for Fire Department expenditures, Zmyslinski notes that the City Council reduced the mayor’s recommended budget for overtime.
“Overtime is the major area of concern,” Zmyslinski writes.
As of Feb. 29 the city had spent about $2 million in overtime and that based on the current trend the final amount could be as much as $3 million.
“Reductions in other Fire Department line items will help reduce the impact of the additional overtime expenditures but it is clear that this department will end the fiscal year with a deficit,” reads the report. Zmyslinski suggests savings from other departments will be needed to offset the deficit.
Yet, overall, Zmyslinski casts a positive picture.
“Based upon the information at this time, both the city and school department are expected to end the fiscal year on a positive note,” he concludes.
Avedisian attributes the city’s financial position, in part, to his policy of the past several years of not floating any new bonds even though voters approved them. He said the city’s bonded indebtedness is $18.7 million and schools are at $33.7 million. This does not include either sewer or water bonds that are paid for by revenues generated by those enterprise funds.
“But you can see that the fiscal constraints that we put into place are paying dividends,” the mayor said.