Budget would hike tax rate 69¢

Mayor would allocate $1M to road repairs, establish trust to pay for retiree benefits other than pensions

John Howell
Posted 5/14/15

Mayor Scott Avedisian’s $294 million budget, which was released yesterday, will bring smiles to some, scowls to others and promises to be a source of comments for the next couple …

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Budget would hike tax rate 69¢

Mayor would allocate $1M to road repairs, establish trust to pay for retiree benefits other than pensions

Posted

Mayor Scott Avedisian’s $294 million budget, which was released yesterday, will bring smiles to some, scowls to others and promises to be a source of comments for the next couple of weeks, if not longer.

• The budget level funds schools at $159.5 million, although the School Committee requested an additional $6.9 million.

• The budget includes $1 million for road repaving, an increase of $500,000 from the current year, but surely not enough in the opinions of some.

• The budget includes $1.4 million to give the city’s three major unions raises that they haven’t seen for the last four years, although, as of this time contracts haven’t been finalized.

• The budget allocates $400,000 to complete construction of the Potowomut fire station that exceeded the $2 million voters approved for the project.

• For the first time, the budget includes $200,000 to initiate a trust to help pay for the other post employment benefits (OPEB) of retirees than pensions.

• And probably of the greatest universal interest, the mayor’s budget calls for a 69-cent increase in the residential property tax. This would mean an increase of $112.06 for a home valued at $162,400, the median value of a Warwick single-family home. The residential rate would be $20.75 commercial/industrial, $31.13 and tangible personal property, $41.50. The motor vehicle tax is unchanged at $34.60.

In a seven-page budget message Avedisian paints a positive picture of the city’s position, citing new and planned development, the Apponaug bypass project, improvements at Green Airport, efforts to keep Warwick neighborhoods vibrant and energized and the city’s hardworking and dedicated employees. Even before getting into the budget numbers, Avedisian focused on the montage that is featured on the document cover. It spotlights the Warwick Library, Community College of Rhode Island, Gaspee Days, J. Arthur Trudeau Memorial Center and RIPTA that are all celebrating 50th anniversaries this year.

“It highlights what makes Warwick special,” Avedisian said of those organizations that play roles in the community.

“This was a hard budget,” acknowledged William DePasquale, interim chief of staff.

What makes it difficult is that tax revenues remain constant, a reflection of minor increases in the tax rolls resulting from the downturn in new construction and abatements resulting from challenges to property values. Those abatements, which are largely for commercial properties, totaled about $3 million. Some were promises for tax refunds made in prior years based on agreements and court settlements reached over property valuations. One of the largest, representing about $1 million in tax revenue reductions, is for the former Leviton property on Jefferson Boulevard that is now being developed by Michael Integlia.

“This fiscal year a lot of that comes to an end,” said City Finance Director Ernest Zmyslinski.

With such a reduction in tax revenues, Avedisian is moving to lessen the sting to taxpayers by tapping $3 million from the city’s undesignated reserves or surplus. While this is projected to reduce city reserves from $10.8 million as of the close of fiscal year 2014 to $7.2 million, both Zmyslinski and Avedisian note that the city has constantly run surpluses, thereby reducing the drawdown on reserves.

The mayor also touched on his proposal to level fund schools. He pointed out that the School Committee failed to follow a recommendation last year that would have consolidated secondary schools, saving millions, and is now facing a consultant report that concludes the city has eight to 10 too many schools based on current and projected enrollments. He reiterated his pledge of last year to let schools keep whatever funds are saved through consolidation and cutbacks.

In apparent concession to critics of a plan for a $5 million road repaving bond, the mayor said he is looking to doubling the road budget to $1 million. Last year, the City Council wanted even more money for roads, arguing that delaying repairs would only cost more ultimately.

The mayor would not commit as to whether he favors an ongoing $1 million program for road repairs. As for how $1 million would be spent this year, DePasquale said the intent is to follow a “pavement management plan” that rates the conditions of roads and is designed to establish what action would be taken. That work would fall into the categories of crack sealing, which is the least costly, to resurfacing and reconstruction that is the most costly. The program will be approached on the basis of getting the best return for the money spent and those roads in severe condition.

For the first time, the city administration is addressing the unfunded liability in OPEB, projected to be about $246 million. The city has met these costs on a pay-as-it-goes basis.

In a statement he said, “I think the most important part of the announcement today is that we are creating a process to evaluate OPEB issues and whether an OPEB trust makes sense for the city, its taxpayers and public service employees.” He could not say at this point whether the Rhode Island Interlocal Risk Management Trust or another entity would manage the funds.

Acknowledging that $200,000 is a small amount given the liability, DePasquale said, “It’s a crack, a start at opening that door.”

The mayor’s budget represents a $4.8 million increase in city spending. It calls for 822 positions on the city side of the budget. New positions include a deputy city clerk, financial accountant, property management specialist for the Building Department so as to follow up on vacant and neglected properties and five uniformed police personnel.

Comments

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  • davebarry109

    CLOSE THE FREAKIN SCHOOLS NOW!!! You are costing us money every year. We should have closed schools twelve years ago. Twelve years of stupidity but you keep raising taxes every year. Fifteen consecutive years of raising taxes.

    Thursday, May 14, 2015 Report this

  • markyc

    Place a moratorium on ALL new positions. Postpone the $ 400, 000 for the new fire station; this is a bonding issue! Delay the $200,000 contribution to OPEB. Isn't this the 2nd year in a row that the City is budgeting a draw down on reserves? And $ 3 million worth(almost 30 %). Warwick's tax base is not getting much better; taxpayers, including businesses, can't afford annual tax increases.

    Thursday, May 14, 2015 Report this

  • FASTFREDWARD4

    you can also 8 dems that go along with tax increases. now and in the pass

    Thursday, May 14, 2015 Report this

  • RoyDempsey

    A number of people have provided comments on this page regarding the significant financial problems facing Warwick. During the last election they presented numbers that showed Warwick was not on a financially viable path, that there has been no economic growth. The Mayor disagreed, the Beacon did not challenge the Mayor and his budget numbers, the Mayor touted R I Mall development and other growth areas and based his budget on an increase in the tax base that did NOT prove correct. Fifteen years of tax increases, and there is nothing that has been presented that will stop it from becoming Sixteen, Seventeen, etc. etc.

    Thursday, May 14, 2015 Report this

  • allent

    $1 million for road repaving? out of a $294 million budget. That'll pave maybe a mile of road. What a joke.

    Thursday, May 14, 2015 Report this

  • falina

    Hate to say it, but the citizens can't say people didn't try to warn them....

    Thursday, May 14, 2015 Report this

  • Reality

    Another tax increase from Scottie. Not a surprise. Watch Scottie change the focus to the School Dept and blame them for all the ills in Warwick but we all know the schools have been level funded for years.

    Check how much taxpayer funding has increased for retiree pensions and healthcare. Scottie, Vella and Dona do nothing about it. It time for a change. Oh I forgot that empty dress Kathleen will provide the answers. It's laughable.

    Thursday, May 14, 2015 Report this

  • patientman

    The death spiral continues. At least the mayor has finally admitted that OPEB is an issue. Gee, if only somebody had mentioned that to him before.

    Friday, May 15, 2015 Report this

  • wwkvoter

    I have to say that I am incredulous about the lack of foresight on the schools. Right on THIS PAGE is a link "City has 8 to 10 too many schools".

    Sunday, May 17, 2015 Report this

  • Sullyofamily

    This mayor is crooked and sneaky. He knows damn well assessments were done and I'm sure most of the property values went up. When that happens the rate should be adjusted lower. But no, he's increasing it knowing he's going to get a lot of money. With this rate mine will go up almost $1000 . True scumbag

    Wednesday, March 30, 2016 Report this

  • Sullyofamily

    I really hope a lot of people turn out to this budget meeting at some point to let this worm know the facts. this loser worm sneaky jerk is a true terrorist on his own people. I hope cancer takes him fast

    Wednesday, March 30, 2016 Report this