Pension revision reduces budget tax pressures

Jennifer Rodrigues and John Howell
Posted 6/4/13

Even before the City Council was scheduled to vote on Scott Avedisian’s $283 million budget last night, the mayor made an adjustment that cuts his proposed 22 cent increase in the residential tax …

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Pension revision reduces budget tax pressures

Posted

Even before the City Council was scheduled to vote on Scott Avedisian’s $283 million budget last night, the mayor made an adjustment that cuts his proposed 22 cent increase in the residential tax rate by 11 cents. The proposed residential tax rate is $19.79 per $1,000 of valuation.

But even with that cut and the prospect of additional reductions, some council members aren’t seeing a way to hold the line on taxes.

“We need the same level of income and unless the tax base expands significantly to raise the same amount plus fixed increases, there will be people who will be paying more taxes,” Councilman Joe Solomon said.

He pointed out that it is not an exact science, as with the revaluation, some properties have depreciated in value more than others. And some taxpayers may actually end up paying the same or less in taxes.

But Solomon is pleased to have found that the city could reduce pension payments by $1.1 million.

“Specifically, the contribution for the Fire II pension plan incorrectly includes approximately $1.1 million more in employer contribution than the actuarial report recommends,” Avedisian said in a letter to City Council members on Friday.

Solomon said he discovered the added amount on Wednesday and brought it to the attention of Ward 3 Councilwoman Camille Vella-Wilkinson, chair of the council finance committee. He said he planned to include the $1.1 million among other budget amendments.

In an e-mail yesterday, Vella-Wilkinson wrote that she encouraged Soloman to bring up the error right away.

“I said to you then and there to disclose this information,” said Vella-Wilkinson. “You placed your index finder over your lips and said, ‘Don’t say anything.’”

Vella-Wilkinson said she alerted Council President Donna Travis to the error on Wednesday and when the council received advanced copies of Avedisian’s press release, Solomon responded.

“You turned to me and said, ‘So much for loyalty,” read Vella-Wilkinson’s e-mail to Solomon and other council members.

“I am not particularly interested in who finds errors in our budget packages or who gets credit. I simply want them to be found and rectified,” said Vella-Wilkinson.

“When we bring certain things to light and they take the chance to make changes, the taxpayers enjoy the benefits,” he said. Solomon would not say whether he would look at the $1.1 million as a means of increasing the city’s $118.6 million allocation to schools that has remained unchanged for at least five years. The school budget calls for a $3.8 million increase in city revenues.

Councilman Steve Merolla wasn’t as forgiving as Solomon.

He questioned the accuracy of the $1.1 million, suggesting it could be something different.

“The mayor hasn’t given us the reports for the fourth quarter,” he said. “He refuses to give us the reports.”

The change resulted from an over estimation of what’s needed in the city’s pension contributions.

The change was revealed on Friday on the heels of three nights of hearings on the proposed budget for FY2014. Another hearing, which would end with a vote on the budget, was scheduled for last night.

“It’s been exhausting, but it’s been productive,” Solomon said of the 18 hours of public hearings.

Thursday night’s hearing covered many areas of public service. When it came time to discuss the budget for the Warwick Police Department, there was praise as well as questions for Col. Stephen McCartney and Commander Michael Babula.

Vella-Wilkinson and Travis [Ward 6] were happy to see $45,000 budgeted for the re-instatement of the Neighborhood Intensive Traffic Enforcement (NITE) program, something their constituents had been asking for.

“I have a special affiliation for that program. Thank you,” said Vella-Wilkinson.

The program, which was eliminated in 2009 due to the fiscal conditions of the city, allows for council members to call into the traffic division with complaints, and the traffic and patrol officers would be assigned specific details each week to focus on those complaints. McCartney explained that the $45,000 needed for the program is divided up to provide $5,000 per ward.

Solomon had some tough questions for the officers regarding the overtime budget. Since the department went over their overtime budget by $218,470 last year, Solomon questioned how accurate the estimate of $738,800 for FY2014 could be.

“I’m a stickler for accuracy,” said Solomon. “I want to plan accordingly.”

Both McCartney and Babula were certain their estimate would be better for this year, especially because fewer officers would be on deployment.

“Overtime budget has been problematic,” said McCartney. “Military deployment leads to that sometimes. As these deployments reduce, we will hopefully see less vacancies.”

Babula agreed.

“By the end of the year, if we remain with two or three officers deployed, I will have a better idea with overtime,” he said.

The colonel also added that overtime could be incredibly unpredictable in the event of violent crimes, such as the recent murder in City Park. Many times the call is made last minute if investigators will continue working through the night, collecting overtime, or pick up again the next day.

The Fire Department faced a similar storm of questions from Solomon regarding more than $1 million in overspending from overtime.

Six hundred thousand would be taken care of from a lump-savings throughout last year’s budget, but Solomon demanded to know where the remaining $400,000 would come from.

“We are 30 days away from the end of our fiscal year. Do we wait until the last day? We’re not gonna pull it down from the sky,” said Solomon.

Chief Edmund Armstrong estimated he would be almost $900,000 ahead in his salary budget and the coverage could come from that.

Diane Brennan of the city’s Finance Department echoed the chief’s estimate, saying much of the overtime was caused by the staff not being complete.

This year, Armstrong says it will be a different story.

The department has hired 32 new firefighters since last July; 17 due to a $3.1 million SAFA grant, bringing the total number of firefighters in WFD to 220.

“I predict the only time overtime will occur is if someone calls in sick, or, it’s a dangerous job, someone gets injured,” said Armstrong.

Ward 9 Councilman Steve Merolla took the opportunity to ask Armstrong how service in the Potowomut area would work once a station is built there.

Armstrong explained that he was still in the process of determining what vehicles would be at the new station; he said an engine would be there, but he has not determined if any rescue vehicles would be housed there, even though he admitted most calls from the area are rescue calls.

He also said Potowomut residents can expect 17 firefighters to respond to incidents.

“I think residents will be surprised how many firefighters will respond,” said Armstrong.

Merolla also asked if the mutual aid relationship with East Greenwich would remain intact and Armstrong said that relationship would remain.

“If East Greenwich doesn’t get to the call, at least we will,” said Armstrong.

Thursday night’s hearing ended with David Piccozi, director of Public Works, addressing the various divisions he oversees. One major topic was the quality of roads in the city.

“I think we’ve neglected the roads, budget-wise not maintenance-wise,” said Merolla. “We are not putting enough money in the budget.”

“We’re doing pretty well paving-wise. We’ve been trying to look ahead and see where money is coming from,” said Piccozi, who added that he was anxious to see how the state budget turns out. A proposed $800,000 is set for street paving.

When it was revealed that Public Works had an overall surplus in funds that was taken to cover other debts, one audience member felt compelled to speak up.

“Let the departments that save money keep that money instead of rewarding departments that go over budget and punishing departments that save money,” said John Kennedy.

Ward 5 Councilman Edgar Ladouceur agreed.

“Why aren’t we taking these savings and putting it back into the roads?”

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  • davet1107

    Hooray, the Mayor, thru a calculation error, found $1.1 million and can reduce the average home's increase by $21.56, yep, maybe 10 medium Dunkin iced coffees worth of savings. Meanwhile, he continues to punish the schools. Thank you Council person Solomon for offering amendments that cut an additional $432k from the Mayors budget (the only council member to oppose EVERY ONE of those amendments was Ms. Vella-Wilkinson) and give it to the schools but real political courage by the council would have been to give that and the $1.1 million to the schools and then have them find roughly $2million to cut. But no. It was funny to watch Council woman Travis sigh and vacillate when the vote to give the schools the additional $432k was put before her. She was concerned that the money wouldn't "go to the kids" like in the past when, she said, 'we gave them extra and it didn't go to them'. She must've gone way back in her memory bank for that one because the city hasn't given the schools extra money in a long time. Other council people showed a profound ignorance of the schools and what they're actually required to do. It reminded me of Churchill's maxim of best being thought of as a fool than to open one's mouth and remove all doubt. It was sad, really to hear some lament that the tax base isn't growing. Keep punishing the school and see how much tax base growth we get.

    Tuesday, June 4, 2013 Report this