Mayor Joseph Solomon announced via press release Monday that the city is projecting an approximately $5.5 million operational surplus for the fiscal year that concluded on June 30, 2019 (FY19), representative of revenue coming in $2.2 million under budget projections but also $7.7 million under projected expenses for the year, according to Finance Director Brian Silvia.
“These results reflect our ongoing efforts to take a fiscally-conservative approach to budgeting and reinforces the fact that the City's finances – as confirmed by Standard & Poor's, audits of our OPEB and pension obligations and the low interest rates for the recent school bond offering – are on solid ground,” Solomon said in a statement in the release. “The projected surplus will also allow us to address an anticipated school deficit and move that department onto more solid financial ground going forward and to address outstanding encumbrances, all with minimal impact on our unassigned fund balance."
The release goes on to indicate that the projected surplus, which it notes are “only estimates at this time and may change in the final audited statements,” would be applied to account for several known encumbrances.
First, the surplus would enable the city to mitigate a $2.9 million year-end deficit that the Warwick School Department projects for their own FY19 budget. It would also enable the city to cover $350,000 in outstanding year-end encumbrances – “the cost of goods and services ordered, but not yet received, prior to June 30, 2019,” the release clarifies.
With the approximately $2.3 million left in the projected surplus, the city could mostly eliminate the anticipated $2.4 draw down on the city’s free cash reserves – which was approved in the FY20 budget – resulting in just around $100,000 to be taken from the rainy day fund, from an audited $22.6 million as of June 30, 2018 to $22.5 million as of June 30, 2019.
Silvia sent the following statement regarding the city’s progress towards submitting their official audit for FY19:
“…the Finance Department staff have been working diligently and will continue to do so to prepare all of the necessary documents and information that are required as part of the annual audit process.”