FY17 audit reveals surplus; reserves $22.5M

By Ethan Hartley
Posted 3/22/18

Blum Shapiro, an independent auditing firm from Cranston, has released the FY17 audit of the City of Warwick’s financial situation, assessing for the 16th year in a row an “unqualified audit …

This item is available in full to subscribers.

Please log in to continue

E-mail
Password
Log in

FY17 audit reveals surplus; reserves $22.5M

Posted

Blum Shapiro, an independent auditing firm from Cranston, has released the FY17 audit of the City of Warwick’s financial situation, assessing for the 16th year in a row an “unqualified audit opinion,” which is the “best mark” achievable, according to a press release sent out by the city on Tuesday.

Also for the 16th year in a row, the city recorded a surplus. The surplus for FY17 (which runs from July 1, 2016 to June 30, 2017) was $9,559,726 (including both the city and school department) and featured an increase in $5,478,949 to the city’s unassigned fund balance, which as of June 30 totaled $22,566,957. The surplus is an increase from FY16 of $4,080,777.

“Having a good fund balance is not only good for [securing] bonds and for rating agencies, but it’s positive overall for the city,” said Avedisian on Wednesday, adding that when he took over as mayor, the unassigned fund balance was around $8.9 million. He said the city has experienced 17 surpluses during his 18-year tenure as mayor.

Contributing to the surplus was revenue projections coming in $7 million ahead of what was expected, which the summary released by the city indicated was “primarily due to property tax revenues which exceeded budget by $4.5 million. This was largely due to savings in budgeted refunds, a positive change in prepaid collections, an increase in the taxable assessed property values gained from the final tax roll and a higher collection rate for prior year taxes.”

Likewise, expenditures came in below budget by $2.56 million. The Department of Public Works came in $1.1 million under budget and the school department recorded a $1,218,671 surplus, which will be re-appropriated into the school’s budget for next fiscal year, in addition to a $3 million allotment from the city’s unassigned fund balance to fund raises given to teachers, which was approved by the council in January.

The Warwick Fire Department exceeded their budget by $601,022 and the pension liability budget was exceeded by $513,693. However the city’s total liability for bonds and loans payable decreased by $8.08 million to a total of $145.6 million. This included debt repayments totaling $16.6 million. Enterprise debt, too, decreased from $106.5 million to $99 million.

Overall, Avedisian said that the audit revealed the city to be in good financial health and that the key areas of focus moving forward must be on funding OPEB (other post-employment benefits) liability, perhaps through a mechanism already being utilized to pay down long-term debt on bonds that were assumed to help fund pension liabilities.

“I’ve been trying to identify funding sources so you can have a sustainable funding source for OPEB, that is what my recommendation would be,” Avedisian said.

Comments

4 comments on this item Please log in to comment by clicking here

  • patientman

    Good news but a Mayor that has raised taxes every year but last year shouldn't brag about surpluses. YEA, look at me, I raise your taxes and don't end up with a budget deficit. Well run muni's increase revenue through growth and appreciating Real Estate values. They don't increase revenue through raising property tax rates. In the land of the blind.

    Thursday, March 22, 2018 Report this

  • davebarry109

    There is no reason for so much surplus. A surplus of a few million each year is good news. There is no reason for the city to keep a 22 million dollar surplus. Put 5-7 towards the unfunded health benefits. Or give the taxpayers a break.

    Friday, March 23, 2018 Report this

  • richardcorrente

    You can call it a "surplus". You can call it an "overcharge". The fact is Warwick has money left over after the 2017 budget hearings of Spring 2017. Mayor Avedisian asked for 29 tax-increasing amendments to the budget and was unanimously denied EVERY TIME! This is the best City Council I have ever witnessed in Warwick. Something is different than the last 17 years in a row. Something stopped Mayor Avedisian from raising 29 new taxes. Nothing stopped him in the past from increasing taxes EVERY YEAR FOR 17 YEARS IN A ROW!! I'd like to think it had something to do with my 700-days-in-a-row of campaigning. I'd like to think that spending over $40,000 of my own money got the "Cut Taxes - Cut Spending" message across to the 80,000 taxpayers that are paying the tab and that those 80,000 taxpayers delivered my message loud and clear to their City Council members. Naturally, my critics will say I had nothing to do with it; that it was just a coincidence. I would disagree. And I use my real name, unlike those fake-name critics.

    Happy Easter everyone.

    Rick Corrente

    The Taxpayers Mayor

    Tuesday, March 27, 2018 Report this

  • CrickeeRaven

    The statements made by the fake "mayor" about the FY18 budget are false.

    Mayor Avedisian did NOT submit "29 amendments" -- the city council did. They were NOT "tax-increasing'" they were budget cuts proposed by the council. And they were NOT all passed unanimously.

    The truth of the matter, which the fake "mayor" has not addressed except to attack the news website that researched and published it, is here: https://warwickpost.com/digit-spinner-richard-corrente-fudges-numbers/

    (This factual article also addresses his false claim about his failed 2016 campaign influencing the council's decision on the budget.)

    After lying about its role in the budget process, the fake "mayor" then attempts to pander to his party's city council majority; they are far smarter than to fall for such pathetic behavior.

    "And I use my real name..."

    Honest, taxpaying voters ate grateful that the fake "mayor" will make it so easy to find his name on the ballot and avoid voting for him. His only accomplishment has been to attach his name to blatant lies, tax delinquencies, and juvenile behavior on this website.

    Tuesday, March 27, 2018 Report this