Mayor’s budget increases spending by 1.3%
All things being equal, Mayor Scott Avedisian’s proposed $283 million budget calling for a $3.6 million increase in spending would result in a 22-cent increase in the tax rate.
But since the city just completed a revaluation, not all things are equal. In fact, overall property values declined by nearly 5.5 percent, meaning, just to maintain current tax revenues, the rate must increase.
The mayor has proposed a residential tax rate of $19.90 per $1,000 of valuation; a commercial/industrial rate of $29.85 and tangible rate of $39.80. The motor vehicle rate remains unchanged at $34.60, as does the $2,000 exemption.
In a press conference Tuesday, Avedisian said his administration wrestled with whether to reduce the motor vehicle exemption, which could have covered additional budget expenses without effectively increasing the tax rate. While the administration could have recommended reducing the exemption to $500, the allowable amount set by law, Avedisian said the $2,000 exemption affected more people that probably are in greater need.
However, as a result of the revaluation, not all property owners can expect the higher tax rate will translate into a larger tax bill. Not that the city has done a breakdown, but City Finance Director Ernest Zmyslinski estimated a third of the city’s property owners would see an increase in their tax bill while another third would basically remain the same and the remaining third would experience a decline.
As for the budget, there are few declines in spending and some increases, the most notable being an added $2 million for pensions; an additional $900,000 in principal and interest debt costs; and near level funding for most departments. There are no salary increases for city employees, the result of contracts that exclude salary increases for the next three years. Depending on staffing decisions, there could be up to 3.5 additional city employees.
He lists the largest decrease in city expenses – $1.2 million – as coming in the area of employee benefits as the city drops Blue Cross and Blue Shield and moves to the Rhode Island Interlocal Risk Management Trust as the third-party administrator.
Addressing Fire Department overtime, which has consistently run over budget and promises to do so again in the current budget, Avedisian budgets about $900,000, or $1.8 million less than what is projected to be spent this year. He expects to accomplish this with a federal $3.1 million grant that enabled the department to add 17 people to bring it to a full complement of 220. Those salaries and benefits are to be paid with grant funds that will be ending sometime toward the end of 2015.
The mayor has recommended a $156.6 million school budget that calls for a level funding of the city appropriation at $118.6 million.
Avedisian said the level funding of schools should not come as a surprise to School Committee Chairwoman Bethany Furtado or Superintendent Richard D’Agostino. He said he had discussions and expressed his feeling it was not fair for the committee to be handing out salary increases when other non-school municipal employees were going without raises. Teachers, non-teachers and administrators received salary increases of about 1.5 percent.
Avedisian said school personnel assured him that those raises could be made without turning to the city for more money and that they could live within that budget. The School Committee has passed a budget that calls for an overall increase of $1.2 million in spending and an additional $3.8 million from the city.
“I took them at face value. Their assurances pretty much made that [level funding schools] the easiest decision in the budget process,” the mayor said.
In his budget message, the mayor says the fiscal year 2014 spending package “bears in mind the need to balance the fiscal realities that the City faces with the need to maintain the quality municipal services that our residents expect.”
In response to Council President Donna Travis, who has been pushing for the funding, the mayor’s budget recommends $45,000 to implement the Neighborhood Intensive Traffic Enforcement (NITE) program in the Police Department, which was dropped in the current budget. An additional $108,000 is proposed for computers and printers; $45,000 for fire station building improvements and; $35,000 to buy mowers for recreation fields.
The budget assumes passage of the governor’s proposed budget, providing the city with $2.9 million in state aid.
In the opening remarks to his budget address, Avedisian says the city has “weathered the economic crises far better than many other cities and towns, attributing that in part to the cooperation of union and management employees who have gone without raises and withstood budget cuts. He also points to positive developments, saying that the general fund bonded debt, with the exclusion of schools, is the lowest in 16 years and that the city has posted surpluses for 12 of the last 13 years. The surplus now stands at about $8 million. It was not used, as was done in prior years, to balance the budget.
Under the transfer of funds at the end of the current fiscal year, the city may dip into the reserves for a total of $800,000 to cover revenue shortfalls resulting from possible delays in the processing of tax bills and the postponement of the city tax sale to August, which would put it in the 2014 fiscal year.
The mayor’s chief of staff, Mark Carruolo, said yesterday that the $800,000 is included in the end of the year transfer to “err on the side of caution.” Only some of it, perhaps none of it, will be needed, he said.
Outside of finances, the mayor highlighted “positive trends” in economic development. He cited the opening of new retail outlets at the Warwick Mall; JetBlue service at Green Airport; opening the Ocean State Theatre Company; the city’s strong hotel occupancy rate; the sale of the Rhode Island Mall; and the ongoing efforts to market the Warwick Station Development District.
District development is also mentioned as the mayor takes a look forward. Other projects in the new fiscal year mentioned are: reuse of the Potowomut School property as the site for a new fire station; relocation of the Winslow ball fields as the Rhode Island Airport Corporation moves ahead with a runway extension; commencement of the long awaited Apponaug Bypass; and the cleanup and development of the more than 80 acres of Rocky Point acquired earlier this year by the state.