Numbers can be tricky things. Add a significant expanse of time to that equation and you have a recipe for many questions – some of which remain without satisfying answers.
Mayor Joseph Solomon has heralded the recently released FY18 audit report as vindication of his administration’s prudent financial prowess. He claims that certain decisions, such as not hiring employees within vacant positions and implementing a spending freeze shortly after taking office helped contribute to increasing the city’s surplus by $100,000 when, in his very own prediction this past February, that number could dip as low as $13 million.
While Solomon said on Wednesday morning that it was a matter of “simple arithmetic” to see how we got from the doom and gloom prediction of February’s State of the City to the recent unbridled optimism of moving in the “right direction,” does an examination of the financial data support this?
Solomon became mayor in mid-May of 2018, long after the budget for FY18 had been finalized by the council (which occurred in late May, early June of 2017) and just as the budget proceedings for FY19 were ramping into full gear. There is no questioning the difficult position he was thrust into, which was compounded by the departure of finance director Bruce Keiser and multiple employees within the finance department who help prepare the city’s annual audit.
Thus, it is not the purpose of this editorial to criticize that the FY18 took so long to prepare. Originally due prior to the first calendar day of January, 2019, the audit required four deadline extensions (how many college students are envious of that, we wonder) and wasn’t turned in until this past week. The report was only just publicly released this past Friday and was then publicized through a City Hall press release on Monday.
Therefore citizens of Warwick, and this publication, are now sifting through a 194-page document that chronicles the spending that occurred within a budget that was assembled over two years ago and concluded over a year ago. This is an important point to keep in mind.
In February, during his State of the City address, Solomon announced that the city’s surplus would be lower than the $22.5 million reported in the city’s FY17 audit – much lower, to the tune of between $13-15 million. He contends that this number was based on the assumption that the city would be utilizing $4.3 million in surplus funds to balance the budget for FY18 and $3.9 million from the surplus to balance the FY19 budget that was assembled shortly after he took office.
But Solomon also now contends that the positive results shown in the FY18 audit – where the surplus actually increased by $100,000 rather than decreased by the $4.3 million amount that was originally budgeted for – was no mistake, but rather the result of strenuous fiscal effort and wise decisions on the part of his administration.
But the numbers tell a different story. The vast majority of the extra money found in the FY18 audit comes from unanticipated revenue above budgeted expectations (a total of $2,880,953) – and the vast majority of that comes from better than expected collections on municipal fees and taxes ($2.36 million above anticipated) and significantly more money from the state’s car tax phase out plan than was budgeted ($2.17 million more), which was balanced by certain revenue lines that came in significantly below expectations, like property tax collections that came in $2.33 million under anticipated amounts.
Neither of these fiscal windfalls had anything to do with Solomon’s actions, nor would they for any mayor for that matter. They were, by the very definition, unanticipated. If Solomon wants to claim some credit for the $1.16 million in expenses that came in under budget, he has a right to do so. However, seeing he was only in office for the final one and a half months of FY18 (which ended June 30, 2018), we think it’s also fair to question the validity of that assertion.
The true proof of Solomon’s financial acumen as mayor will come from the FY19 audit, which is due Dec. 31. This budget is the first to be completely assembled by Solomon, and he will therefore own all of its successes or and all of its shortcomings. It will also paint a more accurate picture of where the city’s financial health truly lies.
The city’s legislative branch can help with this as well, as Council President Steve Merolla has docketed a discussion pertaining to a new five-year fiscal outlook for the next meeting in August. Hopefully this forecast will help add clarity to a picture that continues to cause alarm for many within the community.