Mayor Frank Picozzi’s proposed $360.8 million city budget, which Finance Director Peder Schaefer calls the “best one” in his 50 years as an administrator, underwent seven hours of scrutiny from Warwick City Council members and the public Monday night.

The budget, which is subject to amendments and City Council action tonight, represents a 2.2% increase in spending from the current $353.2 million budget.

“Every year brings with it new possibilities and new challenges,” Picozzi wrote in his budget message. “Chief among the challenges we are facing is the borrowing of substantial sums to finance the construction of two new high schools. There is also the perennial personnel cost increases we face; with inflation remaining at over 3%, and recruiting challenges, it is unrealistic to expect city staff to go without modest compensation improvement.”

The FY25 budget that takes effect on July 1 includes the first tax raise of the Picozzi administration, with a 1.5% tax rate increase. Picozzi, in his budget message, said that the costs of school renovations and construction projects, as well as lower-than-expected state aid, made raising taxes a necessity.

In total, according to Schaefer, the city has a $1.9 million increase in debt service costs, with 2/3 of those costs attributable to projects to renovate and upgrade schools at the elementary and middle levels and design construction of the new high schools.

Only two members of the public not associated with any of the city’s departments spoke during the budget meeting outside of discussion about Warwick Public Schools, with the increase and larger budget coming as unwelcome news to both of them, who advocated for slimming down the budget.

“I would challenge each of my councilpeople to come up with a cut from somewhere,” resident Jim Italiani said. “I’ve got to tell you, when I hear that there are no cuts in this budget it sounds like me telling my wife that there are no cuts in our household budget.”

Only $2.5 million remains in American Rescue Plan Act fund money, which must be allocated before December 31.

Traffic camera revenue

One of the more controversial aspects of the proposed budget was an estimated $1.3 million in revenue from traffic cameras that would be used to ticket speeders in school zones and motorists who run red lights.

City Council President Steven McAllister expects the Police Department will outline the program to the council next month.

Schaefer is comfortable including the item at the behest of Picozzi and the WPD, saying the estimated revenue is conservative on the assumption the cameras are operational by December or January.

“This has been in the works for some time,” Schaefer said. “The Chief and Deputy Chief have spent a lot of time on this, the mayor’s involved in this… it’s a good plan, and the evidence shows that it’s a money-raiser and it works.”

In total, Schaefer said, the City Council could expect the traffic cameras to generate $2.5 million to $3 million in revenue a year, though he cautioned they would likely see a decline in revenue from the cameras in subsequent years due to knowledge of their placements spreading.

Picozzi told the council that the assumption of revenue from traffic cameras was not out of the ordinary, and that he had done the same thing in past budgets with the sale of school property.

“We didn’t know if they would be sold- it was a bid system, so they had to come back to the City Council to be approved,” Picozzi said. “Had the City Council not approved the sales, it wouldn’t have been in the revenue. It’s an assumption of revenue, and that’s what we went with.”

Multiple councilmembers, though, expressed concerns about using the estimated revenue in the budget, with McAllister saying that until the item came before the Council, they would be missing critical information, such as the vendors, their policy, and the price for the cameras.

Ward 5 Councilman Ed Ladouceur took his concerns a step further, saying there was “no way on God’s green earth” that he was going to support having the $1.3 million estimate in the final budget.

“I’m particularly disturbed with this item, and to be frank I think it’s rather bold to assume that the City Council is just going to go ahead and pass these special cameras,” Ladouceur said. “I think it’s very concerning that instead of looking to cut costs, the administration is basically just saying that they’re very confident that this is going to pass… I’ve never seen anything like this in the time that I’ve been on the council.”

On Tuesday Mayor Picozzi said the Council doesn’t have the authority to remove revenue from the budget and reiterated the $1.3 million is a projection and the Police Department will present the camera program and the Council will have the power to approve or reject it.

Schools

The largest portion of the planned budget - $189.7 million, representing a 2% increase over the FY24 budget- is allocated to schools. In total, the schools make up 52.6% of the city’s expenses.

According to School Department Finance Director Brandon Bohl, the gulf between Picozzi’s proposed budget and the School Department’s requested budget is approximately $900,000.

What would likely be postponed, according to Bohl, would be needed repairs to athletic facilities at Warwick Veterans Memorial Middle School, which will be used by both high schools and both middle schools next year as construction starts on new Toll Gate and Pilgrim High Schools. The new schools will be built in the existing athletic fields. Once completed, the existing buildings would be demolished and athletic fields would be built in their place.

“There’s a question of whether or not the whole foundation [of the track at Vets] needs to be dug up,” Bohl said. “We would argue that it is unsafe- there are visible cracks within the track.”

In order to trim costs, Bohl said, 15 positions had been eliminated from the Warwick Teachers Union and 20 from the Warwick Independent School Employees Union. Five of the 15 WTU decreases were achieved through layoffs; all 20 of WISE’s were positions were layoffs.

State aid to schools will not be finalized until the state budget is approved long after the council approves the city budget. Last year at this time Picozzi added funds to the school budget on condition if projected state revenues increased, the city, not the schools would get the money. Initial state aid projections were increased, but the city didn’t get to offset its appropriation. Should the General Assembly allocate anything more than the $450,000 increase targeted for Warwick Schools this year, Picozzi won’t be looking for the city to get a piece of it.

Breaking down the school budget Bohl said non-discretionary costs make up between 90-93% of WPS’s approximately $40 million non-staffing budget. The largest chunks of those, according to Bohl, go towards statewide transportation and out-of-district tuitions to support students from Warwick attending other public high schools, making up approximately $17.9 million combined.

The new high schools, multiple speakers argued, would lead to a significant reduction in that number.

“Warwick has to pay to send their public school students to another school,” Darlene Netcoh, president of the Warwick Teachers Union, said. “What these new schools are going to do is bring more students into our district and retain our Warwick students.”

Members of the School Department pointed to East Providence High School as an example to follow, with construction of their new high school finished in 2021.

Ladouceur expressed concern with the city’s credit due to mounting bond debt. Schaefer said that while he shared that concern, saying that the school projects added a lot of debt to incur, other municipalities had already gone through the same process successfully.

Construction of both high schools, Schaefer said, will not count against the debt limit, as there was a specific carveout for them in the language of the bond passed by voters in November 2022.

An additional concern in bond repayment brought up during the meeting was the issue that the Rhode Island Department of Education would not reimburse the city until construction of both high schools is completed.

 Schaefer noted the City Council approved a resolution calling on the state to reimburse its share of new school costs as the work is completed, but that is not happening.

Picozzi said that he was ‘hopeful’ that RIDE could change course and allow early reimbursements, and will be working with other municipalities in the League of Cities and Towns that are currently building new schools to lobby RIDE and the state for early reimbursements.

Other budget developments

Picozzi said that $1 million is being left for the city in the proposed budget to negotiate raises with police officers and municipal workers.

An increase of $200,000 is also in line for the Board of Canvassers, owing to the 2024 primary and general elections both occurring within FY25.

Picozzi was unsure if the council would approve his budget as submitted. As he stated in his budget message, Picozzi acknowledged the budget calls for a “modest” tax increase and for the council to reduce the proposed increase or eliminate it would require cutting into city services.

“Anything you cut out of there is services and taxpayers don’t like that,” Picozzi said. “They want to enjoy living in the city they live in.”

The council will propose amendments and vote on the budget tonight at 4 p.m.

With reports from John Howell.