Audit: City stronger than thought

Report as of June 30, 2018 shows $22.6M surplus

Posted 7/30/19

By ETHAN HARTLEY It took almost seven months to get here, but the financial audit for the city of Warwick's fiscal year that ended June 30, 2018 is finally out - and among many highlights garnered during a cursory read through its 194 pages, the report

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Audit: City stronger than thought

Report as of June 30, 2018 shows $22.6M surplus


It took almost seven months to get here, but the financial audit for the city of Warwick’s fiscal year that ended June 30, 2018 is finally out – and among many highlights garnered during a cursory read through its 194 pages, the report shows an interesting disparity between fiscal assumptions made by Mayor Joseph Solomon earlier this year.

During his “State of the City” address held on February 26, Solomon reported that the city’s anticipated unrestricted fund balance (often referred to as a city’s free cash reserves or “rainy day fund”) was in a danger zone between $13-14 million; a far cry from the $22.5 million number that was reported in the prior year’s FY17 audit.

However the FY18 audit, posted to the state’s Department of Administration site on Friday, revealed an unrestricted fund balance of $22.6 million in Warwick.

“At the State of the City address, Solomon, Council President Merolla, and [City Council] Finance Chair Edgar Ladouceur all pointed to an exaggerated surplus,” said former Mayor Scott Avedisian in an email statement. “Actually, I was underestimating the surplus by more than $600,000.”

Reached for comment on Monday, Solomon said that when he made his financial prediction in February, it was predicated on an assumption that the city – which had a $22.5 million fund balance as of the FY17 audit – utilized $4.3 million from the rainy-day fund to balance its budget for FY18 and $3.8 million to balance the budget for FY19.

However, due to revenue coming in at $2.8 million higher than projected and expenses coming in $1.1 million under expectations, the fund balance was not needed to draw from in FY19.

“Our goal is to get to a point where we don’t have to use our rainy-day fund and that's what we're trying to achieve here,” Solomon said.

A release sent out by City Hall credited Solomon’s administrative decisions as having a positive impact on the city – although the specificity of those decisions are somewhat vague.

“Due to austerity and cost saving measures implemented by Mayor Solomon upon taking office in 2018, the City’s unassigned fund balance (funds available for use) at the end of fiscal year 2018 actually rose by $104,000, to $22.6 million, and the total fund balance, including restricted funds, was at $27.4 million at year’s end,” it reads.

Quick hits from FY18 audit

The audit shows that total revenue in the city decreased from $360 million in FY17 to $352 million in FY18. Total expenses also decreased from $373.3 million in FY17 to $367.9 million FY18. The city collected 73 percent of its revenue from property taxes, amounting to $228.3 million – which is down from $231 million in FY17. State aid increased by $2.3 million between FY17 and FY18.

The city’s bond rating remained the same from last year, with an A1 rating from Moody’s and an AA rating from Standard & Poors.

As of June 30, 2018 the city had a total of $133.9 million in outstanding bonds and loans, of which $45.9 million are general fund bonds. This means that, with a current debt limit of $278.4 million, the city of Warwick can still accrue another $232.5 million in debt.

Multiple areas of the city experienced cost overruns in the FY18 budget, including $137,261 in the sanitation division of DPW and $193,214 in insurance costs. However, the highest cost overrun belongs to the Warwick Fire Department, which went $1.6 million over budget.

The total net value of all assessed property in Warwick, after exemptions, is about $9.28 billion. Collections on this property garnered about $223.4 million in property tax revenue (which equates to a 97.4 collection percentage of the total tax levy). Unpaid property taxes amounted to $12.5 million after accounting for unpaid “uncollectable property.”

Long-term liabilities are sure to continue to cause strife among financial critics within the city, as the city’s total liability was reported to be $1.04 billion – although this is actually decreased from FY17, when total liabilities amounted to $1.07 billion. For FY18, this number includes $123.9 million in long-term debt, $405.8 million in net OPEB liability (other post-employment benefits, essentially healthcare costs) and $453.5 in net pension liability.

In terms of the city’s various pension plans, they break down like this:

l City’s municipal pension plan: 779 members (369 active employees, 379 retired and receiving benefits, 31 entitled to benefits but not collecting);

l Police and Fire 1 pension plan: 430 members (24 active, 406 inactive and receiving benefits);

l Police 2 pension plan: 346 members (158 active members, 184 inactive and receiving benefits, 4 eligible but not receiving benefits);

l Fire 2 pension plan (which is being challenged by the firefighter union): 212 members, (195 active members, 17 inactive receiving benefits);

l School department’s private pension plan: 507 members (336 active employees, 146 inactive and receiving benefits and 25 eligible for benefits who are not receiving them)

OPEB benefits broken down show that there are 1,649 members of the city departments collecting healthcare, 711 of which are active employees and 938 who are retired. This amounts to a total OPEB liability of $352,383,048.

The school department has 1,357 members receiving OPEB benefits, 1,295 of which are active employees and 62 that are retired, amounting to a total OPEB liability of $53,466,538.

Notable among the numbers is a $4.24 million decrease in total OPEB liabilities from last year’s audit, which Avedisian noted in his comments.

“That shows that the pension reform that I pushed for and Councilman Steve Colantuono and Councilwoman Donna Travis sponsored is working,” he wrote.

Some other interesting facts to note:

  • The city received about $3.67 million from various revenue streams related to T.F. Green Airport, not including property tax or payments in lieu of taxes. These include fees gathered from airport parking taxes, miscellaneous income and surcharges.
  • Hotel and meal tax exceeded expected revenue in FY18 by $160,000 and $338,000 respectively.
  • The unemployment rate in Warwick averaged at 3.5 percent in FY18
  • The median family income in FY18 for Warwick was $87,369

A step in the right direction?

Solomon viewed the report optimistically on Monday, saying, “It is a step in the right direction. I take pride in leading it in that direction. The ultimate beneficiaries will be the residents and the taxpayers and the city itself and its future.”

Similarly, Avedisian looked upon the report as vindication for his final term in office. He said that he was awaiting the FY18 report to respond to criticism of his administration. He also said he is waiting on a report from the Rhode Island Public Expenditure Council – which was said to be launched shortly after Solomon took office, but has not been released to date – and a five-year financial report from the City Council’s auditing firm, which was also never released in a finalized version.

“With a $22.6 million surplus for the Fiscal Year that ended a year ago, Warwick is hardly in a bad financial situation,” he wrote in his statement. “The Fiscal Year 2019 audit will prove to be interesting when it is completed.”

Others weren’t as rosy about the report.

“It hasn't been given to the council. We haven't seen it. We're reading about it in the press like you are, I don't know what to say,” said City Council President Steve Merolla when reached around noon on Monday. Merolla echoed sentiments regarding his concern over the annual required contribution needed to curb down OPEB liabilities increasing from $23 million to $34 million last year to this year.

“To say we're in great shape when we can't pay our bills is concerning to me,” he said.


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Mr. Merolla, since you claim the sky is falling, what strategies are you proposing for stopping the OPEB liabilities? Will the city keep giving generous healthcare or make cuts? Will co-pays go up? Will the city keep giving 3% raises every year to unions? Will the Fire Department be allowed to go over budget by 1.5 million every year with no consequences? The FD has been over budget since the 1980s.

Tuesday, July 30, 2019

Wait a minute, your telling me they lied..... Next your gonna tell me the FBI aren’t raiding city hall.

Tuesday, July 30, 2019
Hillsgrove Hal

Tepid as they may be, it is good to see the Beacon write a few critical words about Mayor Solomon's prior statements.

But while it's good that they termed Solomon's claims about his decisions as mayor in FY18 "somewhat vague," they apparently didn't feel the need to point out that Solomon was appointed mayor in the middle of May, a month and a half before the end of the fiscal year.

There's virtually nothing Solomon could have done to improve the city's budget that much in just 45 days, certainly not unspecified "austerity and cost saving measures."

I also notice that the Beacon doesn't report more from Solomon's press release -- covered here in detail: -- especially where Solomon says "his plans to bring city spending back under control are working..."

City spending is under control?

We must all be imagining those huge back-to-back tax increases over the last two years, I guess.

Tuesday, July 30, 2019

Solomon, Merolla and Laduecer, Moe, Larry and Curly. It seems that the city is in way better shape than they were claiming (Cushman wrong again) and yet they raised our taxes thru the roof and tried to screw over the schools. I guess they needed more money to hire Solomon's relatives in jobs created for them.

Tuesday, July 30, 2019
Dozing for $$$$

Now we will see Solomon give away a generous Union contract to the Fire Thiefs so he can continue to get their vote, knowing well he is contributing to the bankrupting of the city.

Tuesday, July 30, 2019

Dave, if your electric bill is 100 a month and you only budget 75, you’re going to be over budget by 25 dollars every damn month.

That is what politicians have done with regards to the WFD budget for years. Solomon admitted as much when he finally submitted a realistic WFD OT budget this year. He even acknowledged that it’s cheaper to pay the money in OT than it is to hire more personnel. Why knowingly under budget the WFD? Well, that’s simple. Those frequent WFD OT stories are traditionally the only bad press the WFD receives. I say traditionally because there’s no shortage of outright fabrications about the WFD being spun up and reported on lately. But therein lies the point. Those negative stories create some political capital against a Warwick Fire Dept which remains incredibly popular with Warwick taxpayers. Take a look around the state at FD budgets. Warwick isn’t an outlier and in fact, provides a pretty good bargain comparatively, especially when considering the quality of service.

Tuesday, July 30, 2019
What's the real number

The surplus was $22.6 million on June 30, 2018. Solomon stated it was $13 million 8 months later in February 2019. Now recently paying $4 million in school 2019 fiscal over spending, how much is really in the rainy day fund.

Also having money in your bank savings account may look great on paper but when your minimum annual payments are increasing at unsustainable rates and resulting in new spending as high as a maximum tax increases, that means you are in the mist of a fiscal crisis.

Tuesday, July 30, 2019
Ben Dover

Accounting by 'Dewey, Fleecem and How"...OK, you Wharton school graduates, this is why my assessment jumped 70K and my residential taxes jumped 7%?, along with almost everyone else, sans politicians... Glad we got the school situation straightened. out...That 19K per student is bound to pay academic dividends now, no? Wait till those poor folks in Bayside and Long Meadow get their sewer assessment in their water bill....Congratulations, you have put a band aid on a shotgun wound...Systemic change in an election year.....Forrrgetttaboutittt....

Tuesday, July 30, 2019

I’m awaiting Mayor Solomon, and councilmen Merolla and Ladiucers apologies to Mayor Avedesian and to the citizens of this city for misleading (lying) to us and fabricating an alleged crisis.

Tuesday, July 30, 2019

When is the beacon or any other news org going to do the story on the fake FBI allegations.

Tuesday, July 30, 2019
can't believe it

Listen to the spin from the WFD and Scottie's supporters.

Everything is great in Warwick ? Really ???? I guess if you're feeding at the taxpayers' trough things are great.

Let's look at the facts. The taxpayers debt that Scottie left us with is over $1 BILLION. Unfunded healthcare and pensions make up $800 million of that figure. We have approx. $22 mil or just 2% what we owe in the bank.

Our required OPEB payment is $35 mil a year and we put nothing aside. Councilman Coluntuano gets lifetime healthcare for himself and his family costing the taxpayers hundreds of thousand for serving only 8 yrs part-time. Scottie didn't mention that nor did he mention he gave Donna's daughter a high paying job at the library. That's why Colunantuno and Travis did Scottie's bidding at his command.

The WFD have abused overtime for yrs. Side deal contracts anyone?

Solomon promised great reforms but too date nothing has happened. Appointing relatives, councilors' daughters to courts were things we expected from Scottie but not Joe. What a letdown .

Taxes went thru the roof this year and Solomon has not addressed the structural issues in the city. We now have more city retirees receiving lavish driving senior citizens from their homes.

Warwick is in free fall.

Tuesday, July 30, 2019

Hey look, it's Stacia...I mean Sabrina...I mean Flo... I mean can't believe it. Go away, you don't pay taxes in Warwick. Actually you never did your husband did, but no longer

Tuesday, July 30, 2019

No one gives a rats butt about Stacia. She can use any screen name she wants we all know she is “not well”. Honestly she doesn’t bother anyone. Kind of like flies on dog shit.

Tuesday, July 30, 2019
can't believe it

Samuel and Jimmy two WFD losers

Tuesday, July 30, 2019
joe blow

imagine being a mid to late 40's divorced cellar dwellar living in moms basement, no kids, no friends and calling other people losers. lol

Tuesday, July 30, 2019

Robbie, Robbie, Robbie what now?

Wednesday, July 31, 2019

It has both to do with being Avedesian supporters or a firefighter. A few of you have been spewing venom for well over a year with many insults and they were defending themselves. I do recall time and again heading wait for the audit but the vigilantes couldnt.

As so.down always states "numbers don't lie". Well the numbers are in. We were mislead by our Mayor and inept council with a ridiculous and unnecessary tax increase. We also sustained an evaluation of our homes which has been proven the council and Mayors properties barely increased while the majority did.

Yes change needs to be made regarding OPEB but that's on all city workers not one individual union.

Merolla always says its unsustainable and he's right but where does one stary? I say start with our elected leaders being the .take and council. You want to help right the ship start by giving up your HEALTHCARE for part time work and crappy part time work.

There are many who receive this perk Travis, Coluntuono, Gallucci, Pisatauro, Merolla, Ladocuer, Solomon, Donovan and how many more?

I remind you part time work maybe 2 terms approximately 6 years to get this perk when all city employees have to work full time for 20+ years to be eligible.

So start with yourselves then come to the employees!!!!

Wednesday, July 31, 2019

My apologies i didn't proof before I hit send and typos occurred. Sorry.

Wednesday, July 31, 2019
Fed up

Cushman is not wrong. The rainy day fund does not indicate the health or fiscal stability of the city. Just because there is 22 million AS OF JUNE 30 2018, does not mean that is the balance today. And even it it was today's balance, it does not mean that the city is healthy.

Look at the unfunded liabilities and how are they going to be paid. Next year it will be worse as the balloon to fund OPEB continues to grow at a rate that is in excess of what maximum tax increases can produce.

Also, Solomon violated the city charter by transferring funds without a transfer resolution being presented to the council to be voted on. Since 95% of the city residents cant comprehend math or understand the way the city works, its easy for Jimmy and his fellow fire sloutches to try to convince them that all is rosy in Warwick.

Wednesday, July 31, 2019

I never said all is Rosey. Changes need to be made, I agree and most would too. All I was saying was that the current admin lied about the city funds to make themselves look better when there was 8 million more than thought. Leads me to believe that the FBI claim was politically motivated to make the dept. look bad when in reality the ONLY PERSON BEING INVESTIGATED WAS THE COUNCIL PRES. The WFD has never been visited or called by the FBI regarding side deal claims.

Wednesday, July 31, 2019

Fed up . Seriously it seems you have some issues with particular firefighters but to call them all slouches is childish and grossly inaccurate. That being said I’m sure there are some that could be considered less than exemplary but the vast majority that I know are dedicated hard working professionals that are proud to call themselves firefighters for the city of Warwick.

Wednesday, July 31, 2019
Hillsgrove Hal

I've read this article several more times, and I'm more confused than I was on Tuesday.

First, I see this:

"However, due to revenue coming in at $2.8 million higher than projected and expenses coming in $1.1 million under expectations, the fund balance was not needed to draw from in FY19."

And then, I read this:

"The audit shows that total revenue in the city decreased from $360 million in FY17 to $352 million in FY18. Total expenses also decreased from $373.3 million in FY17 to $367.9 million FY18."

So, did the city lose $8 million in revenue or add $2.8 million?

And did spending go down by $5.4 million or $1.1 million?

Either way, the audit's numbers are different from the mayor's, and there's no explanation why.

Wednesday, July 31, 2019

Now Stacia if Fed Up? LMAO. What a nut

Wednesday, July 31, 2019
Erin Brockovich

Patiently waiting for Fed Up, Flo5582, Can't Believe it, and Get Real to have a full blown brawl. Who will referee, asking for a friend?????

Wednesday, July 31, 2019

Nothing has changed in the city because an 18 month old report has finally been published providing a snap shot as of June 30, 2018.

I have to actually agree with Hal's comment, that there's virtually nothing the mayor could have done to improve the city's budget that much in just 45 days. In fact when you compare the fiscal 2019 budget spending before and after the so called austerity cost saving measures you will see the following:

The 2019 revised municipal budget was $150,932,468 in which the spending broke down to

6% Capital & Debt Expense

52% Active Employee Expense

28% Retired Employee Expense

14% All other spending (including the massive $5 million increase for paving)

The 2019 projected municipal budget was $147,433,235, in which spending broke down into

6% Capital & Debt Expense

53% Active Employee Expense

29% Retired Employee Expense

12% All other spending ($3 million taken from paving re-allocated to other line items. most likely fire overtime which was over spent by $2.3 million) (BTW - according to the city charter the mayor should have disclosed through a resolution to the council all the line items where funds were redistributed to plug holes during the budget process. That was not done)

So my point is, if the city financial position is improving as a result of "Solomon’s administrative decisions as having a positive impact on the city", why then was the 2020 fiscal budget proposed at $156,980,615, or $6,048,147 greater than the 2019 revised budget or a WHOPPING $9,547,380 more than the 2019 projected budget.

And out of that $6,048,147 if the structural problems specific to the unsustainable increase in legacy costs was corrected, why would $3,067,181 or 51% of the increase be allocated to increasing legacy coast in the 2020 budget?

The fact is, nothing has changed. Avedisian can claim through his actions that the city was left in great financial shape but the hidden numbers in the audit tell a different story of a city drowning in retiree expense debt over $1,000,000,000. And the percent of the city budget allocated to pay for these costs ticking up another basis point from 28% in the 2019 budget to 29% in the 2020 budget.

Solomon refusing to acknowledge that over the last 15 years when legacy cost consumed 19% of the budget to where it stands now at 29% has meant that in that span of time from 2004 - 2020 out of the $61,237,885 in new tax dollars spent, 44% or $26,898,459 was spent on legacy cost. That more than what was spent on active employees at $26,008,952 or 42% of the funds.

Only $8,330,474 was spent on everything else (including capital & debt expense)

The city is upside down now with more retired employees then active employees.

Anyone unwilling to acknowledge these facts and the need for immediate reforms is perpetrating a fraud upon the residents and business in the city.

Thursday, August 1, 2019

So now what are all the naysayers going to do? I cannot see little Bobby Cote or the mayor apologizing for crying wolf and throwing the prior administration under the bus FOR NO REASON! I'm sure little Joey knew what was actually going on but jumped on the band wagon anyway. He seems to be more a follower than a leader. It was easy for him to hide on the city council and point fingers, now all fingers point to him. Hey Joe, I got a great deal on a 1983 Yugo with ultra low miles....would make a great clown car....oooops, Mayors car....And we all know you would know a great used car deal when you saw it.....the used Westerly ladder for example.

Thursday, August 1, 2019

I read Bob Cushman's excellent post, and then the one after and see the problem. People who appear to have defective minds like salty are running things and people who SHOULD be running things like Bob Cushman are not.

Result will likely be eventual failure.

Thursday, August 1, 2019


the rhetoric is old.....time to come up with a new shtick the current one is now quite irrelevant and boring. Confucius say: It always gets darker towards night.

Friday, August 2, 2019

If "Salty" can read the FACT that NO amount of maximum tax increases can catch up with retiree costs, and say that, denying reality, that's the definition of a troll.

Looks like salty may be our local troll.


Friday, August 2, 2019

Yawn........this situation is...hopeless...baa haa haa

Friday, August 2, 2019
Patient Man

The comment that has the main takeaway is the budgets 29% & growing piece of the budget that goes to retiree benefits. I would think this is an outlier compared to other cities & towns.

As usual it comes from Bob Cushman. I don't care which side you are on in the discussion, this should be a major concern for you.

Thursday, August 8, 2019

Sorry to say this is a nation wide issue "In fiscal year 2017, the federal government spent $4 trillion, amounting to 21 percent of the nation's gross domestic product (GDP). Of that $4 trillion, over $3.3 trillion was financed by federal revenues. The remaining amount ($665 billion) was financed by borrowing"

and this has been a issue for decades is all levels of government...

Friday, August 9, 2019