By ETHAN HARTLEY The Warwick City Council will hold hearings to discuss Mayor Solomon's $322.8 million FY20 budget proposal next week, but some financially active residents have scheduled their own meeting to interpret the numbers and raise points of
The Warwick City Council will hold hearings to discuss Mayor Solomon’s $322.8 million FY20 budget proposal next week, but some financially active residents have scheduled their own meeting to interpret the numbers and raise points of concern.
“Bottom line, I'm not happy with this budget because it’s a reactionary budget,” said former city councilman and former school committee member Bob Cushman, who has also been a long-outspoken critic of Warwick’s financial strategies in the past. “It's the same old ‘crisis of the moment’ budget and it doesn’t do anything to solve our long-term problems, in my opinion.”
By “crisis of the moment,” Cushman is referring to how he believes Solomon’s budget seeks to plug short-term deficits while not addressing long-term fiscal concerns, which he believes to be rooted in unsustainable pension and retired employee healthcare costs.
“I don’t see any type of strategic planning in this budget,” he said. “Mayor Solomon basically came out in February and said we have a major, Category 5 storm, that we’re facing an $18 million deficit. Does this solve that? I don't think so. I think this kicks the can down the road for another year.”
Cushman was also critical of the city’s proposed funding to the schools. The budget calls for and additional $500,000 to be provided to the schools over last year, equivalent to a 0.37 percent increase. The schools have requested $8.5 million from the city council, with much of that need coming in the form of anticipated, contractual increases for staff. The proposal does include covering $1.7 million of principal and interest payments for a 2006 school construction bond, but that money was excluded from the school’s budget forecast as an expected burden of the city, so it does not actually move their anticipated need.
On top of these facts, the school department has indicated that the actual proposed allocation from the city side has been level-funded from last year, at about $123 million, while the $500,000 increase actually came from an approximate $1 million increase in state aid and Medicaid reimbursement balanced by a loss of funding resulting from fewer out of district students coming to Warwick.
“From our perspective, the local contribution is level funded and the increase in the budget is from other revenues like state aid and Medicaid,” said school finance director Anthony Ferrucci.
Cushman said that the school department and school committee need to find ways to bring their cost per pupil down, which sits at around $19,000 per student – among the highest in the state – but that the city needs to be more collaborative in working with them to figure out a good strategy moving forward.
“I don’t have an issue with the Solomon administration or anyone else going to the school department and saying we need to reduce the per pupil cost. I think that's a valid request to be made,” he said. “My problem is not joining with them and forging a direction as to what they need to do. Instead, you basically pull the rug right out from under them and level fund them again.”
Superintendent Philip Thornton maintained on Monday that the school department has taken steps to reduce their expenses, but that their expressed need for next year’s budget is accurately represented.
“Over the past several years, the district has reduced staff in terms of teachers, support staff and administrators, the district has closed schools – the budget as approved by the school committee is what we truly need to operate moving forward,” he said. “A large part of the budget request for next year reflects the contractual costs that we know we have.”
Those contractual costs include $3 million for professional staff raises, $2.2 million of which comes from Warwick Teachers’ Union members, and $4 million in anticipated fringe benefits increases. All told, the school department estimated as much as $12 million in increases during a February meeting for the upcoming fiscal year, which begins July 1.
Ferrucci said the school department was still “looking into” the arbitrator’s decision that would require them to take $4 million from the Warwick Independent School Employee (WISE) Union’s pension to cover their existing deficit for the fiscal year that ends June 30. If that gap is not filled, it is not certain at which point the state Auditor General would become involved in the reconciliation.
“Whatever his remedies are, we're open to,” Ferrucci said when asked what would happen if the situation came to that. “We'll provide unlimited access and if he wants to meet with us, we're more than happy to meet with him.”
Talking more generally, Cushman said that preparing and presenting a budget without either a year-end fiscal audit being finalized or an official five-year financial outlook is not in the best interest of the city’s financial health. Cushman’s own forecast of city finances targeted a “snapshot” showing a five-year deficit ranging in the $78 million range, assuming maximum tax increases each of those years.
“It's like, I'm going to go drive to California with no maps or GPS, I’m just going to wing it, and wherever it leads me, maybe I wind up in Niagara Falls before I realize what's going on,” he said.
Cushman said he has not been contacted by the city to ask questions about his analysis, and Mayor Solomon has denied seeing Cushman’s report during a recent interview.
“The question is why wouldn't you want to look at it?” Cushman asked. “Maybe because you don't want to know the answer.”
“I want to see more transparency and I want to see a strategic plan,” he continued. “And I don't see that right now, I see more of the blame game.”
In advance to the public budget hearings set for Tuesday, May 28 and Wednesday, May 29 starting at 4 p.m. both days at City Hall, the recently formed Warwick Financial Crisis Committee will meet this Thursday at 6:30 p.m. at the Warwick Public Library.
Peter Buongiovanni, who founded the group in the wake of the revaluation completed in April, said Saturday the purpose of Thursday’s meeting is to review the mayor’s budget and prepare for the hearings. Citizen advocate Rob Cote, as well as Cushman, have been invited to give their perspectives of the proposed budget.
Given the mayor’s budget and tax rates, Buongiovanni said, “People are really upset.”
He said he is personally troubled by “a lack of guidance” and a five-year plan to deal with mounting city legacy costs of pensions and health care costs of retirees. He notes that those costs exceed those of active members of some departments.
“There’s got to be a way to address the legacy cost,” he said.
He said the meeting is open to the public.
“We welcome anyone who has an interest in the life style in Warwick,” he said. He said he would welcome the mayor to attend.
Reached on Monday by phone, Mayor Solomon indicated that he believed the city was headed in the right direction.
“You can't turn an aircraft carrier around as quickly as you'd like to, but we're turning in a direction that's going to be positive for the taxpayers, it's going to be positive for the employees,” he said. “People are going to continue to receive the services that they deserve and are entitled to. Change sometimes can be radical and painful, but services will continue.”
Solomon confirmed that the city had still not received its finalized audit for the FY18 fiscal year, which would provide insight on what exactly was left in city cash reserves, of which Solomon is tapping into for another $3.5 million in his FY20 budget proposal. He said that he was hopeful the city would not be entering the “danger zone” in terms of what is left in reserves, but did not provide further information on what that means or how much he anticipates the reserve account will be left with.
“I'm hoping that once we have a more solid handle on things as we go forward, and we're heading in that direction, that we will be able to act with certainty,” he said. “But right now, it's day to day. Fortunately, we're headed in a good direction day-to-day.”
Solomon said that he was proactive to ask departments to reduce their overall budgets by 5 percent, but he needed to include figures in the budget that account for worst case scenarios, such as the fire department union turning down a tentative agreement that would have provided no pay raises for the 2020-21 contract, and allocating roughly $4 million in overtime for firefighters due to being in a position where the city cannot hire more firefighters until the issue regarding the pension system can be finalized.
“I am not in a position, until that Tier II [pension] issue is resolved, to hire any additional firefighters or personnel,” he said. “That would not be the prudent business decision to make. That's still a variable that's out there.”
Solomon said he would be awaiting advice from “outside financial advisors” to provide more information regarding fiscal liabilities moving forward.
“I will leave that to them because, let's face it, you cannot plan for the things that we've incurred,” he said. “We've incurred a lot of things that could not have been planned for.”
Ward 5 Councilman and city finance committee chairman Ed Ladouceur did not respond to a call requesting comment on this piece.
(With reports from John Howell)