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Budget Commissioner: Deficit Won't Be Solved This Year

Commission cautions citizens to be ready for a long haul, with a supplemental tax.

 

During Thursday's Budget Commission meeting, Budget Commission member Peder Schaefer told a sparse group of spectators the panel had made progress in figuring out how to fix Woonsocket's projected $15 million cumulative deficit.

Actually fixing it is going to take a little while longer than some might expect, though. "We're not going to get there this year," Schaefer told the audience, which seemed nearly equally spread among citizens and Department of Revenue representatives.

"That doesn't mean you can't get there over a period of years,' though, Schaefer said, "We're making good progress in knowing what we need to do to get there."

Also, Budget Commissioner and City Council President John Ward said citizens should not expect the supplemental tax coming at the end of their process will necessarily be less than the bill pitched to the General Assembly in April. Nor, he said, is a supplemental tax hike likely to expire, since the city needs to increase its levy to adequately fund the school system going forward.

Even with additional cuts to the city side of the budget, including negotiations with the fire and police departments to hold staffing at lower levels, an effort to bring all city employees, including police and fire personnel, under one health insurer and concessions on pensions, all currently in the negotiation stage, higher taxes will be needed.

"I just don't want people perceiving us as somehow coming up with a magic bullet that's going to slay this dragon. It's not happening," Ward said.

Also, Ward said, the advanced state aid the city has received is a loan from the state Woonsocket has to pay interest on. 

"It's insignificant," RI Director of Revenue Rosemary Booth Galoogly said about the interest. 

"It's not zero, is my point," Ward said, noting that even $90,000 spent paying the interest could mean jobs the city wouldn' be able to pay someone to do, services city residents will be denied.

"Keep an eye on us, it's going to be an interesting run," Ward said.

Commission member Leo Fontaine asked Galoogly if the recently reported $17 million state surplus would be returned to cities and towns. Galoogly said the state would likely stick with it's already-outlined FY 2013 budget plan.

Schaefer noted the city could also see some relief from the state's Distressed Community Fund. In 2012, Woonsocket received $881,782 from the fund, about 12.5 percent of the $7 million deficit the city faced this current fiscal year.

The city's cumulative deficit, according to City Finance Director Thomas Bruce, comes from a previous $8 million deficit and a roughly $7 million deficit projected for the current year, on the school department's books.

Current plans to cut costs include:

  • Putting all employees under one health insurance plan: $4 million savings OR Health savings plan (a kind of health procedure 401K): $4 million savings.
  • Pension and benefits for retirees concessions: in negotiations (a large, but as-yet undetermined amount)
  • Cost of Living Adjustments for retirees: in negotiations
  • Police and fire department staffing levels: in negotiations

Bruce said the city could also amortize its previous deficits over the course of 5 years, essentially reaching a payment plan agreement with the state. 

Bruce said the city is running out of time to decide what cost savings it can effect and make a case for a new supplemental tax bill. He said they'll need to have a plan in place in October to get it ready to present to the General Assembly in December for the next legislative session.

Commission Chairman Bill Sequino did not attend the meeting, which was led by Schaefer in his absence.

nimrod September 17, 2012 at 09:26 PM
Something like this should be unthinkable,let alone possible.Debt holders will be paid in full though,with or without a reciever.Thanks GA for letting the credit card companies (bondholders) off the hook.
Nick September 17, 2012 at 11:29 PM
The state surplus should be used to fill the gaps, not fund new projects the governor wants.
Novan for Life September 17, 2012 at 11:39 PM
WU SAO baldelli-hunt and brien disagreed with a supplemental tax because the city didn't have a plan to solve the problem and all our GA delegates found out later they were lied to by the mayor and CCP for the fact they just wanted to raise taxes. so stop blaming them and focus on the two pea brains on the budget commission(the mayor and the CCP)
Novan for Life September 17, 2012 at 11:40 PM
steve i agree with you the state is laughing at us
Jan Allard September 18, 2012 at 01:14 AM
Wowee, after having the Budget commission here for 4 months, the conclusion is, Woonsocket needs a supplemental tax bill??? Are you for real? When are you going to do something about the school problems with money? You don't need a college education to figure out 4 months later what the city will need!!! They haven't consolidated positions, or made any changes, PLEASE...if you can't fix the problem, admit it and move on. Let RI start sharing some of their surplus, since they put us in this mess. RI is pathetic, all politics and no answers !!
la_mouffette September 18, 2012 at 01:51 AM
The most painful (or hilarious, if you've got to the desperate gallows humor stage) part of it all is this--- the Budget Commission has no special abilities, no more power than the city council did. It's designed purely to bring in people from out of town, when the people in town appear not able to fix the problem. As for moving G&W down, I wouldn't mind if it were moved down slightly, for just one reason-- it might actually get some people who tend to talk and split, to sit and listen for a bit!
la_mouffette September 18, 2012 at 01:57 AM
EXACTLY, Rob!
la_mouffette September 18, 2012 at 02:14 AM
So, "helping" would have meant what, Wu? As for as many Woonsocket residents were concerned, not allowing the supplemental through, at that time and in that form, WAS helping. The timing and scenario were all wrong. That's why they chose to try to stop it. And for what it's worth, the state and the reps spent many, many hours trying to come to *some* kind of workable agreement before the deadline. It's not as if Phillips, Baldelli-Hunt and Brien shut off their cell phones and left the country. They were in meetings until all kinds of hours during the night, and then right back into Legislative session when day came! Also, it isn't the JOB of the state reps to work out this problem at Budget Commission meetings. You may as well complain that our fire chief wasn't giving the keynote speech at the MLK jr. monument dedication! State reps work for their constituents on the state level. Our local government was trying to solve our increasingly scary fiscal crisis with "more of the same", constituents begged Baldelli-Hunt to do something to stop it on the state level, and she did. Because things on the state level are her job. She isn't on the Budget Commission, or the City Council, or the School Committee, nor are Phillips or Brien. It seems strange to criticize them for not wearing everyone else's hats for them. 2.
la_mouffette September 18, 2012 at 05:48 AM
Wu Sao, you haven't been paying attention. Previously, Bill Sequino, head of the budget commission, has said he wants to pursue union concessions and a lower supplemental than what was previously being asked for. Also, that last Supplemental, that our state reps managed to stop because there was no other firm plan that went along with it, would ALSO have been "forever." The tax hike portion was going to be rolled into the annual tax rate. As he has previously stated, Ward's plan is simply the same supplemental tax, "take 2" or as he has also called it, "the second bite at the apple." This is not worse than what the City Administration was asking for. If the commission can cut here and there, and successfully negotiate with the unions, it may well be better. You saying this is somehow dramatically worse, and blaming Baldelli-Hunt, makes no sense at all, unless I assume you haven't been watching this show closely for very long....
la_mouffette September 18, 2012 at 05:56 AM
The thing Axead needs to realize is this-- part of why the state reps decided to try to stop the supplemental as it was, is because they were reportedly being told by state officials that Woonsocket would probably get a budget commission, with or without a supplemental. It makes sense, because the supplemental alone (and despite months and months, the supplemental tax was the ONLY part of the solution that our mayor and council president worked on to completion, at least as far as the public can tell) could not possibly fix our problems --it could only keep us treading water, right on the edge of drowning, for a bit longer. (you know...like that multi-million budget deficit bond this administration took out some time ago, without allow citizens to vote on it! Just paying piles of money to postpone our problems.) Our drastically underfunded pensions* are an ominous giant, hunched on the horizon. Even with the supplemental, a budget commission was most likely still coming, and we still would have been on a collision course with disaster. *we must pay TEN million a year to even begin to catch up. Instead, we pay one million.
la_mouffette September 18, 2012 at 06:11 AM
OUr reps did the right thing, but it was a choice between bad and worse. Bad was pushing off the solution until it was a REAL solution. Worse was giving in to a massive supplemental that wouldn't fix anything. Jut like the budget deficit bond, it would have been bailing out the boat instead of REALLY trying to fix the leaks. At least now, with the budget commission, there's an effort to formulate some sane solutions (the HUGE project to build a new drinking water treatment plant has at last been put aside while more pressing issues are addressed. We need it, sure, but good lord. We're on the edge of a cliff!) But I agree with that last sentence. They weren't all of the problem, but they were a BIG part!
harley0011 September 18, 2012 at 06:27 AM
I'm sorry Steve, in all due respect, the city is going under because we have a little over 11,000 tax payers and 42,000+ residents. Stop blaming the unions and address the real issue, 11,000 can not pay for 42,000. Please stop blaming the people that are working every day. Do the math, it's not the "unions" that are putting the city under, it is the people that are living for free that are killing this city, but for some reason nobody wants to address it.
John Ward September 18, 2012 at 10:34 AM
I would hope to see you at our next meeting so you can call me out for trying to stifle public comment, but I doubt you would take the time to actually participate Sly. But feel free to come, I'll be there for you. BTW, the receiver has no special powers either, except to be able to petition the city inot bankruptcy court "if we qualify." And, like in CF, the first act of the receiver would be to request a supplemental tax bill while negotiating with the unions for concessions; pretty much the same thing that is happening right now. Oh, sorry, I forgot that you don't like to deal in facts or reality, just you usual slander and name calling. Carry on.
John September 18, 2012 at 11:42 AM
Baldelli-Hunt and Brien just didn't want it before the election. Let's see how hard she fights against now that she's guaranteed two more years in office. Remember WWII Memorial Park before the last election?? How's that coming along? Wake up people!!
John September 18, 2012 at 11:50 AM
la_mouffette, In order to represent their constituents at the state level they need to know what's going on at the city level. Don't you remember them saying "We had no idea this was going on in Woonsocket". Even though the Mayor produced several e-mails to them proving differently. For God sake, Brien's father is on the City Counsel and lives next door to him. Just ask or attend some local meetings to know what's going on. Why do our City Counsel members and School Committee members have to testify an fight for things at the state house while Baldelli-Hunt and Brien can't be bothered to attand meetings in their own city?
Tired Tax Payer September 18, 2012 at 11:56 AM
The budget commission hasn't done anything different than the idiots we already have. Did people really think they were going to come in and not raise taxes and not do a supplemental bill? They might not be politicians from woonsocket...but are politicians. That says it all.
DMA September 18, 2012 at 12:50 PM
Very Well Put Sly! I completely agree! Remember All. It Is Under Ward & Fontaines watch that this mess happened and if they were doing their Jobs Properly this Fiscal Crisis would never have happened. I cannot wait till next year to remove Ward & Fontaine!
nimrod September 18, 2012 at 12:51 PM
I'd like a little supplemental income to pay your supplemental tax,John.It's a little tough in a city with an 18% unemployment rate though.Why are you entitled to my savings?Why are you entitled to ever increasing amounts of everyone's income in what is obviously a depression? It's a moral issue now,like it or not.
Rob Borkowski (Editor) September 18, 2012 at 01:08 PM
DMA - It's unfair to lay the deficit at the feet of the Mayor and City Council president. The deficits happened at the school department, and crept up on the city thanks to poor fiscal reporting practices which roughly four guest auditors (one courtesy of RIDE) the School Committee itself, and the Budget Commission have yet to straighten out. State law sets up a wall between the city administration/elected officials and the schools that they are only just beginning to put a window through. It's clear you don't like how the Mayor and Council President are running things, which is OK. The School Department and its mill stone of deficit aren't among those things, though.
John September 18, 2012 at 06:59 PM
I'll tell you who the person behind all of this is: Eleanor Nadeau. She made this happen from her seat on the School Committee for the last 6 years. She was in charge of the hiring sub-committee for the last 6 years that hired all of the incompetent people that got us in this mess: 1. She ran Superintendent Daccioli out town and paid out his contract, a full year of pay sitting at home. 2. She then hired Superintendent Macera who left the school in a financial mess 3. She hired business manager Robert Strom as a favor to the exiting Mayor Menard. He was not qualified and left the school in a deeper financial mess. 4. She hired Superintendent Dr. Geradi who well overspent his budget. 5. She also hired Finance Director Stacey Busby...you remember her...we have a surplus, no my mistake a 7 million dollar deficit. 6. Now she Hires Dr. Donoyan, we'll see how that works out. Please remove her from the school committee. This city cannot afford her arrogance and incompetence.
Sly September 18, 2012 at 07:42 PM
John I agree,She's another one that her welcome ran out a long time ago.She also needs to go very soon.Maybe even her own talk show, would be a good fit because that's all she knows how to do. is TALK.Incompetence comes with age, she is living proof.Ward getting up there in age.
DR September 19, 2012 at 05:36 AM
Rob the mayor and council president have been running the city ( into the ground ) for years,it is not like they were just elected last year.They knew the school dept. couldn't run on 60 million( no matter how many auditors were brought in) then all of a sudden they were surprised when the school dept. had a 8 million deficit. A YEAR EARLIER a multimillion dollar bond was issued to solve a deficit problem without taxpayer approval, however NO REQUIRED CUTS WERE MADE as was required by the State.The sad part is both these people are on the Budget Commission-what a stacked deck against the taxpayers and business owners. The longer it takes the Free Budget Commission to make the necessary cuts the more expensive it is for the city. Mr. Flanders and crew would have been less expensive in the long run.
Rob Borkowski (Editor) September 19, 2012 at 01:18 PM
Dr - Knowing about a problem and having the power to solve it are two different things. The school department operates independently of the Mayor and City Council. Even with the Budget Commission in place, they remain autonomous. What do you suggest the Mayor and Council President should have done to exert control they didn't (and still don't) legally have?
nimrod September 19, 2012 at 01:42 PM
People really need to understand that Woonsocket's debt holders don't have their cards on the table.They made bad bets and are laughing all the way to the bank.
DR September 19, 2012 at 01:53 PM
Rob over 2 years ago when the deficit bond was approved the city was required to make cuts instead of sleeping. At that point meetings with the School Committee,unions and the public should have been a priority instead of tag day. All of a sudden a year or so later there is a 8 million deficit-where did that come from?
John R Dionne September 19, 2012 at 02:27 PM
If the budget commission has no additional power than the city council, where does John Ward, Leo fontaine and the rest of the commission get the power to cary over a deficit which is against the home rule charter for the city of woonsocket? John R Dionne
John R Dionne September 19, 2012 at 02:38 PM
According to John, Ellie Nadeau is the blame for everything as a member of the school committee. If my memory is correct wasn't there a search committee of 15 or 16 people? What happened to the other 4-members of the school committee? You can be critical of her, but let us not forget the city council approved a $59 million budget knowing it needed $66 million. That is what created the deficit. John R Dionne
John R Dionne September 19, 2012 at 02:44 PM
Can we all agree that the supplemental tax bill before the General Assembly was important as stated by Fontaine and Ward? Do you know who many personal phone calls they made to our local Rep's explaining and asking for help. ZERO CALLS. John R. Dionne
DMA September 19, 2012 at 02:54 PM
Rob Borkowski I respectfully Do Not Agree with you. The Mayor and Council President Have A Fiduciary Responsibility to the Residents of Woonsocket. All Fiscal maters in the City Including The School Dept. Are Directly Monitored by the Mayor and Council President. Wht did they allow the overspending that put the City in Perril? It is very apparent they were Not Doing Their Jobs! They Allowed this to happen! Now The Taxpayers , Residents and Employees will suffer. What upsets me is Now they want to Reduce Pensions of City Employees Buy Mayor Fontaine will bet a Big Fat Pension after serving 4 Years as Mayor that We All Must Fund! $$$$ Is he willing to reduce his pension?
la_mouffette September 24, 2012 at 03:17 AM
John's bringin' down the thunder! ka-BOOM!

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