UPDATE: Chafee Announces Appointment Of Budget Commission for Woonsocket

Gov. Lincoln Chafee made a swift, affirmative response to the Woonsocket City Council's request for a budget commisson today, announcing the appointment of a five-member panel, according to a release this afternoon.

Director of Revenue Rosemary Booth Gallogly has appointed Peder Schaefer, Associate Director of the League of Cities and Towns; William Sequino, Town Manager of East Greenwich; and Dina Dutremble, a retired school business officer familiar with the financial conditions and operations of the Woonsocket Education Department.

By law, the other two members of the commission will be Mayor Leo Fontaine and Woonsocket City Council President John Ward.

The commission is the second of three possible steps – fiscal overseer, budget commission, and receiver – of state intervention under the Fiscal Stability Act of 2010. On Friday, Ward noted that the House decision to send the supplemental tax bill back to committee on Thursday left the city with little choice but to ask for a budget commission to step in.

"It left the city very few options", said Fontaine this afternoon. He said he learned that Gallogly was appointing the Commission this afternoon. Now, the only option that will allow the schools to pay some of their bills is to advance state aid - about $4 million - from the June delivery date to this month to give to creditors. Only a budget commission has the authority to advance that state aid payment, Fontaine said.

Some vendors have appealed the Department of Education to make sure they're paid first from that sum, leaving about $3 million. The first thing to be paid from that will be the school department's payroll for the last weeks of the fiscal year, he said.

Remaining bills will be paid from whatever is left, a figure Fontaine did not have immediately available.

The Woonsocket City Council and Woonsocket School Committee will continue to meet, Fontaine said, but are stripped of authority over any fiscal matters - spending and hiring, for instance, are now the responsibility of the Budget Commission. The Budget Commission's first meeting, which is open to the public and will be posted, will be on Friday morning, Fontaine said. He said the exact time and venue have not been decided yet.

Fontaine said the Budget Commission's powers are very similar to that of a receiver, with the exception that a receiver can move the city into bankruptcy.

Fontaine said Gallogly intends to revive the supplemental tax bill - which will reduce the deficit the Budget Commission will need to deal with from $10 million to about $4.4 million, a move he supports.