City Council President John Ward told members of the Council and School Committee Wednesday that the act authorizing the city to issue new tax bills could get another chance May 22.
Ward spoke during a Council working session at Town Hall last night, with School Committee Chair Anita Forcier-Mcguire, School Committee Vice Chair Vimala Phongsavanh and Superintendent Giovanna Donoyan present. He said he'd spoken with Rep. Jon Brien (Dist. 50, Woonsocket) earlier Wednesday and had learned the Finance Committee might be considering the act again as early as next Tuesday. The Finance Committee tabled the authorizing legislation Tuesday, May 15.
"It usually means that the bill is killed," when a committee tables a bill for further study, said Mayor Leo Fontaine, so a possible new hearing is good news. But time is still short, he said. The school department is out of money, and is largely operating due to the good will of its creditors. Durham Bus Services, for instance, is continuing to provide transport for the schools despite an outstanding $600,000 bill.
The Finance Committee's tabling of the supplemental tax bill threatens that good will. "I think there is a big question in vendor's minds," Fontaine said. Also, he said, the city has since heard from Fitch Ratings Agency and Moody's about their concerns about the Finance Committee's decision to give the legislation more study.
Councilman Albert Brien suggested a second option to bring in funds for the city - borrowing from the city's pension fund. Finance Director Thomas Bruce said there's approximately $54 million in that fund, about $20 million of it in cash.
Brien said the cash is earning one quarter of one percent in interest. The city could borrow about $5 million from that, he said, esssentially borrowing from itself at 6.75 percent interest, benefiting the fund and raising money to pay vendors.
Bruce said he would double check with the city's bond attorney, Normand Benoit, but he has already told them the city can't do that. Also, Bruce said, he didn't think the idea was a good one. The pension funds are a trust between the city and employees. "You can't breach that trust," he said. Bruce added that he doubted State Auditor General Dennis E. Hoyle would approve borrowing from the fund.
Also during the meeting Superintendent Giovanna Donoyan told Council members that the schools draft budget had risen by $2,596,000 from the $64,500,000 budget B&E Consulting had given them to work with on Saturday, to $67.1 million.
The hike was largely due to $1.4 million expense for retirement funding and a $550,000 expense for a capital budget that B&E hadn't accounted for, Donoyan said.
Bruce commended the School Committee for its work to flesh out the budget, and noted it was unusual for an accounting firm's work to leave out the line items the School Committee had discovered and added in. "I've never seen that," Bruce said.
Ward said that while the omissions were shocking, the rushed nature of the task set out for B&E probably contributed to the ommissions. In early May, with the schools budget already weeks overdue, the Council demanded a budget from the school department.
"Thank God these people went through this line by line," said Councilman Robert Moreau, praising the School Committee's dilligence.
Donoyan said the School Committee would likely vote on their budget Friday.