By ALEX MALM
Mayor Frank Picozzi defended his proposed $341.1 million budget Monday saying with the rising cost of gas and groceries this isn’t the year to raise taxes even though the …
By ALEX MALM
Mayor Frank Picozzi defended his proposed $341.1 million budget Monday saying with the rising cost of gas and groceries this isn’t the year to raise taxes even though the budget increases spending by approximately $8 million.
“Times are hard, that's why we didn’t want to put any additional burden on the taxpayers this year,” said Picozzi. Yet he acknowledges, “We have a structural deficit a lot of it is going to be addressed.”
On Monday Picozzi and Finance Director Peder Schaefer reviewed the budget including explaining what the administration sees as one time expenses covered by American Rescue Plan Act (ARPA) funds in the general fund.
It includes $1 million for the recall of employees, $500,000 for COVID health claims, and $2 million for energy cost increases.
There’s an additional $7.3 million in the budget from ARPA for “general qualifying support.”
“There’s no question that there is a challenge here in managing (the budget) going forward but it's not like it's a $20 million problem it's more like a $7 million problem,” said Schaefer. Schaefer defended the no-tax increase budget saying in view of the effect inflation is having on the cost of living and the hot real estate market that has fueled home prices it is tantamount to a cut in taxes.
"This focus on taxes is all nominal dollars. If you look at real dollars…this mayor has orchestrated the biggest tax decrease in the City of Warwick. The biggest decrease on real dollars,” he said.
Looking at taxes as a percentage of real estate value, Schaefer argues "real taxes have plummeted in the city."
Overall, Council President Steve McAllister said he is in support of the proposed budget.
“I think it's a very solid budget… the goal of the Mayor is to have a no tax increase for the second year in a row and I think he provided us with a good document to work off of,” said McAllister.
As part of the proposed budget the city projects a 0.8 percent growth in real estate and tangible taxes.
“ There will be a decline in motor vehicle taxes, as state law will reduce the tax rate to $20 per $1,000 of assessed value,” the budget address reads. “This loss will be offset by state aid. Other revenues show good growth especially in the real estate sector during this year, with expected moderation next year.”
The budget also calls for $4 million as revenue from the sale of city owned properties. Schaefer on Monday said the city projects to receive $2.1 million from the sale of John Wickes and recently received around $500,000 from the sale of Christopher Rhodes.
“The recent bid opening on the former Wickes School property confirms this as a reasonable estimate,” Picozzi’s budget address reads. “Other City properties will produce unrestricted revenues in future years.”
Picozzi anticipates a growth in tax revenues. “It is clear that economic growth is on the rebound in Warwick providing many benefits to the City in the form of expanded tax revenues, new and diversified jobs, and consumer shopping and dining experiences,” the budget address reads. “Growth in the tax base over the next 1-3 years will yield over $3 million in added property taxes.”
McAllister pointed to the increase in housing developments as a positive sign that more revenue will be generated.
“I’m really excited about the future of the city. There are so many more developments that are coming here that are really going to bring in new revenues that are really going to help us out,” said McAllister.
Aside for the $1.2 million going to the schools for technology and one-time cost spending along with $10.2 million dedicated to the general fund, Picozzi’s budget also proposes for the following to be pledged from ARPA funds:
$3.5 million for construction of the outdoor rink
$2.7 million for Public Safety and Public Works equipment
$2.4 million for public building improvements
$500,000 as an initial pledge for critical and essential police station renovations
$800,000 for a Post Road paving improvements planned in concert with the RI Department of Transportation
$3 million for Road Resurfacing
$1.8 million for City Council Ward projects
$1.7 million for police and City technology initiatives
“Over $11 million of this spending will reduce costs in the future over several years because they are non-reoccurring, one-time costs, or they avoid debt and lease costs which will not reoccur,” Picozzi’s budget address reads. “ A conservative estimate of annual reduced costs show that well over $2 million in reduction would occur in FY 24 and thereafter as a result of spending these ARPA dollars now. This $28.4 million pledge to the general fund and special projects allocates most of the remainder of the $39.4 million entitlement for the City of Warwick.”
Schaefer on Tuesday said that not all the ARPA funds for capital projects may be spent in this year’s budget and may be carried over to next year.
The proposed budget calls for an increase of seven full time employees across the different departments, including three additional full time employees for the Warwick Public Library and 10 additional full time employees for Thayer Arena. In total the proposed budget calls for 783 employees. When factoring in the enterprise departments the proposed budget calls for 850 full time employees.
The additional library staff in the proposed budget adds two full time library aides back to the library staff, according to Library Director Jana Stevenson.
“These were eliminated in FY22. With these positions filled we will have the staff levels needed to go back to pre pandemic hours at all of the branches. Roughly 20 hours each,” said Stevenson.
Asked when all the neighborhood branches would go back to pre pandemic hours, Stevenson said “the positions have to be filled before we can do that.”
“With staff planning vacations all summer we are usually short staffed June to August,” said Stevenson. “These positions will make it possible to cover those who are on vacation. The sooner they are filled the sooner we can expand the hours.”
Asked about the raises for non union employees Picozzi said they will all receive 2.75 percent which is the same as the municipal employees union. Police are set to receive a 3.25 percent increase as part of their contract and teachers will be receiving 2.5 percent, Schaefer said.
“All non-union people get that except the Mayor,” said Picozzi.
The estimate for employee benefits is $71.5 million which is up $274,676 compared to the current budget.
McAllister said that the fire department’s budget has always been a major topic during budget hearings since he has been on the Council.
“That's always been a hot topic at these public hearings,” said McAllister.
This year he thinks there will be less drama with a reduction of over $800,000 in the proposed budget.
The proposed budget accounts for 23 new firefighters who joined the department and 12 more who will graduate from the Fire Academy in June.
Schaefer noted in the proposed budget that overtime per week has been reduced from $150,000 to approximately $70,000 with “further reductions to occur as the new fiscal year begins.”
At an $80,000 a week decrease in overtime the city expects to save approximately $4.1 million on overtime.
McAllister said that the fire class was the first one they had since he was on the Council.
“That was a great investment,” said McAllister.
Schaefer said that the proposed budget also calls for $400,000 in contingencies for increases to the firefighters contract which expires at the end of June.
Following the release of the budget Mike Fleury the endorsed Libertarian Candidate for the Ward 5 Council race said in a statement “After spending Thursday afternoon reviewing the documents provided, I was left very underwhelmed with a path of fiscal responsibility.”
“The mayor is taking the ARPA funds being made available to Warwick and using it to start projects that in future will cost the taxpayers big,” said Fleury. “Payroll expenses are on the rise, especially in places like the Tourism, Board of Canvassers, Public Works and City Clerks office. These major expansions of our cities government will have long term issues, including pension shortfalls, COLA spikes as we head into a possible recession, and a spike in benefit costs.”
Former School Committee Chairman Bob Cushman also responded to the budget stating in a letter to the editor “Warwick Mayor Frank Picozzi has only been in office for a little less than two years. In that short time total spending in the city has increased almost $20 million without a tax increase.”
“What magic formula has Mayor Picozzi discovered that allows him to freely spend tens of millions of dollars and not raise taxes? The answer is that the mayor is using one-time revenue sources to fund this spending,” Cushman’s letter read.
With Picozzi’s budget proposed budget set the next step is for the City Council to vote on ratifying the budget. The Council is allowed to adjust line items in all department budgets except for the School Department’s in which case the Council can only adjust the bottom line number.
The first hearing is set for Monday at 4 p.m. with a second hearing on Tuesday at 4 p.m.
The Council is required to wait 24 hours after their final budget hearing before voting on the budget meaning that they are expected to take a vote on the final budget next Thursday at 4 p.m.
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