By ALEX MALM
Mayor Frank Picozzi’s plan for a second consecutive zero percent tax increase budget, albeit a “structural deficit budget” is now in the hands of the City Council …
By ALEX MALM
Mayor Frank Picozzi’s plan for a second consecutive zero percent tax increase budget, albeit a “structural deficit budget” is now in the hands of the City Council following two hearings totaling 11 hours. The City Council will meet this afternoon at 4 to vote on the $341.1 million budget plan, or amend it should they choose.
Picozzi wasn’t venturing guesses on how the vote would turn out although he thought Council review went smoothly and there were no major issues.
Asked on Wednesday morning if he thinks that the Council will make any changes to his budget Picozzi said “I don’t really (see) a lot of places where they can go without reducing services.”
“You can reduce services or raise the taxes. Raising the taxes this year is not an option people are suffering,” said Picozzi.
By “structural deficit budget,” Picozzi is recognizing that about $7 million is in federal funding for operations that won’t be available next year.
One of the biggest discussions outside of the school budget was in regards to the American Rescue Plan Act funds.
As part of the proposed budget $10.3 million is being put into the general fund with $1 million for the recall of employees, $500,000 for COVID health claims, and $2 million for energy cost increases.
An additional $7.3 million in ARPA would be allocated for “general qualifying support.”
In addition to those funds the budget also calls for ARPA funds going towards:
Ward 2 Councilman Jeremy Rix thinks the infrastructure and particularly roads in Warwick have been underfunded for decades and was pleased that $3 million was being proposed in ARPA funds for paving.
With that said he thought that it was important to also have a dedicated revenue stream for roads and said that he is concerned that in order to continue their efforts it will need to be added to the operating budget in future years but wasn’t part of the FY 23 budget.
Rix said that he is concerned about having a 0 percent tax increase because he is afraid that the city is going to be in a situation where they have to go with a maximum tax increase in a single year to continue to fund things like roads and vehicles.
Ward 5 Councilman Ed Ladouceur during the capital portion of the budget said the Council passed a resolution asking for a five year forecast be provided to the Council. He thinks it's important to have before the Council makes long term decisions regarding projects.
Ladouceur asked Finance Director Peder Schaefer if a five year forecast has been completed yet.
“Are you prepared to provide us with that forecast,” said Ladouceur.
Schaefer said that he has been working on it but the forecast hasn’t been completed yet.
Rix also raised the question of $200,000 being allocated to each Ward for different projects.
Council President Steve McAllister said that the plan is to have a similar system to the General Assembly where people from the community are able to express their ideas for projects online. He said that the goal is to also get feedback in other ways.
“There will be plenty of public input,” said McAllister.
Picozzi said that Council members should begin getting input soon noting that all the funds have to be designated by Dec. 31 2024.
Ward 9 Councilman Vincent Gebhart asked about the ARPA funds being used in the operating budget. Schaefer said that the city could’ve used some fund balance instead of using ARPA funds but said it makes more sense to use ARPA funds.
Last year during the budget hearings former School Committee Chairman Robert Cushman argued that he should be allowed to make comments regarding the revenue portion of the budget however was denied since it wasn’t on the agenda.
This year the revenue portion of the budget was added to the agenda.
As part of the proposed budget the city is expecting 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.”
This year’s budget also calls for $4 million as revenue from the sale of city owned properties. Schaefer on Monday said that they are expected to receive $2.1 million from the sale of John Wickes and recently received around $300,000 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 in his budget address noted that they expect to have expanded tax revenue. “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.”
Citizen Rob Cote during the meeting raised the question of $4 million being projected from the sale of properties saying that it is speculative at this point outside of the $2.6 million that the city has already received.
“You don’t have four million in revenue, you have 2.6,” said Cote.
Cote said that if the city doesn’t sell $4 million in properties this year then they will have a structural deficit.
“You get into trouble that way,” said Cote.
As part of last year’s budget the Council approved $250,000 for the initiation of an “other post employment benefits trust.”
The trust was established to “begin to address the very significant Warwick OPEB liability of over $170 million,” Picozzi said in his budget address.
“The Trust has been established through the RI Interlocal Risk Management Trust,” the budget address reads. “This budget pledges another $250,000 from general funds for the OPEB Trust in FY 23. Currently, the City’s pension actuary is assisting in devising a strategy to identify a long-term funding stream to address this liability.”
Schaefer said that the city’s actuary would be attending a future Council meeting to lay out the different options the city has in order to address the long term issues related to OPEB.
“He is ready to come, he’s ready and willing,” said Schaefer.
Ladouceur said that he feels it's important to get a handle on the OPED liability. He said that it’s going to continue to be a significant and increasing burden on the taxpayers.
“Sooner or later that thing is going to come home to the roost,” said Ladouceur.
Rix said that he thinks it's important for the actuary to present to the Council before any votes are taken on collective bargaining agreements.
Picozzi on Wednesday said that he wanted to increase the amount for OPEB this year but it was before they knew what the allocation for the schools would be.
The benefits portion of the budget also led to Cote questioning how Picozzi was able to decide on repayment plans for himself, and three of his staffers after it was determined that a clerical error led to their share of health insurance not being deducted from their checks.
Cote argued that 56-2 in the City Charter says ”all purchases and contracts, including but not limited to the purchase of or contracts for professional services, in excess of $2,500.00 shall be subject to the provisions of this chapter as to notices and bids.”
“The award of such purchases and contracts in excess of $2,500.00 is subject to approval of the city council,” the charter reads.
Cote argued that the agreement should’ve been voted on by the City Council.
McAllister wouldn’t allow Picozzi to respond citing that the line of questioning didn’t pertain to any particular line item in the budget.
After three library aides were laid off from the budget last year Library Director Jana Stevenson said that the FY 23 Library proposes bringing back the positions. Those positions will allow for the neighborhood branches to be opened to pre pandemic hours again.
Rix, who grew up in Norwood, said that he was glad to hear that the neighborhood branches would go back to their regular hours, saying that he spent many hours as a child at the library.
“This is something near and dear to my heart,” said Rix.