Polisena: Audit a reflection of town’s positive finances

“We feel very confident that the town’s finances are very strong...I can tell you the auditors were pleased. I leave it totally up to [Finance Director] Joe [Chiodo], I have total faith and trust in him. Now that he’s here, he got everything stabilized.””

Mayor Joseph Polisena

Johnston Mayor Joseph Polisena said he was pleased with the results of the town’s annual audit, framing it as a reflection of the town’s improved financial standing since he took office.

Polisena and Finance Director Joseph Chiodo spoke to the Sun Rise at Town Hall on Dec. 19, as the former said he was “very, very happy” with the audit. Polisena said he was unable to attend the Dec. 9 Town Council meeting during which Nyhart’s Randy Gomez presented the results of the study.
The report showed that overall liabilities were 7 to 8 percent lower than expected, and Gomez noted that there was an adjustment made with regard to how many future retirees take health care. He said Nyhart is recommending the assumption that all future retirees will enroll be lowered to 90 percent. He said no future adjustments would be advocated without proper data.
“Our conclusion was, there’s a lot of free coverage, employer-paid coverage, and although free coverage is nice, not everybody takes it because they have other healthcare somewhere else,” Gomez said. “We’re not going to go lower than that until we have more evidence. Every three to five years we’re going to come in and we’re going to reevaluate that.”
Gomez explained that some retirees may not add spouses to their medical plan, though he was not sure why — but it did result in a $13 million decrease in liabilities for the town.
Polisena commended Chiodo for keeping “his finger on the pulse,” resulting in a positive audit and Johnston’s consistently climbing bond rating. After starting out at BBB+ – two grades from the bottom – when he took office, Polisena has witnessed the bond rating climb to AA, which was awarded by Standard and Poor’s over the summer.
Chiodo said the bond rating puts Johnston in line with “all of the so-called financially secure, elite communities.” He noted that the town faced a $2.5 million deficit when Polisena took over, as well as a $5 million hole in the school department. Since then, the schools have a surplus of more than $4 million, while the town’s cumulative fund balance sits at $32 million.
“What we’ve done is every newly hired municipal employee, they don’t get healthcare when they retire. They go on Medicare,” Polisena said. “That’s going to stop the bleeding somewhat, but now you have people that are obviously getting it but it’ll stop the bleeding. We feel very confident that the town’s finances are very strong … I can tell you the auditors were pleased. I leave it totally up to Joe, I have total faith and trust in him. Now that he’s here, he’s got everything stabilized.”
“We have positive variances in tax collections,” Chiodo said.
Polisena and Chiodo both noted that employee cuts and bulk buying health insurance have also helped the town rise from the red. Chiodo said the town’s revenues and expenses are close, but both said they will spend more than expected on snow removal.
“We bulk buy health insurance, we started that 10 years ago, 11 years ago with other communities. We get a better rate,” Polisena said. “We try to do a lot of consolidation with buying stuff and we shop around. We sharpen our pencils. It’s something that you have to look at every single day.”
Chiodo said he will have a better understanding of the entire town picture when the school audit is complete, but he said his “books are basically in good shape.”
“I’m just waiting for the schools so we can put everything together, but there are certain things you have to do after everything is done that I just can’t do yet,” Chiodo said.
Polisena said he keeps an eye on spending, and tries to avoid asking for more taxpayer help if possible.
“If you raise taxes [it’s] because you need to raise taxes for the financial stability of the town,” Polisena said. “It’s easy for mayors not to have a tax increase and try to get elected, back then it was every two years, but we don’t do that. If we need a tax increase, we’ll have one. If we don’t need one, I’m not going to take the people’s money unless I need it to run the town.”