WOONSOCKET â The City Council held a âstate of the budgetâ work session with administration and state officials Monday night and settled on a forecast that could only be described as dire and ominous.
Not only is the city once again looking at an operating deficit well over $14 million for the current fiscal year, it could also be dealing with that same figure each year through 2017 if drastic changes to city spending or state financial support are not made.
The cityâs state-mandated need to fund its outstanding pension liability over a five-year period is just one factor behind its structural deficit in a $136 million city budget, as is the as-yet-unfunded $5 million increase in current school spending approved by the state Budget Commission last summer.
A draft âbaselineâ compilation of all city spending and projected costs presented to the council by city Finance Director Tom Bruce and Stephen Coleman, a productivity director for the state Department of Revenue, takes into account a 4-percent annual tax increase over five years but doesnât specify how much more might be needed as a supplemental tax to address the deficit.
It also doesnât specify what employee and benefit savings might be found on the way to the Budget Commission finalizing a formal 5-year spending plan for the city and how those changes might address the projected red ink.
Bruce suggested that such changes could be worked into the projection as soon as they become known.
âThis plan is dynamic and continually subject to change,â Bruce said while presenting the overview in the Councilâs second-floor conference room.
State Rep. Lisa Baldelli-Hunt, attending the Councilâs meeting with state Rep. Robert Philips, joined Councilman Roger Jalette in questioning why information on possible savings is still not known nearly a year after the city was well aware it must have employee and retiree cost savings as a way out of its fiscal morass.
âPeople are just scared stiff waiting to find out about that information, including me,â Jalette said.
Baldelli-Hunt suggested the city could have worked out some agreements with its employees in the area of health care coverage as far back as seven months ago that would have generated upwards of a $4.5 million savings in the current budget, thereby lowering the overall projected deficit by at least that amount.
âWe are now approaching February 2013 and what concerns me is the lack of aggressiveness in trying to reduce the structural deficit,â Baldelli-Hunt told the Council.
Instead of waiting for special legal council hired by the Budget Commission to take up the topic of negotiated costs savings with city union members, Baldelli-Hunt suggested the city should have made that move on its own months ago. If savings were secured, as Mayor Angel Tavares has been able to do in Providence, they would already be at work reducing the deficit, according to Baldelli-Hunt.
Fontaine, a member of the Budget Commission as is City Council President John Ward, and Bruce said it has been the commissionâs goal and that of Rosemary Booth Gallogly, director of the Department of Revenue, to complete documentation of the cityâs overall budget costs before setting a target for the savings needed from employees or retirees.
Fontaine said he agreed with Baldelli-Hunt that the health care savings, projected by the administration even before the Budget Commission was brought in, could have generated a savings this year, but also explained the stateâs interest in obtaining final projections on needed budget reductions before beginning such negotiations.
The city did hold a general meeting with all its union groups on the topic of healthcare last year and also held additional meetings with representatives of the different union groups, Fontaine noted.
But how much in concessions would have to be negotiated was not known at that time, he added. The city would not have been able to answer the question â what is the number? â without having a number to give them, Fontaine said. âThe talks have been very preliminary,â he said.
The lack of concrete information on what steps the Budget Commission will take to offer a balanced city spending plan also troubled Councilmen Daniel Gendron, Christopher Beauchamp, and Marc Dubois.
Gendron also questioned why the commission has not moved faster in working out a plan for lower health care costs or agreements on pension savings.