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State takes over city finances

May 29, 2012

WOONSOCKET — With the city teetering at the edge of a fiscal cliff, State Revenue Director Rosemary Booth Gallogly appointed a budget commission yesterday to take control of its financial affairs.
The three non-elected members of the panel were identified as Dina Dutremble, Peder A. Schaefer and Bill Sequino Jr. by members of the governor’s staff. By statute, Mayor Leo T. Fontaine and City Council President John Ward are automatically on the panel.
Dutremble, a North Smithfield resident, is a former business manager of the Woonsocket Education Department who temporarily replaced Stacey Busby, the business manager forced to resign in the wake of the surprise discovery of a $10 million shortfall on the WED’s books, the root cause of the fiscal crisis. She worked closely with the auditing firm Bacon & Edge to reconstruct the WED’s books and define the extent of the shortfall after Busby’s exit.
Schaefer is the assistant director of the Rhode Island League of Cities and Towns and a former finance director in Warwick when Gov. Lincoln Chafee was the city’s mayor.
Bill Sequino Jr. is the current town manager in East Greenwich, one of the most fiscally secure municipalities in the state.
He’s a graduate of the Harvard University Kennedy School of Government, a former town administrator of Stoneham, Mass., and a former city manager in Ownesboro, Ky. and also in Statesville, North Carolina.
“These are great people,” reacted Finance Director Thomas M. Bruce III upon learning the names. “I’ve worked with all of them, and knowing who they are gives me great confidence that this is going to be a successful budget commission.”
The arrival of the commission comes on the heels of the City Council’s emergency meeting, just two days ago, on the eve of Memorial Day, to ask for one. Councilors blamed the legislature’s failure to approve enabling legislation allowing the city to levy a 13 percent supplemental tax bill for forcing their hand.
City officials portrayed the tax as part of a plan to begin closing the $10 million hole in the WED’s budget and pump some cash into the city’s coffers, including some $3.2 million in short-term loans, to keep the schools operating.
Without the tax, which would have raised up to $6.6 million, or about $350 each from the average taxpayer, the schools will probably run out of money to pay by the middle of June, gobbling up the last bit of state aid they’re due this year. Payments to major vendors, including transportation providers, are also some $6 million in arrears.
“Woonsocket, like a number of other Rhode Island communities, has been experiencing severe financial challenges for some time now,” Governor Chafee said in a statement. “The members of the budget commission – all of whom have relevant municipal experience and expertise – will be able to assist the city as it works to get its fiscal house in order. State intervention is never the preferred course, but hopefully this commission will help the city correct some of its major structural problems and craft a solution that ensures a stable future for the community and its taxpayers.”
Speaking during a press briefing at the Statehouse Tuesday, Gallogly predicted the budget commission will press members of the legislature to resurrect the enabling legislation to allow the city to issue the supplemental tax bills.
“The budget commission is just a start,” she said. “They still have a very significant problem. The supplemental tax bill still needs to be passed.”
A budget commission makes the city the third in the state operating under some form of intervention for distressed communities. East Providence is also operating under a budget commission, and Central Falls is in bankruptcy following the appointment of a receiver, a more aggressive form of state intervention.
Mayor Fontaine said Gallogly informed him that the budget commission had been seated shortly before the press briefing at the Statehouse.
Fontaine said the initial plan is to hold the first meeting of the panel as soon as Friday, but the time and the location haven’t been firmed up yet. The location, frequency and time of the meetings will probably be among the first items on the panel’s agenda.
One noteworthy difference between a budget commission meeting and those of the City Council is that members of the general public won’t be allowed to voice their opinions during an open segment known as “good and welfare.”
“I don’t believe that’s been the case in East Providence,” he said.
Only two members of the council voted against the resolution calling for a budget commission, Councilors Albert G. Brien and Roger G. Jalette Sr.
Instead, they favored the appointment of a receiver. Their opinions echoed that of many members of the city’s legislative delegation, including State Rep. Lisa Baldelli Hunt, who moved to recommit the enabling legislation for the supplemental tax plan last Thursday, a parliamentary maneuver that makes it unlikely the bill will be resurrected this session, except on her say-so, according to Larry Berman, a spokesman for House Speaker Gordon Fox.
A budget commission effectively absorbs all the financial decision-making power of the City Council, the School Committee, and administrative machinery of the Fontaine administration. The council and the school committee may still meet, but their authority for the foreseeable future, will likely be confined to routine, non-financial issues, including licensing and other regulatory matters.
Tellingly, the panel arrives at a time when neither the city’s budget, nor that of the school department, have been finalized. Major contracts are also in play, including a deal on a $35 million water treatment plant that the budget commission would presumably now take over.
Neverthless, Fontaine said he hopes the major government bodies continue to offer feedback to the budget commission, which could be in place for as long as five year under state law.
City officials say a budget commission is likely to pursue a multi-pronged course or both supplemental taxes and additional cuts to put the city back in the black. Some likely targets include Harris Public Library, the Senior Center and the city’s generous 42 percent “homestead” exemption for single-family property owners.
Still, if the panel feels it can’t get the job done with cuts and more taxes, it could dissolve itself and ask the state for a receiver.

Comments

budget commission

May 30, 2012 by fedupandangry (not verified), 2 years 16 weeks ago
Comment: 1362

I thought we were looking for new ideas through a new set of eyes. This commission is made up with the same people that allowed us to get in this mess. We must be stupid. Let's resolve our problems. Let the State give us the monies we need to run our school system or let the State run it. If Woonsocket is the best resource for special needs students in the State, thats great but shouldn't other communities help with the cost? If we cannot negotiate with unions regarding cut backs because they refuse to lose something, how would they fell if we went into receivership and they lost everything. Come on folks, let's use our heads. Why can't the leaders of Woonsocket, East Providence, Pawtucket, West Warwick and any other hard hit community get together and go to Providence and tell this governor what we need request his help or tell him were to go.

Good Luck Woonsocket

May 29, 2012 by Ron C (not verified), 2 years 16 weeks ago
Comment: 1358

Good luck to Woonsocket from an East Providence resident. You're going to need it. Although all reports are that the commission is helping solve our financial problems it has done so by destroying all of the reasons many of us chose to live in EP. I lay the blame squarely on the Governor for sending us this plague. While our taxes go up we are now hit with fees for everything we do. Our water and sewer rates have been raised, libraries closed, no money spent on roads, our parks are a mess, increased fees for seniors using the senior center, fees for our summer playground program (with less offerings then when it was free) and our youth groups now all pay to use school gyms or sports fields. They don't add taxes they just try to hit us with fee after fee after fee and don't think we realize they are really just taxing us more and more. The budget commission has destroyed East Providence and they don't care because they don't EVER have to face us in an election. I voted for the governor and our current city council. I won't vote for any of them again!!!!!! Taxpayers of Woonsocket, you need to speak up and demand that Woonsocket send the commission packing now. As I started, good luck, you're going to need it.

Here's a thought

May 30, 2012 by fedupandangry (not verified), 2 years 16 weeks ago
Comment: 1363

I thought this commission was to help the City. It's made up of the same people that allowed us to get into this mess. I wanted new ideas (or really an idea) through a new set of eyes. Let's get real. Why can't the leaders of the repressed communities of RI get together and tell the Governor what they need and require to exist as communities? If Woonsocket is the ideal place for Special needs Students, great, but how about assistance from other communities and the State. If RI isn't willing to lend a hand with the School Budgets, let the State run the schools. If Unions are not willing to allow cut backs and give SOMETHING maybe we should go into receivership and then they can lose EVERYTHING. I'm getting ready to lose everything. Supplementary tax my --- . Less then 25% of our community pay taxes what about the rest? Why do we have Non-tax organizations and facilities? Don't they use city services? Come on people let's start using our heads so we can stop using our wallets.

Real tax increase the City's best kept secret..

May 29, 2012 by Marcel (not verified), 2 years 16 weeks ago
Comment: 1357

Will the city powers to be use this budget commissionto ram-rod the supplemental tax bill ( permanent 13% tax increase) and not take actual blame for what it'll do to most tax payers?
Just think of what a 17% tax increase could do to those large companies located at the Woonsocket business park. Maybe a citizen can move out of the city and their home just gets bought by someone who can some how afford the taxes but if let's say CVS takes a hike to North Smithfield as Wal-Mart did and Lowe's is about to do, the city will become very similar to that of Detroit, very sad, poor and crime ridden..
Like Councilors Albert G. Brien and Roger G. Jalette Sr., I believe a receiver is what's needed in Woonsocket. Unions will be approached and deals would have to be made to save the city without a 17% increase in our taxes.. That SEVENTEEN PERCENT.....WOW!!! ( 13% Supplemental and 4% already going into affect on July 1st.) It's the City's best kept secret...

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