WOONSOCKET â Congress may have gotten the nation past one fiscal cliff, but this teetering city of 41,000 is still on course to fall into a local version of the abyss in 2013.
After the reigning state Budget Commission temporarily balanced the books last year, the financial forecast calls for the city to lapse into deficit spending again by May 25, according to Finance Director Thomas Bruce.
On that day, the cityâs bills are expected to outstrip cash on hand by a mere $195,068. But without massive cuts in spending or similarly dramatic spikes in revenues, the reverse flow of cash will reach more than $11 million by July. Combined with past deficits, the city will end the fiscal year $14 to $15 million in the hole, according to Bruce.
âThese projections that have been coming out of our controllerâs office have pretty much been spot on,â says the finance director. Based on the looming cash crunch, the budget commission recently instructed Bruce and Schools Supt. Giovanna Donoyan to begin notifying the cityâs biggest creditors that its accounts with them might lapse into arrears this spring. Bruce said heâs already sent out letters to National Grid, Blue Cross/Blue Shield of Rhode Island and the cityâs trash hauler, Waste Management Inc.
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