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Officials to plan next step for city

May 6, 2013

WOONSOCKET – As the city inches closer to a fiscal cliff, the Budget Commission and state lawmakers are to meet with Gov. Lincoln Chafee and State Revenue Director Rosemary Booth Gallogly tomorrow to chart a course forward.
Mayor Leo T. Fontaine, a member of the commission, says state leaders do not support replacing the commission with a receiver who could push the city into municipal bankruptcy.
Fontaine said the governor is expected to encourage the commission to continue attempting to implement its five-year plan to restore the city to fiscal solvency. That includes negotiated health care concessions from current employees, the suspension of COLAs for public safety retirees, and a $2.5 million supplemental tax bill on real estate and motor vehicles that would require approval of state lawmakers.
“I expect the meeting will be an opportunity for everyone to put our heads together and make a decision about how we’re going to go forward,” said Fontaine.
Still, Fontaine says some major pieces of the five-year plan, including concessions from municipal employees, are falling into place more slowly than expected. He told a gathering of the Northern Rhode Island Chamber of Commerce last month that some city unions may actually favor receivership because, based on the experience of Central Falls, they believe the process will be easier on their pocketbooks than a negotiated settlement with the commission.
The mayor said he’s still hopeful of reaching negotiated settlements with the unions, but barring that, the commission appears ready to impose the cuts they’re seeking without collective bargaining.
Most city workers, with the exception of firefighters, are operating under contracts that have already expired, or will, by July 1, which could open a legal window for the commission to act unilaterally. But Capt. Michael Morin, the president of the International Association of Fire Fighters, says he has been told by the commission’s lawyer that the panel is ready to vote on a resolution that would impose cuts on firefighters without collective bargaining, too.
“I take that as a threat,” he said.
Officially, Morin said the IAFF hasn’t had a collective bargaining session with the commission or any of its designees since March, but one is scheduled for today. The meeting with the governor, meanwhile, is to take place tomorrow at the Department of Administration in Providence, opposite the State House, at 2 p.m., according to Fontaine.
“As part of the stakeholders involved in this process, I don’t know why we didn’t get invited to that meeting,” said Morin. ‘Everybody gets invited but the stakeholders? That’s not what I call transparency in government.”
In the weeks ahead the pressure will build on the commission to reach a consensus on how to stabilize the city’s finances, which are growing increasingly illiquid as the end of fiscal year approaches, on July 1. In the most recently released cash flow projections, effective April 19, Finance Director Thomas M. Bruce III said the city’s debts would exceed cash on hand by approximately $1 million by the first week of June, a figure that would grow to more than $10 million by the end of the fiscal year.
Fontaine the city has already asked major vendors, including Blue Cross/Blue Shield of Rhode Island, Durham Student Transportation and National Grid, for extra time to get up to date on bills.
Some options for closing the short-term budget gap? According to city officials, borrowing money from a bank or taking an advance in state aid from the Rhode Island Department of Education, as the commission did last year, to the tune of $12.5 million, are on the table.
Meanwhile, the Budget Commission is slated to hold an open hearing on the proposed fiscal 2013 municipal budget at 6:30 p.m. Thursday in Harris Hall, following its regular meeting. The $126.5 million spending plan, including some $66 million for schools, shows a built-in deficit of $4.47 million, a figure that takes into account many savings of the five-year plan.

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