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Budget panel: FY 13 surplus totals $2.36M

October 17, 2013

WOONSOCKET – As promised, the Budget Commission released a much sought-after report yesterday preliminarily indicating that the city finished fiscal year 2013 on June 30 with a combined $2.36 million operating surplus for the city and its Education Department.

It may sound rosier than it is, since the city projected finishing the fiscal year with a cumulative multi-year deficit of $6.4 million. Thanks to the better-than-expected performance in the one-year operating position, that cumulative deficit is about a third smaller, but it still stands at an imposing $4.046 million.

Nevertheless, Finance Director Thomas M. Bruce III said it’s a significant achievement that shows progress and which may rub off favorably on the city’s bond rating, presently at junk status. Essentially, he said, it means the city stopped bleeding cash in 2013, ending a spiral of ballooning deficits.

“We’ve reduced the cumulative deficit by a third, which shows some progress,” he said. “It’s good news. We’re still in a position of having to be careful of losing ground in terms of overspending or not losing any revenue.”

Both the city and the Education Department performed better than expected, according to the unaudited figures. The city registered a $3 million operating surplus, including $1.2 million resulting from a supplemental tax bill, plus unexpended revenue from a school construction bond and “favorable variance for the employer’s contribution to the Municipal Employees Retirement System.”

The WED appears to have spent $62.65 million of a budgeted $66.6 million, which had included a $4.5 million cushion for potential overspending. That cushion was officially dubbed the “Education Reserve for Deficit Reduction.”

The math indicates the WED needed just $638,497 of the reserve, which means it ran a $3.99 million operating surplus for the year. During a brief interview with Schools Supt. Giovanna Donoyan yesterday, she took issue with the notion that the savings came as a surprise, because they are largely the result of personnel cuts mandated by the Budget Commission.

The report says as much. “Vacancies at the School Department during FY2013 resulted in an unanticipated salary savings of $1.3 million,” it says. “These positions include the business director, several building principals, teachers, curriculum director, technology positions, as well as the unfilled deputy superintendent position.”
Medical benefits for active and retired employees also checked in $1.8 million less than budgeted, the report says.

When the ledgers for the city and school department are combined, the operating surplus equals $2.36 million, a figure which includes a reduction in the cityside surplus by the $638,497 needed to satisfy the education reserve account.

The figures, particularly those that emerged from the WED, had been generating a fair share of controversy of late. At least one media outlet decreed that a “gag order” had been placed on school administrators because they were instructed by the Budget Commission not to discuss the figures publicly. Councilman Al Brien also filed a lawsuit against the WED several days ago alleging that administrators are in violation of the Access to Public Records Act because they have refused to release budget documents containing the information.

A hearing on that suit is scheduled to take place in Superior Court next week.

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