WOONSOCKET — Mayor Leo T. Fontaine yesterday proposed a $120.5 million budget for next fiscal year that calls for a 4.5 increase in the tax levy, the maximum allowed by law without a waiver from the state.
Despite the increase, Fontaine said the budget calls for the elimination of two positions in the highway division, unpaid furlough days for employees and spending rollbacks for most city departments.
The budget represents a hike of some $4.7 million in overall spending, or about 4 percent, most of which is the result of increased debt service associated with the deficit elimination bond approved earlier this year. The first payment of $2.9 million on the five-year, $12 million note, designed to wipe out years of accumulated deficits that have tanked the city's bond rating, comes due in fiscal year 2012.
“We are dealing with a fiscal crisis that is truly unprecedented,” said Fontaine. “We have made every effort to deal with the needs of the budget but at the same time take into account all of the challenges taxpayers in the city are facing.”
The levy represents all the money the city envisions collecting from a variety of sources, including taxes on business equipment, motor vehicles and various classes of real estate — a figure that climbs to some $53 million in the proposed spending package.
But not all classes of property owners will share the pain quite equally. For homeowners, the current tax rate of $23.63 per thousand would increase $1.47, which actually represents an increase of just over 5 percent.
The commercial tax rate of $35.05 per thousand, already among the highest in the state, would rise $1.09, an increase of about 3 percent.
On a single-family home assessed at $200,000, the tax rates in the proposed budget would translate into an annual property tax bill of $3,112, an increase of roughly $182. That's taking into account the existing homestead exemption.
Beyond the deficit elimination bond, the mayor said increases in health insurance, pension costs and other retirement benefits accounted for most of the increase in proposed spending. The line item for Blue Cross/Blue Shield coverage for municipal employees alone shot up to about $8.3 million, an increase of about 13 percent.
Some other components of the proposed spending package:
• The virtual elimination of overtime at the Woonsocket Fire Department, which accounted for about 10 percent of its $10 million budget in the current fiscal year. Overtime shrinks to just $200,000 in 2012, a reflection of the administration's commitment to a 56-hour work week for firefighters, the focus of both Superior Court litigation and, it is believed, collective bargaining talks with the International Association of Fire Fighters Local 732.
• School spending accounts for just $59.6 million. That's the chariest school budget in recent memory and marks the first time the figure has fallen below $60 million in years. The city's contribution to school spending would be $12,964,157, which actually represents an increase of about 3 percent, according to the mayor, but continuing declines in state aid will force the Woonsocket School Department to make do with less.
If there's a windfall anywhere in the budget, it's a revenue bump of $1 million in the form of host fees from Veolia North America, the private company that runs the Woonsocket Regional Wastewater Treatment Plant. Still, it's not a sure thing, says Fontaine; the receipt of the money depends on whether Veolia and the city can successfully come to terms on the early renewal of its contract to run the plant, which is subject to a host of new regulatory demands from the state Department of Environmental Management.
Fontaine said the personnel cutbacks in highway come on top of the elimination of five positions during the current year. The new positions will be eliminated either through layoff or attrition, Fontaine said.
Other money-saving personnel tweaks include leaving some high-profile positions vacant to save on salary costs. Former Planning Director Joel Mathews, who retired recently from his roughly $81,000 a year job, will not be replaced, but Fontaine said he will appoint an interim director with a stipend from within the ranks of existing personnel, saving a net $65,000.
“There were some areas where we would have liked to spend more money, but we really just couldn't,” said Fontaine. “There's no capital expenditures at all. We hope to purchase a couple of new police cruisers with grants. We would have liked to do some road improvements.”
Fontaine distributed copies of the budget late yesterday afternoon to members of the City Council, which is expected to hold a public hearing on the spending package June 1. The panel has the power to modify the budget before adopting a final spending package, which could come as soon as June 20.