EAST PROVIDENCE — At its meeting Tuesday night, Sept. 17, the East Providence City Council was presented by Finance Director Malcolm Moore and City Manager Peter Graczykowski with a draft proposal for the Fiscal Year 2013-14 budget.
The suggested budget, $167,762,071 in total, remains relatively true to the five-year financial plan put into place by the Budget Commission during its stay in the city. It does, however, stray from what the state-appointees offered, specifically in regard to fully funding the Annual Retirement Contribution (ARC) to the East Providence Police Officers’ pension.
Mr. Moore, while offering the Council a brief overview of the proposal, explained the reason for not fully funding the police ARC was due to the possibility of the city changing its fiscal calendar to match up with that of the state.
Last November, voters, at the suggestion of the Budget Commission, approved an amendment to the City Charter which would allow East Providence to one day change is fiscal year from its current October 1 start date to July 1, the date used by the state and most other municipalities.
To do so, though, the city, specifically taxpayers, would take on a significant burden. Under the proposed FY13-14 Budget, Messrs. Moore and Graczykowski are suggesting East Providence procure what is called a synchronization bond to make up for what would be a sizable deficit in the budget when the fiscal year change is made. The Finance Director estimated the gap to be between $20 and $25 million.
According to Mr. Moore, the bond would likely be for approximately $40 to $50 million and would be taken over a period of 10, 15 or 20 years. The roughly $2.7 million removed from the city’s police pension ARC would go towards paying the debt service on the bond. Mr. Moore said the $49.2 million in Google settlement money the city received last year towards the police pension offsets the reduction.
Going the synchronization bond route is one option. Another, not referred to Tuesday, would be to petition the General Assembly to approve a one-time supplemental tax levy, which could make up for the fiscal year change. It would mean sending out five tax bills in one calendar year instead of four.
In addition to the possible fiscal year change, Mr. Moore noted the Budget Commission’s FY2013-14 Budget proposal and that of the city includes a one percent tax increase and a further one-percent reduction in the Homestead Exemption as well as another reduction in the percentage break taxpayers receive for paying their bills in full by July 1.
(Updated, Sept. 20, 4:30 p.m.) The Council took a non-binding vote to accept the draft, approving it by a 5-0 count. It also set up a FY13-14 Budget workshop, which was originally scheduled to take place Monday evening, Sept. 23, but was moved to the following evening, Sept. 24, to coincide with a joint between the Council and the School Committee.
The joint forum takes place Tuesday at 6 o’clock followed by the workshop roughly 90 minutes later. Both meetings will take place in the City Hall Chamber. The first public hearing on the budget is set for Tuesday, Oct. 1, at 7:30 p.m. as part of the Council’s regularly scheduled meeting on that date.
Council President and Mayor James Briden noted the participation of Paul Luba, the recently installed Municipal Finance Advisor, in the process. The state-appointed MFA, according to Mr. Briden, will compare the city’s proposed budget to that of the Budget Commission’s plan and add any of his observations and recommendations.
Not mentioned by Mr. Moore during his presentation were some of the other expenditures proposed in the budget, including raises for himself, the City Manager and other top administrators, nearly all of whom would receive some kind of bump, whether it be a small percentage similar to a COLA (Cost of Living Adjustment) or something a bit more hefty.
Among the more notable raises proposed at that for Mr. Graczykowski, whose total compensation package (benefits, pension, etc.) would grow from $178,667 to $197,540, including a base salary increase from $125,000 to $142,800. Mr. Moore’s base salary would increase from $112,210 to $122,400. The base salary of Human Resources Director Kathleen Waterbury would rise from $95,000 to $112,200.