Annual audit reveals budget surplus for East Providence
EAST PROVIDENCE — City Manager Paul Lemont announced East Providence remains on a path of financial improvement, doing so prior to a presentation of the annual audit during the City Council meeting Tuesday night, June 17.
“Things are looking a lot better and we’re headed into a new day with the city,” Mr. Lemont said before a presentation made by City Finance Director Malcolm Moore and auditors.
Mr. Moore told the Council the city’s general fund for the Fiscal Year 2012-13 had a surplus of around $3.5 million, a 42 percent increase from the previous year. Once obligations are accounted for, the net surplus is approximately $2.5 million.
As was the case with the school department, Mr. Moore noted the city side is funding its Annual Retirement Contribution or ARC to 100 percent. The city side is also funding its Other Post Employment Benefits requirement or OPEB to the full amount.
Jason Parmalee, of the auditing firm of Parmelee Poirier & Associates, was in attendance as well Tuesday. He explained the city’s governmental net assets had almost doubled since the previous fiscal year, primarily due to the fire department grant project and money from the Google asset forfeiture gained through the police department. The Google money and favorable returns from market investments have helped to substantially ease the city's unfunded pension liability.
In addition, tax and departmental collections and state aid revenue were all over budget, and expenditures were under budget by about $2.6 million.
Mr. Parmalee also explained the source of the school department’s surplus of around $2.5 million. The schools collected around $600,000 more in state aid revenue than the amount budgeted and expenditures were under budget by about $2 million. Parmalee said the latter was likely due to the department having around 20 unstaffed positions yet to be filled.
Mr. Parmalee also noted the water fund’s rate did not sustain the operational cost for the third year in a row. The new rate approved by the council for this year will likely solve that problem. As well, he mentioned the city's contribution to the state-run Municipal Employment Retirement System or MERS, in which teachers and others city workers participate, has a $2 million shortfall. He said the state will likely seek an increase of East Providence's contribution into the system in the near future.
In addition to the audit, Mr. Moore also announced that the finance department had undergone a heavy overhaul of its accounting computer software from a DOS (text)-based system to a Windows-based system over the past year. The new system has monthly reports and online purchasing, making bills easier to keep track of. The upgrade process, which began in earnest in 2013, continues and is not expected to be fully implemented for at least the next several months.
"We've got a good group and the manager (Mr. Lemont) has been very supportive," Mr. Moore said of the software upgrade. "We've got a long way to go, but hopefully we'll be there by next year."
— By Joseph D'Amico, eastbayri.com intern