Council conducts another workshop on East Providence’s proposed FY18-19 budget

Botelho questions whether reducing planned tax increase is prudent

By Mike Rego
Posted 10/12/18

EAST PROVIDENCE — Neither able to speak nor attend the last forum due to the effects of a dental procedure, Ward 3 City Councilor Joe Botelho was in full voice late last week, October 11, at a …

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Council conducts another workshop on East Providence’s proposed FY18-19 budget

Botelho questions whether reducing planned tax increase is prudent

Posted

EAST PROVIDENCE — Neither able to speak nor attend the last forum due to the effects of a dental procedure, Ward 3 City Councilor Joe Botelho was in full voice late last week, October 11, at a special session of the body held in part to serve as a workshop on the forthcoming Fiscal Year 2018-19 budget.
Mr. Botelho was the only one of the three members present to talk in any great detail about the proposal of Acting City Manager/East Providence Chief Chris Parella and the administration. He asked the chief, City Finance Director Malcolm Moore and state-appointed Municipal Finance Director Paul Luba for their thoughts on the draft and also offered opinions on the move to slash the tax rate percentage increase from 2.9 to 1.59 percent initially suggested in Chief Parella’s draft.
“I guess I don’t quite understand why we are at this point now cutting the budget in this way,” Mr. Botelho said, adding later, “I think cutting this budget the way it’s been described to me at this point is putting the next council in a huge bind, especially if the school bond passes.”
Of the proposed 2.9 percent tax increase, .8 percent, or approximately $800,000, would have been set aside to begin paying for a new East Providence High School if it receives voter approval in November, something the council and administrators near unanimously agreed is likely to pass.
The chief noted as well the reductions to reach the council requested 1.59 number came from removing a full-time position from the City Clerk’s office, a part-time spot in the Information Technology department, $25,000 more from the IT operating budget and $100,000 from the School Department’s budget. Chief Parella said he returned to the schools to seek an additional $150,000 cut, which was agreed upon by Superintendent Kathryn Crowley and her staff, though it must also gain the support of the School Committee before it can be implemented. Easing the blow a bit to the schools, Chief Parella said he would be able to pay for a School Resource Police Officer position with $50,000 from his department’s budget.
Mr. Botelho, also referring to a series of two percent raises provided in contracts negotiated with each of the city’s unions included in the budget, said it seemed impractical to not increase expenditures by the commensurate figure.
He said, “I have no clue how a city council hands out two percent raises over the life of five years to all of the unions that represent various workers throughout the city expecting the budget to come in less than that. It just makes no sense to me.”
“We’re kicking the can down the road…So what we do is gut everything to make us look good,” Mr. Botelho added. “We nickel and dime out of various departments to do this.”
Asked for his thoughts, Mr. Luba said he backed Chief Parella’s draft proposal.
“Basically we went through every line item with every department head,” Mr. Luba explained. “We either subtracted or added if we thought they were under-budgeted. We conducted a thorough review of every line item and in the end the department heads and city manager made a compelling argument for the budget that was presented.”
Mr. Botelho further asked Mr. Luba if he thought the draft was “fiscally prudent” to which the latter responded “I do” with a caveat in regard to the school debt funding.
Mr. Luba said there were two ways to look at the situation, comparing it to parents planning to pay for their child’s education.
“Do you put money away now or when the college bill comes?” Mr. Luba asked, rhetorically. “From my point of view you put money away now.”
However, taking the opposing position, he said the city could plan to pay “one big bill at once, which the city can certainly do.”
Mr. Luba added of the likelihood the new EPHS bond referendum passes, “You know it’s coming. I’m pretty sure it’s coming.”
About the city’s ability to decrease the proposed tax increase by nearly half, Mr. Luba said it could do so this year and also possibly keep any expected hike next fiscal year similarly low was because revenues are currently higher than expected and are anticipated to be so in 2019 as well.
“Revenues this year and next are absorbing a good part of the increase,” he added.
Capital funds
In another budget-related discussion, At-Large Councilor Jim Briden inquired with Mr. Luba about the viability of taking some of the $3-plus million earmarked for capital spending in FY18-19 to reduce the overall budget.
Mr. Luba said if that was done, it would lead to a “big tax increase” in the future. He suggested a more prudent use of any reduction in capital spending (i.e. improvements to roads, sidewalks, buildings) would be to, again, set it aside for paying down any debt associated with the construction of a new EPHS.
Mr. Luba cautioned, however, it would make more sense to make capital improvements this fiscal year because the city’s ability to attempt fixes in the future will be impacted by the new high school.
“I think it’s wise to do now because if the bond passes, not much will be available,” Mr. Luba said.
Pension changes
The council gave first passage of an amended ordinance pertaining to the pension funds for fire and police personnel. The change is to Chapter 11, Section 11-253 titled “Death of a retired participant.”
The ordinance now reads as follows:
“Upon death of a retired member while in receipt of a service retirement annuity shall be entitled to a survivor benefit. The survivor benefit annuity is a fixed amount and shall be equal to 67.5% of the deceased members’ annuity. Eligibility for a survivor benefit shall be subject to the following conditions:
“(1) The spouse shall have been married to the member.
“(2) The participant was not married at the time of retirement but had unmarried child/children under the age 18 including in utero at the date of retirement. The legal guardian of the child/children shall receive the survivor benefit and would terminate upon their attainment of age 18, death or marriage, whichever first occurs.
“(a) Minor children shall include children of the blood and adopted children, provided that the proceedings for adoption shall have been initiated at least one year prior to the date of the death of the member.”
The ordinance will take effect upon second passage of the council at a future meeting.

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