May 3, 1990 – City Council Budget Workshop

CITY OF CENTRAL FALLS

CITY COUNCIL BUDGET WORKSHOP

THURSDAY, MAY 3, 1990

A City Council Budget Workshop was held on the above date in the City Hall Council Chambers' at 7:37 P.M.

Roll Call present

Councilman Charbonneau

Councilman Laroche

Councilwoman Moreau

Councilman Vaudreuil

Quorum Present.

City Council President Albert O. Laroche presided.

Mayor Lazieh addressed the City Council and explained that the deficit as of June 1989 is $2.1 million dollars as shown in the audit report. He introduced Edna Poulin, Finance Director and asked her to explain the present financial status of the City.

Edna Poulin, Finance Director stated that only two members of the City Council had been in touch with her concerning the audit and the budget. She offered to review City finances with any interested City Council Member. She went on to explain the present shortfall in City Revenue as follows:

The Finance Director stated that the 1989/1990 expected shortfall in revenues would be approximately $762,429.

Mayor Lazieh itemized the savings made in recent months, by his Administration, through the cuts in salaries, jobs and positions totalling $131,947. Not included in this savings is approximately $12,000 saved in Blue Cross and the City's share in pension cost of approximately $14,760. The Heavy Trash pick up, which has been discontinued has produced $40,000 in savings. Even with these cost cutting measures the City can expect a shortfall of approximately $710,083. Mayor Lazieh explained the Budgeted Revenue Sharing of $969,541 was cut by the Governor for fiscal year 1989/1991 by $360,000 and of the expected $1.1 million due for fiscal year 1990/1991 only $147,000 is budgeted from the State from Distressed Cities Aid Formula. This will produce a shortfall of $953,000. Mayor Lazieh addressed the revenue sharing money from the State and spoke of the possibility of not having returned to the City $360,000 from the Governor.

The Pension Plan was explained in the following manner:

This year $150,000 was budgeted by the prior Administration for pensions for a shortfall of $583,336.

It was further explained that just to address the shortfalls and increase in expenditures in the 1989/1990 budget the following would have to be considered for setting next year's tax rate:

$6.25 School Department Increase

.88 Blue Cross Increase

3.17 Pension

4.45 General

$14.75 per thousand, increase in the tax rate could be expected for the 1990/1991 budget, this does not include three union contracts, general departmental increases, fuel, electricity, telephone and other capital expenditures.

Edna Poulin, Finance Director discussed the procedures used relative to Bond Anticipation Notes vs. Tax Anticipation Notes. She explained that on the advise of Fleet National Bank's Fiscal Advisors, Bond Counsel and R.I.P.E.C. it would be prudent to utilize this Bond and transfer $1,000,000 to the City for the purpose of meeting the payroll and other expenses of the City. She further stipulated that the $1,000,000 dollars transferred to the City would be repaid in June 1990.

Councilman Laroche questioned the Finance Director on this issue and asked who authorized the Finance Director to use the BANS?

Edna Poulin, Finance Director explained that she was advised by Bond Counsel and Financial Advisors to the City that this would benefit the City and would be the least costly measure the City could take.

Mayor Lazieh remarked that the City borrowed $9.9 million in BANS and the City and the taxpayers benefited from this transfer. He further explained that this money from the school is 84% reimbursed by the State and that this action saved the City between $35,000 to $40,000, in lieu of Tax Anticipation Note expenses.

Councilman Laroche stated that what was done was right for the City, however, he objected to how it was done without City Council Approval.

Mayor Lazieh stated that actions were taken to save the City $35,000 to $40,000, at the advice of Finance and Bond Counsel.

Councilman Laroche pointed out a court action Tiverton vs. Tiverton and stated that he didn't disagree with what was done just how it was done.

Mayor Lazieh spoke on the Budget and said he will meet with Fleet advisors, Bond Counsel and Gary Sasse from RIPEC. He further stated that this is not going to be an easy task and referred to $800,000 in Bond Interst Payments, Increased costs in Blue Cross and State Aid Cuts. "Other Cities and Towns are experienceing tax increases, the City of Central Falls is one of two communities with an accumulated deficit instead of a surplus."

Mayor Lazieh remarked that he is available to meet with any Council Member to review the City finances and welcomes any suggestions they might have to solve the City's financial problems.

Councilman Charbonneau and Councilwoman Moreau commented.

Mayor Lazieh commented.

Councilman Vaudreuil commented on tipping fees.

Councilman Laroche commented on school bills due.

Motion to adjourn was made by Councilman Charbonneau and seconded by Councilwoman Moreau. All Agreed. So Voted. Time 9:06 P.M.

Daniel J. Issa, City Clerk