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5/8/2008
McKee: Iwuc's administration to blame for deficits, legal expenses

Last week The Breeze printed a letter that was submitted by former mayor David Iwuc. The letter was a rambling litany of inaccuracies and misrepresentations.

Mr. Iwuc paints himself as a master of municipal finances in his letter. Perhaps Moody's April bond rating report can put Mr. Iwuc's dream to bed once and for all. Moody's affirmed Cumberland's A bond rating, something Iwuc predicted in his letter would not happen, but Moody's assigned the town a negative outlook because as it stated in the report, "fiscal years 2006 and 2007 (Iwuc's only two budgets) ended with operating deficits of $1.3 million and $2.4 million, respectively."

Moody's independent confirmation that Mr. Iwuc's budgets produced consecutive deficits totaling $3.7 million dollars should be enough to destroy any credibility that Mr. Iwuc might think he has in the town finance debate.

As outrageous as the points that Iwuc raised in his letter are, I will do my best to address them. I will try to be as brief as possible.

Mr. Iwuc claims that taxpayers would "not be liable for an increased tax rate if the present administration controlled spending." Based on Mr. Iwuc's past budget performance, it is not a surprise that he does not know what he is talking about. My administration worked with the Town Council to amend the current budget by $900,000 this winter because of shortfalls in recording fees, permit fees and conveyance taxes directly related to the national real estate slowdown. In addition the Town Council has enacted measures that will begin to make the water and sewer funds self supporting and I have placed a freeze on new hiring and a freeze on all non essential spending.

I will do my best to address, as briefly as possible, the outrageous points that Mr. Iwuc raised in his letter.

In June of 2007 I submitted and the Town Council passed a budget that would require a 4 percent tax increase to balance the budget. As difficult as it is for Mr. Iwuc to comprehend, the taxes that are collected at an effective rate of $12.38 set because of this year's lower assessment is equal to what would have been collected at an $11.99 rate if there were no revaluation this year. The actual property tax increases this year is 4 percent, the exact increase that was budgeted last June, not double as Mr. Iwuc claims.

Mr. Iwuc has arbitrarily suggested in his words a modest 46 cent tax increase. Mr. Iwuc has no idea nor does he seem to care that a 46 cent increase would cause another deficit in the range of $650,000 this year and a greater deficit next year. But he likes the number even though it represents less than half of the tax increase needed to balance the budget. Using Mr. Iwuc's number would have disastrous consequences for the town's financial standing, destroy the town's credibility with the credit rating agencies and plunge the town back into the financial mess Mr. Iwuc created in his brief, but reckless, term of office.

Mr. Iwuc called the Ephpheta House repurchase "the final straw that broke the taxpayer's back." The statement makes no sense. Let me explain. In 2002 the town sold 8.6 acres to the Northern Rhode Island Collaborative for $500,000 to build classrooms. In 2007 the NRIC changed its business plan and decided to sell the property. I negotiated a sale price of $625,000 from an asking price significantly higher. This year the town will repurchase 4.6 acres for $225,000. The remaining four acres will be purchased by a local, nonprofit affordable housing agency for $400,000. They will build 41 one bedroom affordable senior housing units.

The result is that the town will repurchase its portion of the property for less than it sold it for six years ago, not by $200,000 more as Iwuc has incorrectly stated in his letter. The town will add to its affordable housing inventory without impacting our schools and millions of federal dollars will be invested in Cumberland adding tens of thousands of new tax dollars to our tax rolls.

It is safe to say that each subsequent point that Mr. Iwuc attempts to make in last week's ramble is as false and unfounded as the other. The combination of the solicitor's office and human resources is saving taxpayer's money. Any added legal expense is directly related to stopping Iwuc's C&D trash facility as well as Iwuc's decision not to defend the town in the utility tax appeals. Yes, Mr. Iwuc, your chickens have come home to roost and we taxpayers must pay the tab for your actions.

It comes as no surprise that, once again, Mr. Iwuc is using Cumberland's youth as his political football when he attacks the Office of Children, Youth and Learning. In a short period of time the OCYL is helping hundreds of students and their families. The Youth Commission is a tremendous success and has helped the high school seniors on the commission gain acceptance and leadership scholarships to top notch colleges. The OCYL has raised hundreds of thousands of dollars in grants in the last year to support its programs and is quickly being recognized as an education innovation worth investing in. The future of this office is bright and the small investment that is being made is reaping great dividends both financially and in its results.

This is a difficult economic time. With energy prices and food prices up by more than 20 percent in the last year I realize that it is little consolation that property taxes increased 4 percent, especially when some tax bills increased at even higher rates because of revaluation. On Dec. 23, 2004, a few weeks before Mr. Iwuc became mayor, Moody's raised Cumberland's bond rating its fifth point in my four years in office. Moody's called the recovery "remarkable." At the time, Town Council President Jeff Mutter and all the members of the Town Council were as responsible as anyone for this remarkable recovery.

That is why it amazes me that at the end of his letter Iwuc sarcastically challenges Jeff Mutter's financial knowledge by asking him if he knows the price of milk. When Jeff gives him the answer perhaps then Mr. Iwuc could answer the question that is begging to be asked:

Mr. Iwuc, how many gallons of milk could the town have bought with the $3.7 million dollars of deficits that resulted from your two budgets? Or more importantly, how many roads could have been repaired, or how many tax dollars could have been saved in interest expense or how many more services could have been provided with the $3.7 million deficit that resulted from your mismanagement?

Mayor Daniel McKee

Cumberland