Budget surplus could make for tense fiscal discussions in Woonsocket

Budget surplus could make for tense fiscal discussions in Woonsocket

WOONSOCKET – Most of the discussion of the financial impacts of the pandemic has centered on the funds spent to combat COVID-19, but it’s the ones that weren’t spent that could become a talking point in the upcoming city budget season.

Last Friday, Mayor Lisa Baldelli-Hunt announced in a press release the city’s 2020 audit confirmed budgetary surpluses of $479,417 on the city side and $2,562,362 for the Woonsocket Education Department for the fiscal year ending June 30, 2020. She lauded the efforts of City Finance Director Christine Chamberland and WED Finance Director Brad Peryea, saying it was a challenging year from a financial viewpoint.

“This was not a standard year for our finance departments in any respect. State, federal and local revenues were uncertain for most of the year, expenditures were often driven by situational responses to the pandemic, federal and state paperwork increased exponentially and we had to work through pandemic-related absences in our workforce,” she said.

On Monday, Baldelli-Hunt told reporters the city had moved past the days of “us versus them” budgeting between the municipal and school departments and that Chamberland and Peryea work closely throughout the year.

However, those amicable relations could soon come to an end. Though it’s unclear yet whether state law will allow it, Baldelli-Hunt said she’s looking into possibly requesting the WED use its surplus to offset the local education contribution for the upcoming budget year. Such a move would require an exemption from the “maintenance of effort” law that requires the city to match its previous contributions.

“There’s been discussion through the Rhode Island League of Cities and Towns as far as what cities and towns can use to offset (the local contribution) in the 2022 budget to relieve the mandate that we have for maintenance of effort,” she said.

Baldelli-Hunt said she’s not sure yet whether the request is possible under the particular requirements governing Woonsocket as a distressed community, but that it might offer a “feasible and fair” approach to the budget process.

“Certainly it would help to give some relief to the taxpayers of the city, because a $2 million surplus is significant,” she said.

The request would not be without precedent. The early days of the pandemic proved a financial boon for many local school districts, with lower distance learning costs and fewer employee health expenses creating unexpected savings through much of 2020. Last month, the Pawtucket School Committee agreed to hand over $1.6 million of a projected $2 million surplus to the city to pay down school-related bond debt after it was revealed the city was facing a $2.6 million budget gap on the municipal side.

However, Paul Bourget, chairman of the Woonsocket School Committee, argued that’s not the case in Woonsocket, pointing out to The Breeze on Monday the city also posted a budget surplus last year.

“There’s no evidence that they’re losing money. There’s no evidence that anyone’s losing money,” he said.

Bourget said it would be irresponsible to put last year’s school budget surplus toward the city’s contribution when the department is still figuring out the financial impact of the pandemic for the current year. Peryea told the School Committee last week the WED is currently projecting a $254,000 surplus for the 2020-2021 fiscal year, but that expenses have continued to increase toward pre-pandemic levels as employees resume using their health benefits for elective surgeries and other procedures.

Bourget also pointed out the WED is currently in contract negotiations with the Woonsocket Teachers Guild for a new, three-year contract. The previous contract came about after a grueling, yearlong negotiation with the understanding the city would increase its local contribution by $250,000 in both the 2020 and 2021 fiscal years. Last year’s expected increase never took place, and Bourget said the department will likely need its surplus to fund the new contract.

“The city can ask for relief, we’re not expecting to give it. Because we’re going to need it,” he said.

Also complicating the issue is an expected $70 million in federal stimulus money headed to the city later this year. While both the city and the school departments are expected to receive at least $30 million, Baldelli-Hunt said they’re still waiting for the particulars of how and when those funds can be spent. As a result, she said, she’s considering invoking her executive authority to postpone the municipal budget process until they can get clarification from the state’s congressional delegates.

“We’d like to know those answers first,” she said.

Per the city charter, the mayor is required to submit a budget proposal at least 50 days prior to the start of the new fiscal year, a date that typically falls in mid-May. The City Council usually votes on the new budget by July 1.

Comments

Clean up this filthy city!!!! NOT JUST MAIN STREET!!!! Litter everywhere in Woonsocket ... Looks like a dump in a ghetto ... Trash, nip bottles, masks, diapers, pizza/ food boxes , cans, bottles , etc ... This city needs to be cleaned up!!!

There is no nexus between the city budget and the new federal funds. I have heard of no other city or town in RI delaying the production of their operating budget because of the unknown of the ARP funding regulations.

I believe there is another reason for the mayor's claim to need a delay and this is just being used as an convenient excuse.

I wish the reporter had contacted some city council members before accepting the mayor's story. We share responsibility for the city budget and should have been consulted by the mayor before bringing the story to the press.