Fung Proposes $275 Million Budget with No Tax Increase for Fiscal 2017

CRANSTON, RI—Cranson Mayor Allan W. Fung has proposed a $275 million spending plan for fiscal 2017 that calls for no change to the property tax rate.

It's the fourth time in five years that Fung has proposed a budget with no tax increases—a fact Fung hammered home Friday night as he unveiled the budget during his annual State of the City address at Cranston City Hall.

The budget calls for $7.8 million in additional spending over last year's adopted budget and relies on an expected increase in tax collections to the tune of $2 million. The budget also accounts for $4.1 more in state aid for education—Cranston is due to receive $54.3 million from the state this year, an increase over last year's $50.2 million, according to the budget proposal.

"You might be asking how we are funding all of this. And no, we have not put any gimmicks in the budget," Fung said in prepared copy of his speech. "This budget is based upon a combination of growth in both our residential and commercial tax base, state aid, and being fervent watchdogs and making those hard decisions in terms of expense reductions that our citizens expect leaders to make."

Fung's annual State of the City address, especially in an election year, is as much a campaign speech as a review of the city's overall health.

Fung made note of the city's AA- bond rating, the "Top 50 Best Cities to Live in America" distinction from 24/7 Wall Street for the second year of a row and a host of city initiatives, including Cranston signing on to the CodeRED emergency alert system, the state-leading Cranston Public Library system that hosts jazz concerts and 3D printing classes, city hall computer upgrades and ongoing investments in road repairs.

Fung also emphasized that Cranston is fully funding its pension and OPEB obligations in the calendar year.

On the school side, Fung is proposing the city increase its annual appropriation to the schools by $800,000. The total appropriation to schools is a proposed $149.5 million, an increase of $4.8 million over last year.

The budget now is in the hands of the City Council, which will hold a series of public hearings before making final changes and passing a final budget, which then sends it back to the mayor's desk for signing. The mayor can veto budget amendments passed by the council.

View the budget:

The full text of Fung's State of the City address is below:

Mayor Allan W. Fung State of the City and

2016-2017 Fiscal Year Budget Address

Delivered April 1, 2016

Good evening, and welcome to the members of our City Council, our hardworking City employees, and to the citizens of Cranston. It is my distinct honor to present to you my eighth budget address.

Together, we have accomplished so much in the last seven plus years. As a result of this hard work, we have earned the title as one of the “Top 50 Best Cities to Live in America,” for the second year in a row by 24/7 Wall Street.

An important reason for our success is because our fiscal health is so strong. We have been innovative, efficient, and most importantly, fiscal watch-dogs with your tax dollars over these last seven years. This has led Cranston to its highest bond rating with S&P in the past two decades (AA-) and also upgrades from Moody’s and Fitch.

We accomplished this by tackling head on many long term fiscal challenges that have plagued Cranston for generations.

Municipal pension reform is something that I am extremely proud of, and it has saved our city six million annually. We secured an unprecedented compromise with our public safety unions and retirees that will help to restore the solvency of the pension fund. While some retirees have taken us to court regarding this solution, I am defending that case vigorously for our taxpayers and to improve the financial solvency of the system.

Looking to secure our financial future, I have also moved a number of civilian employees from defined benefit state pensions to defined contribution retirement plans that mirror the private sector. We have also made the commitment to fund our OPEB obligations at 100% of the required ARC so that this doesn’t become the next noose around Cranston’s neck.

Addressing these legacy issues head on is one of the principle reasons constantly cited by the credit agencies as they improved our ratings.

We have also found solutions to, and successfully weathered many different issues that have arisen in the seven plus years that I have been privileged to be your Mayor.

Whether we are talking about the multi-million dollar deficits inherited from the last Mayor and unchecked overspending in the school system, or the over $18 million in cuts from state aid, or the great floods of 2010, or the never-ending blizzards of 2013 and 2015, Cranston, and my administration, has weathered it all. I’m proud to say that we finished for a fourth consecutive year with a cumulative budget surplus, and restored our Rainy Day Fund to its current healthy state of over $20 million.

By watching every single dollar, we have been able to keep taxes down. Over the past four years, we have seen only one small tax increase. In the current fiscal year, both the city and school administrations are working hard so that we can come in with yet another balanced budget.

But controlling our spending has not diminished the quality of life for our residents. We have continued to invest in the care of, and services for our community, making technology and innovation a priority.

Currently, departments across the board are demonstrating this mission.

Take, for instance, our amazing libraries. From hosting jazz concerts to 3D printing classes, they have gone above and beyond our expectations. In 2015, the Cranston Public Library was named number one in the state by URI, because of its expanding and innovative use of technology programs, like the C-Lab. And just this week, Cranston’s libraries won a prestigious national award, alongside the New York Public and Louisville Kentucky Library Systems. The Library Journal & Novelist organization announced it was bestowing a LibraryAware Community Award to Cranston, recognizing their forward thinking and multi-cultural community outreach.

Additionally, Building Inspections is out in front as part of the statewide pilot program to move towards a uniform Electronic -Permitting system.

Our tax assessors and collections offices are completing their computer upgrades. This will allow for easier and improved online tax payment programs in the future, and an ability to access tax information in the comfort of your own home.

Our public safety divisions have invested in the Code Red app, that alerts our residents to, and keeps them informed during an emergency.

Our infrastructure has been a major priority for us this year. Public Works has spent nearly $2 million to fix and repave our roads. Additionally, parks and recreation has installed and rehabbed three playgrounds, and continues to upgrade our sporting fields and facilities citywide.

Providing for quality education has always been important to me. When I first came into office, spending by the previous school administration was out of control. I stood up to the school committee and administration at that time to reign that in – and now we see the positive results. I am happy to report that our schools have turned the corner financially, and are out of debt! They have fully paid the city back, and are moving forward with growing much needed programs for our children.

We have developed a collaborative relationship with the new school department administration, and want to help make sure that this kind of financial performance continues into the future. But it’s not only about the finances, the entire school system has made significant forward progress in providing top notch education for our children. In fact, Cranston has the same number of RI Department of Education Commended Schools as Barrington and more than East Greenwich!

In terms of economic development, we’ve had a banner year! In addition to the over thirty new businesses in our City, many of our existing ones have undergone huge expansions. Tasca Automotive Group completed their consolidation efforts, and moved their corporate headquarters to the Howard Industrial Complex. Yushin America, a major high tech manufacturer, completed a $2 million expansion there too. Restaurant Depot finished the second phase of their $5.3 million expansion. The old Bickford’s site was re-developed into the home of the RI Credit Union. And if you haven’t tried the new Diversi Ristorante on Rolfe Square, you are missing some excellent authentic Italian food. This is just a microcosm of the exciting business ventures that are happening here in the city, and I didn’t even name the plethora of national-chain activity in Garden City and Chapel View.

There’s more to come throughout our city in 2016 and beyond! LL Bean will officially arrive in Garden City. O’Reilly Autoparts is re-developing the old Tappetio Restaurant. Cedar Crest Nursing Home is adding fourteen new rooms to their facility. Hope Nursing on Reservoir Avenue has purchased the Knights of Columbus building on Park Avenue and is currently re-developing it into an Adult Day Care facility. Also, Agcore Technologies, which started right here in Cranston, is growing into a second greenhouse facility on Sharpe Drive to grow Tom Brady’s favorite ingredient, Spirulina.

These and other commercial projects will continue to spur our economic growth. As we continue our aggressive efforts to attract new businesses to our city, we will continue to benefit from all of this increased business development, influx of jobs, and therefore decrease the financial burden on our residential taxpayers.

In terms of economic development tools, we are already utilizing that new 15 and 20-year industrial tax stabilization plan to pitch to potential businesses and developers. We have added more than 1700 jobs under my administration, and we aren’t stopping there. Everyday our team is fielding inquiries and working with budding entrepreneurs to realize their dreams, and realize them here in Cranston!

As you have heard, the fiscal health of our city does not have to come at the expense of quality municipal services. Strong schools and excellent resident services can be achieved when dollars are managed responsibly. This is what we have delivered year after year.

That brings us to the budget I am here to present tonight.

I am incredibly pleased to announce that for the FOURTH time in FIVE years, we will have NO PROPERTY TAX INCREASE!

On the revenue side, we continue to budget realistic and prudent collection rates. We are budgeting for a 98.8% total collection rate and are confident we will attain that goal as we have for the past two years.

My budget funds our negotiated contractual increases as well as our long term obligations. Our retirees will be happy to know that we are honoring our commitment to them and funding our pension and OPEB obligations at 100%.

After experiencing a significant increase in our healthcare expenses in 2014, we have done a better job controlling our claims in the past year. And because of this fiscal control, our health care costs for our employees will NOT be rising this year.

We are also happy that the Cranston School Department has done such a good job this past year improving their financial health. This ensures that we have the money to fund our advanced programs that are preparing our children to succeed in college and beyond. This budget increases our city funds to the schools. Our city appropriation will be $800,000 more and is in addition to the increased state aide that they will be receiving. Our city appropriation will help fund all of their necessary educational programs and provide an additional $225,000 to help subsidize the cost of middle school sports and music. Further, the city is continuing its commitment to help with capital construction projects and will be spending over $1.6 million at schools all over the city in this upcoming year.

In terms of capital needs on the city side, we are continuing to aggressively address our critical infrastructure projects. My budget allocates over $2.3 million for more road paving, and drainage and sewer improvements. It is also important to have our residents get behind a $25 million bond referendum that will be on the ballot in November. We want to take advantage of the excellent interest rates afforded to us by our high credit ratings so that we can continue to improve our infrastructure for years to come.

You might be asking how we are funding all of this. And no, we have not put any gimmicks in the budget. This budget is based upon a combination of growth in both our residential and commercial tax base, state aid, and being fervent watchdogs and making those hard decisions in terms of expense reductions that our citizens expect leaders to make.

On the growth side, businesses and residents are benefitting from our economic development initiatives over the past seven years. Where businesses once only wanted to go into Garden City, we are seeing a buzz and revitalization of business developments all across this city. People are driving from near and far to dine in our legendary restaurants in Knightsville, Pawtuxet Village, Rolfe Street and beyond. In fact, we are seeing a ten percent increase in revenue from the state meals and beverage tax.

And people want to live in this great city…One of the Top 50 Cities to Live in America. Our residential base has grown to the point where we almost caught Warwick in terms of becoming the second largest city in the state.

In terms of expenses, we are taking full advantage of our improved bond rating, and will be refinancing over $9 million in past debt to save about $300,000. We will be purchasing our street lights from National Grid and will see approximate savings of $300,000. And this figure does not include the future electrical savings Cranston will realize when we finish the conversion to LED. Furthermore, we have finished paying our obligation to the Public Facility Management Foundation for the financing of our Public Works Building on Phenix Avenue, which accounts for an additional savings of $365,000.

My budget is direct evidence that communities can operate without raising property taxes while maintaining and improving overall service to its residents. In summary, I am proud of this budget that provides more aid to our schools, invests in roads and infrastructure, strategically supports business across industries and doesn’t forget important municipal services like our library and senior center. It does NOT rely on gimmicks or pie in the sky estimates to balance. Most importantly, it does not require that our hard working residents pay any more in their property taxes than they do today. That is what the residents have come to expect from my administration over these last seven years. That is what the residents should expect from all of their elected officials. I am submitting this budget to you on behalf of those residents tonight.

Thank you for your time and more importantly for your continued support of my administration’s efforts to make Cranston the best it can be.