AUDIT: Woonsocket Ends Fiscal Year with Healthy Surpluses

WOONSOCKET, RI—The city ended the most recent fiscal year with healthy surpluses on both the municipal and school sides of the budget, city officials announced on Tuesday, signaling that Woonsocket's years of seemingly bottomless financial problems are finally in the rear-view mirror.

Though Woonsocket is facing a looming pension crisis of potentially catastrophic scale in the years to come, for now, the fiscal picture is brighter than it has been in years.

The annual independent audit of the city's finances show that the city ended fiscal 2015 with an operating surplus of $2.6 million and $3.3 million in the municipal and school budgets respectively. The cumulative surplus, often referred to as the rainy day fund, now stands at $3.19 million and $1.99 million each for a combined fund balance of $6.19 million.

"My office and the Office of the Finance Director work each and every day to improve the fiscal condition of the City. These numbers support that our efforts are moving the City in a positive direction," Woonsocket Mayor Lisa Baldelli-Hunt said in a statement.

The last time the school department ended a fiscal year with a positive fund balance was 2007. In 2012, things were so bad that its budget had a cumulative deficit of $9.4 million. Now, thanks to recent surpluses and the implementation of a variety of spending controls and cost efficiencies, the $2 million fund balance serves as a foundation for stability, officials said.

The overall financial picture should also serve to reassure ratings agencies keeping a close eye on Woonsocket, especially after the departure of the Woonsocket Budget Commission in 2015 and a return of fiscal authority entirely to the city.

The mayor stressed the importance of stockpiling reserve funds, which ratings agencies consider when assigning bond ratings, which in turn sets the interest rate the city pays for its debts.

"A sufficient fund balance also improves cash flow and provides a reserve for unexpected budgetary events," the city said in a news release.

Brad Peryea, the education department's finance director, said that the schools' long-term forecast "remains positive."

"We are continuing on the course that the Woonsocket Budget Commission set forth when they departed the City of Woonsocket in 2015. The Woonsocket Education Department in conjunction with the Woonsocket School Committee is committed to continuing to help restore fiscal stability to the City of Woonsocket," he said.

City Finance Director Christine Cumberland said that the results "are consistent with the overall framework of the WBC’s five-year plan. As we plan for the future, I am committed to adhere to the plan’s goals as the surest way to bring fiscal stability to our city."