Woonsocket Budget Carries $3.6 Million Deficit

When citizens show up for the May 9 Budget Hearing at City Hall at 6:30 p.m., there'll be a $3.6 million deficit and a plan to change expired union contracts to fit the Budget Commission's 5-year plan waiting for them.

City Finance Director Thomas Bruce said Monday that thanks to the Budget Commission's decision to add $4.5 million to the Woonsocket School Department's budget over the summer, the city's $900,000 surplus was used up, leaving a $3.6 million deficit.  

An additional wrinkle is a pending $500,000 payment from Synagro, which runs the city's sludge-burning incinerator on Cumberland Street, which recently notified the city it had filed for bankruptcy. At Monday's City Council meeting, Mayor Leo Fontaine said he was in talks with a lawyer (recommended by RI Department of Revenue Director Rosemary Booth Galoogly, Bruce said) to apply pressure on Synagro to pay the city.

With that payment, the city's deficit comes out to $3.1 million. However, it would need to come before June 30. "I'm conservatively predicting that we're not going to get it," Bruce said.

So that likely leaves the city at a $3.6 million deficit. Bruce said the city will have to use the entire $2.6 million surplus from previous years in the general fund (not including 2012) to help plug the gap, leaving a $1 million deficit for this year. The 5-year plan will ammortize this year's $1 million deficit, Bruce said. 

Bruce said that while the School Department isn't showing a deficit this year, an $8.9 million deficit from the schools' previous years still needs to be handled.

The Woonsocket Budget Commission, which Galoogly charged with handling the city's deficits at the request of the City Council in April 2012, has developed 5-year-plan to pay down the city's past deficits and fund future city and school budgets. But with all elements of the plan essential for its success, and a final deal with unions unfulfilled, the Budget Commission voted to make the changes to the city's expired contracts on April 19.

Bruce said he's still confident the 5-year-plan will straighten the city's finances, but he said it will be dynamic, because the future will be, too. The plan may have to change to acccount for extra state aid or an increase or decrease on the tax rolls, for example, Bruce said. Should Landmark Medical Center go private, for instance, that would add to the city's tax rolls.

The Budget Commission won't approve this budget during the hearing, Bruce said, so there are still opportunities to change it after Thursday. The hearing will be the public's opportunity to ask questions about the current budget and the Budget Commission's 5-year-plan.