BY VINAYA SAKSENA

CENTRAL FALLS — With state government attempting to navigate its way out of a major budget crisis, city officials are preparing for what could be major belt-tightening across the board, according to the city’s mayor and finance director.

The Times has obtained a copy of a "confidential internal document" sent by Finance Director John Kuzmiski to city department heads earlier this month. The message instructs city departments to operate under both a hiring and spending freeze and take steps to reduce operating costs and increase revenue.
Kuzmiski and Mayor Charles Moreau confirmed Thursday that the city would be taking “corrective action” to prevent or reduce anticipated financial difficulties for the city. Moreau added that Central Falls was not alone in facing such problems.
“This is (affecting) every community in the state of Rhode Island,” the mayor said. “This year, I got a note from the governor looking to cut city revenue by fifteen percent.”
(State aid would receive at $10 million overall cut under the governor’s supplemental budget, include a cut of $261,806 from funds for Central Falls.)
In an attempt to close its budget gap, the city would look to revert back to spending levels contained in the 2004-2005 budget, according to the e-mail sent to department heads.
Moreau indicated that city departments had been asked to operate on a hiring freeze for the rest of the fiscal year, meaning that staffing vacancies that arose in that time would not be filled.
He said, for example, that two firefighters expected to retire in the near future would not be replaced.
The e-mail message requested that departments reduce overtime and have any requests for overtime approved by Moreau, in his role as public safety director, before payroll processing.
“In the police department, we have between nine and ten people out on disability right now,” Moreau said. “Overtime spending in that department alone is a cause for concern.”
See CENTRAL FALLS, Page A-2
However, Moreau pointed out that the police department was not the only entity that would need to tighten its belt this year. The aforementioned e-mail indicated that the city had reported a projected shortfall of $992,288 in its general fund for the current fiscal year. Moreau, who pointed out that the figure was merely a projection, said budget problems at the state level were a factor in the city’s worsening financial state. However, he said the most obvious problem was the local economy, hit hard by foreclosures, creating a high vacancy rate among local properties, and thus a substantial decrease in local tax revenue.
”We’re projecting that about one hundred houses will be vacant,” the mayor said. “If they don’t pay their taxes, you’re taking about $400,000 that was supposed to come in.”
To stave off the effects of this problem, Moreau and Kuzmiski said the city was considering several options. The e-mail said that staff reductions would be “necessary and will be forthcoming,” though no specific reductions were cited. Moreau said departments were being asked to curb discretionary spending and submit applications for federal reimbursement in a timelier manner. He added that other measures were also being considered.
“We’re looking at furloughs,” Moreau said. “We’re looking at substantial reductions in some departments. We’re looking at everything we can cut.”
Additionally, Kuzmiski said the city would be holding its tax sale early this year, moving the date up from its normal September date to July 24. In this sale, investors could bid on tax liens- security interest imposed on properties to ensure payment of taxes.
“The last thing that the banks want is a tax lien on the property,” Kuzmiski said. “That’s why this is an excellent (way) to get them to pay us on time.
The city has also filed a request with the office of Auditor General Ernest A. Almonte for a time extension that gives the city until January 31 to file its annual report to the office. Moreau said the request, which was approved, did not have to do with the city’s anticipated financial difficulties, but was made as a result of several one-time issues the city was dealing with relating to staffing, infrastructure and asset disclosure. Moreau and Kuzmiski said the city would make one staff addition this year, bringing on a grant writer to help procure funds from the state or federal government. He said that position would be paid through administrative fees from grants garnered by the city.
As a means of reducing state costs, a provision was included in the state’s supplemental budget calling for the creation of a committee to determine if Central Falls can begin contributing to the costs of its school system, currently run by the state. However, Moreau maintained that taking on this expense was not an option in his mind, adding that the city already paid for a school resource officer and other school-related expenses, and had recently paid for sprinkler systems to be installed in schools.
“We don’t have the money to pay,” he said. “As long as I’m mayor, we’re not contributing dime one to the school system.”