EAST PROVIDENCE — Submitting his first budget since being elected mayor, Bob DaSilva is proposing a $165.8 million budget for FY2020, which calls for a tax rate that is 2.6% higher than last year.
DaSilva submitted his proposed spending plan to the City Council Tuesday. The council will review the plan then hold public hearings on Oct. 1 and Oct. 15.
“This fiscal year 2020 proposed budget was conservatively prepared and it not only meets the inherited financial challenges that my administration was confronted with upon our taking office in January 2019, but more importantly, it provides East Providence with a solid financial platform to move forward and seize the many future opportunities that will make our city the preeminent place in Rhode Island to live, work and operate a business,” DaSilva said in his budget message to the city.
“Elected officials must take great care in deciding how to spend your tax dollars,” he added. “It is important that we provide great city services and investments in our infrastructure through capital improvements, while also weighing the community’s ability to pay for those services.”
The 2020 proposed budget calls for general fund expenditures (including schools) of approximately $165.8 million – a $4.8 million, or 3 percent, increase over the prior year. City expenditures will increase by nearly $2.7 million, or 3.6 percent, in the proposed budget, however $1.4 million of that amount represents a debt service reserve for future bond payments associated with the construction of the city’s new high school. Without that reserve, DaSilva explained, city expenditures are proposed to increase by approximately $1.3 million, and the School Department expenditures are proposed to increase by $2.1 million (2.5 percent) with the city contributing $1.4 million of the increase.
To fund the proposed 2020 budget, the administration is requesting a tax rate that is 2.6 percent higher than last year. That will translate into an increase of approximately $104 to the average homeowner’s tax bill.
“While any tax increase represents an additional financial burden for our taxpayers we believe that a 2.6 percent rate increase is reasonable given the fiscal challenges we have addressed in this proposed budget, especially those involved with funding our schools,” the mayor said.
The proposed budget increases the homestead exemption by .5 percent, raising it to 13.5 percent. DaSilva says his goal is to bring the homestead exemption back to the 15 percent level that it was at before it was lowered by the Budget Commission.
DaSilva said the most substantial expenditure increase in the budget is for the schools. The School Department presented a budget that called for a year-over-year expenditure increase of $3.1 million, or 3.6 percent, with the city picking up nearly $2.4 million of that escalation and with increases in state, federal and other funding sources paying for the rest. Contractual salary increases, higher benefit costs and $950,000 for school construction and repairs make up the majority of the School Department’s proposed 2020 budget expenditure growth.
According to the mayor, the city has been holding in escrow $6.5 million of school funds, which represent windfalls from accumulated prior year surpluses generated by the School Department and will be earmarked for future school capital improvements.
“In its presented 2020 budget to us, the School Department requested $950,000 for capital improvements,” DaSilva said. “This would have been in addition to the $6.5 million that we have already accumulated. I do not believe that this additional nearly $1 million for school capital improvements is prudent at this time given the tremendous future debt load that the city’s taxpayers will incur for our new high school.”
“To ask our taxpayers to pay another $950,000 for school capital in addition to the already accumulated $6.5 million is just too much,” said DaSilva.
The mayor said he will not include $950,000 in the School Department’s budget, but instead, will be allocating that amount into a restricted debt service account in the city’s budget to be used exclusively for future debt payments for the new high school. The removal of $950,000 from the additional $2.4 million in city funding that was requested by the School Department brings the proposed 2020 city budget contribution to the schools up to an additional $1.4 million.
DaSilva said inherited expenditure increases were considerable and deeply influenced how his administration prepared the fiscal 2020 budget. “While our goal was to cut and or maintain departmental expenditures wherever possible, we also want to position ourselves for economic expansion and an increased tax base, continue to improve our infrastructure and maintain high levels of public safety,” he said.
The mayor says the proposed 2020 budget calls for a significant $3.7 million investment in capital.
“We carefully evaluated capital requests from all of our departments and selected to fund in fiscal 2020 those items and projects that are of greatest need and most beneficial to our community,” he said. “Neglecting to adequately fix our infrastructure and replace the city’s old, deteriorated assets is a mistake that my administration will not make.”
DaSilva said the most obvious challenge is the future financing of the new $189 million high school.
“We have been meeting regularly with representatives from all disciplines involved with this complex, expensive, much needed and exciting project, including those involved with design, construction and bond financing,” he said. “There are still numerous major unknowns involved with the new high school construction including the final amount and reimbursement timing of state aid. We have always known that building this school would require an overall tax increase. There are many aspects of our bond financing still to be developed and we are working hard to lower our projected interest rates wherever we can to save money on this project. When finalized, we will present to the public a comprehensive financing plan for the new high school.”
In his budget presentation, DaSilva listed several goals and objectives for the next fiscal year, including continued economic development on the waterfront.
“The waterfront district presents one of the most exciting growth opportunities,” he said. “The industrial, aged waterfront is slowly transforming into a mixed-use district with open space, residential and business opportunities. It is my goal to see our waterfront district flourish.”
Said DaSilva: “This budget delivers for our community a plan to pay for an amazing new high school and other city school improvements, greater access to the waterfront, an open for business mentality, investments in our parks and continued support of our city’s services and people. I see a great future for this city and this budget will help to get us there.”
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