September 5, 2006                                                      
Contact: Scott Avedisian or Sue Baker
For Immediate Release
738-2000, ext. 6200

Avedisian: No New Taxes
Necessary to Fund New School Contract

WARWICK – Mayor Scott Avedisian today announced that there will be no supplemental tax increase nor will the City utilize Tax Anticipation Notes “in order to fund the recently agreed upon contract between the Warwick School Committee and the Warwick Teachers’ Union.”

“When I took office in February of 2000, our cumulative surplus was less than $4 million.  Today, due to prudent stewardship of our tax dollars, that surplus stands at more than $8.5 million.  That represents a 112% increase in our surplus,” he said. “It is that fiscally responsible behavior that allows us to fund the new teacher contract with a combination of cuts in spending and utilization of surplus.”

The Warwick School Committee has requested an additional $7.8 million to pay for the first year of the contract – of which $2.3 million is covered by surplus on their side of the budget.  The School Committee is now looking for an additional $5.5 million to cover the rest of the costs of the contract.

Realizing that the city side of the budget cannot support all of the costs associated with the latest request of the School Committee, Avedisian said that they must cut $1 million on non-salary items in their budget.  “The city,” he said, “will likewise commit to cutting $750,000 from our budget.” 

The $750,000 will come from cuts in the following areas:

• $500,000 will come from line items associated with annual street paving projects across the city.  “I have spoken with David Picozzi, Acting Director of the Department of Public Works, and we are confident that a delay of one year will not negatively impact [any area.  Emergency situations will still be dealt with on case by case basis,” Avedisian said.

• $10,000 from the Board of Canvassers and Registration that had been earmarked for costs associated with special elections.  “Clerk of the Board Joseph Gallucci and I have looked at this line item and believe that it can be cut,” Avedisian continued.

• $120,000 will be saved by delaying until January the decision to hire two additional firefighters and two additional police officers.

• $10,000 from the contingency fund in the Finance Administration Office.

• $10,000 from the telephone line item (25 303) from the Management Information Systems budget

• $10,000 from the seasonal salary line item (40 119) from the Parks & Recreation budget

• $5,000 from the special program budget (46 355) for the Department of Family Support and Human Services

• $5,000 in city-wide savings in the postage account

• $50,000 for the proposed changing room at McDermott Pool

• $30,000 from capital expenditures for a requisition/purchasing order tracking module

Avedisian also said that $1.1 million in additional surplus will be created within the current fiscal year due to changes made by the City Council during budget deliberations.  That amount will be transferred to the School Committee in the last three months of this current fiscal year.

The Mayor added that normal year-end procedure would be to increase the legal reserve that is held by the city.  The amount in this account is usually $1 million.  Due to the successful settlement of two major cases recently, Avedisian said that $500,000 of this could now be directed toward the school contract.

The remaining $2.1 million will be allocated from the existing fund balance that the city maintains.

“I believe that this is a rational solution to the dilemma that the school contract has given to the City, and I would ask the City Council to ratify such a plan,” Avedisian concluded.

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