September 17, 2019
Dear Council Members,
It is my privilege to present to the council and the people of the city of East Providence the 2020 fiscal year budget.
This budget represents our priorities and vision for the community. This budget has been crafted with much care over the past few months taking input from department and division heads, the school department and the community. My goal as mayor of this fine city is to make East Providence the first place you choose to live, work, educate and raise your families. As you read through the budget, you will see where our priorities lie --and for me --it is working to make East Providence number one.
Elected officials must take great care in deciding how to spend your tax dollars. 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.
Taxpayers should know how their tax dollars are spent. For the first time ever -- and under my administration -- we will be introducing our budget on the OpenGov online platform, which will allow our community to gain access to our up-to-date budget and spending practices.
I believe in keeping our community well informed of how things are being din our government and OpenGov is just one of the steps we are taking to create greater transparency. We are making full use of public feedback meetings, robust communications utilizing social media platforms, traditional media and Code Red alerts all in effort to keep our residents informed.
When I ran for office, I promised the residents of this city tax relief. This budget increases the homestead exemption by .5 percent raising it to 13.5 percent. My 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. In time we can achieve this goal through incremental increases to the homestead exemption.
As the city embarks on building a state-of-the-art high school we need to plan accordingly as many of you do when you purchase a home or vehicle and devise a plan to pay it back. We need to do exactly that in order to pay for the bills that will come due on this modern school. This is why I propose that we raise enough funds in this budget to set aside $1.4 million in a restricted debt service account so we can lessen the burden on future generations and prepare to make those payments on the school.
Our 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.
The 2020 proposed budget calls for General Fund expenditures (including schools) of approximately $165.8 million, a $4.8 million (3 percent) increase over the prior year. City expenditures will increase by nearly $2.7 million (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 our new high school. Without this reserve, city expenditures are proposed to increase by approximately $1.3 million (1.7 percent). School Department expenditures are proposed to increase by $2.1 million (2.5 percent) with the city contributing $1.4 million of the increase.My administration inherited substantial expenditure increases from actions, or inactions, of prior city administrations we had to incur those increases in the current proposed budget. These Include:
- Our police and fire annual required pension contributions (ARC) went up by a combined $720,000 (9.6 percent) mainly due to this administration's choice to adopt a more actuarially conservative mortality table than what we previously had. We could have stayed with the older, less costly, more actuarially unsound mortality table that was used in previous years, but we chose to do the right thing in fiscal 2020 to ensure that future generations in East Providence are not unfairly burdened with police and fire pension costs.
- A previously negotiated 2 percent salary increase, as well as step increases, across all of our previously negotiated municipal employee contracts added approximately $700,000 to our 2020 expenditure total.
- Our debt service for fiscal year 2020 (not including the $1.4 million debt service reserve for new high school debt payments) increased by $503,000 because we will only now begin to make payments on the 2017 Tax Incremental Financing (TIF) bond for Kettle Point. In addition, we will now begin making payments on a 2017 bond that previous city administrations used to make our city buildings more energy efficient. Both of these previously issued bonds were beneficial to our city, but we have not had to feel the projectsâ cost impact of $1 million until this fiscal 2020 budget.
- The most substantial expenditure increase in our proposed fiscal 2020 budget is for the East Providence School Department. The School Department presented us with a budget that called for a year-over-year expenditure increase of $3.1 million (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 (a new and very costly line item in their budget), made up the majority of the School Department's presented 2020 budget expenditure growth.
- The city has been holding in escrow $6.5 million of school funds. These funds represent windfalls from accumulated prior year surpluses generated by the School Department and will be earmarked for future school capital improvements. In their presented 2020 budget to us, the School Department requested $950,000 for capital improvements. 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. Therefore, I will not be including $950,000 in the School Department's budget, but instead will be allocating $950,000 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 to be an additional $1.4 million.
There are fixed costs to city government such as contractual and pension obligations, existing debt services, personnel and fixed operating costs that must be funded.
These inherited expenditure increases were considerable and deeply influenced how we 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. For instance, we cut positions in our Tax Collection, Assessor and Recreation/Senior Services Departments, and rejected requests for new full and part-time positions across other departments. On the other hand, we budgeted to fully staff our depleted Police and Fire Departments with new recruits. These necessary additions to our public safety departments will help to not only reduce the departments' overtime costs, but will also enhance fire and police's ability to better protect and serve our community.
Recently the City Council approved ordinance changes that will allow us to restructure our Planning Department so that the department can generate a greater focus on economic development and the marketing of our city.
The newly renamed Planning and Economic Development Department will now include an economic development and a planning division. The economic development division will include a marketing/data specialist and the planning division will have a primary planner, which was unfunded from the 2019 budget. By aligning our planning and development efforts with a marketing strategy we will bolster new business growth, increase the city's tax base and add good-paying jobs.
Finally, in the fiscal 2020 budget we are proposing to make our part-time minimum housing officer a full-time position. Our city residents should not have to experience blighted and neglected properties and we aim to put a greater emphasis on minimum housing enforcement and neighborhood revitalization.
Our 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.
Neglecting to adequately fix our infrastructure and replace the city's old, deteriorated assets is a mistake that my administration will not make.
In the past, many of these issues were postponed for future administrations, it is easy to keep kicking the capital replacement can down the road, but eventually things break down and must be replaced, most often at a higher cost to the city. To help decrease our capital costs, we challenged our department heads to come up with less costly ways to meet their capital needs.
For instance, rather than purchasing new, expensive trucks, the city's fire department will be acquiring high-quality, preowned ladder and engine trucks to meet the immediate needs of this community. We will also aggressively seek out grants to supplement capital programs throughout our departments and our newly restructured Planning and Economic Development Department will be the driving force behind this effort.
While we have detailed many of the financial challenges presented to us in this fiscal 2020 budget, the most obvious challenge is the future financing of our 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. 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.
To fund our proposed 2020 budget we are requesting a tax rate that is 2.6 percent higher than it was last year. 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. What will this mean for the average homeowner? It means an increase of approximately $104 to the average homeowner's tax bill.
Our city is on the rise and my administration is very proud of the improvements in economic development, infrastructure, community programs and arts and entertainment throughout East Providence. A combination of all of these elements presents growth and job opportunities for our city.
Our community is bustling with economic development from breaking ground on the new high school to working with Live Nation Entertainment on securing a new amphitheater to house the city's waterfront concert series. The 45-acre, mixed-used development site sat unoccupied and mostly unused for nearly 40 years. That will soon change. RI Waterfront Enterprises LLC, the new land owner, has planned a mixed-used model to not only connect East Providence residents to the waterfront, but to serve the port needs of the offshore wind industry. As weâve witnessed with the Bold Point Concerts, live music helps to attract tourists and contributes to the city's cultural environment.
The waterfront district presents one of the most exciting growth opportunities. 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. In addition to Live Nation, our state and federal delegation has committed $54 million to build a new Henderson Bridge which will provide greater access to the waterfront and open additional land for development. In addition, my administration has been working with the governor and the Rhode Island Dept. of Transportation to build an offramp from Interstate 195 westbound directly to Waterfront Drive.
Investment in our community and support for small businesses is key to our city's continued economic growth. That is why we have formed a partnership with the Small Business Development Center, which now has a satellite office in East Providence City Hall to provide private, no-cost counseling to prospective entrepreneurs and existing business owners.
Investors are interested in what we have to offer in East Providence. The Odd Fellows Home, which has sat vacant for decades, has been an eyesore and drain on our resources. In a short period of time, my administration has been able to mobilize and sell this key historic building in our growing Watchemocket arts district. The revitalization of this historic property at the gateway of our waterfront and our arts district will be a key piece to our growth and community development.
Speaking of historic gems, the Looff Carousel at Crescent Park has undergone significant improvements in recent years. We pride ourselves on being able to keep the carousel operating and available to our residents and visitors, however years of use of a very old and historic building does come with needed maintenance and repairs to the building's infrastructure. This budget provides for the much needed improvements to our carousel.
The carousel attracts tourists and brings vitality to Riverside, but there's more we can do to make this a year-round destination spot. Creating a new and expanded concession building would provide year-round revenue that will support the continued preservation of the carousel. To build on the idea of year-round recreation, $100,000 in capital improvements is recommended for the acquisition and installation of an ice-skating rink, which was part of the Landscape Design Plan approved by the City Council and the Rhode Island Historical Preservation and Heritage Commission.
The city's Department of Public Works has had a busy year. The city has implemented the first phase of a three-year $10 million roadway improvement plan. Our paving contractor has been milling and paving our city's roadways and once phase one is complete, residents will see improvements on approximately 40 roadways. We are requesting additional funding for installation of pedestrian signals to improve public safety and promote walking and cycling.
Improvements need to expand beyond the roadways and into our city parks. The Kevin Robinson Memorial Skate Park at Onna Moniz-John Park is a popular destination and the addition of a second park in the city would benefit and create greater access for the youth throughout our community. Recently the K-Rob Foundation donated to the city professional-grade skate ramps, which we plan on using to create that second skate park in our city.
Renovations at the Pierce Field Complex are in great need. Our city's youth utilize these parks and fields on a daily basis and deferring replacement of basketball courts, fencing and lighting will result in safety issues for the public.
The city has begun renovations to improve Americans with Disabilities Act (ADA) accessibility at Pierce Stadium Complex by installing and widening new and existing sidewalks. As this important work continues, we are looking to the future. We want to build a pavilion with gazebo on site so that our youth and arts community can utilize it for ceremonies, performances and summer programs. Music in the park and theatre in the park will become a cherished community event for all to enjoy.
The city is going to make improvements and expand upon the basketball courts at Pierce. Throughout the year, the two existing basketball courts get great use and they are in poor condition. Our goal is to improve the existing and add two new basketball courts at the Pierce Complex.
Part of my vision for the city is to create an arts and entertainment district. It's been proven that there is a direct correlation between the arts and economic development and having an arts district will benefit our creative community, local economy, and social well-being -- it is a win for all.
Included in this budget is a $50,000 funding request to create a city-funded grant program to promote public arts. Public art programs spur economic development, invigorate public spaces and make art free for everyone to enjoy.
We have already accomplished much under my administration, but there is still a lot of work to be done and I am excited about what is to come.
My vision has always been to continue to attract people to the city of East Providence who will want to live, work and raise their families here.
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. It's an honor serving as your first mayor and I will continue to work hard on your behalf.
Roberto L. DaSilva