After a tense week, Providence budget wins support from council panel

PROVIDENCE, R.I. (WPRI) – Three days after city budget negotiations appeared to hit a wall, the Providence City Council Finance Committee unanimously approved a $717.9-million spending package Thursday with the blessing of the Elorza administration.

The tax-and-spending plan that will be considered by the full City Council on Monday and again next Thursday makes marginal tweaks to the one Mayor Jorge Elorza proposed in April, slightly increasing the overall size of the budget while lowering tax rates for homeowners throughout the capital city.

“This is a balanced budget that allows us to pay our bills on time,” Finance Committee Chairman John Igliozzi said following the four-hour meeting. “We’ve cut expenditures and lowered tax rates to provide much-needed relief to the people of Providence, and we’ve delivered a balanced budget package ahead of schedule.”

The committee approved a tax levy earlier in the week that would cut Providence’s owner-occupied property tax rate to $18.77 per $1,000 of assessed value and the non-owner-occupied rate to $31.91 per $1,000 of value. The proposal also lowers the city’s commercial tax rate to $36.65 per $1,000, which is actually 15 cents higher than the mayor proposed but still lower than the current year’s rate. City car taxes would remain $60 per $1,000, but the exemption goes from $1,000 to $2,000.

Even with lower rates, the average homeowner in the city is still expected to see a tax increase because property values have increased by nearly 10% on average throughout Providence, according to the city’s recent property revaluation.

Thursday’s meeting focused on how the city would spend taxpayer money when the fiscal year begins July 1.

The committee’s budget includes funding for a class of 80 new firefighters as well as 60 new police officers. The fire academy does not rely on a $15-million federal grant the city applied for in March, but administration officials say they are still seeking the extra money. The proposed budget also sets aside $500,000 to purchase more than 1,200 computers for the school department, a much-needed technological investment administration officials have touted in recent months.

The Finance Committee said it found around $1.5 million in additional revenue for the budget through a payment-in-lieu-of-taxes agreement that was not included in the mayor’s proposal as well as the sale of the vacant Flynn School and a tax treaty with the Manchester Street Power Station, which has increased slightly from the $8.5 million Elorza’s budget projected it would receive from the deal.

On the spending side, the committee agreed the city would eliminate funding for 11 currently vacant positions in the fire department and 14 vacant spots in the police department as well as several unfilled administrative jobs within city government.

The council has decided to set aside $1 million for what it calls a neighborhood reinvestment account, a fund that will assist with “bricks and mortar projects” throughout the city, according to Igliozzi. He said the fund will function similarly to the federal Community Development Block Grant (CDBG), with councilors making recommendations on how the money should be spent.

“If we don’t reinvest in our infrastructure, then people do not want to invest in our city and live here,” Igliozzi said.

The proposed budget also increases the amount the city will set aside for deficit reduction to $6.1 million for the 2016-17 fiscal year, a spike designed to help the city pay down its $13.4-million cumulative deficit as soon as possible. The budget also sets aside $1 million “to address a negative outcome” in the ongoing legal dispute between the administration and the city’s firefighters over how much they should be paid for an 14-hour increase to their average work week.

The fire budget sets aside just $2 million for callback overtime in the next fiscal year, even though the city has averaged spending more than $9 million annually over the last six years. The proposal does include Elorza’s plan to create a $5-million contingency budget that would be dedicated to any overages in overtime or set aside for a possible resolution to the legal dispute.

Administration worked the phones to reach deal with council

Thursday’s meeting was a far cry from the contentious hearing the Finance Committee held earlier in the week.

After the committee approved a levy without a corresponding spending plan on Monday evening, state officials fired off a letter to Elorza and City Council President Luis Aponte expressing concern. The mayor suggested he wouldn’t consider a budget until he had both the revenue and spending plans in front of him.

But Elorza and other administration officials spent the week negotiating changes to the budget with the council. The mayor made several phone calls to individual council members in recent days and met face-to-face with council leadership early Thursday morning.

By the time the committee meeting started at 5:30 p.m., it was clear a deal was in place.

The committee meeting was filled with Providence firefighters, who hoped to see fireworks between Igliozzi and Public Safety Commissioner Steven Pare when they discussed the fire department budget. Igliozzi made it clear he believes “time is running out” for the city to reach a resolution with its firefighters, but he chose to avoid a bitter public clash Thursday.

After spending about two hours vetting the fire department budget and meeting with other city department heads, the committee took a 45-minute break to eat pizza from Pizza Pie-er. Members of the Elorza administration accepted slices of pizza from the council.

By 9 p.m., most of the councilors who do not serve on the Finance Committee had departed and the room was down to a few members of the administration, fire union president Paul Doughty and one reporter. The only question left was how long the victory speeches would last.

Brett Smiley, the city’s chief operating officer, said the administration supports the “positive [budget] changes that will strengthen neighborhoods throughout the city.” Aponte said the budget “addresses the realities in our city and throughout our neighborhoods.”

In a statement following the passage, Elorza said the budget “strengthens every neighborhood in the city by investing in our schools, our roads and infrastructure, and in economic growth.”

“My administration has been working in collaboration with our colleagues on the council to further hone the budget to accomplish these goals and accelerate the pace of deficit reduction,” he said.

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Dan McGowan ( ) covers politics, education and the city of Providence for Follow him on Facebook and Twitter: @danmcgowan

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