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Warwick Finance Department Irons Out FY21 Budget Bugs

Warwick City Hall
Warwick City Hall
Warwick City Hall.

WARWICK, RI — Warwick’s Finance Department, led by new Finance director Peder Schaefer, filed its mid-year review of the FY21 budget, projects a $1.2 million deficit, offset by a $1.9 million prior-year surplus.

The surplus is less than the $3.8 million announced by the administration of former Mayor Joseph J. Solomon, according to a statement from Mayor Frank Picozzi’s office.

The FY20 budget also includes a deficit of $2.6 million in the fire department. That deficit was largely attributed to overtime and a $500,000 deficit in police and fire pension contributions, resulting from incorrect payroll information used in preparing the FY21 budget.

“We don’t really know,” Schaefer said when asked how the incorrect payroll information error occurred during the Solomon administration.

“The pension contribution for police is 33.43 percent of pay; for fire 28.67 percent. Multiply those percentages ( as determined by the actuary) times projected regular and holiday pay for police and fire and you get a $500,000 deficit. It is possible that the holiday component was excluded, but we don’t know for sure,” Schaefer added.

Spending surpluses in many city departments offset the police and holiday pay deficit, making the  net spending deficit projection $200,000, according to the budget review.

According to the Mayor’s statement,  the report is based on expectations that local appropriations to schools are enough to support Warwick school activities for the year. The overall deficit projection is less than 0.3 percent of annual operating expenses. Risks to the forecast include:  pending grievances associated with the city employee layoffs put in place last April, as well as additional revenue risks in the hospitality industry. Property tax revenues are expected to meet estimates contingent on renewed collection efforts and a planned tax sale at the end of the year.

Picozzi said the deficit is manageable.

“The next challenge will be crafting a FY22 budget that is reasonable and affordable,” Picozzi said.

Schaefer, associate director of the Rhode Island League of Cities and Towns, previously served as Director of the Department of Administration and Acting Director of the Department of Revenue under Governor Lincoln Chafee. A respected expert on municipal finance, Schaefer also served on the City of Woonsocket’s Budget Commission in 2012 and 2013 during that city’s budget crisis.

Schaefer replaced the interim Finance Director,  City Treasurer Lynne Prodger, who had been serving both roles for the city and is now solely focused on her treasury duties, according to Picozzi’s office. Finance Consultant Mike D’Amico was not retained by the Picozzi Administration.


Rob Borkowski
Author: Rob Borkowski

Rob has worked as reporter and editor for several publications, including The Kent County Daily Times and Coventry Courier, before working for Gatehouse in MA then moving home with Patch Media. Now he's publisher and editor of Contact him at [email protected] with tips, press releases, advertising inquiries, and concerns.

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