May 1, 2020
Good evening to the City Council, all of our dedicated City employees, our residents, and other members of the public who are listening virtually. I want to thank everyone for being here for what will be my last State of the City and Budget Address as your Mayor.
It is a weird feeling addressing all of you through my laptop sitting in my kitchen instead of live in the council chambers, but this is a different world that we are living in and our lives are truly upside down right now.
This has been the most challenging budget for me to put together. But I was determined to not add another penny to your worries this year. I know our residents and our businesses need help more than ever as people are stressed and out of work due to the pandemic. We have the third-highest number of positive COVID cases in the state. There were over 9300 unemployment claims from our residents through early April and our city’s unemployment percentage at the end of March jumped to 4.8%.
Thus, I want you to know right off the bat that I am NOT raising your taxes this year.
I want to assure you that all this craziness that we are going through right now will NOT be the new norm. We WILL overcome the COVID-19 pandemic. Our city is strong. Our employees are dedicated. Our residents are resilient. We have withstood many challenges throughout my time as Mayor, and this one will be no different. I’ve seen our city get through the worst of times by coming together and helping one another. Caring. Compassion. This is Cranston, and we remain Cranston Strong.
This isn’t our first rodeo. We’ve fought back from those devasting floods from ten years ago. We plowed our way through during “Snowmageddon” five years ago. We’ve survived large chemical fires and freak microburst storms. I joke, but the locusts at times don’t seem that far off.
Yet, over the last decade, all the hard work we have done with the budget, with making services more efficient, and pushing our teams to be more innovative and effective, is paying off BIG TIME during this crisis. We fundamentally changed how government worked and diversified the Cranston economy, making us more resilient.
Those difficult decisions back then to get our financial house in order led our city to the highest bond rating in decades. Just a few weeks ago, Moody’s issued another report and confirmed Cranston’s solid credit position and stable finances. They also did not see any material immediate credit risks.
Most importantly, we built up a substantial rainy-day fund. Because we are solvent, we were able to give our hurting residents a breather on their 4th Quarter tax bills this month and we can even afford to waive any interest for those that will be paying their 4th Quarter bills late. We are in a better cash position to weather this pandemic than many other cities in the state who couldn’t do the same.
Even though we have been closed to the public, our employees have stepped up during this time as they have been doing throughout the entire year.
I am so proud of our schools. Our teachers and administrators were already preparing our students for the jobs of the next century. The new wing at Eden Park Elementary is the showcase of future learning and heavily emphasized the use of technology. These initiatives helped our school system transition more quickly into distance learning when this pandemic upended the school year. They even provided over 1000 Chrome Books to those students who had no other access to technology. I also want to extend a special thanks to our students. Not only have you stepped up via distance learning but students from both East and West have supported our healthcare workers, first responders, and others in need through your generous donations. You truly epitomize Cranston at its best!
Next, our police department's intensive community policing effort throughout the year have resulted in our property crime rate dropping to a ten-year low, and their opioid initiatives reduced the number of overdoses from the prior year. When the pandemic hit, our officers joined the efforts of Economic Development to perform compliance checks to ensure that critical businesses are operating safely and that our residents were doing their part too.
Our fire department rescue division numbers were already up during the year and that has increased significantly as they have been running to numerous COVID calls in the past several weeks.
From day one of this crisis, our senior center staff never stopped and have been preparing over 800 bagged lunches daily for seniors in Cranston and statewide. Plus, they lent out one of our vans so that our important community partner, CODAC, could deliver necessary medication to their patients.
Our libraries have been busy providing virtual services and offerings to our community, particularly for our students. They are even using the 3D printer in the C-Lab to make face shields for CCAP’s testing site.
Our canvassing office is preparing for a mostly mail ballot Presidential Preference Primary election and we’ll be giving them more resources as they’ll need to gear up for the upcoming election cycle where you will be deciding who leads our great city as my term limits kick in.
Our finance and tax collections departments are answering calls daily, processing payments that have been dropped off or have come through online, and even chasing past-due taxes. These efforts have pushed us closer to our budgeted collection rate. In fact, our collection percentage as of April 1 is slightly ahead of the prior year.
Our community development team is developing programs to deploy our announced allotment of federal funds to increase COVID testing in underserved areas, to supply more food to those in need, and to lend a helping hand to struggling small businesses that qualify.
Our maintenance division has constantly been disinfecting and cleaning our buildings to maintain a safe environment for our employees.
I could go on and on as employees in every department have stepped up, and continue to work hard for the city, whether in person or remotely. These are extraordinary times, and our city workers know we all need to be on our A-game.
The current year’s budget is still trending well. Because we clamped down on routine spending when this crisis hit, we are steering ahead right now towards a balanced budget despite hurricane-force headwinds brought on by the pandemic.
This brings me to the proposed 2020-2021 budget. Undoubtedly, this has been the most challenging one for me, Bob Strom and Mike Igoe in our twelve years together. Unfortunately, we have hardly received any guidance from the state as to our anticipated state and education aid allotments. So, we are following the state law regarding state aid when the general assembly does not meet to pass a budget because of an emergency. This law allows for the allocation of the same amounts appropriated in the prior fiscal year.
Even with this, we’ve taken a conservative approach with our city’s revenue streams. We made the best estimates based on our current and past actuals and took into consideration the impact this pandemic will have on our local economy. For example, you will see that we did not budget the $2.2 million that the state anticipated us receiving from the restaurant and meals tax. We can’t trust that number as so many restaurants have been forced to close. Instead, we dropped it by about 20% to $1.8 million.
On the expense side, there were many increases that we could not avoid. There is an increase of $533,000 dollars for our trash services, mainly because of the increase from the tipping fees to RI Resource Recovery that I have been railing against for years! Additionally, there is just more trash being thrown into the landfill as people are home and doing more projects inside and outside their houses. We are pushing the state to get the landfill to waive the city’s allotment cap in the hopes of avoiding some of this increase.
We also have to absorb a 4% increase to our healthcare costs, a significant increase of over $170,000 in our hydrant rental fees from Providence Water, over $433,000 for our state-mandated statistical revaluation, higher annual contributions to the state pension fund for some employees, and increased funding to support our Canvassing department for this year’s elections.
In this budget, we still know what our priority will be. Our school children have always been at the forefront and will continue to be. Even with this tight budget, we will be providing our school department with another $400,000 dollars towards their operating budget, so that they can continue to innovate, invest in technology, and make sure our kids are ready for the jobs of the future.
In order to get our budget to balance and support our children as well as these increased costs, we made many difficult decisions.
First, we will be down 15 positions in various departments throughout the city, including in police and fire. This will save over $1 million in salary and benefits in this budget. The administrative staff will forego raises. But know that this is just the beginning. As a first step in this sign of solidarity to get us through the crisis, I am asking this Council to introduce an ordinance to postpone the raise for the next Mayor and Council that I had to allocate in the budget because it was existing law.
If the state does not come through with our projected revenues to help our hurting residents, all options are on the table and we will have to seek concessions as well as further staffing reductions such as furloughs and layoffs.
Next, we had been performing road and infrastructure improvements at an accelerated rate over the past few years. Last year, we spent over $4 million dollars on road repairs and repaving, but for this budget, we could only afford $2.5 million. This amount will still allow us to make further improvements and improve safety in our neighborhoods.
Sadly, our parks and recreation programs will also take a hit due to the pandemic. Because of the Governor’s announcements yesterday prohibiting large gatherings as well as the social distancing guidelines still being in place during most of the summer, our beloved Budlong Pool may not open and the quality summer recreation programs for our kids may not happen as well. We are hopeful and still budgeted for a reduced season just in case the state relaxes their restrictions.
Additionally, we also had to postpone some vehicle and equipment upgrades for highway and the fire department. We essentially limited these big-ticket purchases to those that were absolutely essential. In line with sacrifices all around, we also reduced our borrowing for our Open Space needs. All of this allowed us to keep our debt service line expense at the same levels as last year.
While we continue to make 100% of our obligation to our local police and fire pension fund, we had to cut the appropriation this year for our OPEB obligation. Fortunately, we’ve been ahead of the curve with respect to OPEB by making 100% of our payments when there is no requirement by GASB or the Rating Agencies to do so. This built up a healthy fund that stands in the millions and we have one of the lowest OPEB unfunded obligations out of the many cities across the state.
Through balancing our priorities and making these tough decisions on cuts, I am proud to say that my final budget will help our residents and businesses by NOT raising their property taxes or sewer fees in these tough times.
I want to end by saying how proud I am to have led this city for the past twelve years. We have had our highs and now our extreme lows. But through it all, I am so grateful for a great team of people working with me that had one priority in mind, our residents. Thank you so much for the privilege to serve as your Mayor. It’s been a wonderful ride.
Mayor Allan W. Fung