News & Features

January 24, 2012

City Hall

By Tom Shevlin

NEWPORT -- Newport is facing deficits totaling close to $50 million over the next five years, a new report by city's Finance Department shows.

The five-year prospectus, which is required under state law, shows that beginning next year, the city will be forced to grapple with what Finance Director Laura Sitrin described as a "structural imbalance" that has become all too common in state and local governments across the country.

Most of the projected deficits will come in the form of mounting employee benefit costs.

"We've known for a while, in Newport – and almost all governments – that expenditures are growing more than revenues," Sitrin said Tuesday.

Beginning in fiscal year 2013, expenditures on municipal services and education are each expected to exceed revenues by just over $6 million. By FY2014, that number will grow to roughly $10.5 million. If no action is taken, the deficit would swell to $15 million in FY2015 and $17.6 million in FY2016 – or just over $48 million over the next five years.

Specifically, the report shows that the city's expenditures are anticipated to rise from $115 million in the current fiscal year to $134 million in FY16. Meanwhile revenues will remain relatively flat, inching up from $115 million in the current year, to just over $116.5 million in FY16.

"As you can see, there are significant deficits projected for the next few years," Sitrin wrote in a Jan. 12 memo to council members.

The document, which beginning this year was required to be submitted to the state Department of Revenue, didn't contain any specific recommendations from addressing the multi-million-dollar shortfall, except to note that "a combination of additional revenues and reduced expenditures" will be needed.

Mayor Stephen C. Waluk said that the report highlights an issue that he has been concerned with for some time.

"This is something that I've been talking about, and something we've known," he said. "We have to find ways to save money."

According to Sitrin, the "big dollars," are in benefits.

"Every year, the total cost of benefits grows closer to the total cost of salaries and may soon outpace salaries. For instance, the projected cost of salaries in FY16 is $24.2 million versus the projected cost of benefits in FY16 of $23.7 million," she wrote.

"All governments face an issue right now as to what kinds of services they can afford to provide, and Newport is no different," Sitrin said.  

January 24, 2012

Latest Comments

  • A FEW IDEAS TO HELP

    1. Thames St. from Washington Sq. to Mill St; and from Memorial Blvd to Wellington becomes a Toll Road. Also, Bellevue Avenue from Narragansett to Ocean Drive; all of Ocean Drive (both ways); and Morton Ave from Carroll to Spring (because people drive much too fast up there) - all Toll Roads.

    2. One windmill per park to generate enough power to pay for the electric bills in all of our schools and all of the street lamps.

    3. A Jazz Tax/Phil Collins surcharge. So often in the spring and summer I hear people complaining about the kids blasting music from their motorcars. It's annoying, rude and very often difficult to make out what they're singing about. We need to pass a law prohibiting the playing of the loud music from automobiles, subject to high fines (a thousand bucks). However, in order to preserve the integrity and history of the town, we should allow the playing of jazz - provided the driver has purchased a sticker (a day or summer pass, like with the beaches). This, of course can be adjusted for an additional fee to allow recently divorced middle-aged men in fast cars to blast Phil Collins when they go speeding around the Drive with the top down.

    4. Raise the price of going to First Beach to include everyone. Narragansett charges people to go to the beach (that means, people who walk to the beach), so can Newport. Naturally, we'd have to clean the beach up a tiny bit; but for now we can call it "the Seaweed Tax."

    5. Employ The WAL-MART Initiative. Wal-Mart famously employs workers at less than 40 hours a week in order to avoid having to pay for such nuisances as health care and overtime. Newport should adopt this plan for all of its' civil servants. I'm sure no one would mind.

    6. Bring Back the Double-Header to the Creamery. Call it the "City of Newport's Double Header" and see to it that the city gets HALF of every Double-Header cone sold statewide. (Also, they need to bring back the Cabinet - they used to make them really good.)

    7. Sell beer and wine at 1St Beach. If we're going to entertain the idea of full-scale casino gaming at Jai-Alai, then we should consider selling beer and wine at the beach. Look at how well they do over there at Johnny's House of Seafood! Tremendous what goes on over there! Think how much revenue we could generate every summer!

    8. Full Open Bar at all City Council meetings. Since we're on the subject, why not really get residents involved by making the meetings more entertaining and tolerable. Of course, there will be a fee...

    9. More parades. The Police Parade and the St. Patrick's Day Parade generate business and please everyone! We should allow more parades, but charge higher license fees. Consider parades for a Fourth of July; the Jazz & Folk Festivals; Columbus Day, Halloween , Thanksgiving Day; etc.

    10. A Pizza & Beer tax. It won't be popular, but 50 cents a slice and $1 a pie; 50 cents a beer & $1 per six pack. Think about it. In this town? We'd pay off the deficit in a matter of weeks.

    Posted by FRED SULLIVAN January 26, 2012 16:37:44

  • Deficts

    If the current council "has been concerned with [this] for some time," why have they not taken steps to address it? Four of them have been sitting on the counbcil for 10 years or more.

    Their year-to-year budget process has been a major factor in creating the situation. Now they are starting a long range planning process but can't get beyond being a "first class toruist city." Come on - let's have a strategic budget process that forms priorities for 5 years out. Then decide what we can afford to do and what we have to forego.

    Posted by Herb Armstrong January 26, 2012 15:31:37

  • What Services to Cut - Early Public Input ?

    Alien concept for Newport: Survey consumers of City of Newport services on which ones that they'd be prepared to accept changes. Give them "what-if" scenarios. Use those results, however unscientific they may be, to shape the city manager's proposed budget. Why not begin conditioning the population to the inevitable changes early on in the budget process instead of waiting for the formal public workshops ?

    Posted by Mike Cullen @ KnowingNewport January 26, 2012 15:09:27

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