Last night during the Warwick city council finance committee meeting, the question was asked as to how the new roof costing $102,000 at fire station #2 would be paid for. The answer was that the funds would come from an old voter approved bond from 2006 which is a "City Building /Roof Replacement Program" bond.
The question was then asked what line item in the budget reflects where the expenditures are being extracted from to cover the costs of the new roof. The answer was that it's not in the Warwick General Fund budget and the funding was being pulled from city bonds. No one from our city council finance committee or city leadership who was present at the time could explain the bond indebtedness breakdown and how, or where, it could be found.
The way it was eventually explained at the full city council meeting (later last night) is that the city refinances its debt to pay off old debt and take on new debt, and the payments for bonding pretty much remain constant or within budgeted amounts.
Basically, what's taking place in the city of Warwick is that we are taking on new debt, and bonding payments are remaining constant, because the city repeatedly increases taxes and depletes our savings account to balance the budget to make its debt payments.
A day later and a little more digging around, more financial answers lie in the City of Warwick Financial Statements With Independent Auditors' Report for the period and fiscal year ending June 30, 2014.
What's most interesting about this "auditors" report is that the city's financial statistical information that is documented on twenty pages in the report, wasn't even audited. (see pages 176-196)
City of Warwick Statistical Section, last 10 years, (UNAUDITED) :
How any auditing company hired to provide a comprehensive financial report on a municipality, that does not actually audit the statistical components, would make anyone who knows better question the validity and merit of any such auditing report.
Warwick is the second largest city in the state of R.I. and it looks like Cranston will be surpassing us in the not too distant future. No one knows the last time any municipal department in the city of Warwick was thoroughly audited.
Our city council briefly had an auditor, and she resigned a few months ago. There has been absolutely no further discussion regarding the replacement of the city council auditor position. Who is doing the checking and balancing? Not anyone at Warwick City Hall. As far as anyone is concerned, the city's true financial operating numbers are more like rabbits being pulled out of a hat.
Now back to how that $102,000 fire station roof will be paid for.
The question regarding how a new fire station #2 roof will be paid for, is by no means being asked to diminish the necessity of the fire station needing a new roof. It's being called into question because when BIDS come before the city council finance committee on a monthly basis, the public, as well as our city finance committee, should be able to understand how, and easily pinpoint where, our tax dollars are being utilized to cover any and all city expenses.
The charts below (from the auditors' report) show the ten year trend of our city's outstanding bonded debt (what we borrow), to be used to pay for certain projects and repairs throughout the city (like a new roof for fire station #2).
What's important to note is that though the total outstanding bond debt amount has decreased from 2005-2014, our city's taxable value of properties has also decreased by approximately $450 million, and our property tax rates have steadily and substantially increased. We're getting hit good also with automobile tax increases to try and make up for the loss on taxable property value. The increase in automobile tax revenue collected by the city is $219,018,721 more than it was ten years ago.
Think about that for a minute.
We are paying off our bonded (borrowed) debt with less available taxable properties, and yet those properties that can be taxed, are paying more in taxes, year after year, to pay off our debt.
In simplest terms, the less available to tax means those that can be taxed, will be taxed more and more, to keep paying off all of the city's operational costs and debt, i.e.: GO bonds, city vehicles (lease purchases), pensions, retiree healthcare, city principal debt and interest, city debt services costs, salaries, healthcare, COLA's, etc.
We also currently have a middle-of-the-road credit rating which includes a negative outlook by Moody's investors. As stated in the Moody's report, what could make our city's GO (general obligation) bond rating go down are:
So what do you think is going to happen to our GO (general obligation) bond credit rating in the future when we have a city leadership running the show that has been kicking the can down the road for the past sixteen years?
There is no doubt our city departments will need new roofs, new vehicles, new equipment, new everything at some given point in time and they have and will receive it all, at any given point in time... but there is a tipping point. What Warwick taxpayers do not see at any given point in time is a proactive, concerted effort by Warwick city leadership and its municipal departments getting their financial spending under control.
Warwick city leadership is essentially sabotaging the city's own economic growth capability by failing to address its very serious financial debt issues and inequities. This in turn will only continue to decrease the city's tax base. How is this an attractive financial climate for small businesses and families?
City leadership is also well aware of what the elephant in the room is that is drowning us financially. What cannot continue to happen is that our remaining tax base keeps carrying the short-end-of-the-stick financial burden. We know it will continue to close businesses, decrease school population size, and have more families leaving the city of Warwick.
Those who are paying attention to all of this also know where and how the dividing line has been etched in our city, and this has allowed for business-as-usual to carry on for far too long in Warwick. It has kept certain individuals employed and at the helm of certain leadership and municipal positions who are either not qualified, or not willing and/or capable of getting the job done fairly and efficiently.
Dividing and lying to the people is far from what good and honorable leadership represents, and it's all reflected in the numbers and the deteriorating, weed filled lots and run down vacant homes and buildings, slowly consuming the city of Warwick landscape.
Warwick is still long overdue for a thorough, fiscal auditing. I can't imagine what would be revealed.
"You cannot just keep borrowing more and more and keep spending more and more without eventually having a day of reckoning." ~Wilbur Ross