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City of Providence Reports $1.6 Million Budget Surplus for FY2013
Annual financial audit affirms Taveras administration's successful efforts to address $110 million structural deficit
PROVIDENCE, RI – Mayor Angel Taveras announced today that the City of Providence ended FY2013 with a $1.6 million budget surplus, effectively closing the city's $110 million structural deficit. The results were outlined in the city's annual financial audit that was submitted to the City Council.
"Through shared sacrifice and true collaboration, we have made real progress in Providence and pulled the city back from the brink of bankruptcy," Mayor Taveras said. "I am grateful to everyone who has put so much effort into moving Providence forward."
The $1.6 million surplus achieved is attributed mostly to better than expected tax collections and revenue generated from permits and fees in the Department of Inspections and Standards. The FY2013 budget also accounts for $5 million less in savings than was originally budgeted as a result of pension and retiree health care reform. While $23 million in savings was budgeted for FY2013, the pension settlement achieved $18 million in savings. The $5 million in unachieved savings was spread across city departments. Mayor Taveras felt strongly that the $5 million less in savings was a price worth paying for the certainty of a negotiated settlement rather than a high stakes court battle.
After taking office in January 2011, Mayor Taveras signed an Executive Order creating an independent Municipal Finances Review Panel to conduct a full review of the city's finances. On March 3, 2011, the Panel delivered a report that identified a $110 million structural deficit in FY2012.
Mayor Taveras took swift and decisive actions to address the budget deficit, calling on every stakeholder in the city to share in the necessary sacrifices, including:
• Cutting his own pay by 10-percent;
• Reducing the Mayor's Office budget by 10-percent;
• Renegotiating union contracts with city workers, firefighters, police officers and teachers, saving approximately 10-percent of the value of those contracts in FY2012 and more than $100 million over the next several years;
• Securing contributions from seven major, tax-exempt colleges, universities and hospitals in Providence, totaling nearly $38 million in additional revenue over 11 years; and
• Reaching a landmark agreement with retirees and current employees to reform the city pension and retiree health care system. The agreement saved Providence $18.5 million in FY2013 and reduces the city's unfunded pension liability by approximately $170 million.
A copy of the full FY2013 financial audit is available at: http://www.providenceri.com/finance/financial-reports.