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Director Gallogly Returns Control to the City of Woonsocket's Administration

On March 19th, following a meeting with the Woonsocket Budget Commission, Director Rosemary Booth Gallogly concurred with the report detailing the accomplishments of the commission of having met its goal of returning fiscal stability to the city of Woonsocket.

The commission, established in May 2012, addressed many of the structural problems plaguing the city including a $6.3 million cumulative deficit, a lack of uniformity in medical insurance plans, an unfunded pension liability of over $30 million, an unfunded OPEB liability of $125 million, and a lack of funding for infrastructure and capital equipment.

The commission developed a five year budget forecast which projects that the deficit will be eliminated by the end of this fiscal year. Under the Fiscal Stability Act, the commission had a maximum of five years to eliminate the deficit. The commission was able to accomplish this in three. Some of the items reflected in the forecast include, successfully negotiated five-year collective bargaining agreements with all seven of the city's employee groups, successfully negotiated memorandum of agreements with the majority of the city's retirees, a reduction in the pension liability by 13%, full funding of the pension annual required contribution (ARC), and a reduction in the OPEB liability by 35%, fully funding the ARC for OPEB starting in FY 2017, and a tax levy increase every year that is less than the statutory maximum of four percent. The commission also created a budget reserve fund in FY 2017.

Part of the successful negotiation of collective bargaining agreements provided important disclosures for retirees and beneficiaries in the form of a required annual funding notice from the city. This addressed retiree concerns about the past practice of not funding the ARC and investment performance. The funding notice will provide key information concerning the health of the pension fund.

In accordance with Rhode Island General Law section 45-9-10.1(b), the Director of Revenue has appointed Paul Luba to serve as the fiscal advisor for a period of five years until 2020.

For more information on the work completed by the Woonsocket Budget Commission, including the complete exit binder and supporting materials, click on the link below.

Questions or comments may be directed to Susanne Greschner, chief of the division using the contact us link.

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