East Providence Leaders Press for Savings

East Providence leaders facing a budget deficit of at least $6.2 million met for five hours Monday night to look for ways to generate more money for the city.

The City Council and School Committee held a work session during which they questioned city and school department heads about potential areas for savings and consolidation.

"We need to take decisive action," School Committee Chairman Charles Tsonos said at the beginning of the meeting. "We cannot let things go on any further."

The school system's deficit has been building since around 2003, according to school officials. The lack of cash means that the school system's vendors have gone unpaid, and some have stopped doing business with the district. It has also affected the city's ability to borrow money. City leaders have described it as the most critical issue facing East Providence.

Several administrators said their departments were already understaffed and overworked, however. 

East Providence's human resources director, Mary Sullivan Scanlon, said the city had already reduced full-time positions by about 15 percent from since 2007.  Her department, which has three employees, works with nearly 600 people.

"We're struggling as it is right now," she said.

The city and school divisions also hire workers with different employment processes, which would make cross training time consuming. City employees are civil service, while on the school side, hiring is governed by Rhode Island Department of Education requirements.

There's also different specific knowledge of contracts. The city has contracts with five different unions, while the school side has agreements with four unions. Scanlon also suggested union representatives be at the table for any discussions of cost savings.

City leaders also talked about the potential of merging the city and school division's finance departments. Mary King, finance director of the school division, said however that finance departments on both the school and city side are "critically understaffed."

But Councilman William Conley said he had wanted to hear from department heads of ways they could work smarter.

"Consolidation is going to be painful," he said. "There's a reason why everybody talks about it and never does it."

He said that the previous City Council and School Committee had used unions as scapegoats and imposed pay cuts, but said that didn't work and the city was in the same financial situation.

"We excused the administrative level from review," Conley said. "That can't go on any longer."

City leaders also asked department heads about potential savings by seeking joint coverage for city and school employees for health insurance, dental care and life insurance. Scanlon said she was recently notified that the city's premium would be going up 15 percent for health care, a cost of about $375,000.

But because the city would have to notify its plan holder within ten days, city leaders agreed that finding cost savings this way could take longer as they investigated alternative plans.

Mayor Bruce Rogers suggested the city could offer retirement incentives to some long-term employees. School committee member Stephen Furtado questioned whether making the payroll system paperless could also save costs.

Representatives from purchasing and transportation also mentioned assorted savings that had already been made, but said they would look into other options committee leaders mentioned.

City leaders also questioned department heads about potential consolidation of the city and school division's information technology, purchasing and facilities maintenance.

Joseph Tavares, the school division's facilities manager, pointed out that the schools division has worked with the city on several projects, including Silver Spring Elementary School.

City leaders also got updates on the potential sales of city buildings. One sticking point was the Grove Avenue School, which currently houses Ocean State Montessori.

The school division had planned to sell the school to Ocean State before the last budget year ended on Oct. 31. The deal didn't close by the end of that fiscal year, so the school's division filled the $450,000 gap with some grant money from this fiscal year.

Interim City Manager Orlando Andreoni said the sale was now proceeding, but pointed out that the city is the deedholder. Superintendent Mario Cirillo said the proceeds from the sale was supposed to go to the school's operating budget.

Rogers asked Andreoni to provide more information about the sale at the next meeting. He also asked city staff to come back in 30 days with consolidation suggestions to save money in the upcoming budget.

"We have to make some hard, strong decisions, and we have to make them right away," Rogers said.

They also discussed the possibility of using tax-anticipation notes to help pay off the deficit. Conley opposed the idea, saying it was like paying off a debt with a credit card. King said she and Cirillo had talked about other options, but that one, a debt reduction bond, would need voter approval. Meanwhile, she said the city is running out of cash.