State Representative John Lombardi and a host of residents and business owners in the Broadway and Federal Hill area are up in arms about Mayor Jorge Elorza’s plan to install parking meters along both Broadway and Atwells Avenues. These parking meters would replace posted parking - in many cases, the existing parking is signs dictating two hour limits.
“Placing parking meters on Federal HIll is anti-business, anti-consumer and anti-residential. I will not support the installation of the meters and I urge everyone who lives or does business in the area to please let the City know their feelings,” said Lombardi, the former City Council President and Interim Acting Mayor in a Facebook post that he reaffirmed to GoLocalProv.
Elorza in his budget plan line-itemed increased parking revenue to the City of Providence by $1.6 million over the revenue estimated to be generated in 2015.
The expansion of meters has hit numerous neighborhoods including the Thayer Street area and downtown Providence earlier this year.
Parking meter revenue for the CALE meters -- i.e. "pay and display" receipts from kiosks - just a few years ago was a tiny portion of the budget. In 2013, the city of Providence took in $188,848. For the 2016 fiscal year, the Elorza administration has budgeted a $1,775,000, for a 900% increase in just four years.
“These small businesses (in the West End) need to draw customers from other shopping venues that have free parking. If the city decides to make their customers pay for the privilege of shopping on the West Side, some of those potential customers will choose other options. Since the profit margins for many of these businesses are thin, any threats to these businesses will result in closures,” said Ric Santurri, Providence Real Estate Developer.
Overall, the City of Providence has increased the budgeted amount of parking fees (which includes overnight parking permits and all forms of meters) from $2,056,439 to a 2016 budgeted number of $4,275,000.
These line items do not include the revenue the city realizes from parking tickets which is budgeted at $7 million.
"I do understand that there are studies out there that claim that parking meters actually help out neighboring businesses in the long run, since there is more parking space turnovers. Maybe the Mayor can hand one of these studies to a bankrupt business owner after these paid parking meters are the tipping point on whether that proprietor's business will stay open or fold," said Santurri.
Related Slideshow: Elorza’s First Budget Address—Ten Things To Know
While Mayor Elorza will be introducing his Fiscal Year 2016 budget proposal on Wednesday, over two months remain for FY15. In his FY15 to FY17 budget narrative, Providence internal auditor Matt Clarkin projected that the city would break even for the current fiscal year -- which City Council President Luis Aponte said is still on target based in part by the city's recent bond refinancing. 'We're hoping one of things that helped us is the refinancing of the PRA and PRB bonds which has yielded some savings. If there is a deficit for the current year, it will be a small one," said Aponte.
From the campaign until now, Mayor Elorza has indicated that he doesn't support raising taxes. Former RIPEC Executive Director Gary Sasse told GoLocal that he questioned the implications - and realistic expectations -- of forgoing a property tax increase this year (see Wednesday's article.)
Meanwhile, GoLocal MINDSETTER Mike Riley - who continues to make the case for bankruptcy for Providence -- told GoLocal In December, "Providence is in dire straits and needs to consider imposing a wealth tax totaling about $1 billion dollars, combined with another $500 million in additional PILOTs from Brown and other non-profits over the next 3 years to survive," said Riley, deeming Providence highest on the list of cities and towns in Rhode Island that could go bankrupt.
Adding a potential hurdle for this first year's budget is the fact that Governor Raimondo's proposed FY16 budget eliminates $5 million in "payment-in-lieu-of-taxes" (PILOT) funding to cities and towns, which had gotten a boost from refinancing tobacco bonds last year -- so Providence would be returned to FY14 levels.
"We'd receive 2 million less from the state next year, which we'd have to factor in if that stays in the [state] budget," said Aponte, who noted that he hasn't spoken with the Governor about the proposal. "I know that city officials and lobbyists are working to address it."
Providence City Councilman Sam Zurier spoke to the FY16 budget where he said there were roughly $7 million in "one-time fixes" - meaning they wouldn't recur in the next fiscal year -- but he remained optimistic the city could identify other "one time" solutions on a similar scale next year. Last year, outgoing Mayor Angel Taveras tinkered the budget by selling the naming rights of the city's downtown skating rink, with a lease extension at Triggs, and anticipating the sale of Flynn Elementary School and Urban League property, the latter two which are still pending. How will Elorza match those line items this year? "Every year something comes up," said Zurier.
The ordinance passed by the City Council last year that allows landlords who do not live in their homes to pay 160% (down from 175%) of the city’s $19.25 per $1,000 of assessed value rate for owner-occupied homes starting in FY16 means a $6 million plus shortfall in revenue for the coming year.
Whether the Mayor will support the change -- and the City Council, with two members since last year's votes -- is another question. "The new remembers replace the two who were on opposite sides of the issue last year," said Zurier. "If there's still a substantial majority that supports this issue, and the Mayor presents a budget that doesn't included it, they'd have to make the case of how to address that shortfall."
City internal auditor Clarkin said that the city was meeting with its actuaries to discuss the first quarter returns on Tuesday -- the same day GoLocal MINDSETTER Michael Riley posed the pension question, that "if total plan assets are actually $357,000,000 as reported in city documents, then why is Wainwright only managing $268,000,000?" Clarkin did not provide a response when asked Tuesday. "Providence and their actuaries under each Mayor knowingly overstated Pension Assets producing an inaccurate and overstated Funding ratio," wrote Riley.
"This allowed the Mayors to set less aside for ARC payments and spend tax dollars on other items including raises,' continued Riley. "The tactic of over reporting the assets and funded ratios caused an estimated $60 to $100 million shortfall in what should have been contributed to the pension over the last decade." Will the city stick to its guns -- and explain the difference and explain its reported assets number in light of what is managed?"
A report done by consultant and former Taveras Chief of Staff Michael D'Amico, submitted to the City Council on April 1, outlines twenty potential areas of at least $344,000 in reduced costs to the city following a comprehensive review of staffing -- and opportunities to streamline operations.
"It's important to note that some of the recommendations may require negotiated changes within the city's collective bargaining agreements with its unions," writes D'Amico. From DPW and Parks department consolidations, to addressing overlap of clerical positions, what Elorza will attempt to implement from the suggestions -- and what can be achieved -- remains to be seen.
According to Clarkin, Medical benefit spending is expected to increase a continual substantial rate in coming years. Expenditures for employee and retiree medical benefits are projected to increase 7.75% annually through FY 2017, according to the city’s medical consultant -- it is projected that the city’s general fund budget for medical expenditures will increase from $40.5 million in FY 2015 to $47.0 million in FY 2017. How the city will continue to account for the increasing costs will be a major question for Elorza.
The most recent contract with the Providence Teachers union expired on August 31, 2014 -- and after the PTU rejected a contract deal last fall, it has been mediation since. In Internal Auditor Clarkin's FY15-17 budget projection, it was assumed that a new contract with the PTU will not contain an across-the-board salary increase effective in fiscal years 2016 and 2017.
"A one-percent across-the-board salary increase would result in approximately $1.35 million in additional salary costs," wrote Clarkin. "Additional salary costs of $800,000 for teacher step increases have been incorporated into the school department’s budgets in fiscal years 2016 and 2017." Whether or not the projections will be accurate will be seen when a new contract is ratified.
The structural deficit projected by Clarkin is supposed to increase from $17M in FY16 to $22M in FY17. Will structural staffing changes have an impact on the bottom line? How will the city continue to address pension obligation needs? As Elorza looks to tackle this year's budget issues, longer-term implications will be at the core of many decisions.
