PROVIDENCE – Rhode Island Department of Revenue Director Rosemary Booth Gallogly has appointed a five-member budget commission to assist East Providence achieve fiscal stability.
The commission is the second of three steps – fiscal overseer, budget commission, and receivership – of state intervention under the Fiscal Stability Act of 2010.
Last month, Gov. Lincoln D. Chafee appointed Maj. Stephen M. Bannon of the state police as fiscal overseer for the city. Bannon has since concluded that the city is unable to propose a balanced municipal budget, faces a fiscal crisis that poses an imminent danger to the city, and that stability will not be achieved without the assistance of a budget commission.
Bannon indicated this in a letter dated Dec. 19, recommending that a budget commission be formed. With the naming of the five-member commission, his position is now eliminated.
“Based upon Maj. Steve Bannon’s finding that a budget commission should be appointed for the city, as well as my own familiarity of the current fiscal challenges being faced by the city of East Providence, I have determined that the appointment of a budget commission is in the best interests of the city,” Gallogly said. “Therefore, I have advised Governor Chafee that I am abolishing the fiscal overseer position and establishing a budget commission for the city.”
East Providence finds itself with a growing cumulative school deficit estimated at $7.2 million in fiscal 2011. In addition, the city’s fiscal 2012 adopted budget has resulted in an additional $7.2 million budget gap.
Last week Moody’s downgraded the city’s bond rating three levels, to below investment grade. As a result, the city now faces a cash flow problem and is expected to experience difficulties in securing the short term financing it has historically relied upon to pay bills and city payrolls.
In addition to Brennan, designees to the commission are: Michael O’Keefe, former budget officer and House fiscal advisor of North Providence; Diane L. Brennan, a Warwick financial report analyst; East Providence City Council President Bruce Rogers; and City Manager Peter Graczykowski.
“This step will allow the state to further assist the city of East Providence and help it reach fiscal stability,” Chafee said.
“My administration has been proactive in confronting financial difficulties in our cities and towns, and we will continue to help struggling municipalities and protect the property taxpayer wherever necessary. I am confident that East Providence elected officials, employees, and taxpayers will ultimately view this as a positive and will welcome the establishment of the budget commission to assist in the development of a plan that resolves the prior year deficits, brings the current year into balance, and provides for structural balance in the future.”
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.