Panel tackles Woonsocket fiscal crisis

WPRI 12

Reporting by: Susan Campbell

Updated: Jun 1, 2012 6:03 PM

WOONSOCKET, R.I. (WPRI) -- Just days after its formation, the budget commission created to oversee Woonsocket's dire financial situation got down to work late Friday morning.

State Revenue Director Rosemary Booth Gallogly seated the five-member panel earlier this week, shortly after Mayor Leo Fontaine announced that the school department could be out of money within two weeks.

One of the first orders of business during Friday's meeting at Harris Hall was a briefing from Woonsocket School Supt . Giovanna Donoyan .

The Woonsocket School Department is facing a $10 million budget shortfall. Last Friday, the House of Representatives failed to vote on a proposed tax hike on property owners in the city.  The hike aimed to close that gap, and would have cost the average homeowner about $350.

The group has until June 29th to give final notice for tax bills.

Budget Commission Chairperson William Sequino says, "Generally it takes about four or five months to do the budget. We're looking at trying to come up a gap of $4 to $6 million in like maybe three weeks."

The budget commission has already passed one resolution, requesting a $3.1 million advance payment of state education aid.

Mayor Leo Fontaine said, "That goes to regular operations and that helps them to make payroll. Other than that, it doesn't help anything to do with the deficit situation."

The creation of the commission made Woonsocket the third Rhode Island city whose financial situation is under direct oversight by the state, along with Central Falls and East Providence.

Commission members include Mayor Fontaine, City Council President John F. Ward, East Greenwich Town Manager William Sequino Jr ., Dina Dutremble , former business manager for the Woonsocket Education Department; and Peder Schaefer, assistant director of the Rhode Island League of Cities and Towns.

Meanwhile, the financial hits keep coming for Woonsocket. According to the Providence Journal, the city's bond rating has been downgraded deeper into junk bond status. Fitch Ratings has moved the city's rating from BB to B with a negative outlook.

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