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Finance director warns Cranston is trending toward $10.4 million deficit as council presses for details
Summary
At a May 4 finance committee meeting, Cranston's finance director told council members the city is "trending in a bad way," citing a projected $10.4 million deficit driven by lower-than-expected revenue and higher expenditures; council asked for faster, more detailed weekly reports and for a breakdown of fourth-quarter transfers and ARPA spending.
Cranston's finance director told the city's finance committee on May 4 that the municipal budget is trending toward a roughly $10.4 million shortfall, and he said he has begun restricting purchase orders to slow expenditures.
"The ARPA funds are pretty much all consumed," the finance director said, and "we put in for the last three months ... only spending on essential or emergency items," adding he expects April receipts to change the picture somewhat. Council president Wahl said the $10.4 million figure was "concerning" and pressed the director for specifics on revenue declines and expenditure overruns.
Council members focused on two revenue items that they said have contributed to the gap: investment income and departmental revenue. The director said investment income was overstated in the budget and that previously invested ARPA funds no longer generate the returns assumed when the budget was set, contributing to a roughly $1.2 million revenue shortfall. Departmentally generated fees such as inspections were also lagging in the month-end packet but have shown rebound in weekly reports, the director said.
On the expenditure side, the director and councilors pointed to approximately $9.2 million in over-budget spending across municipal and education lines and flagged interest-on-debt costs as a major, non-discretionary driver. "You gotta pay your debt," the director said; "you don't want to default on debt service."
Council members asked for more timely data to spot problems earlier. The director offered to provide weekly transaction reports that he runs and to work with department heads and the council to identify areas for fourth-quarter transfers. "If you see anything glaring, we'll bring it to administration," he said.
Councilors also asked for detail on specific items that are affecting the budget, including the snow-removal overruns in the highway budget and severance and bonus payments that will show up in next month's reports. The director said severance costs and some payroll-related items will cause year-end hits that result in savings next fiscal year but will impact the current-year figures.
Next steps: the director said he would provide a more detailed accounting for the council's next meeting, including a list of ARPA disbursements and the status of purchase orders. Several members requested weekly versions of the director's internal reports so the council can raise questions earlier than the monthly packet allows.
