I don't know if you're not going to be able to do that.

Like the code at the order review committee to order.

Today is Monday, March 2nd at five thirty PM.

Clerk, please take a roll.

Mr.

Richie, Mr.

Connors.

Can you please take a roll?

Yes.

Yes.

Yes.

Is there anyone in the orders that would like to um comment on agenda items only?

Seven thirty, I believe.

Safety services and licenses committee to order tonight.

Clerk, please take a roll call.

President Ritz.

Present.

Present.

Present.

Here.

Could I please have an approval of the minutes from February second, two thousand twenty six?

Motion.

Second.

Any discussion.

Clerk, could I have a roll call vote?

Yes.

Yes.

Yes.

Yes.

Okay.

Next on the agenda is public comment for Mattis appearing on the docket tonight.

Is there anyone from the public that would like to speak tonight on agenda items only?

Tom, is there anyone online that would like to speak?

A reminder, please use the raise hand function.

I see no public comment.

Yep.

Next on the agenda is a class B V liquor license.

This is a new one.

And this is G and MK Coop, located at one forty-six Gansett Avenue.

Is there anyone here from that business tonight that would like to come up to the agenda, state your name and your address?

And if there's anything you'd like us to know.

Second.

Any discussion.

Councilman Andeha.

Um to a city solicitor.

There's been alcohol on that premises before, correct?

This license has been in existence for a long time.

With alcohol, correct?

Yeah.

No, this is a new license from what is a new license.

I know, but at that location has been I don't know.

I have no idea.

I don't know what this address is.

Okay.

Um, no, I have no problem.

I'm glad.

I'm glad you're opening.

I know there was closed for some time.

Um, I'm very, you know, happy that it's coming back to the neighborhood.

A lot of local people in the area missed it.

So I wish you the best.

And if we could be of any service to you, don't hesitate to reach out.

Thank you.

Councilman Graziano, did you have a question?

Thank you.

Was this BYOB before?

And now you're seeking a license.

No, we want a full liquor license.

I was there twenty two years, and I opsend a year.

I was there 22 years, and I ups and a year coming back.

We opened it.

Okay.

I owned the buildings.

Got it.

Thank you.

Yeah.

Thank you.

Um, Clerk, could I please have a roll call vote tonight?

Yes.

Yes.

Yes.

Yes.

Yes.

You were approved tonight out of committee.

It will be on the next full council meeting agenda because our city is at the cap of liquor licenses.

So you can come to the next meeting if you'd like to.

Okay.

Thank you for taking time to come tonight.

Thank you.

You're welcome.

Next on the agenda, you dumpling Cranston, Rhode Island, LLC doing business as ugly.

Dumplin at 2000 Chapel View Boulevard.

Is there anyone here from that?

Hello, please state your name.

Thank you.

Thank you, Madam Chairman.

Uh, Daniel Vieira from VR Indigenous Flip O 50 Park Road West in the Fair City of Providence.

Um, appreciate the opportunity to be here this evening.

Okay.

I see that we're still waiting for a letter of good standing.

Yes, ma'am.

I do see that the manager was tip certified, but you do not have a certificate of occupancy yet.

That's correct.

It should be we're hoping at some point towards the end of April or May, we'll get this certificate of documents from the city.

I can't hear him.

Well, if I speak too close, I apologize.

We should have the certificate of occupancy sometime the end of April or at the latest, the first week of May.

When were you hoping to open this?

Um shortly after the occupancy.

So in May.

Yes, ma'am.

Okay, I'm gonna ask for this to be continued to the April meeting to see what we have and if everything's in order.

Okay.

Motion to continue to the April meeting.

Second.

Any discussion.

Clerk, may I please have a roll call vote?

Yes.

Yes.

Yes.

Yes.

Yes.

Thank you.

See you in April.

You bet.

Next class C liquor license.

This isn't a new one.

And this is at KJ Ama venue L C located at 1016 Park Avenue.

Would you please come up to the podium, state your name and your address, and let us know anything you'd like us to know about this?

Good evening.

Jenny Alcantara from Latino Tex.

Jenny.

J-E-N-A-Y Alcantara.

A L C A M T A R A.

801 Park Avenue.

And she is a business owner.

Hello, I'm Katherine Gomez.

Um, my address is um my business address.

Uh 1016 Park Avenue.

Could you tell me a little bit about what your hopes have for this business?

Yes.

Um, is um is um uh being new for private um uh familiar events uh where the people can celebrate parties, um birthdays, weddings, and um nobody is allowed to bring um any alcohol because we are the one who's gonna apply for the license, and we're gonna bring the the liquor.

Okay, um have you applied for an entertainment license or the victory license to serve food or just the liquor license?

Just the liquor license.

Um the guests they're gonna bring their um their own food.

Um no food will be um cooking in the in the place in the promises.

Uh the guests are going to well, the food will be served um prepared on site uh from the caterers or guests.

Um they are aware.

Well, she will uh present that uh the food um the cookers or the vendors, they need to be licensed uh with the full department.

Um we're just doing a little research, okay.

Do you plan to have live bands or anyone singing?

Um life um DJs, but we don't think about life music, but we we need to apply to for entertainment music.

For entertainment license.

Thank you.

Okay, I'm still waiting for a letter of good standings from the state of Rhode Island.

Have you requested that?

Yes, we are ready to request it.

They are a little behind.

We should get it any time by the end of this week or next week.

When will you hope until she is willing to open um by the end of March or the beginning of January?

Um April.

Perfect.

So I'm gonna ask for a continuing on this so that it gives you time to get the letter of good standings, and then you'll come next month to the meeting.

And if everything's in order then, okay?

Perfect.

Could I please ask uh councilman Andahla?

Thank you, Madam Chair.

I would recommend that you also apply for entertainment because you did say you're gonna have a DJ.

So since we're gonna continue it, you could apply for the entertainment now so that way when you come back, you'll have everything in order.

So and you from from what I heard, you are having caterers come in and bring food, correct?

Correct.

Okay, I just want to get that clear so that way everybody's on the same page.

So I welcome you, thank you.

Make sure next month come in with your letter of good standing and make sure you apply for entertainment tomorrow.

So that way it'll be on the April's calendar, okay?

Okay, good luck.

Thank you.

God bless you.

Thank you.

You need a motion to continue?

Yes, could I please have a motion to continue?

So continue into the April meeting.

So moved.

Second.

Clark, may I please have a graziano?

Yes.

I don't think mine's working now.

Yes.

Yes.

Under show cause is gravel bank license, PJ Keaton company.

Councilman Campiano asked for that to be on our agenda tonight.

He has asked me to continue that until our April meeting.

So I'm asking for a motion to continue that.

Motion to continue.

Any discussion.

Clark, could I have a roll call?

Yes.

Yes.

Yes.

Yes.

Yes.

Okay.

Committee matters.

Okay.

Cla committee business carried over.

Class B V liquor license, a status update from 39 West Phoenix Plaza.

Doing business as 39 West and Lounge.

Could you please state your name and your address, sir?

Yes, hi.

My name is Steve Fonse.

The address for the business is 39 Phoenix Ave Cranston.

Okay.

So I am told that you did go in and pay the fine.

That is correct.

Okay.

Um, so we received a letter uh stating for the fine, but however, we were told not um to be present on the second of uh, I believe it was February 2nd.

So there was a little bit of a misunderstanding.

Um that sense, we received a letter stating that you would move forward and give us a fine.

We then contacted a few people and we're trying to get on this hearing for today.

We still paid the fine and let it like in good standing, just to uh understand that we we we were not aware we were supposed to be here in December or in January.

May I ask who told you you didn't need to be present?

Uh we had somebody from the city, uh, the police station and somebody within the city.

Um they were under a misunderstanding as well.

Uh next time, maybe just call and ask the clerk because if you're under show cause and they send you what's even funnier is uh in January, I believe it was January 6th.

On January 5th, I believe it was a Monday.

Um, I believe we were supposed to be here.

We didn't know, we didn't receive a letter, not for December or January.

Uh we heard on January 5th, which I believe was a Monday night that we were called and we weren't there, and they said, Hey, why want you there?

Um, we felt that we were actually uh alienated to some degree because I why weren't why wouldn't we get a letter to be there?

Um, I believe there was uh a hearing for the the feast for the hours for the entertainment.

So we weren't present because we didn't know, and obviously we would have been present because that's pretty big for our business, especially at that time.

It's actually the lifeline of our business because in the summertime, it's very hard for our business to survive, and we count on that entertainment for that month to actually carry us almost four to six months.

Um, so we wanted to be there for that.

Um, and then on top of that, once we were notified, I contacted the clerk that day, and she had stated to me, as long as you get down here before three o'clock today and pay the fine uh or pay the fee for the liquor license, you're all set.

When I came in, well, I asked her, I can't pay the fine because I'm doing it online, and it's saying safety committee on pause.

Now, my other two licenses, the victual and the entertainment, um, had the same issue, but also somehow it unpaused.

It then stated the fee.

We paid the fee online and everything was fine.

Uh, for the liquor license, it didn't, it still said remaining on pause.

So when I called the clerk and stated that to her, she stated that she's going to lift the pause to let the fee go through online, and then I can pay it either online or come in.

I told her I don't want to take any chances.

I'm coming right in, I'm paying that uh fee.

So that's what I did.

And then the next day, a police officer showed up at the restaurant and stated, hey, I'm coming to confiscate your liquor.

And that's what I said, hey, wait a minute.

Let me show you.

I have a, you know, this is what we paid.

This is the check.

And that I contacted the committee.

Um, I mean, contacted the uh clerk.

They made a call to the city, the police department.

They stated, yes, we have that.

The letter must have crossed.

Um, there is another hearing on February uh, I believe, is it 5th?

I'm trying to remember the date.

Um, or February 2nd, I'm trying to remember which date they stated, but we were told, don't worry about it.

You don't have to go that you already paid, you're all set.

Then we received another visit from the police department stating, hey, you missed that visit.

We're going to continue and say, okay, even though you were denied, but you have a fee.

That's when we went down to the city again, paid the fee, and said we would like to, you know, obviously rectify this matter.

Because if we would have known we were supposed to be here in December, I definitely would have been here in December.

The fine was for operating without a liquor license and serving liquor.

Um, I'm gonna turn this over to the solicitor because he'll have all the dates that letters went out to you and all the proper information and how long you operated without having proper licenses.

True.

Yes, um, madam chair.

So I had a conversation with Mr.

Fonse, right?

Uh a few weeks, a few weeks ago.

I think what happened here uh after hearing his version, um, and being mindful of these events as they were unfolding in real time.

Um there does seem there was some type of disconnect here in terms of communication.

And I'm not excusing uh Mr.

Fonse or anyone else for not responding to the earlier letters.

We had we sent out many uh letters, and and I'm not here to assign blame and and and and and play that game.

But what happened here was when the police went down to 39 West, as they went to several other establishments to seize the liquor.

Um I don't recall precisely who I spoke with.

Someone from the police department informed me that Mr.

Fonz had basically come into compliance in terms of payment of the fees, in terms of the certificate of good standing, so on and so forth.

Now at that time, I still could have made the decision to seize his liquor because this committee had voted at that time not to renew his liquor license because there was a no-show in January.

So technically, even though he came into compliance, um, he still, or I say I say he, 39 West did not possess a renewed liquor license.

They had met all the requirements.

I told the police officer, look, given that I'm not gonna seize their liquor, don't seize their liquor.

Okay.

I didn't think that was fair given the fact that they complied with everything else and they were on the uh agenda for February.

I think what happened was there may have been a misunderstanding with regard to what I told the police and what they relate to him.

That got translated into you're all set, you never have to do another thing, which was not the case, obviously.

They needed to still appear in February to see if the committee was going to at that time reconsider denying the renewal and then issuing the renewal.

But after speaking with Mr.

Fonts, it it does seem that he tried to act in good faith.

Um there clearly was some disconnect and some miscommunication.

I do recall at that time, it was during the holidays.

The police were going out.

We were seizing liquor from some establishments.

I mean, this was all happening in real time, and it was very confusing because everyone was scrambling at the last second.

People were coming up with the $2,000 fee all of a sudden.

People were coming up with the certificates of good standing.

So this was happening in real time, and we were trying to deal with that because let's face it, seizing the liquor, seizing their inventory.

That's a big step.

And I didn't want to do it unless it was absolutely necessary.

So we allowed 39 West to keep operating based on the representations the police made to me that they um were in compliance with the outstanding requirements.

So when I spoke with Mr.

Fonce, I made it very clear.

I said, look, you need to appear before the committee.

Okay.

That's what they're asking.

If you had just appeared even once, and you could have addressed the committee, none of this would have happened.

He claims he didn't get a lot of the notices and the letters.

I I'm not going to second guess uh at this point.

All I can say is we sent out several.

Um perhaps uh there's some internal problem getting the mail.

I don't I don't know.

I don't know.

But he did pay, he made a sign of good faith.

He paid the fine that the committee uh imposed upon him.

I said to him that perhaps, and this is up to the committee, perhaps the committee would reconsider the fine and allow him to apply that $500 to this year's um fee for renewing his license.

But that's up to the committee.

I I said that I wouldn't object necessarily to that because he was a gentleman, he did try to comply.

I think there was a misunderstanding, but I also told him it's not up to me.

It's it's up to the committee.

But that is how this whole event unfolded.

I have a question.

How long was he operating without a liquor license?

Roughly about the 30 days um between the time that the committee denied the renewal to the time that the committee reconsidered and then granted the renewal in February.

So it would have been between the January and February meetings, however long that was, I'm assuming it was about 30 days.

That's usually what they when did the prior liquor license expire?

December 1st.

First hand I saw up was Councilman And how thank you for coming today.

Um I was the advocate to give you a heftier fine because basically you never showed up.

Um, I'm hearing now from our solicitor, the miscommunication.

I apologize for our end, but as a small business owner, I think on your end going forward, you need to understand that if you ever get served, if you ever get a notice, the first person you should be calling is the clerk's office, not go through third party, so we avoid this.

So I want to thank you for coming in today.

I want to thank you for keeping your business open.

And I will basically go by whatever recommendation our city solicitor gives.

That's how I would vote as far as that fine being applied to.

Thank you.

All right, Council President War.

Thank you, madam chair.

Um couple of months back, members on this committee in the solicitor's office made kind of a considered effort.

Um to hold the businesses accountable for updating their licenses, necessary certificates.

Um, I've been to your business.

I I enjoyed it.

I'm happy that you do business in Cranston.

So I probably would be the killjoy in this situation where I say I probably wouldn't be in favor of waiving.

There is certain certain fees that have to be paid if they're late.

Um and we all make mistakes.

I've not paid things, I've had to pay late charges on certain things at certain times in my life.

It's kind of a reminder.

I think yeah, as a you have a responsibility as a business owner to make sure you have the proper licensure.

So I'm happy you're you're on the right.

I look forward to voting to approve of it tonight, but I would not be in favor of waiving it this evening.

Councilwoman Graziano.

Thank you.

Um, Council Chair.

I'm sorry, Chair.

Um so thank you for coming in this evening.

I appreciate it.

But I I think I think it needs to go all the way back to the beginning, which is you have to keep an open valid license as a business owner in the city of Cranston.

So, regardless how many notifications you get, it you know, that is part of your doing business in Cranston is to make sure you have valid licenses.

And I think this council worked really hard with the city solicitor to ensure that we are running a safe community for our residents.

And I think that's the ultimate goal here.

So whatever happened, you know, we can't trace everything back unless I have a full timeline.

Um, but I I'll have to agree with President Wall.

Um, I'm not going to be in favor of waiving anything because all the work that staff does for the city takes a lot of time.

And that's the, you know, that's where the fines are at.

And so I I'm I can't have it going somewhere else.

So I would not be in favor of that.

Okay.

Okay.

Councilman Rates.

I'll try and talk loud.

Um, you know, appreciate you had you won business in Cranston.

Uh, you know, it definitely seems like there was some some miscommunication here that we had.

Um, I would be in favor of what the solicitor offered of using uh part of the fine towards the fee.

I think that's reasonable uh with everything that went on here.

Thank you.

I did.

I did.

I think hi, hello.

Um you know, I I on the full council, I know I don't have a vote here tonight, but on the uh in this committee, but on the full council, I think um we've been very, very uh accommodating to extenuating circumstances.

And we we also uh have given people chance after chance after chance.

And I've heard my grandfather used to say a lot of catchy things.

Um I used to say this when I was playing cards.

If I didn't pay attention, I was gonna pay cash.

And uh I think that's that's pretty accurate, not only when we're playing Hallow Jack, but in life.

If you don't pay attention, you're gonna have to pay cash.

And um, you know, I think uh that this may be an expensive lesson, but it's a lesson.

And if we if we go ahead and waive the fine, we're sort of sort of like when you, you know, when you punish your children and then um you acquiesce and and unpunish them really fast, they're gonna know that they can get away with that again and again and again and again.

And uh perhaps this particular business will not.

Um, but what we do here will permeate out to all the rest of the businesses, and then we'll be going right down the same path that we were trying to get off of before.

So um, I appreciate being business friendly, but my my way of being business friendly is the people that come to the meetings when they're supposed to, the people that don't have to come to meetings because they simply just pay their renewal fees and and the people that do the right thing uh every day.

Um, you know, uh, and I'm not saying that this particular business was trying to, you know, uh issue the rules or shirk responsibility.

That's not what I'm saying.

But the people that do take the time to to do everything the correct way and pay everything on time and come to the meetings when they're summoned, it's a slap in the face to them if we let people not have to pay cash once in a while when they weren't paying attention.

So I want to echo the words of uh councilman Graziano and um the our president council uh councilman wall.

Um I think that you know we need to send a very clear message that these things need to be renewed on time and it's serious if they're not.

Thank you.

Anyone else have any?

Okay, I'm gonna ask for a motion to approve the liquor license.

So move to approve.

Second any discussion.

Well, actually, uh, madam clerk, I uh madam clerk, I'm sorry, madam chair.

Um this was basically just on for status.

Um the the committee has already approved the renewal at the last meeting.

So I think the only motion, if someone uh were of a mind to make it, and if it gets a second, would be a motion to um take the $500 fine and essentially convert that into um a credit toward next year's uh fee if someone was of a mind to do that.

I think that would be the only motion.

Other than that, there's there's nothing to do because it was just on for status.

I wanted him to come in to address the committee because we uh several times the committee wanted to uh speak with uh Mr.

Fonse.

So that's what this accomplished.

Mr.

Fonse, I want to say thank you for coming tonight.

As you know, I've called you in the past for different issues.

I enjoy coming to 39 West, but we all put a lot of work in uh November, December.

I can't tell you how much work the city solicitor put in.

He even went to core.

I am not comfortable um asking for the fee to be given back to you.

We can't pay a speeding ticket and then get the money back.

Um there is a thing, votes can be taken, but I'm not sure what the vote would be.

So councilman, Mr.

Solicitor.

So your recommendation, if you could just say it on the record, is the $500 fine that was given be added as a credit towards his 2026 license fee, correct?

Well, I don't know if it's so much a recommendation.

I I believe it's his request.

Um, I would not object to that, put it that way.

And I think the motion would be to convert the the fine into a credit um toward the 26.

I'm sorry, the 2526 license.

Okay, so uh may entertain a motion to credit the 500 from the fine to the 2025 2026 license renewal.

Actually, Rose, would that be the Rose Medical?

Would that be the 2627 renewal?

20.

Okay, so may entertain a motion to credit the 500 paid for a fine based on our um city solicitors' explanation of the situation, be credited towards the 2026, 2027 license.

Mary entertain a motion.

Hearing no motion.

Well, is there a is there a second?

I'll I'll second it.

I have a soul move.

Is there a second?

So he's the he's chair.

You made it in okay.

700 seconds.

All right, you have to call the vote.

I have a question.

Consulman Boudano.

I have two questions through the chair, probably to I think we should do the discussion and then wait I called on him for discussion.

Right.

Sorry, sorry.

Uh, through through the chair, probably to um Rose.

How much is uh renewal?

I'm surprised that we don't know this over here, but I believe for the poll it's 2500.

So I'm wrong now.

Yeah.

Um this is where I I like I said, I again I don't have a vote on this committee, but um I would have a problem with this.

I just want to go on record saying that I think basically everything I just said, you know, I I understand we want to be business friendly, and I don't think that I think 39 West is a reputable business.

Um, I think 39 West is a great place to go.

And I think that um if it was just one meeting that they missed, my opinion would be different.

Um because then I think you know you can't blame somebody through who said somebody who said something, but we keep getting notices, it's it's just different.

And I almost feel bad, but uh you know, I have an issue again because those people who don't find themselves in this particular situation, um, it's it's not fair to them.

Council President Wall.

I won't belabor the point.

You know my position.

I I too like 39 West, and I think they're a fine business.

I certainly do.

Um, but I think the precedent we're setting this evening is you pay a fine, and then we put it towards your next license.

So essentially, there is no real fine.

I think the fine is supposed to be yeah, deterrent from not renewing your license.

And I think if we set this pattern today, we do this because we all like 39 West.

Tomorrow, every other business is gonna want this.

So essentially the work that you've done, Mr.

Solicitor and the the chair is for naught.

So I would I oppose it and I will I will not be voting for it, and it's not because I don't enjoy your business because I do.

Councilman Andy Hackman.

Thank you, madam chair.

Like I said, um, members of the council, my my colleagues.

I am I submitted that I made that motion because our solicitor that works very, very hard on this, and I said it for the record.

I wanted to give you a 2500 fine.

Our solicitor said he wouldn't object, and he's the one that worked as hardest on this.

So that's why I made that motion.

I feel that if he would have kept his mouth shouldn't have said anything, then you know we all voted it down.

But since he opened up the door as a small business owner, 500 can go a long way.

I'm pretty sure 500 can buy you a few kegs that you desperately need.

So that's why I made the motion.

So um you support it, you support it, you don't, you don't, he's still gonna live, but I I'm doing my part.

Councilman Ritz.

I I just feel you know, if if you're speeding, you're doing 20 miles over the speed limit, you get pulled over.

Your speed and ticket for 10 miles over the speed limit.

I think there's still a lesson learned there, and there's some compromise in between the part I I struggle a little bit.

It seems like there's some miscommunication on both sides.

So I think if the license is 2500, we give them 500 back.

I think it's a fair thing to a business that's been there forever and just a gesture of good faith, but I think it also sets the precedent for other businesses to come in and that we are serious with this.

So just my thoughts.

Thank you.

Clerk, could I have a roll call vote, please?

Consulma Graziano.

No, Cosmo Ritz.

Yes.

No.

Yes.

Consul Vice President Haroyan.

No.

Consult President Wall.

No.

So the motion fail.

Move on.

Sorry, Steve.

No problem.

Thank you, guys, for your time.

Yes.

Next on the agenda is Class B Vical license transfer.

And we're gonna do it from JMMH co op doing business as Ganser Asian Bistro, 736 Pac Gav to Love and Table 88 Corp.

And they have everything in order.

If you want to come up and speak your name, you can in your address.

Thank you for getting everything in order for tonight.

736 Puck Avenue.

Jing Lu.

Nice job.

I'm asking for a motion to approve these licenses tonight.

Second.

Any discussion?

Thank you for opening.

Clerk, could I have a roll call vote, please?

Yes.

Yes.

Yes.

Yes.

Thank you.

You're all set.

Next is the Victorian new license.

And this is going to be on DM Pizza, located at 41 Warwick Avenue.

If you want to come in up and state your name and your address, I did have the honor of speaking to the owner.

He has owned this building for many years, used to open and used to run the business.

Then he leased it out and is gonna reopen as himself.

He is still waiting for his Rhode Island Department of Health inspection.

He has applied for it.

Um do you want to tell us anything?

No, my name is Nicolas Tatakis, and would have gotten in the photo on a water gavignon.

Okay.

Thank you.

Um I found out earlier he has no intentions of opening in the next two months.

So there is time for the Department of Health to come in, do the inspection.

So I'm gonna ask for a motion to continue this until the April meeting.

Motion to continue.

Second.

Any discussion?

Clerk, could I have a roll call vote on continuing this?

Yes.

Yes.

Yes.

Do you want to say something, sir?

No.

All right.

We'll see you next month.

And I hope the Department of Health gets out to do your inspection.

Thank you very much.

Good night.

Next says temporary mass gathering, roadie foot roadie food truck events, LLC.

It's going to be located at 1000 New London Avenue.

Mike McIntyre, I believe he is here tonight.

Um Mike, I have a list of dates here and the hours you're asking for 4:30 to 10 p.m.

Yes.

I've been doing it for um this is my fifth year.

I was under Ocean State Food Truck Festivals before.

Uh me and Joe parted aways.

He opened up a pizza place.

So I decided to do it on my own and opened up roadie food trucks.

Um, and I'm working with Mike from Mulligan's, and uh we also work with the CPD outreach program, and we do all their um community events.

Thank you for picking Cranston for these events.

No problem.

Could I keep please have a motion to approve?

Motion to approve.

Second.

Any discussion?

Clark, could I have a roll call vote?

Consulate Braziano, yes.

Yes.

Yes.

Yes.

Yes.

Thank you.

You're all set.

Have a great night.

It's Michael McEtier, M-C-A-T-E-E-R.

34 Midland Drive, Cranston, Rhode Island, 02920.

Sorry about that.

That's okay.

Thank you.

Next item is Victorian license, GMK co-op doing business at Should be restaurant 146 Ganton Avenue.

Is there anyone here from that business tonight?

He was here earlier.

Okay, they are still missing the Rhode Island Department of Health.

So we're gonna ask for a continuance till April.

Motion to continue until April.

Second Any discussion, Clerk, could I have a roll call vote?

Yes.

Yes.

Yes.

Yes.

Yes.

Yes.

Okay, next is also you dumpling Cranston.

LLC doing business as ugly dumpling located at 2000 Chapel.

May I please have a motion to move to to continue to next motion to continue until April.

Second.

Any discussion?

Clark could have a roll call vote.

Caso Mobraziano.

Yes.

Yes.

Yes.

Yes.

Yes.

Yes.

Next on the agenda license renewals before the committee.

The first one's second hand dealer license for Roman jewelers located at one thousand Reservoir Avenue.

Could I please have a motion to approve?

Motion to approve.

Second.

Any discussion?

Clerk could have a roll call vote.

Yes.

Yes.

Yes.

Yes.

Yes.

Yes.

Okay.

Next is used auto dealer licenses.

R and A auto at 1171 Park Avenue.

Could I please have a motion to approve?

Motion to approve.

Second.

Any discussion?

Clerk could have a roll call vote, please.

Caswell McBraziano.

Yes.

Yes.

Yes.

Yes.

Yes.

Yes.

All right.

Next is Victorian license for Betuxet Village.

Farmers Market located at one roads place.

Um Saturdays from 9 a.m.

to 12 from May through October.

Could I please have a motion to approve?

Motion to approve.

Any discussion?

Clerk could have a roll call vote.

Yes.

Yes.

Yes.

Yes.

Next on the agenda to Angels Tacos.

Located at 154 Ganset Avenue.

Could I please have a motion to approve?

Motion to approve.

Second.

Second.

Any discussion?

Clerk could have a roll call vote.

Yes.

Yes.

Yes.

Yes.

Yes.

Okay.

Next is mobile food establishment renewal.

This is only for our information.

Then we got the three monthly schedules.

Um everyone had a chance to look at them.

Could I could I please have a motion to accept these into the record?

Motion to accept the monthly schedules into the record.

Any discussion?

Clark could have a roll call vote.

Yes.

Yes.

Yes.

Yes.

Yes.

Okay.

Under communications tonight.

We have the door-to-door solicit solicitation permits.

Um anyone have any questions about these at all?

Nope.

Okay.

That's for informational purposes only.

License approved subject to not yet issued.

Did everyone have a chance to click on those today?

We still have some businesses operating.

So I'd like to ask for a motion to adjourn.

Motion to adjourn.

All those in favor?

All those favor.

Meeting is adjourned.

Meeting adjourned.

Like to call the finance committee meeting to order Monday March 2nd at 702 p.m.

Clerk, please take a roll.

Present.

Present.

Casminduha.

Present.

House President Wall.

Here.

Thank you.

I would like to entertain a motion to approve the minutes from the February 2nd, 2026 regular meeting.

Most.

Go ahead.

Motion to approve.

Second.

Any discussion?

Clerk, please take a roll.

Councilman McGraziano.

Yes.

Yes.

Consul Mavazi.

Yes.

President Hawaiian.

Yes.

Considering Duhar.

Yes.

Yes.

Moving on to committee business matters carried over.

Um Ordinance 1-2602 ordinance and amendment of Title Three Revenue and Finance of the City of Cranston Code of Ordnance 2025 and titled Chapter 3.12.

Sponsored by eight of us.

Motion to continue.

Second.

Any discussion.

Seeing none, I just want to let our veterans know for the city.

I was just going to ask the president for the record.

We we continue because we don't have the uh financials on this prepared as of yet.

Is that correct?

Yes, that and uh we are also exploring the possibility of uh obtaining uh uh enabling legislation.

Thank you.

Any further discussion?

Anybody else?

Seeing none, I just want to let our veterans know for the city that we are working on, we're working hard for them, and we will get this resolved.

So clerk, please take a roll.

Yes, for Ritz.

Yes.

Yes, Casman Duhar.

Yes, President Wall.

Yes.

Uh correspondence, there are none public comment.

Is there anyone in the audience that would like to comment on documented items only?

Anyone in the audience.

Seeing none.

Clerk, is there anyone online?

This is all right.

There's no public comment online.

At this time, I'm closing public comment.

Moving on to new matters before the committee, there are none.

Uh moving on to resolutions.

There are none.

C a real estate tax abatements.

I'm pretty sure everybody saw that in their package.

May entertain a motion to approve.

Motion to approve.

Any discussion.

Seeing none, Clerk, please take a roll.

Yes.

Yes.

Yes.

Yes.

Yes.

Thank you.

Moving on to motor motor vehicle taxes abatements.

There are none.

Tangible tax abatement.

There are none.

Um pretty sure everybody got in their packet.

Taxes, tax interest waiver approvals.

May entertain a motion to approve.

Motion to approve.

Second.

Any discussion.

See you none.

Clerk, please take a roll.

Yes.

Yes.

Yes.

Yes.

Yes.

Moving on.

There are no tax interest waiver denials.

Moving to H tax assessment order review.

Assessed December 31st, 2023.

It's informational only.

There are none.

Uh council member communications.

I will uh pass the mic over to uh President Wall.

Uh thank you, Mr.

Chairman.

If you look at tonight's agenda, and I believe there probably was some miscommunication uh between the clerk and I.

I probably sent uh the wrong item in.

What it should read on the agenda, and we will not be able to discuss it this evening.

It should have read uh discussion of the monthly report, which ended in the period of December thirty first and twenty-five.

I think it would be a good practice for us to always keep a handle on what's going on.

So I won't have anything to speak on, but I asked the um the clerk to please put it on the agenda going forward, the most recent fine we'll check which one is the most recent financial report that month.

That's a really good idea, so that way we could focus on uh the monetary issues the city has, and going forward, we may have some good input.

So with that moving on, I entertain a motion to adjourn.

Motion to adjourn.

Any discussion?

Seeing none, all those in favor say aye.

Any nays eyes have it?

City Council meeting tonight, March the second, two thousand twenty six to order.

I asked the clerk to please call roll.

Present present.

Is that better?

As I said, I'm kind of committed to making sure people have public comments.

So if there are no objections, I'm going to take public comment this evening on agenda matters only.

If there are no objections.

So if anybody in the in the auditorium this evening would like to make public comment on agenda matters only, please step up to the podium.

You'll be given four minutes, and please state your name and address for the record.

Give them a second.

I see none stepping up.

Is there anyone online, Tom, who'd like to make public comment?

And I know you're going to ask them to put the hand up, etc.

There's no public comment online.

All right.

Then that this point I'll close that public comment.

Um, the first item of business that we're going to consider tonight, and really the only item business that we are going to consider this evening will be the discussion and the presentation uh of the audit and financial statements of the city of Cranston for the fiscal year ending June the 30th, 2025, as it has been prepared by Clifton Larson and Alan LLP.

Uh Mr.

Steven Gross is here representing that organization.

Uh he has a short presentation, and then I'm going to open up the floor to uh questions.

Mr.

Gross, the uh floor is yours.

Thank you so much.

So I have a slide presentation.

Yep.

If you raise it, we'll be able to hear it better.

Thank you.

How's that?

Better?

Much better.

Perfect.

So I have a short presentation that I can uh take you through.

So my name's Steven Gross.

I am an audit principal with COA.

I'm tasked with ultimately reviewing and signing the engagement.

Uh moving on to slide two.

This is just a legal disclaimer.

Moving on to slide three.

Uh, my agenda.

I'm just gonna go over the audit scope and the process.

You'll I'm gonna go over the audit opinions and the communications required by us.

And then I'm gonna do a brief financial statement highlight, and then I can open up to questions to the council after that.

So my audit scope.

Essentially, I have five different reports I provide to you.

Next slide.

Thank you.

Uh, I do a report on the organization's financial statements.

Um, I do a report on internal control over financial reporting, which is also known as the yellow buck letter.

I also provide a communication to those charged with governance, aka the council.

I also have a report on internal controls and major programs with compliance for the federal single audit, also known as uniform guidance these days.

And then I also have an internal control slash management letter that I provide when necessary.

Moving on to the next slide.

So our audit is a risk-based approach.

So we document the city's internal controls both on the city and school departments.

Uh we review revenue recognition to make sure it's appropriate.

We make sure that all liabilities are complete and within the financial statements.

Uh, we review significant estimates, and we also help implement any new accounting standards.

So moving on to the next slide.

I essentially provide the city with three reports.

The first report is a generally accepted auditing standards report, which expresses the opinion on the basic financial statements.

These are presented in accordance with generally accepted accounting principles, also known as GAP.

The city received a unmodified or clean opinion.

This is the highest level opinion that the city can achieve.

And we had two findings related to that.

One finding is a carryover finding from prior year and from well, I remember it's a multi-year finding.

And then we also have a new finding this year related to the distribution of OPEP trust fund assets related to the school department.

The third report we provide is a uniform guidance report, which is related to their federal single audit.

That is required to be issued by March 31st.

Moving on to the next slide.

These are required communications to those charged with governments, which is required by us.

Your orders to you.

Moving on to the next slide.

Accounting policies are consistent with the prior year.

There's three significant estimates that I've mentioned previously, which is net pension liability, net OPEB liability.

These are actually determined uh liabilities.

So there's a lot of underlying assumptions that were made there, such as mortality tables, investment returns on assets held in the pension and OPEP trust funds, as well as many other underlying assumptions, such as demographic data that is provided by management to the actuary.

Obviously, these are just predictions based on actual results, and those liabilities are booked under GASB 68 and 75.

The third one is the incurred but not reported, also known as IBNR.

These are your health care claims that come in around May, June that are recorded by the insurance carriers, but may not be able to be provided to the city in a certain time just because of when the visit occurs by the employee or when the information is communicated by the health care provider to the insurance carrier.

So there's some estimates related to that.

There's one sensitive financial statement disclosure, which is related to the implementation of GASB 101 compensated absences.

This just changed the calculation from a what would the city have to pay out as of June 30th to looking at what will need to be paid out over a employee's life.

So if only if none of their sick time is paid out as of 630, but they are expected to best.

We now calculate that vesting opportunity and capture that on the 630 financial statements.

Moving on to difficulties encountered in performing the audit.

There was none.

Moving on to the next slide.

There was some uncorrected uh misstatements.

One relates to the bond emorization of the bond premium amortization.

This is just an amortization method uh that essentially takes bond premium up front relative to the straight line that the city is currently using.

There was also a in the general fund, there's unrecorded property tax interest and lien accruals, which is a balance sheet only entry and would not have any effect on the essentially the PL of the financial statements.

In addition, there's performance bonds that are recorded as a custodial fund, but they should be recorded in the governmental activities under GASME number 84, which is fiduciary activities.

Moving on to the next slide.

There was no significant issues discussed with management prior to the engagement.

And there was no significant findings or issues that were discussed or the subject of correspondence with management that haven't already been disclosed to the council.

Lastly, our report contains other documents other than the basic financial statements.

If you move to the next slide, uh these are the required supplementary schedules, the introductory information, as well as the stat tables in the back of the financials.

Moving on to the financial highlights.

So if you move to the next slide, yep.

This is a five-year trend of your government-wide net position.

This includes all of your long-term assets and liabilities on a government-wide.

This is full accrual accounting, where uh most of the time the city is dealing on a modified recruit basis.

As you can see, that liability has decreased for the most part each year.

There was a little uptrend between 24 and 25 from 249 million dollar deficit to a 258 million dollar deficit.

Moving on to the next slide, which is your city general fund balance.

So I have two things going on here.

The chart shows your fund balance trend over the last five years.

So you went from 14.4 million, 21, and then an increase a little bit between 23 and 24 up to 21 million, and then in 25, it decreased a little bit back down to that 14.5 million dollar range again.

As you can see on the left side, it shows your surplus and deficit.

So this year it showed a 4.9 million dollar deficit.

So kind of uh offset some of those surpluses in the prior year.

Moving on to the school unrestricted fund balance.

As you can see, the school's fund balance has decreased over the last few years.

That's because uh fund balance has been utilized by the school department to help balance its budget.

That's why you saw you a pretty big drop off between 2023 and 2025 by the utilizing of some of that fund balance.

And in 2025, there was a $2.9 million deficit that has been recorded.

Moving on to the next slide.

This is just a high overview of your current debt that is held by the city.

Uh there was a $50 million bond issue that was recorded during fiscal year 25.

The remainder of it was just current year debt schedule payments that were all made by the city.

Moving on, as this is a high-level view of all of the pension and OPEP plans, so all the pensions that are required and the OPEB for the postmedical and health insurance.

Uh for the most part, a lot of the uh three of the plans had increases in the uh pension, the pension and op liabilities, while the other plans had decreases.

Uh for the MERS plans and the Earth plans and the teacher survivor benefit.

So those top four uh plans, those are state rent run plans.

So you don't have an option of how much to contribute on an annual basis.

The state sets those rates with the city and the school department.

So those liabilities just fluctuate based on what they tell you that you have to contribute, which those contributions have been made to those plans for the other three plans, the police and fire and those two OPEC plans for the school and city, the city and the school department uh school committee, they have the ability to contribute what they want to those plans.

So there's a little bit more flexibility.

There is a actual determined contribution, uh which was made for the police and fire plan as well as the city plan, but the school plan chose not to contribute anything this year to that plan.

On the bottom, I just wanted to show the funding ratio of the liability relative to uh both the pension and the OPEB assets.

As you can see, the pension, the police and pension that's uh gone up between a couple of percentage points over the last few uh few years.

So at the low point, it was around 24.3%, but now it's up to 29%.

So it's trending in the right direction now at least.

For the OPEP plan, as you can see, the city's OPEP plan also has been pretty uh static.

Um it was around 17.6% in 21, and then it slid down to 15.8% in 2025.

For the school fund, they chose to utilize some of those assets to pay current year retiree health insurance and dental costs.

So that's why it's decreased between from the 9% to the 5% between last year and this year.

Uh on to the next slide.

This is these are just all your funds that are currently in negative uh deficit positions.

So for the school bond fund, that 70 million and the highway bond fund 3.2 million, those tend to get cured by the issuance of bonds.

So right now you're showing uh significant expenses in those funds, but that's because the bond anticipation note is being used for the school bond fund.

Once that gets permanently financed, refinanced, that 70 million will get wiped off and will be uh back to a zero uh net position uh fund balance for that.

Uh for those internal service funds, the city and the school will have to work on either looking at the working rates or working with their health uh health insurance providers to figure out how to cure those deficits in those two funds.

And then with that, I open up to any questions that the council may have.

Get you.

But all right, there we go.

Thank you, Mr.

Grosser.

I do appreciate um, I believe this is your second year with this.

Yeah, that'd be correct.

Yes, and thank you for that very thorough presentation.

I am gonna open up the floor to everybody on the council for if they have any questions.

I'm gonna start with me.

Um in this occasion.

I'd like you to I mentioned this before.

Is I look at page number 16, uh, the management's discussion and analysis on page 16.

Um, they discussed two of the funds, the school fund and the general fund.

And if I'm reading it as I read it online, um, I saw that we had a deficit of 6.5 million dollars in the general fund.

If I'm reading it correctly, I'm a bottom line type person on that last line.

And in the school fund, I saw a $3.9 million deficit.

And when I read our, and I don't have the school monthly reports, but when I read our city's general fund monthly reports, and I went through them, you know, I tracked where we were surplus deficit, etc.

And as the fiscal year closed out, that last report showed us at approximately a 4.9 million dollar deficit.

And that seemed to be something you also that that was also represented in your presentation.

Can you in layman's terms tell me where I'm why I'm seeing those two figures and how do we reconcile with that and which is the actual?

Because in the paper is obviously reported that the city has a 6.5 and the school department has a 3.9.

And for the sake of accuracy, help me out.

Sure.

Uh so there's three different levels of accounting that are in your financial statements.

You got a government wide, which is full accrual, then the city deal and the school deal with uh the fund level financial statements, which is on modified accrual, and then there's a third level of accounting, which is budgetary accounting.

Okay.

Um probably most of the numbers that were reported to you are on that budgetary accounting.

So the difference between both budget to gap, there we have a reconciliation that's in the financial statements, and essentially the majority of your difference is related to uh Gas B 54.

So there's other funds that the city does not budget for that are included into your general fund as side funds, and though bringing that activity onto that general fund, sweet uh excuse that number relative to what you see in the budget to actual reports.

So the last phrase I heard was that number is skewed.

So the more accurate figure am I right to if I'm not putting words in your mouth because you're the financial man, not myself.

Is our deficit a 4.9 million dollar deficit?

Would that be it the more accurate report of what it is?

Correct.

So that's what is reported on your RSI one, which is the city's budget to actual is the 4.9.

Okay, and thank you.

Thank you for clearing that that part up.

Um the other the other stuff I I had heard, and if we go to I believe page 52, where it says the excessive expenditures, and this is something that I highlighted when I initially went.

If you guys all want to go to 52.

I got the right page.

Um, so if I look at that and I marked it and I had marked it on my online version as well.

If we look at those areas, and you know, they're bulleted there.

Uh basically, and as I know Mr.

Dameo has told me many times that budgets are based on assumptions, right?

So it's basically those expenditures where you can see is that basically we made an assumption it did not materialize, and that's where the deficit is.

Is would that be an accurate depiction of what's included there?

So these RXX expenditures over budget.

So obviously every year you have to look at historic trends, right?

And knowing what also is that things that you do know, like for example, your union contracts.

If you have a union contract that you're in year one, you got a three-year contract, you know what your budget increases are going to be on that union contract.

But also, look what happened last Monday with the snowstorm.

Obviously, you're gonna have a big hit to your public works probably for fiscal year 2026, because who would have known such a big snowstorm was gonna come by, right?

Right.

So you kind of have to assume some stuff with the budget.

I see.

Um I think you covered, I'm gonna open the floor just so I don't take all them.

And what I'm gonna do, because in my head, I always have to make a circle all the way around.

So if you get ready, I'm gonna make a circle counterclockwise all around to the council members.

I'm gonna give you guys one chance to ask your questions, then I'm gonna go around a second time.

All right, and I'll I'm gonna start with uh councilman Anderhardt because he's the first one in front of me.

Thank you, Mr.

President.

Uh thank you for coming out tonight.

Um, I see that the rescue fund line was overspent by 441,000.

Now we get Medicaid that you know, we bill out, and then we get that back.

Did we receive the money already for Medicaid?

We still went over, or that wasn't counted for.

Through the chair to the the counselor.

Um this is on the expense side.

So what you're speaking to is on the revenue side on that, it was um predominantly two, it's really the big what we record is what I'll refer to as the city write-offs for the balances and then the billing expense were the two components that go into the the deficit that you see there.

Thank you.

As I as I keep turning, Miss uh Councilman Traffic Canny, would you have something at this time?

Yep.

Okay, hear me okay.

I noticed in your summary, you you encourage the city and the school officials to consider implementing budgetary um constraints and controls for the current fiscal year.

You know if they've done that at the present time.

So just to be clear, I'm not the auditor general.

That was David Bergentino's letter.

So I am the external auditor.

May I ask the administration a question?

Yes, absolutely.

Uh who's gonna director, are you gonna speak for the administration this evening or is uh director Zidellas?

And then you'll determine who would answer it best.

Excellent.

Uh Councilman Traffic Annie.

Uh uh, I'll read it Anthony.

It says the auditor encouraged city and school officials to consider implementing budgetary and spending controls for the remainder of fiscal year 2026 to minimize any potential operating deficits for the fiscal year ending June 30th, 2026.

Yeah.

Um we're in the process of developing very finite definitive identified uh controls and measures uh to mitigate uh the the trend.

Um we have instituted some some elements, like for instance, but essentially uh basically hiring freeze, um, unless you know uh absolutely necessary.

Um so that's one example, but the department heads are being scrutinized for for spending at this point.

Um so it's both we've begun to do that, but I think there's gonna be more savings as we look forward uh once uh those programs or initiatives are implemented uh over the coming months.

But so that those they're being so that so things have been formulated and they're in the process process of taking effect.

And within the next uh next three weeks or so, you will be three to four weeks, you'll be seeing uh a hearing of of those changes that will be coming about the initiatives coming, at least from the administration.

From the school's end, we have not uh spoken with them as to where what they have uh that what they're coming up with, so I can't speak on their behalf at this point, uh Mayor.

Um, and that lends to part of the discussion with the auditor general.

They kind of had this a similar comment uh about and initiating uh uh savings opportunities and and programs to to you know trend differently.

So in so a bit a bit has been done, but more substantially what will be coming soon uh will be uh more meat and potatoes.

Councilman B.

Or if I just to make sure before you uh you step down, uh director.

So you already have implemented a uh hiring freeze on uh if I'm paraphrasing, would it be non-essential personnel?

It would uh non-required or required correct.

Yeah, it would it's being scrutinized.

Anything anything coming up is screwed, and we've so far we've we've not hired uh there's been one position we uh in inspections actually um that someone has been promoted from a lower level to a higher level.

Um yeah, and certainly the council understands if it's a required or an essential personnel person uh it's it's in the title that it that is being necessary, but something is not essential and not required.

You've already begun that because I know as we spoke last uh week regarding the audit letter, you said that you were working very hard on it, and the council might is it still the consistent you're still consistent with the idea that the council probably hears most of your plans when the actual budget comes out for the next year.

Is that still for sure direction you're going in?

For sure, but not probably not before that.

Um see the be the revolving decisions being made as we speak actually this week, and then uh speaking with department heads communicating to others uh or stakeholders beyond that.

So it's it's it is rolling up behind the scenes.

Um, but there is also something called executive session that uh and certain certainly we spoke in uh that that would definitely be willing to to use that executive session.

That could probably be a more liberty to talk in that respect.

Yep.

Councilman Floyd is still yours.

If you let's you have another question, I'm gonna go right around.

Anthony, has that been communicated to the school department as well as putting restraints on the current fiscal year?

Yeah, yeah, it's it's well, it's they they've gotten the message.

We've had uh a meeting with the auditor general, as you may be aware.

Um, and there's another one set up for next week.

It's a kind of a joint meeting with the state, you know, the state or it's a general's office division of uh uh the department of administration uh of revenue, the schools in the city's uh finance and executives.

Uh so they uh they've brought up the messages clear, and uh so have we gone over any anything specific, frankly.

We've been kind of tied up on our side, so I haven't we haven't sat down with them to see what they're coming up with at this point, but the message is there.

No, sir.

Um I'm going right around Councilman Bernano.

Thank you, Mr.

President.

Um I have basically two questions.

Um, and I don't know who's best to answer them, so I wouldn't go too far, director moretti.

Um the first one, I guess I'm I'm a when it comes to this stuff, I'm sort of a big picture guy.

Um this is details, obviously.

Um, but I'm more of a big picture and I understand the big picture, which is why I am not an accountant or an accounting professional.

Um basically my question is in this fiscal year um that is being reported on tonight, where were we most uh agregiously off in our projections?

Um and you know, where do we suffer the most damage that added up to that figure on 4.9 million dollars?

Yeah, so if you look at that, either page 52, which shows all those excessive expenditures, or you can go to the RSI one, it kind of gives you that budget, the actual presentation that you're looking for, where you can kind of go but through the revenues and the expenditures to see our what were we over, what were we under on.

Okay, what was the page 52?

I so page 52 has the excess uh expenditures over budget.

Okay, and then page 124 is the budget actual for the city general fund.

Okay, and then the page after that is the school unrestricted fund.

All right.

Okay, thank you.

My second question, and I don't know if um this is best answered by the auditor or or not.

But uh, you know, when when there are um trying to use the right word, but when there are you know deficits reported, uh, can affect the city or town's bond rating.

And I just want to know if our bond rating has been affected or if it has changed, um, a since this news has come out, or B since the since you know this council was seated, which is a year and a half ago.

So that's more of a question for your financial advisor.

All I do is report on the numbers to say that you can use this financial report.

The numbers are not materially miscated, and you can rely on the information within it.

Um I can say through this year through the subsequent event date that there was no material items that needed to be disclosed between 6 30, 2025 and our report date.

Okay.

Is there is perhaps the finance is the finance director still here?

Is he sitting behind you?

Can't see him.

Yes, Mr.

President may I ask the finance director if about the bond rating.

Can I ask the finance director about the the bond rating?

Absolutely, absolutely through through the chair to the counselor.

The um bond rating was made.

Okay, since this report, nothing has changed.

Um I approximately August when we issued the 50 million dollar bond, which um Mr.

Gross spoke to uh stayed in pause, took us down one slight notch.

We're still uh uh in a you know, plus rated community and finish maintained our bond rating.

All right, the reason I ask is because um you know, out in the public, the uh the level of concern is uh that of 20 years ago, and 20 years ago our bond ratings fell significantly.

So I want I want to sort of reassure everyone that you know that's not the case.

Um and and you know, this is uh uh not uh you know Armageddon here.

No, and it by no means is it Armageddon, but um we are laser focused on multiple issues, and if I can just editorialize on what Mr.

Gross was speaking to.

Um thing the ordinance relative to our reserve level is five percent.

To be at our bond rating, we should be at a at minimum a 10% reserve level fund balance.

So simultaneously, while we're operating the city, we need to you know continually build up the reserve.

The second thing that's a drag on our um bond rating, which is you know liabilities, whether it be the pension fund or our OPEP fund.

So again, uh focused, you know, forward funding of that is very more just as important, if not more important than a one-year um draw run balance.

So it's it's multi um dimensional finance.

But yeah, we're focused uh focused on all of those aspects.

Thank you.

That that exhausts my question, sir.

Thank you.

Okay, thank you.

Uh moving right along, councilwoman baziri.

Yeah, do I have permission to ask um the admin a question?

Director Muretti?

Or the finance director.

Um, so uh I think director Moretti.

Um so looking at page 10.

Uh, why are we collecting less property tax when the taxes went up?

Would you mind if I pass that one on to the finance director?

I'm not lateral.

Um through the through the chairman to the the council president to the counselor.

The FY, I don't know if you recall the motive um the personal property phase out when the budget was presented to the council.

The personal property exemption calculation had not been finalized in as a as of June 30th, you know, of last year when the budget or the year the budget was presented.

Um we kept that up in the tax.

If you go back to the report that the um council president made reference to that million seven, which was the the personal property tangible um reimbursement from the state was reduced from our tax bill, but we picked it up on state aid.

So that's the difference between you know what you see being collected um in the tax portion, but you see a corresponding increase in the intergovernmental line item.

So it's an offset.

Thank you.

Thank you, councilwoman.

Moving right on along to councilman Ritz.

Just had a couple questions for the auditor.

So in my private life, I worked on budgets for for 20 plus years.

So I know the ebbs and flows of them and the environmental impacts that you said, storms and other things too, but kind of in in simple terms, how would you say the city's financial health is overall?

So again, I'm your external auditor.

Like I don't like I don't interpret your data essentially.

I'm hired to give an opinion on the financial status as a whole, whether you can use it and rely on that information to make your own judgments.

Uh again, I would recommend consulting your financial advisor or the department of the administration.

All right.

My my other question was, you know, going through this disorder and everything.

If there's one area you think we should focus on, keeping an eye on, is it is there one area you would recommend that we watch?

Um it's always I would go with IT security, just because we're in an evolving world with the emergence of AI and you know, other third-party actors that are always looking to grab onto your data through either ransomware tax or anything else, always making sure you have a robust IT security system and that it's being properly funded and data penetration and other penetration tests are being performed.

Sorry, I was I was thinking more like one of the categories in here that you think we should be watching more than the others.

Category by what, like on your like financial stamp or anything?

Um always look at fund balance.

That's always an important thing, as uh director Sidellas mentioned.

Uh that's kind of an item that you know uh bond rating agencies look at as well as um any investor who would look to invest in bonds with the city.

Okay.

Uh thank you, councilman.

I'm going all the way around, and I'm sorry, I see you way down there, Councilman Campabiano.

Thank you, Council President.

Um, I don't know if this is along the lines of what councilman Ritz just says.

How many other cities and towns do you audit?

So we number we ought to a good number of towns and cities and Roman Island.

Um and New England.

Are other cities and towns struggling the way Cranston is?

Each town and city has their own troubles that they face on a daily basis.

But other than that, like all cities and towns face similar issues.

I guess that's uh kind of what we're coming off the COVID money, and now we don't have that anymore.

So I'm thinking there's some other cities and towns are struggling in the same way.

Exactly.

We now don't have that money to draw from.

Um I don't know who can answer this question, but um on page 52 again.

Uh we'll go back to that.

I can kind of figure out most of these line items that are overspent, but the one that I'm curious about is um economic development by 400,000.

Oh, where is it?

200,000.

477.

Yeah, here it is.

I'm sorry.

I'm sorry, councilman.

Which one was that?

So I can follow it.

It's the economic development line uh overspent by 200,477.

Is that in loans that we give out?

Uh what through through the council president to the the counselor, and I'm just gonna focus on the 200,000.

As you may recall in the formulation of the FY25 budget, 200,000 was appropriated for loans.

So what happened was as Mr.

Gross was speaking to, that was one of those side funds, the where the money that was opera money that was programmed into the budget to be spent.

So somewhat the accounting of it inflates the over expenditure, because we had to recognize the transfer of the opera money from the opera fund to the general fund as an expense.

That kind of accounting also incurred uh occurred in our IT department.

Um, and I think it was in DPW with tree cutting.

So it's it's an accounting reconciliation, but the 200,000 was the appropriation of opera money to be spent in loans.

I hope I answered you.

Thank you very much for the exclamation.

It goes back to the opera money that we had.

So I appreciate your answer.

Thank you.

So I got council president.

Uh thank you, councilman.

I'm gonna uh just very quickly go to uh auditor the mayo very quickly because he had maybe a clarification.

I thought the 200,000 in funds was for 200 1,000 grants.

I didn't think it was for lending.

Is that correct, or am I uh mistaken?

I I were the chance of the council.

If if I said loans, I was mistaken.

It was the grants.

And to clarify one more councilwoman Bazeri, were you looking at the total revenue?

This just so everybody's aware, in the current budget we're in, there was not a tax increase.

It was a levelly funded budget.

The last tax increase was for fiscal June 30th of 2024, and that was the last budget where we had opera funds.

We had 4.9 million dollars in opera funds in fiscal year, uh June 30th, 2024.

And in this budget, we did not have those funds roll over, and it was a uh it was not a tax increase for such 3025.

It was a level funded budget.

Mr.

Mayo, and what I was saying is if you go back and look at the detail behind the financials in the top portion on the budget estimate in the collections for um tax revenues.

The budget contained a million seven, which we knew was going to end up in the form of state reimbursement in the form of reimbursement.

So the actual estimated revenue up top is in the taxes down in the bottom when the revenue was recognized, it came in the form of intergovernmental revenue.

Correct.

I I agree.

I just wanted to clarify the fact that the I don't want anybody to have the impression that there was a tax increase in that period.

There was not.

In and of it through the channel, I'm sorry, in and of itself, year over year, there was no tax increase built into the FY25.

Again, for the council, because the council members who haven't been here long enough, the last tax increase was fiscal June 30th of 2024.

And if I'm correct, it was 2.97% is what the increase was.

So I think so.

So that so cut, like I said, the current budget we're in, there was no tax increase, and there was a loss of technically 4.9 million of opera funds.

That was in the previous period.

Moving right along, Councilwoman Graziana.

Thank you, President Wall.

Um, this is for the administration.

If either Director Moretti or Finance Director, you'd like to answer this, whichever one.

So uh Councilman Capapiano brought up let's you know the 200,000 dollars, and that was explained.

But I think my question is for some of the line items, um, and you can correct me if I'm wrong, but like obviously, like things happen.

We are all saying it like public works, there's snow, police and fire, there's emergencies.

So those lines are gonna always vary.

Um, but I guess my question lies with some of these other um line items where why weren't they flagged as they start to go over and you're seeing a differential um at certain point like at your quarter points in the year, why are we not saying like, okay, so I mean, to me, personnel line, that seems like a lot to overspend, but maybe I'm incorrect, like 26,000.

So, like you first overspend by 5,000.

Okay, maybe there's a flag, then you keep overspending.

I know you think there's gonna it's based on revenue and spending, but like at some point when you see a differential, don't you start to get concerned, especially like finance line, 500,000.

You know, I mean, those are the ones that are that are hitting me, or like the ones that are not emergency services.

Um through the council president to the counselor, and I'll just speak to one specific one.

The biggest driver on the finance line um was severance pay.

Someone retired.

So if you go and crosswalk that to um the report that the council president spoke to, and um doing this from memory, I think that over the amount that we were over budget for the severance, and in terms of that severance line in finance, we pay the severance amount for all departments with the exception of police and fire.

So any retiree that retired, I don't, whether it be from you know, City Hall or DPW, their accrued severance.

You know, we cannot not pay that upon their retirement.

So every, you know, there is um a lot of detail behind every line.

And if you like, I can you know get you a summary out and then you know, an explanation of why certain things um you know were in the red, you know, there was back to the um council president, you know, unfortunately, you know, overtime.

If there's a need for overtime, whether it be um, you know, police or fire investigations, we unfortunately we can't stop overtime.

Yeah, so what I'm sorry, can you repeat that?

I'm sorry.

Okay, which for the last part, the last part about um overtime.

Overtime, yeah.

It's public safety over time, you know, it's they're out doing an investigation as an example, just using that as a an example.

Um, we're gonna have to pay there over time, and we'd have most likely a legal challenge.

Okay.

So I kind of like mentioned some of the other line items where you're spending 25,000.

Like, where's the trigger where you stop spending the 25,000 on personnel line?

Like through the council president to the the um council, let me get you a listing of what went into those lines if I if I could.

Okay.

All right, sorry, that was not also just for the council um members.

That was page 52.

I think we all know that.

Um, and then my next question is um on page 124, um, general property taxes, there's a differential of 309,000.

Is that unpaid taxes?

What what's what what's the issue with the um property taxes there?

124 124?

124.

That's the budget to actual um as I as I stated the final budget amount, which did not include a tax increase, included an estimate of 1.7 million dollars worth of personal property taxes that are budgeted up on that line item.

But if you go down to the next line item before, um, you'll see an increase of nine million over 9.9 million in the intergovernmental fund.

A million seven that is budgeted as a revenue up in general property taxes, actually came in the form of intergovernmental receipts from the state.

And Mr.

DeMayo, I can you know, if you go back and look at the the June report, you'll see the budget for um personal property reimbursement phase out coming in at a million and six or a million seven with no budget corresponding budget line.

So that's through the through the council president to the council that that's the explanation.

Is that right?

Are you all set, council?

Or you conferring with the auditor once?

I I was that's quite all right.

I just want to make sure I don't move on.

What do we have?

Yeah, yes.

Maybe perhaps well well it could I I could kind of sidle on because uh the councilwoman's question and and the discussion regarding overtime, it made me consider something.

Um, and it probably would be for the financial director.

Um if we're seeing and you you rightfully mentioned our first responders, sometimes these are essential people that we need to have over, they have to have overtime.

They're public safety offices or public safety in the police and fire.

And I think perhaps, and this is maybe commentary, and it's it's not like a great epiphany.

We're just not making the right assumption uh in our budget that that line should be increased because consistently, if we look at the historical averages, those numbers should be higher.

Um so when I look at go back to 52 and I see some of those issues, we under budgeted those issues because if we look at the five-year average, we were never gonna come under budget on this.

So I mean, and I'm not an auditor, but yeah, I'm just using a little Andy Griffin logic here.

Um, that it that's where that's where I see it.

Um, because there's gonna be we're a second largest city in the state of Rhode Island.

We are definitely gonna have overtime in those lines, and it though that overtime is absolutely going to be necessary.

Um, it's how we budget it, I think it's important.

And in council president, I agree with you 100%.

You will always have overtime because of circumstances beyond our control.

It's a matter of managing overtime.

So that's a whole nother call, you know, conversation.

But yes, you'll always have overtime.

And thank you.

I believe councilwoman graziano is did you have another question?

I'm gonna pass it to Director, I mean to Mr.

DeMayo, directory, just for a little bit of clarification for the councilwoman.

In that 306,000, there would be a consideration for some portion of taxes not paid for some liens that have taken place or some tax revenue that actually the city has not done.

I I get the fact that the state is doing the phase out for the property taxes on the car, but just for her edification, some of that money is uncollected property taxes, which could be on real estate or could be on another item.

It's not just a regular derivative of money that's just from one line to another.

Through the chair, um, if if on a budgetary basis, if it was a perfect world, um, by some chance do you have the personal property number in front of you that came in?

The the line item that was in for the the phase out was 23 million and the excise.

No, no, no.

The the personal property, Mr.

Mayo.

I think you just spoke to the motor vehicle, yeah.

That's the one, hold on.

Um it's not the revenue number is not categorized as personal.

If I just if I just may editorialize for a minute, and I keep using the number that that is resonating as a million seven on a budgetary basis, the million seven is a component of the 186 million.

So that estimate is overstated because we knew, although we didn't know that what the final amount was with the state, we knew that money was going to be recognized in the intergovernmental line.

Yeah, it's a million seven, a million seven uh thirty-eight thousand.

With no budgetary, if you look to the far left, Mr.

DeMayo, I think.

There's not they're absolutely correct.

There is nothing in the budget.

If the budget, if it was a perfect world, that million seven would have been depicted in the intergovernmental line of so thus the collections compared to the final budget, which is reduced by a million seven, taxes would have been above, would have been above budget.

And yes, in to the chair, yes, there are outstanding um tax receivables that are to be collected, but that would further increase revenue.

So and just this as far as the question on the overtime, I would assume in various departments that are here.

You look at history, and you look at carrying the history forward.

Yes, and we look at current activity, yes, sir.

And of obviously previous years, yes, sir.

Consistency.

Yes.

Okay, thank you.

Thank you, auditor.

Are you uh chairman?

You can have as many we're gonna stay here all night.

Do you know what we're doing?

We're all we're here all night.

Okay, you're as long as you need to.

Well, so to what Mr.

DeMayo was saying, that's sort of my my next question.

Like we have these like estimates, but where we're off, I'm still on 124, by the way.

Yeah, um, why are we so far off in our estimates if we're looking back at previous years?

Um, I mean, license and permits is like a million dollars.

So, like, I guess I guess what happened there, like why are we so far off through the council?

I can go through line by line and get you bullet.

Okay, all right.

I'm gonna yield.

Thank you, councilwoman.

I'm gonna move on to council vice president her royan.

The floor is yours.

Thank you.

I'd just like to start saying, um, I think we were at a meeting two weeks ago, and council president asked for us to all get this printed out.

It would have been really nice to have it before our meeting tonight on a table behind us.

Some of us took you know, went and got it printed and studied it, but having it online was not sufficient.

We should be given the tools we asked for to do our jobs.

Um through the council president to the council vice president.

Um, we just had this conversation with the council president.

The actual um CLA sent the box with the binders.

Um we received them.

I don't remember what day it was, they were signed.

No excuses, they never made it up to finance.

So for the night of, and I don't remember.

Um, once we had the actual the actual audit report, they were immediately furnished, you know, with the intention of getting to you.

So yeah, they were delivered.

Um, they just happened to be just on the first floor of City Hall until someone followed up with Mr.

Gross, who said they were signed for I don't remember what day it was, but yes, should they have been out to you prior to that?

Absolutely, and once we found out where the the actual audit was, they got delivered to the clerk's office.

Okay, I'm gonna start by page eight.

My first question.

Um, it's the very first thing, current and other assets.

2024 was 127.9, 2025 is 88.8.

How did that go down?

Did we sell off our assets?

Chrissy, where I'm sorry, where are you?

Page eight.

It's in the I don't know if that's looking at page eight.

Yeah.

So who would who would answer that question?

I don't believe the auditor would have that if would he you would answer that, uh Director Zarlis?

By all means, please.

Yeah.

All right.

That's in the MDNA, and I do not have that answer for you right now because it's got to be cross-walked to the balance sheet.

So this was not prepared by me, but again, we'll get you an answer.

Thank you.

Okay.

Sorry, I have lots of tabs in my book.

We had a blizzard.

I had lots of time to do this.

Thank you to councilwoman.

Zary, that one's been answered.

All right, back to the famous page of 52.

52.

Okay.

I'm confused with the law um line was overspent by 212,210.

Because Solissa Millet always tells us that the law department comes in under budget and he's under budget every year.

Finance, is that one you can answer?

Yep.

The legal expenses were the prior uh outside legal uh council third-party lawyers representing us, were the largest portion of that.

Was outside legal consult.

Yes, sir.

Even though we have a staff of solicitors.

Through okay.

All right.

My next one is you said the fire line, and I know this was um overspent.

I'm okay with that.

I have a question.

Would well, this is probably for the personnel director who's not here, maybe director Moretti, I don't know, to the chair.

Do we know how many personnel we have out on injury waiting for the state to put them on disability that we've paying them to the workman's comp self-employed, but then we're paying someone to fill this spot as overtime.

Is that one you'd be able to answer?

Yeah, I don't I don't recall the exact number.

I could give you ballpark.

Approximation.

You're talking police and fire.

Uh police, I believe might have one uh uh one or two max or zero, one or two fire, probably the vicinity of uh five plus or minus one.

Um have to say from a couple of years, probably since we first came in about four or four years ago, the number I think was in the low 20s.

Okay.

All right, thank you.

Okay, on page 184 through the chair to maybe the finance director.

184.

184.

All right, the COVID opera money is seven three four seven six seven eight.

This deficit takes into account that we use that money.

Um the time, how far off are we in this year with that?

Is that an appropriate question?

Through the council president, um count council uh council vice president, could you specifically ask or point me where you were?

Yep, I'm on page 184.

Yep.

And the COVID opera money, 7347, 678.

Okay.

Um, I'm asking how far off we are this year, because this budget takes into account we use that money.

Okay, if I may, um council president.

That wipes out we have appropriated the entire opera money.

The amount that you just cited was the corpus, the the principal of opera plus the accrued interest in that seven million.

So in terms of utilizing APA, it's now a matter of just spending the APA funds for what the purposes they were appropriated for.

So you won't have um an adjustment.

So you won't have um an adjustment, you know, and conversely, if you go back to whatever page was the budget to actual the transfer out 6.2 is the actions um from the settlement agreement between the council and the mayor.

So all the Apple money has now been appropriated and accounted for.

Now it's a matter of just spending it before December 31st of this fiscal year.

Okay.

So just if you don't mind, just so I'm clear before you go away.

So the only time I'm gonna see it going forward in a budget or a statement is going to be funds that have been previously appropriate, if I'm hearing you.

Yes, there'll be as an example.

If if I just may you appropriated money for a bucket truck for the fire department, I think I believe it was 240.

We spent 220.

We will be coming back to this council, whether it be in what Mr.

Moretti was describing earlier to say, okay, in law of you know, we have this residual appropriation.

We need to repurpose 20 grand, and it's good.

We're gonna keep it in the fire department.

Okay.

Um hold on one second, we'll go back to the uh auditor to demand.

Just to help clarify for the councilwoman, again, 630 of 2024 was the last time opera funds were used to fund the budget.

And the audit period we're now 630, 2025.

There were no opera funds used, I believe is lost revenue.

The opera funds that were appropriated was a portion of it through a settlement, as he had said, with the mayor and the council, and the remaining funds were used.

They were all used for capital assets.

I uh there's a list that's there, but I just to clarify moving forward that the fiscal year 630 2024.

Again, it was roughly 4.9 million.

That was used as a revenue line, and in the budget we're in now, we had no opera funds in the revenue line at all.

If if I just may and we just go the actual appropriation of the opera funds, the settlement actually was consummated December of 24.

That's when we appropriated the APA funds.

That is the fiscal year in question of this audit.

So if I just may the 7.2 was the for no better term, appropriate uh appropriation of the entire amount of that settlement agreement, and it was accounted for coming into the general fund as a revenue being transferred out to the appropriate correct 6.2.

So that's the accounting that occurred in FY25.

The the OPA regulations, just so everybody's aware, is that the funds had to be appropriated by December 31st 2024 and have to be expended by December 31st, 2026 through the council president to the auditor.

That is correct.

Well obligated or um councilwoman, the floor is still yours.

Okay, um, I don't know who this would go to, maybe administration to the chair.

What pages?

Page 208.

208, my friends.

And this might have been something councilwoman Craziano was asking, but it's hard to hear with that fan in one back here.

City clerk number of documents recorded.

2024 was 11,527, but then 2025, it dropped to 6,147 finance.

Can I may I interject to the chair?

That that might have something to do with the real ID Act.

Okay.

I'm sorry, real ID.

Okay.

Could be real ID.

Do you want to answer that?

No, we'll get back to you with the clerk.

Okay, so that will be so that's all for now.

Thank you.

Thank you, Councilman uh Vice President.

Once I'm gonna make one more circle just in case, and I see I'm gonna circle right around, my friends.

I see councilman and councilman.

I just want to remind our my fellow council people that there will be budget meetings, and we will have each department there where we can go line by lane and asking questions.

But for our auditor that's here, um I'm looking at slide 14, the general fund.

So my question is we go from 2022, we're at 14, we jump up to 19 million.

That's five.

So that's good, right?

That's great.

Then we go up, you know, another two point something thousand for 24, but then we drop down to 14.

So my question is I think the standards is we have to have 17% in our general in our rainy day fund house, so they say.

So GFOA says that you should have about two to three months of expenditures in your fund balance.

All right, so let's just hypothetically say we give a bailout and we bail out our 4.9 and we bail out the schools uh their four five million dollars and we drop it down to five.

How bad will our bond rating be if we give this bailout?

Again, that's a financial advisor question.

I would recommend well, I mean, you have you said you have um you know about bond ratings and stuff like that.

So I'm just asking your opinion if we but direct is the deals maybe like through the council president to um the finance chair.

Um first thing is the 4.9, the 14 million is already net of the drawer of 4.9 on a budgetary basis.

So getting it back down to that 5.81% or whatever it is, the number in Mr.

Gross's slide already represents that going down another draw um would be bad, would be very bad because you know, we've maintained um for a lot of reasons the city's bond rating with the infamous five percent level.

Again, this is at least my third time saying that should be at minimum 10 percent.

So, you know, I wouldn't even venture to guess um, you know, another draw, a substantial draw would be extremely bad for our bond rating in light of the other, you know, aspects such as uh pension funding and our op funding.

So you don't believe in a bailout.

Okay, thanks.

Um other places do it, especially Washington.

But um I just want to Mr.

President, give uh give a comment to the administration.

As we're facing these budgetary deficits, I really want I really hope that if layoffs were to occur, they do not occur without blue-collared workers.

Our DPW workers are bottom of the tolling pool, parks and wrecked people, you know, they they're the backbone of the city, and especially on the school side, our teachers' aides, they they're the front line.

So I just want to make that comment that I hope that if layoffs were to be discussed, they leave the blue-collar workers alone.

Thank you.

Thank you, councilman.

Uh councilman Traffic.

I want to follow up on uh Andy's, I'm sorry, councilman uh Andy Hollow's question.

Uh by taking the 6.5 million dollar reserves, you decreased our city reserves from 8.17 down to 5.3%.

I got this to the finance to write that.

And I cost the GF what GFO GFOA is always looking for a 17% uh situation.

Well, you're not concerned by dropping down to 5.3%.

Would it impact our bond rating?

If you were concerned, why do we do it?

Okay, and and again, um answering the direct question, there were certain things we could not have stopped.

So again, in here I will be am the first person to say, um, and as I have, you know, Mr.

Gross spoke to the GFOA.

I focus right in on the SP criteria for rating, which the lowest reserve balance level for our rating category is 10.

So before getting to 17, my goal is to get you know from our existing five percent threshold to a 10% threshold, and that will take multiple years.

So you're telling me that you are confident at this point in time that our bond rating will not be impacted.

I didn't say that.

I said our five percent could put it this way.

So there is a possibility.

Standing in pause was made aware um that we were gonna have a draw, and I think the prediction was, and I'm doing this because this occurred um last August.

Um at that point in time, I believe I was projecting a roughly a three million dollar fund balance draw.

And I believe I was predicting a two million dollar fund balance drawer on the on the school side.

And we're still in the range of our you know bond level, but um it's not one so through the through the council president to the um council, there is no one civil bullet.

Like if we suddenly, if we suddenly increased our fund balance to 10, but our pension, our liabilities that being pension and opeb, um continue to erode, um that would be a you know a cause for um a bond rating decrease.

So it's not one silver bullet.

You we have to um do a financial plan that addresses all of our liabilities and our assets.

It was a dangerous situation.

Um I sorry by reducing the reserves down to 5.3%, it's it that's a very dangerous situation.

And it will impact, I think it will impact our body rating.

It will cost the city more money.

Okay, but and and um, yep.

And it's you've always had a five percent.

I've been trying to you know get it to 10, but um council president, yeah.

Yes, yeah, councilman.

Councilman, just going right around.

Um, I have a sh a small statement and then one more question.

If there was gonna be a draw back in August from the Rainy Day Fund, um the council probably should have known about it back in August.

Just gonna leave that out there.

Um, what's our tax collection rate?

Through the council president, it's above 98.5, but I can get the calculation from this.

Is that what's the industry standard?

Is that what the industry standard is?

Um put this way, there's no industry standard, but this is um a product of us doing tax sales.

Okay.

I I remember, you know, I I was very young, but I do remember back when Cranston had a huge problem.

Um, they were using like two, it was a 99 something percent tax collection rate.

Uh and that that caused problems as well, because they didn't obviously collect that rate of taxes.

So um just food for thought.

If you know, if I just may, that was the exchange that um I had with the the good counselor Graziano.

I mean, the difference of 300,000.

If you so we're at no we're in a healthy position in terms of our collection rate.

Okay.

All right, thank you.

Thank you, councilman.

Going right around, I'm looking to the point.

I see councilman uh Camper Bianca.

Thank you, Council President.

Uh, I'm back on page 52 again, the famous page.

Um, and I can understand the the overspend in the fire and rescue, there's overtime, there's tragedies, there's all kinds of stuff, but the salary line overspend uh on the schools on salaries is 1.2 million.

Um I don't know who can answer that, but I would assume that we know up front the salaries and the teachers that we have.

That's a big number, 1.2 million.

Um Joseph Balducci, Chief Financial Officer, Cranson Public Schools, we agree with you.

Uh, that is a significant um overspend in that line item.

Uh, one of the areas that always always cause us grief is um teacher substitutes.

Um while we try to budget what we believe is an appropriate level uh for one reason or another, um, that area is always overspent.

So that was one of the reasons why uh one of the other areas we looked at um our bus drivers in particular.

Um they don't have a set salary, I'll say per se.

It's basically on the length of their run.

Uh so again, while we try to guesstimate our best to what we believe that spends gonna be at the end of the year, that was one of the other areas that came out over budget.

So those are just two areas that I can think of off the top of my head, but I can provide you with a more detailed explanation of that.

Um, but those are the two areas that just come to light right now.

Oh you still have the floor, council.

Excuse me, one minute.

Well you had to turn it back on.

Councilman Graziano uh just uh pointed out to me if you go all the way down where it says other line was overspent by 845.

What's other line?

Sure.

So when we develop our budget um year over year, uh we make some assumptions, um, savings from teacher retirements, uh staff reductions and so forth.

So when we originally um developed the 2425 budget, that line item um as we define it, budget savings to be determined, uh stood at around three million dollars.

So that was our goal to try to um achieve budget savings with um some additional state aid that came to the district, um, and also some savings from retirements.

We we were able to get that um delta as I refer to it down to 800,000.

The unfortunate thing is um throughout the rest of the year, we were not able to achieve internal savings to make up that $800,000.

So that was a um uh a budget deficit that stayed with us the entire year.

So that's the reason why that light item shows a um a budget deficit of $840,000, approximately $840,000.

But you need to understand uh one thing.

It's and it's an important statement.

Our budget year over year, when we prepare our budget, we make some assumptions, but it is razor thin from an expenditure standpoint.

So any little hiccup, whether it be from um staffing, um we we guesstimate a certain amount of savings from retirements um that are not achieved.

But actually at the most recent school committee meeting that we just had, I identified several areas that caused almost 80 to 85 percent of the two point 2.9 million dollar deficit that was beyond our control.

So they were um outside tuition, whether we um send our kids to charter schools, which caused us grief from a budgetary standpoint.

Um I identified the pension.

I believe um director Zidellas had the same problem that the school department had.

We developed our budget on June 28th.

On the next day, I received a new bill from the state retirement system.

Because if you remember, the general assembly gave back some of the remondo um takeaways back to the retirees.

So that line, that area of my budget overnight, I was 1.2 million dollars in the hole.

When your budget's raised in the way the school department's budget is, you never recover from those type of last-minute changes.

So again, I I mean, um pathway programs.

Uh Governor Ramondo opened up the whole state of Rhode Island.

So anybody, any student can go any uh to other any other district in in the state of Rhode Island.

Who pays the bill?

We do.

So again, you try to guesstimate as bet you best you can, those students that are gonna go to the North Kingstons of the world, the uh exit of West Greenwich of the world because they have pathway programs.

But again, you make the assumption that five students are gonna go out of district because that's what's currently going out of district.

But when you get the bill next year for next school year, 10 students go out of district.

You have no say in the matter, you just have to pay the bill.

So again, I repeat myself when the budget is razor thin the way it is, year over year, any manage uh minor change like that causes us grief.

And sometimes it's tough to recover from.

Thank you, Director.

You're welcome.

Joe, let me keep you uh Balducci, pardon me for the familiarity.

No, it's um Joe, how many in and uh I'm Mr.

Balducci.

How many employees?

And I'm not looking for the accurate, you know, exact number.

How many employees does the school department employ?

Approximately 1,500.

If you count um day-to-day substitutes, um, we're well over 2,000 that we pay every couple of weeks, but I'll say full-time equivalence, we're around 1,500 um employees.

By far the largest workforce in the city.

Yes, correct.

And when you talk about uh many of them are my colleagues are teachers and our workforce is getting much older.

And I I can see that in my own, you know, department because some of the retirement issues that the teachers teach much longer and they're they're more susceptible to illness.

Um, so a few illnesses, you know, or a few long-term sub is illnesses combined with uh long-term sub issues, could could be a pretty significant uh cause a pretty significant deficit.

And I know the people who sat on the school committee with you while we were members of the school committee know the work that you do and know the work that the school department does, and we also know all of us know that your your budget is thin, and you don't have a lot of margin for error.

And I'm I'm sure that's uh I just want that noted.

Um Joe, I have the the other question I do have is it has been reported that you have a $3.9 million dollar deficit.

Is it a $3.9?

But we had gone into the city, the general fund, and we saw that perhaps that wasn't the most accurate depiction.

As we we talked in this room before you got here, that we have a more of a $4.9 million deficit.

What is the figure that you you're you're you're reporting now?

So um like directors Dellis, we live in the budgetary world.

So we develop a budget and then we are um tasked to maintain that budget.

So from a budgetary standpoint, we did run a $2.9 million dollar deficit.

The reason why, again, as stated in the auditor general's letter that everyone received, uh it stands at 3.9.

The school department maintains a capital reserve fund.

So that particular year, um, we purposely, not purposely, we had the need um to draw from that fund about a million, just under a million one worth of expenses.

We do get reimbursed, it's called housing aid reimbursement.

So if we um undertake a capital project that meets the definition of ride for reimbursement purposes, that housing aid revenue goes back into that fund as well.

But at the end of the year, uh that fund ran a million dollar deficit.

From an accounting standpoint, Mr.

Gross and his company cannot show that fund as a standalone capital reserve fund.

So the results of that fund get co-mingled and are uh communicated as part of the school's general fund.

Right.

So therefore, again, from a budgetary standpoint, 2.9.

From a gap standpoint, it was 3.9.

So there's the there's the difference.

So from there it's so just to repeat the capital reserve shows about a million and a 2.9 at that you reported earlier.

So it's a similar situation that we were talking about before.

We talked about the general fund.

Okay.

Thank you.

You're welcome.

I'm gonna go right around uh, I believe my last last two council members.

Yes, and no, I I see, yes.

Councilwoman Graziano.

You sure?

All right.

Councilwoman Heroyan.

You're okay.

Mr.

Chairman, I asked Mr.

Balducci question.

Absolutely.

Uh Councilman.

Joe, you were not here earlier, so I asked a question of our our finance director.

I'll ask you the same question.

Uh the school department and your unrestricted fund reported the deficit of $3.9 million for the fiscal year ending uh 225.

Is that correct?

Again, from a budget standpoint, 2.9.

Yes.

The question I asked was that have you presently implementing any budgetary spending controls, basically try to avoid a deficit in the current fiscal year.

Always.

Um, so again, the good news is um the General Assembly did not surprise the district when they were um analyzing the the requirement for funding this year's pension obligation.

So what they told us the rates would be would were going to be is in fact the rates.

And that's one of the areas I monitor every two weeks after a particular pay period hits the books.

So I can tell you both uh the certified pension and the non-certified pension areas are running right now, about 100,000 in the whole.

But that's that changes, that fluctuates every pay period every two weeks.

So I'm not running a 1.2 million dollar deficit in that area.

Um unfortunately, again, I'm gonna repeat myself, because our budget is raised a thin, and and I'm just gonna use a number off the top of my head.

Let's just say that um substitutes, teacher substitutes was over budget by $300,000.

Year over year, I can't automatically go to increase in that line item by $300,000.

So I have to gradually put more dollars in that area to hopefully at some point get into the black to go from you know, a deficit of $300 and you try to fully fund it the following year.

Unfortunately, uh, we're not able to do that.

Um, but I will tell you again, as we stood before, as the administration stood before the school committee, one of the things we adopted was a zero-based budgeting approach.

As we adopt, as we created our 26-27 budget.

So in so doing, again, there was I said, okay, if we're running 300 in the hole in substitutes, I increase that line by 300,000 over time, just as an example.

If I'm running up into a problem, I fully funded that area to the level it deserves on a go forward basis.

So in 2526, I was not able to do so.

But the goal in 2627 is to present a budget of what it costs Cranson public schools to run its uh system.

I'm not sure if that answers your question, but I understand Joe.

I do.

One more question, Mr.

Chairman.

Go right ahead.

Joe, in your in your internal service fund.

Your experience of 9.7 million dollar problem.

We are.

How do you plan on addressing that?

So that's a significant um deficit that we have to achieve.

Um we've been trying to do it with uh incremental increases in our budget.

Uh the amount of money we set aside for um our contributions into that fund.

For two years in a row, we budgeted double digit increases.

Um in the year we're in.

We're actually, I believe the increase was either a 10 or a 15% increase.

The problem is the claims outpace the revenue.

Um, I mean, we all see the commercials every night on TV for the drug uh drugs that are out there.

That's what's driving our claims.

So it's the drug spend.

It's not the unfortunate you know, the individual that goes to the hospital on a major illness.

But we're seeing that the it's just the the drug spend.

Now, to answer your question, one of the things that we as a district, so we're with a certain collaborative, the West Bay Health Collaborative.

Um two years ago, we uh negotiated an Rx rebate program where the collaborative as a whole, we bring in 30 million dollars over a three-year period, approximately 11 million dollars a year.

Of that 11 million dollars, based on our Cranston's current spend of drugs, our hopefully our annual take of that 11 million is about 4.5 million.

So to answer your question, we're gonna look at trying to maintain our claims, our spend, and bringing in rebate dollars.

So the combination of those two events, hopefully the goal is to get out of the hole within a couple of years.

But again, that's not something we can erase overnight.

Thank you, Joe.

You're welcome.

I'm glad you went to middle beach before the budget.

Agreed.

You're gonna lose that 10.

Thank you, Councilman.

Councilwoman Ryan, you had a uh I have no more questions, but I would just like to acknowledge the school committee members for coming here tonight, sitting here as soon as you got out of your meeting.

Thank you.

I know this deficit is very stressful on all of us.

We've lost sleep, but we're working together.

Thank you for being here.

Yeah, thank you.

Thank you.

And I'm sure all the other council members share your opinion and your thanks.

Um, I do want to ask one question to the auditor, if he would come back up.

He thought perhaps we've forgotten him.

Um, I I do want to point out the fact, and I don't know whose fault it was we received this binder so late.

Um, I know I spoke to you on the phone some time ago, and I and I did express some urgency about getting this delivered to us.

And I apparently it was delivered to the city hall, but we were never notified.

Um, we probably will, if it's okay with you and your uh your company, uh, ask you to come in again.

Uh especially, I think it would be great if you sat before the audit committee.

I know they're gonna have some questions, but it's much easier to navigate this in the the written form.

All right.

I'm a paper guy too, so I gotta so we may be calling you very soon.

I just want to, but I before I before I call for a motion to adjourn, um, on several and and Joe had talked to me about this a number of occasions, the the accounting standards, the gas and the gap.

If I heard you correctly, Cranston can conducts its accounting and its books in a manner.

I'm trying to say it properly, so I asked the question properly, in a manner that is consistent with this those two agents that have standards for accounting and financial record keeping.

Would you that's pretty much what I thought I read there?

Which basically what we could be guilty of is perhaps we as we see not budgeting as accurate as we could be, or not being able to foresee some of the situations that occur that maybe we won't, and perhaps that's we have to look at these situations as um Mr.

Baalducci said that these situations are gonna occur again and again.

And we when we spoke about some of the overtime lines, they are going to occur again, and we're just gonna have to budget it differently.

So I thank you for coming in.

I uh will um probably ask you to come in again, and I know we'll be working through uh the finance uh director, uh finance chairman rather.

Uh Andrew, Councilman, how would you like to say something?

And I I got it, I got it.

Just if we could have extra copies of the audit for our audit committee.

You got a chance, we'll pick it up, so I'll coordinate what you want.

We got a chance, we'll pick it up, so I'll coordinate with you by email.

Okay, so before I ask, I may just say one more thing.

I want to worship very, very happy birthday to uh um school committee member and vice chairman uh Anthony Melillo.

Happy birthday to you tonight.

And many returns.

Um, and with that, I'm gonna ask for a motion to adjourn.

So moved.

Second, all in favor, please signify by saying aye.

Aye, oppose, signify by saying nay.

The ayes have it.

Motion passes.

This meeting is adjourned.