Cranston Finances Improve Across the Board
Sunday, January 29, 2023
The City of Cranston is reporting better than anticipated financial performance not only on its annual budget but also on its pension and healthcare obligation costs.
This past week, Cranston Mayor Ken Hopkins announced that the city ended the last fiscal year, which ended June 30, 2022, with an approximate $643,000 budget operating surplus.
Hopkins said the surplus is comprised of $443,000 from the city’s operating budget and $200,000 from city schools. The mayor stated that “these latest audit results being reported to the City Council and taxpayers are very favorable news in a difficult inflation and recessionary period.”
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Unfunded Pension and Healthcare Obligations
Equally important to the annual budget performance for Cranston is addressing the city’s long-term pension and other post-employment benefits (OPEBS).
OPEB long-term costs are usually dominated by healthcare costs for city employees after their retirement.
The Hopkins administration made a dent in the unfunded liabilities despite a turbulent stock market.
“The city’s unfunded actuarily accrued liability fund moved from $217,346,978 at the beginning of FY22 to $215,833,860 at the end of the fiscal year. OPEB moved from $47,533,523 to $45,156,037 from the beginning to end of FY22. Please note the city of Cranston fully funded its required actuarily determined pension and OPEB for the last fiscal year,” said Zack DeLuca of Hopkins’ office.
Budget Performance
City Charter requires that an auditor is engaged to perform the annual audit for the previous fiscal year.
“This completed audit demonstrates that I have honored my pledge to Cranston residents to carefully watch tax dollars and properly manage their money,” Hopkins said. “For the second year in a row, the auditors have ratified the work of my financial team. By the continued implementation of sound fiscal practices, we earned an unqualified opinion of proper financial management.”
Along with public safety, Hopkins said one of his highest priorities “is to oversee the effective spending of taxpayer dollars” and this “demands daily attention and strong leadership to keep the cost of our city operations down for the taxpayers.”
He noted that as of June 30, 2022, the city had a fund-balance, commonly referred to as a “rainy-day fund” balance, of approximately $15 million. The “rain day” fund is an undesignated fund balance for emergency expenditures. This fund balance increased from last year by the city’s operating budget surplus of $443,000.
“We need to be vigilant and continue our efforts to build up the rainy-day fund,” said Hopkins.
The mayor pointed out that, despite challenging budgetary times, the city’s Fitch general obligation bond rating remained at AA+ “with a stable outlook," and emphasized that the preparation of next year’s budget for the city will be "a challenge." It is required to be completed by an April 1, 2023, submission deadline.
“While we all recognize that the local residents have survived a pandemic and are experiencing inflationary economic challenges, city government has not been immune,” Hopkins said. “My primary financial objective is to manage the city’s finances with a dedication to keep the cost of living reasonably affordable.”
He concluded by saying the city and his administration “will continue best practices to wisely invest tax dollars, keep spending in check, protect the rainy-day fund and keep taxes affordable for all residents and families.”
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