Pawtucket prepares bankruptcy scenario
09:21 AM EST on Thursday, February 19, 2009
By Michael P. McKinney
Journal Staff Writer
PAWTUCKET —- If the city runs out of money around mid-April —- what Mayor James E. Doyle calls a worst-case scenario —- bankruptcy is conceivable.
The city might then have to impose a supplemental tax increase —- something Doyle and Finance Director Ronald Wunschel said they are loath to do in a city that had the highest percentage increase of Rhode Island mortgage defaults in the fourth quarter of 2008, a Journal analysis shows.
The city is not on the verge of bankruptcy, yet, Wunschel said yesterday, but “I’m afraid of the perfect storm … everything hitting us at once.”
Among the ideas the city is considering to deal with its $10-million projected deficit:
*A five-day furlough that would be carried out over time by having employees leave early on Fridays.
*Seeking a tax-anticipation note, where the city would borrow $3 million to pay bills then pay that back within a 90-day period using tax revenue from the next quarter. The City Council has not supported such a move.
*Outsourcing some services, such as crossing guards.
*Closing City Hall a day or two per week.
*Selling Dennis Lynch Arena, a hockey rink that loses some $300,000 a year. The city has been seeking buyers, Doyle said.
About 40 municipal workers have been laid off this year and additional layoffs have not been ruled out.
Wunschel said he does not know whether federal stimulus money could be used to substantially close some of the School Department’s projected $5.2-million deficit.
“I think it’s a little bit foggy right now how it’s going to be used,” he said.
mmckinne@projo.com
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
You must be logged in to post a comment.