MAYOR ELORZA ANNOUNCES LARGEST OPERATING SURPLUS IN OVER TWENTY YEARS

PROVIDENCE, RI- Mayor Jorge Elorza announced today that the City is expecting a
combined year-end operating surplus for Fiscal Year 2016 of $9,472,618. This is the
largest operating surplus that the City has realized in over twenty years.
«This is good financial news for the City of Providence. Providence has gone through
some trying financial times in the past decade, but we have turned a corner,» said
Providence’s Mayor Jorge Elorza.
Just over five years after Providence finances were described as a «Category 5
Fiscal Hurricane,» the City is expected to realize an estimated surplus of
$5,142,464, in addition to a $4,330,154 deficit reduction payment that was made over
the course of the fiscal year. The total $9,472,618 operating surplus is applied
directly to the cumulative deficit and is a result of an increase in revenues,
dramatic savings in expenditures and a modest school district surplus over the
assumed budget.
As budgets are educated estimates of projected costs and collections and cannot
account for unanticipated expenses or revenues, surpluses do occur. This year’s
significant surplus, which will be applied to the City’s cumulative deficit, can be
attributed to:

* Realistic budgeting

* Non-essential hiring freeze

* Better cash management

* More efficient tax collections

* Better departmental revenue

* Lower salary expenditures

* Reduced spending on operational expenses, where opportunities existed.

* Reduced medical claims, due to cost containment as a result of further
coordination of benefits implementation, plan design changes and greater pharmacy
rebates.
«Providence’s FY16 surplus is a step in the right direction, and I credit the Elorza
administration’s work to address the City of Providence’s structural deficit,» said
Rhode Island Department of Revenue Director Robert Hull. «Though we remain concerned
that the city cannot arrive at long-term sustainability without difficult work to
address unsustainable pension and retiree healthcare obligations, the reduction of
year-over-year deficits reflects the administration’s proactive efforts to address
Providence’s fiscal challenges. The Raimondo administration will continue to meet
regularly with the city to ensure Providence continues on a path toward fiscal
health.»
At the end of FY15, the City faced a total deficit of $13,445,000, which has been
accumulated over the past several years. However, this surplus would lower the
cumulative deficit to $3,972,382.
«Due to our proactive efforts, we are pulling ourselves out of a significant deficit
faster than anticipated,» added Elorza. «This is a significant step in our long-term
approach to stabilizing our finances.»