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WARWICK, R.I. — If the City of Warwick were a household, it would have an annual income of $75,000, “modest” assets, a $15,000 car loan, and a whopping $240,000 in credit card debt.

Government watchdogs said that analogy, part of a report reviewed by the City Council on Wednesday night, underscores the city’s financial problems, particularly the burden of pensions and retiree health care costs.

But Mayor Joseph J. Solomon said city finances are stable and an adviser to the mayor blasted the analogy as “completely ridiculous,” saying credit card debt is much different than projected retiree health-care liabilities.

City Council President Steven Merolla said he asked the accounting firm Marcum LLP to analyze the city’s five-year financial outlook and to provide an analogy that the average homeowner could relate to.

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“Once you get into millions and billions of dollars, it’s hard to conceptualize the enormity of the problem with a $330 million budget,” Merolla told the Globe Wednesday. “Right now, we are paying our bills, but in the future it’s unsustainable -- those are not my words, those are the actuary’s words.”

The report says Warwick’s retiree health care liabilities total $352.4 million for city retirees and $53.4 million for school district retirees.

When funding for city retiree health care liabilities is factored in, the report projects a budget shortfall of $27.8 million in 2021 and a total budget gap of $127.8 million over five years. The Globe had obtained a draft of an earlier projection that pegged the five-year budget shortfall at $130.7 million, with retiree health care costs included.

Rob Cote, a Warwick resident who discussed the Marcum report at a recent meeting of the Warwick Financial Crisis Committee, said the household analogy helps put the city’s financial problems in terms people can understand.

“When I showed that slide, people were horrified,” he said. “We understand that all the money is not due tomorrow. But you are not going to be able to raise the money needed to meet future obligations.”

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Cote said Warwick can no longer afford to provide lifetime health care benefits for retired city employees. By contrast, he said, retired city teachers transition to Medicare at age 65.

“The numbers show it is bankrupting the community,” Cote said. “There is no financial way out of this. There is no taxation way out of this. It’s time to hit the reset button and go into receivership.”

But Solomon called the Marcum report “hypothetical and fictitious,” saying, “I rely on the experts I have surrounded myself with, and they have us on solid ground.”

Solomon noted Standard & Poor’s recently gave the city a “AA” bond rating for a school building bond issue. And on Tuesday, he issued a news release saying unaudited figures for fiscal year 2019 show the city has an estimated budget surplus of about $5.5 million and a “rainy day fund” of $22.5 million.

Solomon dismissed the idea of the city entering receivership, saying, “When you have a surplus and a $22-million rainy day account, you would be laughed out of court if you tried to file for receivership.”

Solomon said his administration plans to try to negotiate changes in health care plans. “You could have larger contributions, a longer duration for employees to become vested, or caps on prescription coverage, which could provide significant savings,” he said.

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Ken Block, a Warwick business owner who ran for governor and chairs a nonprofit group called Watchdog RI, argued that receivership would be a “viable mechanism” for the city. But, he said, “It’s one that requires political courage, and political courage has been in very short supply in Warwick for decades.”

But before going to receivership, the city should take steps such as having municipal employees go onto Medicare at age 65, which would save the city millions of dollars, Block said. “Warwick’s financial picture, taking into account its massive liabilities, is grim,” he said.

Marcum LLP’s Kyle Connors reviewed the report with the City Council on Wednesday night, comparing many of the data points to household finances.

For example, he went over the city’s long-term capital planning, drawing this comparison: “Roof is 20 years old. Boiler is 30 years old. Car has 175,000 miles. Furnace needs to be replaced. Every year you say you’ll start saving for it next year but never do.”

At the end of his presentation, City Council member Edgar Ladouceur said, “I think it’s very important for everyone in this city — all of the employees, all the taxpayers, all of us here in city government — to at least admit that we are not on Rosy Street here. Everything isn’t just hunky-dory.”


Edward Fitzpatrick can be reached at edward.fitzpatrick@globe.com. Follow him on Twitter at @FitzProv.