Mayor Joseph Polisena presented his budget Monday night to a crowded Municipal Courthouse, informing residents that there will be no tax increase this year. Still, he said the town might not be out of the woods just yet, if pension reform is not enacted at the municipal level.

“Our police and fire pensions are defined by the state to be at critical status. I would say it is worse,” he said. “We do have a Herculean task. The financial balance of our town hangs on our actions.”

Johnston has a $90 million unfunded pension liability, and an additional $229 million liability in Other Post Employment Benefits. If the town doesn’t address those liabilities soon, Polisena said they will “be on the brink of financial disaster.”

Despite those looming issues, Polisena said he was optimistic about the budget, and he thanked various departments for doing more with less.

The Town Council voted 4-1 to approve the budget, with Councilman Ernest Pitochelli voting against the budget. He is not convinced that the budget numbers jive with the town’s audit report, and he felt closed out of the budget process.

Had he voted to approve the budget, Pitochelli said, “I would not be able to sleep at night.”

Rather than be provided the budget individually and then vote at the next meeting, Pitochelli believes the council should break the budget into pieces and hold public hearings to discuss each department. At those hearings, department heads could explain line items in their respective areas, and Pitochelli said that would make the whole process more transparent.

“I think the Town Council should be more involved,” he said.

Moreover, Pitochelli said the budget is too vague; he wanted departments broken down by line items, with salaries listed next to specific names.

Chief of Staff Doug Jeffries said he would have gladly provided a personnel supplement, and that he was “proud” of how the Finance Department conducted its budget process.

Council President Robert Russo was surprised to hear Pitochelli’s dissatisfaction.

“I thought we came out of that meeting very optimistic,” he said of the initial presentation by Polisena to the council.

“Every time I have a question, it’s answered,” added Vice President Stepahnie Manzi.

Resident Peter Filippi, who conceded he might run for mayor as a Republican, was also critical of the budget, and said that more radical changes need to happen, especially with contracts.

“They’re loaded with provisions that are causing a lot of financial harm,” he said.

Filippi is an advocate for smaller government and privatization of services. He criticized union contracts for their minimum manning requirements, longevity bonuses and calculations of pensions.

“Why are we giving out these outrageous sums of money?” he asked. “The unions in this town are a disgrace. We have to take our government back.”

That, Pitochelli said, is easier said than done.

“It’s not a simple matter, Peter,” he said.

Polisena jumped in, standing at the podium next to Filippi and explaining the binding arbitration process. He believes the process favors the union, and he said changing contracts is a gradual process that requires some compromise.

“It just can’t happen overnight,” Polisena said.

The overall budget increases this year by roughly $1.2 million. Among the added costs to this year’s budget are a 9.2 percent increase on health care ($150,000), an added cellblock at the police station ($60,000), severance ($300,000) and the statistical revaluation, which cost $410,000.

There was no increase, however, for the school department, which was level funded. Polisena commended the district for “making those numbers work,” while delivering high quality services.

To get to level funding, Superintendent Dr. Bernard Di Lullo said the district had to cut a teaching team at Ferri, cut costs in special education and layoff non-certified positions.

“We work hard at meeting the budget expectation,” Di Lullo said.

The town saved money in several areas, through switching general liability insurance, installing the new fuel depot, loss of employees through attrition and no longer paying rent on the Municipal Court, which saves $33,000 per year. Switching from Blue Cross to Medicare could also save the town upwards of $500,000, though the numbers are not yet available.

“We will watch every dollar that is spent,” Polisena said.

In terms of expenses, Polisena also touched upon the town’s legal budget, which he said he is often asked about. In the near future, every legal grievance filed will be posted on the town website so residents can follow how legal monies are being spent. The law department’s budget for FY2013 is more than $480,000.

“We must be willing to fight on behalf of the taxpayers. We’re not going to roll over and play dead,” he said.

In particular, Polisena attributed the town’s high legal costs to grievances filed by Local 1950, the union representing the Johnston Fire Department. The mayor said there are currently 56 legal issues facing the town, and 25 of them deal with fire personnel.

“There will be no government bailout for pensions,” Polisena said, adding that the firefighters “don’t get it.”

Keith Calci, president of Local 1950, believes the mayor has continuously villainized the Fire Department.

“I think we get it completely that we have a contract in place, which the mayor signed himself,” he said. “A grievance is only filed if there’s a violation in the contract. The only remedy when your town does something that’s against the contract is to grieve it; so we could choose to do nothing or we could choose to grieve it.”

“I think it’s clear that [Polisena] is holding some grudge against the union,” Calci added.

Eleven of the challenges have to do with pension benefits, according to Polisena. Calci says many of the complaints filed by Local 1950 have to do with pension calculation, and the inclusion of severance pay, among other things.

“I’d be more than willing to discuss with the town any possible changes in pension benefit, but as of right now, the language in that contract includes the severance portion. You can argue either way about what we deserve, but it’s in there,” Calci said.

Pitochelli said he has had his share of criticism for the Fire Department, but said the mayor’s comments do not apply to every firefighter.

“You have professionals,” he said, addressing Fire Chief Tim McLaughlin. “But you still have some leftover bad eggs who are taking their information from bad people.”

Speaking of the positive things going on in town, Polisena said that Johnston is ahead of the curve when it comes to attracting new business.

“Our economic development continues to surpass our expectations,” he said, ticking off Card$mart, Broadrock Renewables and Sims Metal Recycling as examples. “I think the small businesses are the economic engine that drives our local economy.”

The mayor also touched upon consolidation efforts, including shared street sweeping and animal control services with other municipalities. He is hopeful that a coalition of towns will be able to move forward on consolidated dispatch services, but said it could require General Assembly approval.

“I’m open to reviewing any type of consolidation,” he said.