Keiser: Budget proposal kept at ‘bare-bones minimum’
Jamestown is less than three months away from its Financial Town Meeting, and the propertytax increase that voters will be asked to approve is going to be modest unless the spending plan proposed this week is significantly modified by the Town Council.
The $21,545,203 budget proposed for fiscal year 2012-13 would be 1.9 percent higher than it was in 2011-12. The spending plan was unveiled on March 12 by Town Administrator Bruce Keiser at the first of three council workshops on the proposed budget.
The March 12 workshop addressed the proposed operating budget, with the March 13 session delving into proposed capital spending. A council workshop on the proposed school budget will be held with the School Committee and Superintendent Marcia Lukon on April 12.
But here is the number that will interest Jamestown property owners the most: 12 cents. That is the increase in property taxes necessary to fund a combined (town and school) spending increase of $353,358.
The 12-cent increase would raise the property tax rate to $9.33 per $1,000 of assessed value. At that rate, the annual tax bill for properties with an assessed value of $408,000 (which is Jamestown’s median property value this fiscal year) would be $3,807. That’s only $49 more than property owners paid in taxes for properties with an identical assessed value at the current $9.21 per $1,000.
The property-tax increase would be the second smallest in the past seven fiscal years. According to statistics that Keiser presented to the council, Jamestown’s property tax rate ranks fifth lowest and fourth lowest among the state’s residential and commercial property tax rates, respectively.
Keiser told the council that “this is a bare-bones, steady state budget,” adding, “We have kept our requests for spending increases to a bare minimum.” Nevertheless, one of the major reasons for the modesty of the proposed tax increase is the unexpectedly steady state of medical insurance costs for the town.
During the next fiscal year, Jamestown will pay an additional $10,000 for its Rhode Island Interlocal Trust medical insurance plan, but that’s only because the town will add coverage for employees who had previously opted out of the plan. Otherwise, in an unexpected and welcome development for Jamestown, there won’t be any increase at all in the town’s health care premium during the next fiscal year.
Keiser told the Press that the decision by 69 percent of town employees to shift into Health Savings Accounts, along with the elimination of the previous co-pay plan for prescription and generic drugs, is helping offset upward pressure on the town’s medical insurance premiums.
Among the increases in the proposed operating budget, the single largest driver would be the proposed $194,774 jump in debt service payments.
The reason for the big increase, which is comprised entirely of principal payments, is that the town had previously deferred any principal payments for the $3.5 million bond, which had financed the town’s purchases of farmland development rights. The reason for the deferral was that the town had just started making bond payments for the $3.3 million Town Hall project (while also suffering reductions in state aid), and it was decided to defer the principle payments to avoid a precipitous rise in property taxes. Now, however, the town will start paying the principle on the farmland debt.
Another significant increase in the town’s operating budget would be the $98,665 jump in salaries and wages, with a proposed raise for department heads accounting for the single-largest portion, $28,282, of that amount. The 2.75 percent salary increase for department heads would be identical to their increase during the current fiscal year, which was their first increase in any of the previous three fiscal years.
Another proposed increase is $25,000 more for police overtime. At the same time, the town will save $24,600 on its electricity bills by virtue of its newly signed contract with a wholesale energy supplier offering energy through the Rhode Island League of Cities and Towns. The town had been paying 9.4 cents per kilowatt hour, but will now pay significantly less: 7 cents per kilowatt hour.
Other reductions or reduced obligations in the town’s operating expenses include the following:
• Pension benefit obligations: Because of legislation reforming the state’s Municipal Employees Retirement System, the town’s retirement fund assets – which had stood at 67 percent of its liabilities before the reforms – increased to 81.6 percent of its liabilities. (With the reforms, the town’s unfunded liability is now $2.1 million.)
• Police station bond payments: This fiscal year, the town’s $70,000 payment towards the bond which financed the police station addition will be the last for that particular obligation.
• Road repaving: The Department of Public Works had requested $340,000, but Keiser is proposing $300,000.
• Fort Getty pick-up truck: According to Keiser, the Recreation Department had requested $35,000 for a pick-up truck to help staff enforce town rules on the homemade decks built by RV campers. Keiser declined to include that request in his budget proposal.
• Fire department equipment: The department’s $57,474 request for new equipment and a car for the fire inspector will be funded, Keiser told the Press, with state and federal grants and fire inspection fees.
During the meeting there was a great deal of confusion regarding the increased compensation proposed for the fire chief, along with questions about how much of his position was general management and how much of it was fire marshalling. The proposed budget will be edited to include a footnote explaining the division of payments.