Councilors hold budget work shops
On average, homeowners will see their tax bills increase $28 if residents OK the $21.7 million budget at the Financial Town Meeting on June 3, according to Town Administrator Bruce Keiser.
Budget talks for the upcoming fiscal year that starts July 1 are still in preliminary stages. On Saturday, the councilors met for three hours to discuss the capital investment fund with department heads. On Monday night, the Town Council held its second budget workshop. This time, the councilors reviewed the municipal government’s proposed $7,650,835 operating expenses.
Two other workshops, including one on the school budget, have also been scheduled.
Keiser said the increases in the combined school and town spending plan for the 2014 fiscal year would amount to less than 0.5 percent compared to the current fiscal year.
Counting the capital budget, where the biggest spending requests are coming, the total general budget is increasing 4.52 percent. But school spending will drop 2.52 percent and the cost of debt service will go down by 1.62 percent.
The operating costs of running the municipal government will inch up 2.1 percent.
Keiser said the costs are going up mainly due to salaries, health benefits and pensions.
The town is in the process of negotiating collective bargaining agreements, and as a result, the recommended budget does not yet show any salary increases for union employees. Money is also being set aside for anticipated salary expenses.
Health insurance rose by 8.2 percent from $705,000 in the current year to $762,000. Keiser said the figure “represents one of the largest increases” in this year’s budget due to claims.
“Any concentration of high costs can heavily influence our rates,” he said. “Forty percent of our rate adjustment is based on actual experience and claims, and the rest is Rhode Island at large.”
The retirement system costs will stay at $284,415, he said, and credited the pension reforms enacted by the General Assembly for stabilizing that expense.
“Prior to that, we were seeing significant jumps of 8, 10 and 12 percent,” he said. He anticipates pension costs to remain stable over the next 20 years. The police retirement funds are separate, he went on to explain, and are part of a private plan. However, the town has established a fund to pay those benefits, which are maintained at a level of $141,000.
Over the last five years, Keiser said, reductions in state aid have forced the town to balance the budget by taking steps such as “slightly” raising property taxes and freezing salaries. But, he added, he credits past town councils, department heads and unions with helping to keep the tax levy down.
Due to the state’s financial problems, Keiser said the town has “lost almost 5 percent of our budget” that typically comes from state aid.
The levy increase is 0.73 percent, Keiser said, to raise the $18.4 million needed to support the $21,689,746 combined budget.
The recommended general budget is $9,617,580, he said, and added the total includes town operations, capital spending and debt service. The capital budget is going up by almost one-third to $1.2 million, but debt service is dropping by 1.62 percent.
Keiser said that trend will continue.
“Over the course of the next two years, bonding costs will drop by $267,764, due to the retirement in 2015-16 of the 20-year school bond and a small library bond,” he said.
That will create other opportunities to bond new projects, he said, such as the golf course building and other “beneficial improvements to the community.”
After the overview, the councilors discussed the budget requests with the department heads. Councilor Mary Meagher questioned the line item for electricity in the streetlight section of the Public Works Department’s budget because it is less than actual expenditures.
“Were you just being optimistic?” she asked.
Keiser said there is a problem about the electrical charges for streetlights because all other electricity costs dropped.
“It is an anomaly,” he said. “The item needs to be cleared up.”
Keiser said Finance Director Tina Collins is questioning the bill.
Town Engineer Michael Gray said the electricity money was to pay to illuminate 358 streetlights. He requested $40,000 for next year, the same amount Keiser has recommended.
Councilor Eugene Mihaly questioned the Police Department’s budget figure for maintaining uniforms. The line item called for $32,150.
“Could you elaborate on maintenance of uniforms?” he asked.
The request is essentially for dry cleaning, Keiser said.
Council President Kristine Trocki commented that the number was one-third higher than the line item to maintain the police cruisers.
Police Chief Ed Mello said the item was part of officers’ labor contract.
“It’s common to labor agreements and can be considered a benefit,” said Keiser. Because the actual dry cleaning costs “in all likelihood” do not approach $32,150, Keiser said he will bring it up during contract talks.
Keiser also went over the library budget in the absence of Library Director Donna Fogarty, who did not attend the workshop. In the salary line, he pointed out a change that would consolidate the part-time staff by creating one 30-hour-per-week and one 35-hour-per-week position.
“The cost impact is on the benefits side,” he said. It would save $14,000 in health insurance premiums and retirement benefits.
Collins estimated the pension payments would cost in the “ballpark” of $30,000.
Keiser asked the councilors if they understood the impact of $30,000 on the tax rate.
Meagher replied the taxes would increase 1.5 cents.
Collins went over the Finance Department’s budget and explained increases in this year’s request for professional services, up 14.29 percent from $14,000 to $16,000. She also discussed a 20 percent increase – from $30,000 to $36,000 – for an information technology consultant and computer technician.
Collins said the professional services payment goes to an outside company, which produces the payroll. The IT costs reflect technology advances, including security cameras stationed on town properties. Keiser said the town has installed more security cameras and now has a camera “trained on the East Ferry woodpile pier” to alert authorities to unauthorized uses.