ADMINISTRATIVE BUDGET SESSION

 

MARCH 7, 2011

 

 

Town Manager's FY2011-2012 Proposed Budget

 

At an ADMINISTRATIVE BUDGET SESSION of the Town Council of the Town of South Kingstown, County of Washington, in the State of Rhode Island, convened at the Town Hall, in and for said Town on the 7^th day of March 2011 at 6:45 PM.

 

            PRESENT:   

                                                Ella M. Whaley, President

Carol Hagan McEntee, Vice President

Mary S. Eddy

Kathleen A. Fogarty

James W. O’Neill

 

Also present: Stephen A. Alfred, Town Manager, Alan R. Lord, Finance Director,   Andrew Nota, Director of Administrative Services, Vincent Murray, Director of Planning, Jean Paul Bouchard, Tax Assessor, Shirley Long, Library Director, Terry Murphy, Director of Leisure Services, Jeffrey O’Hara, Building Official and Carol Baker, GIS Administrator.

 

The Pledge of Allegiance is given.

 

The Town Manager discusses where we have been, where we are and where we still have to go in the budget process.

 

A budget in the amount of $89,774,895 is proposed for FY 2011-2012; $109,615 more than the current fiscal year representing a 0.12% increase.  The budget consists of eight funds.  The General Fund is up 0.81% or $588,797; the School Fund is down 0.36% or $213,328; the Water Fund is up 0.48% or $4,589; the Wastewater Fund is down 3.41% or $112,972; the Solid Waste Fund is up 16.90% or $104,021; Peace Dale Office Building is up 10.64% or $8,683; the Neighborhood Guild is up 2.03% or $16,578; and the Senior Services Program is up 1.62% or $11,560. 

 

The Expenditure Statement of the General Fund has an operating program increase of $558,124 or 2.90%; $335,000 of that increase is directly related to employment benefit cost increases in the areas of FICA, retirement and healthcare.  The retirement cost alone is $263,000.  The School Fund operating program is an increase of $306,408.  The School Committee submitted a budget that would have required $770,168 in new property tax dollars to balance their program.  Based on revisions that were recommended totaling $463,760, an increase of $306,408 is proposed in the transfer to the School Fund.  There are reductions in debt service both at the municipal and school level. 

 

The General Fund Revenue Statement proposes less than a 1% overall property tax levy increase or $617,587 to be able to balance the program.   We are anticipating reductions in the amount of $30,000 in prior year taxes and penalty.  Payment in Lieu of Taxes is down $4,149. The Other Fund Transfers is down $167,678 due to economy.  Increases are expected in State Revenue Sources in the amount of $157,981; local revenues in the amount of $5,072 and School Fund Transfers in the amount of $9,984. The undesignated fund balance remains level; we are recommending using $1,200,000 as a means of paying down property tax requirements. 

 

The property tax need proposed for FY 2011-2012 is $64,857,684; in addition to that amount we add $1,348,008 for the overlay and elderly abatement; and then reduce that amount with the prorations and roll additions in the amount of $85,000 for a Gross Tax Levy of $66,120,691.  From the Gross Tax Levy of $66,120,691 we deduct the amount of the Motor Vehicle Excise Tax $4,110,520 (policy decision) for the Net Property Tax Levy in the amount of $62,010,171.   The estimated tax roll as of December 31, 2010 is $4,347,894,425.  If all of the factors that have been taken into consideration were to occur we would see at $0.02 decrease in tax share associated with school and a $0.09 increase associated with the municipal function for a net increase of $0.07.  The overall property tax levy increase would be 0.95%, less than 1% or $621,258. 

 

In FY 2007-2008 the growth of the tax levy cap was 5.25%, in 2008-2009 5%, in 2009-2010 1.22%, in 2010-2011 1.54% and 0.95% is proposed for FY 2011-2012. For FY 2011-2012 the State imposed property tax levy cap is a 4.25% increase over the FY 2010-2011 Property Tax Levy.   

 

The increase in property tax levy is proposed at $621,258 or 0.95% more than the current year property tax levy. The Municipal Program share of the total tax levy is $15,078,010 and the School Program’s share is $51,042,681. Of the $621,258 increase in property tax levy, $510,065 is attributed to the Municipal Program and $111,193 is attributed to the School Program. Of every tax dollar collected, 77.2% is attributed to school programs and 22.8% is attributed to municipal programs.

 

It is anticipated that there will be an increase of $20,819,113 on real estate and tangible property, and the net motor vehicle roll of $219,696,414 will remain the same for FY 2011-2012 until the numbers are updated. The budget that has been prepared for the motor vehicles is based upon the $500 exemption value.  If the $500 exemption is left in place the levy would be $4,110,520. If the exemption were increased to $3,000 another $1,036,195 would be required to come out of real estate and tangible property tax rate and the rate would climb to $14.50 and if the Town Council were to change the exemption back to $6,000 the real estate and tangible property tax rate would climb to $14.72. Sixteen communities inclusive of South Kingstown had the $500 exemption for motor vehicles in the current year.  Eleven had values between $500 and $3,400 and twelve stayed at the $6,000 level. 

 

Since we are not going to collect all of the $64,857,684 budgeted property tax need in the current tax year, we add a 1.4% of the need which is called the overlay in the amount of $908,000; there is also $100,000 that is set aside for erroneous assessments and $340,000 for the elderly tax abatement program, less an estimated proration of $85,000 for a 100% collection value of $66,120,691.

 

Discussion ensues relative to Payment in Lieu of Tax (PILOT) Income.  The following organizations have PILOT agreements with the Town: South County Hospital, South Kingstown Housing Authority, Camp JORI, South Kingstown Land Trust, Welcome House, and La Casa Senior Housing. The proposed payments from these organizations for the FY 2011-2012 are $223,568. In addition the US Fish and Wildlife payment for Trustom Pond is proposed at $22,000. 

 

With the downfall of the economy we are seeing reduction in Fair Share Fees both for Education and Recreation, and in the Real Estate Conveyance Tax resulting in less available for the Open Space Fund. The South Road School Reserve transfer is equal to 30% of the debt service associated with South Road School bonds that are outstanding. There is approximately $271,000 in the South Road School Reserve Fund. 

 

The transfer from the School Fund to the General Fund for services provided by the General Fund for the School Program include:  the school crossing guard, payroll and accounting, school field maintenance reimbursement, energy saving transfer to debt service and alarm system equipment.  A $206,485 transfer is proposed for the FY 2011-2012 representing a $9,984 increase due to the maintenance of Hazard Field and the field behind South Road School. 

 

Discussion ensues relative to the State Revenue Program. State Aid to Education is anticipated to be $111,024 more in FY 2011-2012 than what was budgeted in FY 2010-2011. Income from General Revenue Sharing has not been budgeted for in the past two fiscal years and it is noted that the loss has reduced State-associated revenues to the General Fund by over $1,000,000.     

 

Payment in Lieu of Taxes is a cost share from the State associated with South County Hospital. It used to be 27% of the taxable value they would provide us as a PILOT payment. It is anticipated that we will receive $118,000 in FY 2011-2012, down $6,057 from the current year. 

 

Library Aid from the State is anticipated to be $201,234 in FY 2011-2012 or $4,496 less than FY 2010-2011.

 

Discussion ensues relative to the Pass-Through Aid Programs including: Public Service Corporation Tax, Meal Tax, and Hotel Tax. The pass-through programs should not be impacted by the State budget woes. The Public Service Corporation Tax is a tax on the tangible personal property of telegraph, cable and telecommunication corporations in the state because they are tax exempt. The tax is distributed back to the communities based on a per capita basis. It is anticipated that we will received $302,307 from the Public Service Corporation tax in FY 2011-2012.  The Meal Tax is a 1% tax that the town is provided by the State. The money is collected at the point of service, conveyed to the state department of revenues and redistributed to the communities where the point of service occurred. It is anticipated that we will receive $540,000 in FY 2011-2012 from the Meal Tax. The Hotel Tax is a 6% surcharge on the occupancy of space in a hotel or bed and breakfast. The Town receives 2% of that. It is anticipated that we will receive $110,000 in the FY 2011-2012.    

 

Discussion ensues relative to the State Aid Reimbursement Programs including: School Construction Aid, Motor Vehicle Excise Tax Phase-Out and Library Construction Aid. For FY 2011-2012 we anticipate receiving $906,615 from School Construction Aid, $160,000 from Motor Vehicle Excise Tax Phase-Out and $10,593 from Library Construction Aid.

 

Discussion ensues relative to Local Program Generated Revenues including:  Building Inspection Fees, Non-Business Licenses and Fees, Rental of Town Property, Library System Income, Investment Income, Police Department Revenues, Miscellaneous Revenues, and Recreation Department Income.   Income generated from these is anticipated at $3,183,660 for FY 2011-2012.

 

Discussion ensues relative to Undesignated Funds. The undesignated fund balance as of June 30, 2009 was $9,335,780 and represented 12.71% of the 2009-2010 General Fund.  In FY 2009-2010 there was a $1,150,767 operating surplus. The funds forwarded to finance the FY 2010-2011 budget were $1,200,000 leaving a $9,285,482 undesignated fund balance on June 30, 2010 or 12.76% of the FY 2010-2011 General Fund. It is projected that on June 30, 2011 there will be a $962,920 operating surplus and it is proposed to use $1,200,000 to finance the FY 2011-2012 program leaving a $9,048,402 undesignated fund balance as of June 30, 2011 or 12.33% of the FY 2011-2012 General Fund. 

 

Discussion ensues relative to the General Fund Expenditure Statement including:  the General Fund Operating Program, the Capital Budget Program, the Debt Service Payments, Summary of the Utilities Funds, Transfer to Senior Services and the Transfer to School Fund.

 

The General Fund Operating Program is proposed in the amount of $19,812,157 for FY 2011-2012 representing a $558,124 or 2.9% increase compared with the current year. Of the $558,124 increase, $335,217 is directly associated with Employer Costs for municipal retirement, social security contributions and health care premiums.     

 

Discussion ensues relative to the Personnel Program including staffing, terms and conditions of the collective bargaining agreements, longevity program, health insurance costs, retirement system contribution, and municipal insurances.  For FY 2011-2012 a $269,816 or 2.6% increase is projected for the municipal personnel program, $341,418 is proposed for the municipal longevity program, $154,537 is proposed to transfer from the General Fund to the Compensated Absences Reserve Fund, $3,021,680 is proposed for General Fund Health Care funding, $1,012,019 is required for retirement contributions and $196,000 for municipal insurance. 

 

Discussion ensues relative to the Capital Budget Program.  A $1,239,000 Capital Budget is proposed for FY 2011-2012, $18,000 more than the current year appropriation. 

 

Discussion ensues relative to Debt Service Payments. The Gross Debt Service proposed for FY 2011-2012 is $4,104,557 less third party revenues of $1,569,720 resulting in $2,534,837 of net property tax required or $0.60 per thousand of valuation. 

 

Discussion ensues relative to the Water Enterprise Fund.  Funding in the amount of $963,949 is proposed for FY 2011-2012 or $4,589 more than the current year appropriation.  Rate increases are anticipated going from a minimum base unit of $165 per year to $175 per year, an additional unit charge of $69 per year to $75 per year; and an excess consumption charge of $2.71 per 100 cu. ft. to $2.91 per 100 cu. ft.

 

Discussion ensues relative to the Wastewater Enterprise Fund.  Funding in the amount of $3,201,247 is proposed for FY 2011-2012 down $112,972.  Rate increases are anticipated going from $220 for a single family dwelling with an allocation of 10,000 cu ft. rate structure to $225 and the excess rate of $2.75 per 100 cu. ft. to $2.85. 

 

Discussion ensues relative to the Transfer to Senior Services. An operating budget in the amount of $726,208 is proposed for FY 2011-2012 representing an $11,560 increase.  A general fund transfer of $341,653 is proposed with the remainder being funded through local revenue sources.

 

Discussion ensues relative to the Transfer to School Fund. The School Committee requested $49,619,369 or $770,234 over the current year appropriation of $48,849,134 and the recommended increase was reduced to $306,408.  The School Fund has an undesignated fund balance of $2,350,372 as of June 30, 2010.  It is estimated that there will be a $370,256 surplus as of June 30, 2011.  It is proposed to use $775,623 from the undesignated fund balance to fund the FY 2011-2012 budget leaving a projected balance of $1,945,005 for June 30, 2011. 

 

Francis Crowley, of Matunuck Beach Road is present and discusses salaries and benefits for FY 2011-2012 in the School Budget. 

 

The following operating accounts are reviewed:

Town Council (0110)

Budget Adoption Process (0120)

Municipal Legal Services (0210)

Probate Court (0220)

Town Clerk (0310)

Town Public Information (0350)

Canvassing Authority (0410)

Town Manager’s Office (0510)

Personnel Administration (0520)

League of Cities and Towns (0530)

Town Hall Operation (0540)

Finance Department (0610)

Tax Assessor’s Office (0620)

Assessment Board of Review (0630)

Information Technology Division (0640)

Geographic Information System (0645)

Post Year Audit (0650)

Planning Board (0710)

Planning Department (0720)

Zoning Board of Review (0730)

Zoning/Building Inspection (0740)

 

Shirley Long, Library Director is present and discusses the South Kingstown Public Libraries.  Funding in the amount of $956,349 is proposed reflecting a $15,570 increase over the current year appropriation including $39,537 for the retirement of one librarian. 

 

Jonathan Daly-LaBelle is present and discusses Building Inspection Fees and fuel and electric costs in the schools. 

 

Adjourn at 9:30 PM.

 

ADJOURNED,

 

Dale S. Holberton, CMC

Town Clerk