MINUTES OF THE SPECIAL MEETING OF THE CUMBERLAND TOWN COUNCIL

WEDNESDAY, APRIL 26, 2023, at 6:00 P.M.

CUMBERLAND TOWN HALL, EVERETT “MOE” BONNER, JR. COUNCIL CHAMBERS

45 BROAD STREET, CUMBERLAND, RHODE ISLAND

 

CALL TO ORDER

The regular meeting was called to order at 6:04 pm with a roll call of members.   

 

MEMBERS PRESENT:

In person: President Kinch, Councilors Bradley, Shaw, Magill, Metivier, Schmitt and Beaulieu.

 

Also present—Mayor Jeffrey J. Mutter; Town Clerk Sandra M. Giovanelli

 

Councilor Bradley arrived 6:08p.m.

 

PLEDGE OF ALLEGIANCE

 

OLD BUSINESS

A.  RESOLUTIONS

1.  R-23-29 – A resolution adopting the unsynchronized tax levy for portions of fiscal year 2023 and fiscal year 2024

 

Mayor Mutter - Thank you, Mr. President, members of the council.  We start off with a PowerPoint presentation.  Some of it is to go down memory lane a bit and to try to remind us of the plan that we had and where we are.  There was a presentation that we made back in February 2019, which talked about having a structurally balanced budget and the reasons for that. In a grand scheme of things, we knew that we had an $83 million voter approved school bond that we needed to prepare for.  Even without that, you would want to have a structural balance budget where you were not using, fund balances as revenue sources to balance operating expenses. There may be some recollection, but at the time that began back in 2018 at an amount of $3.4 million plus. That was the time when the council was acquiring the Pascale Highway Complex so that was embedded inside that number, but in 2019 it was at $1.7, and we had effectively thought that we could whittle that down in a two- or three-year time frame. COVID hit, a lot of uncertainty, but we took half of it off in 2020 and then incrementally a little bit in 21 and 22.  In front of you tonight, though, for the levy there's a budget amendment that was presented at the last council meeting that needs to go through the advertising process.  That budget amendment has that appropriation from the general fund surplus at zero. That's an important point to know that was a goal and to keep that in mind, why is that important? In August, we are going to the market to borrow that $83 million.  We've done the bond anticipation notes and other temporary financing, but in August we are going to borrow that long term.  That will prompt a bond rating review and obviously we want to be as prepared as possible to have a budget that reflects that we also want to be prepared for.  We've demonstrated that in the past from Hilltop, our financial consultants, that the debt service costs are associated with that are going to put a strain on the budget.  All this has been part of the plan from day one.

 

Part of that plan was that we established these fund balances, and these are there to buffer unexpected expenses. Also, the big part there is revenue stabilization and then the debt service fund which we know that the projected debt service is going to go up by over $1.1 million next year so we're prepping for that.  We did not prepare for the revaluation as a big one-time expense so with your help, we have created that fund that we will incrementally have in the budget so that when the next reval comes, it will not have any budgetary impact and then the rest of them.  The accessibility was new; something that we have not done enough of so that was added, it's kind of seed money to start that process. And Open space was to accommodate the purchase from the Land Trust.  Basically, the fund balance is there to show that if the collection rate doesn't come in, we prepared for that. We have the rainy-day fund, which would be the unassigned fund balance. And then we have the other funds that are there just for those particular purposes. In a perfect world, you'd have a structurally balanced budget and then as you pay some of these or as you expend some of these dollars on those funds, which you also have the Capital Projects Fund that you would then budget to replenish them because once they're gone, they're gone forever.

So when we get into the levy the five-year collection rate, this is where I always say this is where some of the art comes in as opposed to some of the science. You can see that that has grown. We constantly try to surmise why that may have happened. We feel that with the motor vehicle exemption growing, the dollar amount growing, a lot of people just paid that bill in the first quarter that may have led to some of that increase in the percentage rate. It peaked in 2021, which may be why that rate jumped nearly 3%. and then last year, remember, was the first year without a motor vehicle. We don't know if 49.95% is the new normal so that is the reason why we're at 49.5%. I think on your levy sheet, on the most recent one, it's 49.46 that really becomes just a mathematical equation to arrive at the levy total. We're hedging our bets on that little less than half a percentage point so there's the why; motor vehicle phase out, the fluctuation the last two, two to three years, and then there's just the uncertainty.   So, if you hit 49.5% then that's why we have the little arrow in the stabilization fund. Though we've removed the appropriation from the general fund surplus. We've left the revenue stabilization fund because there is this uncertainty. If you hit 49.5% and everything else holds true, you will use $700,000 of that stabilization fund in which there's $2.3 million. We need to know where the bottom is. I know there's talk about the state phasing out the tangible, but at least at the end of this collection period, we should know.  If it comes in at 49.95 or thereabouts, we have a good indication that's pretty much the number, unless there's some unforeseen economic situation.

Councilor Beaulieu - So what I think I heard you say is at the front end of this, around 2019, 2020, as they were doing the motor vehicle phase out, you are thinking that folks just went ahead and paid the whole thing, versus paying for kind of quarter by quarter as it got smaller and smaller.

Mayor Mutter – Right, as the exemption grew you basically had this $100 bill, and you just paid it. So, all that revenue went into the first quarter, but we surmised that that had something to do with the 49.0 to the nearly 52. It's been an interesting little ride right through COVID. And then, there was this issue with the mortgage companies and taking advantage of the 2%, I mean, we, we think that had something to do with it. Honestly, no one could really say for sure. So that's why there's a slight half a point 45.48 hedge on the 49 and a half.

Councilor Beaulieu - Did you dig in deeper to identify kind of year to year, what percentage of people just paid their motor vehicle tax compared historically?

Mayor Mutter - Finance has gone through that. You must remember, last year we petitioned the governor because we were unsynchronized, and we had that gaping hole, and they funded us. But there's still some residual motor vehicle. You're still trying to get a real handle on it, but that's why there's just that little room there, 49 and a half. You have got to remember we're very dependent on that first quarter collection to balance this current year's budget. If that came in less than that, it's not like you've lost that revenue. But the audit for next year on June 30 is going to show a dramatic swing. You show a big loss, 2023, but all that money would be in the receivable for 2024. And so effectively, you would make the correction in the next year's levy percentage wise, and then you'd show a big surplus. So, it should even itself out. Obviously, we think that if you look at the last three or four years, it's been right around 49%. I think it's going to be close.

Councilor Beaulieu - Two questions on motor vehicles, are we exactly like other communities now? Often, we're in arrears because we're unsynchronized, but as it relates to motor vehicles, we're all the same.

 

Mayor Mutter - I think East Providence is the last one lagging, but we're like everyone else right now.

 

Councilor Beaulieu - And what percentage of the budget, the collection is motor vehicle this year?

 

Mayor Mutter - Zero.

 

Councilor Beaulieu – How about historically?

 

Mayor Mutter - You'd have to go back each year; its total was $6 million at the very beginning was something like 6,023,000.

 

President Kinch - Before we go any further, for the record, Councilor Bradley is now in attendance at 6:06p.m.

 

Mayor Mutter - I think this is important, the budget that was passed last year had a 3.17 levy increase so if there was no revalue and everyone's property values were the same, then the rate was a 2.935.  If you took your revalue, your assessment of last year, and multiplied it by 1543 in the absence of a reval, that that would have been the number. I only put this out there because the levy was 3.17.  Because the assessment value is changing day to day, not going to make a big change overall, but because the assessment numbers $5,340,575,009, it has changed since we presented it. Keeping the collection percentage, the same, it arrives at $11.62, and it's a 3.27. And if you did the math to get to a 3.17, the rate might be a penny difference, one cent or two cent difference. Last year's budget, however, you look at it, was a 3.17.   The balloon stays the same, it's just that it gets appropriated differently. It's pretty much the same increase, but because of the revaluation, it's going to get apportioned differently. That rate is very consistent with what was approved in last year's budget.  To go through the exercise, I know I have it here somewhere if you were to at 3%, I think it's 11.58. If you were at a 2.98% levy, the rate would be 11.58, which is $0.04 difference. I'm only showing that because it effectively matches up to what was passed in last year's budget. We'll talk about how you might want to change that later. But on the levy sheet, the expenses, that top number, which is $110,975,581, will match up exactly to your proposed budget amendment.  I have always maintained that that number should match. So it does match in your proposed budget amendment and the revenues less the tax bill that matches exactly to that budget amendment as well. So even though you're not voting on that tonight, it is my feeling that the integrity of the process, you need to make sure, and we will make sure that whatever gets passed by that budget amendment ultimately arrives at the difference between the projected expenses and projected revenues. Amongst that 35,021,330, which is what drives the rate then the other thing, the latest assessment data is in your pack and is included in that revenue. The last thing is the school achievement grant, which was not part of the maintenance of effort. There's been discussions internally about that, but I have had discussions with the school department and so included in this levy projection and in the rate is funding that, but not funding it to that source, but funding it to the Debt Service Fund, which will help ease the burden for next year. You would need to approve that and would need to be part of the budget amendment. It currently is not part of the budget amendment, but I want you to know that embedded in those numbers is funding that, but not to that particular purpose. If you decided you did not want it to go to that particular place, or you didn't want it to go at all, you could lower those projected expenses by that amount and it would make a difference, but it is embedded in that so that we fund it. But then when it gets to expense, it's going to get pushed to the Debt Service Fund, which would increase that from a 1,000,000 to 1,253,000.

 

President Kinch - Without getting off topic on that are we going to schedule that second meeting with them so we can present our side?

 

Mayor Mutter - We're going to schedule that meeting.  I spoke to the superintendent on the way here and that has been discussed with the School Committee, and they are on board with that. But we are going to comply with the intention to have those meetings. We're going to schedule those meetings so that we do what we said we were going to do.  Then it'll be up to you, seven people, to decide how you want that to go.

 

Councilor Metivier - So if we look at last year's, the levy increase was to 3.17 and the residential rate was 2.95. For this year's, the levy is 3.27, and it says residential rate is negative 20 m.

Mayor Mutter –That's correct. The values went so high; the rate has to come down. So, this is one of those times where because the reval and if you kept that at 15.43, I think you'd probably have to leave town. That's my guess. But that's always the quandary. But when you do the exercise, if you did take your property value that it was prior, and you multiply it by 15.43, and then you take the new one and multiply it by 11.56, the difference of those two numbers is going to be the impact from the reval. We do not participate in assessing people's values, nor do I think the government individual entities and the government we should not be looking people's property values and deciding what they are. So that's why you have the process that you do have. But that would be the difference, because in absence of the reval, that's what the number would be, or very close to that number so the difference between those two numbers is really the impact.

Council Metiver - So the residential rate should be about the same as last year.

Mayor Mutter - Well, just like every reval, there are going to be some that are going to pay more than they would have. There are going to be some that pay pretty much the same, and then there's going to be some that are going to pay less.

President Kinch - think you touched on it, but I didn't get it. What we're doing now is getting the reliance on the fund balance down to zero. If we must use the revenue stabilization to equal off what we lose on a collection rate, are we kind of going backwards? And is that just if we do, is it just for the one year, or are we in the same boat that we got to make it up every budget year?

 

Mayor Mutter - I would say that's just smart budgeting, because of our unsynchronized system there. It's there we put the money aside for it. We'll know, probably in August, we're going to need to see where that is. My feeling is I'm hoping to propose a 24 budget that cuts that in half and then a 25 budget that has none of that in it and so that's the plan. That would be your path to, I think, being on solid footing and that was the commitment that we made back in 2019.   If we collect 49.5% and everything holds true, you're going to use $700,000.  If you collect the 49.95%, you might not use any of it, and if you collect 49%, you're going to be using that plus you're going to show a deficit that will have to be picked up somewhere else. It's just the way our system is.  It's one of those things where it's been a little bit up and down and other factors have occurred that have led to that uncertainty. That's why that money is there, but we're not building any holes, we're getting rid of them.

 

President Kinch - What happens you've done this work the Council supported to get down to this where we're not relying on it. What happens if BF. Norton is approved and we go into this for 50 million? Well, if it's too early to look at that, that's fine. It's just a question. I know we're going to be looking at that.

 

Mayor Mutter – The plans were to be structurally balanced as quickly as you could do it and then you had to be able to withstand the debt service that was associated with the $83 million.   So, all that was planned for FY 25, FY 26, smooth it all out by FY 26, debt service is going down. You've got a structurally balanced budget. You're in good shape. If you were to add $50 million to the debt service, obviously that's going to impact that wiggle room or that room that would have been there in FY 25 and 26. Now, you would never want to take a reduction in a line item like debt service and fill it with an operating expense.  I mean, you could do it, but the problem that wouldn't be the best idea either. But the whole plan was to be structurally balanced, withstand that payment and then at that point in time kind of reassess where you were. You have to remember that in 2018, I'll never forget that the Town was not considering any long term borrowing at the time and issued their report on that. Then six months later, we went to the voters and asked for $83 million, the biggest bond issue we ever had. It's one of those things where forget about even if you didn't have that staring you in the face, you want to be balanced. And the reality is we haven't had to use any anyway. But when we go out for that borrowing, if we can show that we've planned accordingly, that we structurally balance the budget, they're going to look favorably upon that. I know interest rates are higher than they used to be, but that's going to put us in the best position to succeed. That's what we're shooting for. Then at that point, we will have our financial advisor Hilltop come in and explain what a borrowing of that magnitude would entail, and there'll be a decision made.

 

President Kinch- Thank Mayor!  Anyone else have any further questions for the mayor on this issue?

 

Councilor Schmidt - You might have already answered this, but originally you had a collection rate of 49.46%, and now you're proposing 49.5%.

 

Mayor Mutter - No, it's rounded off, it is 49.5. It becomes a mathematical to make those numbers match. It's not reading your spreadsheets. You have to take them out. I believe if I could pull it up, the actual number might be 49.467 but it's effectively a 49.5.

 

Councilor Schmitt - But originally it was 49.

 

Mayor Mutter - It was 49.5. It's now 49.46.

 

Councilor Schmitt - Why the change? I know it's a six-cent increase on the rate.

 

Mayor Mutter - Well, it isn't because of that, it's because of the assessed valuation number, which is now $553,040,575 and I believe it was higher previously, it was $555,400,000 so that's what's driving the number. Not really the collection rate. The assessed valuation that was projected is less.

 

Councilor Schmitt - When do we certify the tax?

 

Mayor Mutter - The plan is, because we generally get the bills out first week of May. It's probably going to be early in the second week, because we want to maintain some consistency there. But the Tax Assessor is going to certify and go through the process, daily update. And then there will be a time when the bills get sent out. And then if there are Abatements after, they will do it after, but we do not want to wait for the whole process to conclude and then send the bills out, because we don't want to be, like, in the third week of May.

 

Councilor Schmitt - Do you know how the abatement requests are going? Are they average, higher, normal?

 

Mayor Mutter - The number that he showed me yesterday, I think after those hearings, the total changed, like, $8,000 so the way it is going and is not making a big impact.

 

Councilor Shaw - I got the letter today, from vision, check out, check the boxes. You have ten days. So, we're good with these numbers have anything to do with that ten-day response time, just so that someone can go through it real quick and be like, okay, we're good with the $8,000 average type of thing, or, based on corrections that people are making. Does that have anything to do with that soft date before the first bill goes out?

 

Mayor Mutter – No, matter of fact, I got that same letter today. Was kind of unaware that that letter was going out, but it is not going to impact those numbers.

 

Councilor Shaw - And if there's no change, they ask you to sign it and return it. Of course, they don't have a self-addressed stamp envelope to do it. But if there's no change, why would you still need to sign it and return it?

 

Mayor Mutter - I am going to tell you that I need to get you an answer for that because I opened it up and wondered the same thing.

 

Councilor Shaw - I don't know the act of the person. If they want to have it adjusted in any way, they'll do everything and anything that empowers to do it, and then they provide all the information. I just thought it was weird that they still asked you to sign it and return it for a no change thing. And I was just curious.

 

Mayor Mutter - That is something I'm going to need to because I was caught completely unaware on that as well.  Yeah. I think we'll get everyone an answer and we'll post it on social media, and the web page as well. I apologize for really; I have no idea what that's about either.

 

President Kinch - Any other questions for the mayor? No further discussion on this. On Resolution 23-29, I'll take a motion to approve.

 

MOTION BY COUNCILOR SHAW, SECONDED BY COUNCILOR MAGILL ANT IT IS UNANIMOUSLY VOTED TO APPROVE.  VOTE 7/0.

B.  ORDINANCES

1.  #23-10 – An ordinance Setting Certain Tax Exemptions on Real and Personal Property

 

President Kinch - I need a motion to replace 20-10 with an amendment for 23-10 A.

MOTION BY COUNCILOR SHAW, SECONDED BY COUNCILOR MAGILL TO SUBSITUTE #23-10 WITH AMENDED VERSION #23-10A.  VOTE 7/0.

Public hearing opened at 06:38p.m.

Mayor Mutter - Amendment 23-10A is just reflective of what those exemptions would be based on the $11.62 tax rate that was just passed. The previous ones were at $11.58 or $11.56, but they changed. That's why they must be done together.  These reflect that difference.

Public hearing closed at 6:39p.m.

MOTION BY COUNCILOR BEAULIEU, SECONDED BY COUNCILOR SHAW AND IT IS UNANIMOULSY VOTED TO APPROVE #23-10A BY A ROLL CALL VOTE.  VOTE 7/0.

NEW BUSINESS

A.  RESOLUTIONS

1.  R-23-34 – A resolution authorizing and empowering Mayor Jeffrey J. Mutter to enter into an agreement with Pare Corporation for a roof structure evaluation at the Diamond Hill Park Amphitheater in an amount not to exceed ten thousand three hundred and ninety dollars ($10,390).

 

Mayor Mutter - Recently you approved resolution R-23-23A, which said some on call firms, we did discuss this issue with those firms. We were only able to get one, to be able to do this in a timely fashion.  I don't mean that in any detriment to Pare for all the work at Diamond Hill Park with respect to the pond and other areas at the park. The town did receive a grant for the lighting and the sound equipment at the stage. We felt it was important enough to make sure that we evaluate the structure so that it could handle the weight of those objects so that is what is in front of us tonight. I have had discussions with Pare because I believe they initially talked about six weeks or more. Obviously, we would really love to tie some of this up at the pond and the stage by the end of May. They're telling me that they could get the job accomplished in the four-week time frame. So, we are asking the council to approve R-23-34. This funding would come from the grant money that we received, and it is in the amount of $10,390.

Councilor Shaw - did we have an evaluation done initially when we were talking about the room that was going to house all the electrical equipment for everything?

Mayor Mutter – In the back of the stage there is some storage back there.  But the concern is the actual hanging of the speakers and the lighting. 

Councilor Shaw - My question is when we went into the project and we saw what we had to work with, we didn't have evaluation or was the scope of the lights and stuff not part of the initial plan and we didn't ask them to look at the building at the time?

Mayor Mutter - I thought about it. It seems like we probably should have done that at the beginning. The only evaluation we did was the ski lodge because we had multiple attempts to whether we were going to retro that building. There was a situation with the roof and a myriad of ideas that we were contemplating, but not to my knowledge did we ever do a structural assessment of the actual stage or overhang of the roof.

Councilor Beaulieu - Are you expecting the outcome of this to be that the roof's great, or are you expecting that's the hope, or are you expecting that they're going to have a list of improvements that are to be made? And this does not include any of that improvement?

Mayor Mutter - I am hopeful that it's an exercise that results in that it is perfectly sufficient to house the structures that have been previously approved. This would not include any repairs. I'm hopeful that it comes back and says, good to go. Obviously, we're seeing that kind of repurposing that area and hopefully reenergizing the pond. We really think that once people see it and all the stuff that happens, they're going to say, maybe it wasn't a bad idea saving that pond. We're hopeful of that and it's good to go. We think that over the years, with the weight of the snow, we think it's going to be good to go. But you know how it goes. We'll keep our fingers crossed, but we may have to make some adjustments if it isn't. But I'm, um, thinking we're going to be good. That might just be maybe optimistic, but we will cross that bridge.

President Kinch – Our building department, and since it's just an evaluation, we wouldn't have anybody on staff who could have handled something of this nature?

Mayor Mutter - We’re being overly cautious and just saying, let's make sure that it's good to go. Do I think we could do it? Yes. Is it worth taking the shot now? Obviously, I don't think so. It's one of those where because, and I'm not disparaging anybody, but would I want to spend $10,390? No. Do I feel like that's what we must do to make sure? Yes. My anticipation that it wasn't going to cost that amount, we could go another way. I just feel like I do see a different use for this stage. We're putting a lot of money and a lot of effort into it, and we just need to make sure so that nothing happens.

Councilor Shaw - So are they also going to be looking at the feasibility of electrical work throughout for it, or just strictly the structure itself and the weight it can support? Are we going to full in depth of the actual building, as far as what we plan on doing up until this point, with all the questions we had with ventilation right. And all this other stuff that like full scope, or is it just strictly about it crumbling down?

Mayor Mutter - It's just can it handle the additional weight that the structures from the lighting and sound are going to be once they are attached to that stage. All the electrical and everything else already taken care of. Just kind of like we just want to make sure that we eliminate as much as we can to any possibility of something unforeseen.

Councilor Schmidt - So the funding source is the grant from Rhode Island Commerce. Is that part of a larger grant we just use in junk, or is that the grant?

Mayor Mutter - The grant was, I think it was previously, one of the grants that we have received. It was a total of 150,000. The council has previously approved lighting and sound, which is underneath the 150.  We did contact Commerce and they said that it was permissible under the grant to make sure these types of assessments and we will still have some money left in the grant. My thought there, not on topic, but the idea would be some memorial benches around the pond. I think you're going to see the fountain has a lighting feature, kind of that whole thing including the park portion of the park, the venue, the playing field.  It is part of that $150,000 grant. 

MOTION BY COUNCILOR SHAW, SECONDED BY COUNCILOR MAGILL AND IT IS UNANIMOULSY VOTED TO APPROVE.  VOTE 7/0.

PUBLIC COMMENTS

Mr. Ted Vecchio - 584 Bound Road, Woonsocket. Normally I wait until way too late and send a mass email to the members of the town council.  If you'd like tickets to our annual performance at the Dance Theatre of Rhode Island.   It's June 4^th, I would like to put that invite out there a little bit earlier, if you're interested.   

 

James McLaughlin – 15 Garden St. Cumberland.  Very interesting meeting tonight. The last resolution you passed in reference to, the park structural integrity is important when you have state code, town code, basically, and when you have “X” amount of people in there.  The integrity of that building and especially the roof with the extra weight that's being burdened. But with that said, I also like to thank a lot of people for their efforts on making Broad Street look beautiful. The new sidewalks are coming along.  I'd like to thank Councilman Kinch, Mayor Mutter, and the former Mayor. It's been a long haul, but when it's completed, it's going to look beautiful. With that said, the budget doesn't look too bad either. Hopefully we can maintain that 49.5. If we go over that we will have problems. Anyways, with that said, thank you.

ADJOURNMENT

MOTION BY COUNCILOR SHAW, SECONDED BY COUNCILOR METIVIER TO ADJOURN AT 6:53P.M.  VOTE 7/0.