Click to view the entire meeting or click any video icon below to jump to that section of the meeting.

Click to listen to the AUDIO of the Meeting.

REGULAR SESSION

DECEMBER 18, 2017

At a REGULAR SESSION of the Town Council of the Town of South Kingstown, County of Washington, in the State of Rhode Island held at the Town Hall, in and for said Town on the 18^th day of December 2017 at 6:30 PM.

PRESENT: TOWN COUNCIL

Margaret M. Healy, President

Abel G. Collins, Vice President

Bryant DaCruz

Liz Gledhill

Joe Viele

Council President Healy calls the meeting to order at 6:30 PM.

1. PLEDGE OF ALLEGIANCE TO THE FLAG

The Pledge to the Flag is given.

2. ROLL CALL

Roll Call is taken and all members are present.

3. NEW BUSINESS

A. UNANIMOUSLY VOTED: to appoint Robert C. Zarnetske, III as the Town Manager for the Town of South Kingstown effective January 16, 2018.

B. UNANIMOUSLY VOTED: to approve the prospective Town Manager’s Employment Agreement for FY2018, and authorize the Town Council President to execute the agreement and all personnel action documents; as further described in a memorandum from the Town Solicitor to the Town Council dated December 13, 2017 and entitled “Town Manager’s Contract.”

Robert C. Zarnetske, III is present and comments.

UNANIMOUSLY VOTED: to recess at 6:38 PM.

The Town Council reconvenes at 7:00 PM.

4. INITIAL BUDGET HEARING WITH SCHOOL COMMITTEE

Discussion and solicitation of comments from the public relating to the general goals and objectives of the development of the FY 2018-2019 municipal and school budgets.

The following members of the School Committee are present: Roland Benjamin, Chairman, Alycia Collins, Michelle Brousseau-Cavallaro, Kate McMahon, and Raissa Mosher.

Also present: Stephen A. Alfred, Town Manager, Patricia Sunderland, Finance Director, Aimee Reiner, Director of Administrative Services, Colleen Camp, Executive Assistant, Chelsea Siefert, Director of Planning, Jon Schock, Director of Public Services, Jean Paul Bouchard, Tax Assessor, Lance Whaley, Communications Superintendent, Terry Murphy, Director of Leisure Services, Jackie Corea, Police Administrative Assistant, Jeffrey O’Hara, Building Official, Laurel Clark, Library Director, Dr. Kristen Stringfellow, School Superintendent, Maryanne Crawford, Business Manager, School Department.

The Town Manager explains the purpose of tonight’s initial budget hearing being solicitation of comments from the public relative to the general goals and objectives of the budget, dialogue relative to taxes, proposed new projects and contractual obligations. He discusses the budget adoption process approved by the electorate at the November 7, 2006 General Election and the tentative budget schedule.

Discussion ensues relative to the Town Council’s goals and objectives. The Town Council adopted its current goals and objectives on February 13, 2017 for the 2016-2018 term. Staff has provided the Council with some proposed updates scheduled for consideration on January 8, 2018.

Discussion ensues relative to the Rhode Island Economic Landscape. In Rhode Island there is a property tax cap of 4% on the annual levy increase; this should be considered as a limit not a goal. We should be adopting budgets where there is ability to pay and a need in terms of the programs and services that are necessary.

Currently our Unassigned General Fund Balance is at 13.5% of the Operating General Fund. The goal is to stay between 12% and 16%. It is anticipated that there will be a $30,000,000 value increase in the property tax roll in FY 2018, generating $460,000 in new tax dollars.

It is important to note that we will be negotiating three out of four municipal labor contracts for the contract year beginning July 1, 2018. We are anticipating a COLA adjustment of 2% in each of these contracts and for the unorganized group. The Municipal and School debt service payments combined will be $1,100,000 for FY 2018-2019. The Town continues to meet the full cost of the annual required contribution to the Town/School Other Post Employment Benefits Trust Fund. Currently, OPEB liabilities for both the schools and municipal government are $18,800,000. Of that amount, we have $11,900,000 in assets with a net liability of $7,000,000. We are 63% funded, one of the highest funding levels in the state.

The November 2017 Revenue Estimating Conference suggests increases in personal income growth over the next five years and that the Consumer Price Index will continue to increase. There is concern about the state budget with revenue shortfalls larger than originally anticipated. We are anticipating the second year of the five year, Motor Vehicles Tax Phase-Out Program in the coming year and we will see additional erosion in the tax base related to that.

Discussion ensues relative to how the property tax levy and expenditures have changed in the last five years. Total General Fund Revenues have increased by $3,878,030 over the five year period and the local revenues are down $950,022. However, this is not an accurate statement because we have taken the debt service programming out of the General Fund so about $1,300,000 in revenue was transferred to the Debt Service Fund, so while we lost $950,022 in that category over five years we actually gained $350,000. Over the same period of time, the value of property taxes increased by 1.55%.

The Town share of the FY 2017-2018 tax distribution is $17.63 million or 24.7% and the School share is $52.78 million or 75.3%. The five year average increase in the property tax levy is 1.44%.

Discussion ensues relative to the Financial Data comparison for five of the communities within Washington County including South Kingstown, Narragansett, North Kingstown, Westerly and Charlestown.

Discussion ensues relative to State Aid to General Fund. The State Aid to the General Fund has been relatively flat over the last five years with the exception of the Motor Vehicle Excise Tax Phase-Out. In FY 2017-2018 we anticipated $341,383 and the Pro Forma amount anticipated for FY 2018-2019 is $481,052. There is a requirement that the property levy be reduced by an equal dollar amount.

The Municipal State Aid has eroded from an amount of $4,333,796 in FY 2006-2007 to an anticipated amount of $2,464,853 in FY 2018-2019. We are anticipating $30,000,000 of growth in the property tax roll for the FY 2018-2019. This is a conservative estimate.

Discussion ensues relative to the preliminary expenditure considerations in the budget development. There are three labor contracts to be negotiated by June 30, 2018 including SKMEA/NEARI, IAFF, ASFME Council 94. COLA increases are projected at 2% for each of the bargaining units being negotiated in 2018. The IBPO (police) contract expires June 30, 2019. The COLA are 2.5% for all ranks below and 2.75% for the rank of Captain.

It is proposed to add one new full time position beginning January 1, 2019 for a Parks Maintenance Technician at an approximate cost of $26,000. It is proposed to restructure two positions in the Finance Department beginning July 1, 2108. The part time Account Clerk in the Tax Collector’s office will be eliminated with a savings of $30,000 and the Senior Account Clerk position will be reclassified to a Financial Assistant I with a $5,500 savings. The Finance and Accounting Administrator position will be upgraded by $6,000; the Assistant Public Grounds Superintendent will be upgraded by $5,000 and seven Parks Maintenance Technicians positions will be upgraded by the amount of $13,400 in total on July 1, 2018.

The total exemption value for motor vehicles is proposed at $3,000 per vehicle. The revenue increase is projected at $140,000 over FY 2016-2017 and the motor vehicle tax levy is decreased by an equal amount. It is anticipated that there will be a $75,000 increase over the current year in local revenues attributed to Real Estate Conveyance Tax and Recording Fees.

The general state aid is not anticipated to increase over current year other than the Motor Vehicle Phase-Out. The Unassigned Fund Balance to be forwarded to FY 2018-2019 will remain at $600,000; the Net Taxable Property Roll increase is anticipated at $30,000,000 and will generate new property taxes in the amount of $460,000.

Discussion ensues relative to the Pro Forma Budget for FY 2018-2019. A Pro Forma is a starting point in a budget development process. The FY 2018-2019 Expenditure Statement Pro Forma proposes total expenditures in the amount of $24,612,719 or $825,364 more and assumes a 3.5% cost increase over the adopted FY 2017-2018 Program Cost. Personnel COLA costs and step increases are included and an 8% increase associated with healthcare and dental costs. The FY 2018-2019 Expenditure Statement Pro Forma proposes a 1.9% increase. Almost 68% will come from the property tax. There are not a lot of dollars available outside of the property tax.

The total personnel costs anticipated for FY 2018-2019 are $16,022,889, $646,026 or 4.2% more than in the current year. The only way to reduce the personnel costs is by reducing personnel, unless you reduce the benefit structure and that is subject to negotiation.

Discussion ensues relative to the property tax requirements. The property tax levy is anticipated to increase by 1.9% over the adopted FY 2017-2018 budget. The property tax requirement to fund the General Fund for FY 2018-2019 is $16,722,045, the School Fund is $53,463,398, the Senior Services Fund is $432,730, the Community Recreation Center Fund is $315,000, the Municipal Debt Service is $550,000, and the School Debt Service is $550,000. The proposed Pro Forma would require a Property Tax Rate of $15.65. Of the $15.65, $11.73 would be attributed to School purposes and $3.91 to Municipal Government.

Discussion ensues relative to the Unassigned Fund Balance. The unassigned fund balance as of June 30, 2016 was $10,171,662. The FY 2016-2017 operating surplus was $882,250. The amount forwarded to fund the FY 2017-2018 program was $600,000. The estimated unaudited, unassigned fund balance as of June 30, 2017 is $10,469,116 or 13.23% of the estimated FY 2017-2018 budget. The estimated operating surplus for FY 2017-2018 is $1,000,000 and the estimated unassigned fund balance for June 30, 2018 is $10,869,116 or 13.47% of the estimated FY 2017-2018 budget.

Discussion ensues relative to the Debt Service Fund Program. A $2,000,000 bond issue is anticipated in FY 2020 and another $2,000,000 in FY 2022 for school purposes, and a $500,000 bond issue is anticipated in FY 2020 for municipal road improvements.

Discussion ensues relative to the Capital Budget for FY 2018-2019. The Capital Budget for FY 2018-2019 is proposed at $3,117,500 or $364,000 more than the adopted FY 2017-2018 program. Major increases are proposed for the Wastewater Enterprise Fund for the sewer system, which is a regional program with the University and the Town of Narragansett.

Discussion ensues relative to the Municipal Retirement System. South Kingstown has three Retirement Liability Employee Groups including the Police, the EMS and the Municipal groups. There is a total of $93,393,391 in liabilities for these groups, and of that amount there is $80,386,439 in assets so we are 86.1% funded.

Dr. Kristen Stringfellow, Superintendent presents the School Committee FY 2018-2019 Pro Forma. A zero percent increase in the property tax transfer to the school fund would require $2,992,669 in reductions to salary and programs allowing for contractual salaries and benefits, a 1% property tax transfer increase would require $2,468,518 in reductions, a 2% property tax transfer increase would require $1,944,367 in reductions, a 3% property tax transfer increase would require $1,420,216 in reductions and a 4% property tax transfer increase would require $896,065 in reductions.

The revenue assumptions are: federal funding will be flat at best (likely to lose Title 2 funding), a reduction of approximately $635,000 in state aid from the funding formula, Group Home Aid is estimated to be reduced, $400,000 of undesignated fund will be applied to FY 2018-2019, Medicaid reimbursements will continue to drop by $400,000 and it is estimated that there will be an $85,272 reduction in out of district tuitions.

The expenditure assumptions include a 2% increase in employee salaries resulting in an additional $600,000: this does not take into consideration employee steps; an increase of $712,000 in employee health insurance costs; and an increase of $230,000 for out of district tuitions and transportation.

Discussion ensues relative to enrollment vs. FTE (full time equivalent) decline. The district has lost another 42 students in FY 2017-2018. The reductions are sprinkled throughout the district from pre-k to 12. Correspondingly 10.8 more FTEs are gone. It is noted that there are contractual and legal obligations to add and reduce staff based on the needs of the students who move in and out of district.

Discussion ensues relative to the contribution toward pensions for certified and non-certified personnel. It is estimated that the certified pension rate for FY 2018-2019 will be 14.35% and the non-certified pension rate will be 13.27%.

Discussion ensues relative to the state aid trend. In FY 1995-1996 state aid was $7,433,939 or 28.90% of the budget, and in FY 2017-2018 it is $6,837,992 or 11.29% of the budget. We are in the 8^th year of the 10 year reduction in state aid funding formula.

Discussion ensues relative to the School Budget History. In FY 2000-2001 the School Budget was $36.81 million and in FY 2017-2018 the School Budget is $60.57 million.

Discussion ensues relative to the history of the property tax transfer to the School Fund. In FY 2005-2006 the property tax transfer to the School Fund was $40,733,077, an increase of $3,099,939 or 8.237% more than in the previous year. In FY 2009-2010 and in FY 2010-2011 the property tax transfer remained the same as in FY 2008-2009 at $47,909,928. In FY 2011-2012 there was a 0.64% increase or $306,408 over the previous year, in FY 2012-2013 there was a 0.307% increase or $147,823, in FY 2013-2014 there was a 1.586% increase or $767,283 more than in the previous year, in FY 2014-2015 there was a 0.982% increase or $482,628, and in FY 2015-2016 there was a 1.41% increase or $699,686 more than the previous year. In FY 2016-2017 the increase was 2.134% or $1,073,593, and in FY 2017-2018 the increase was 2% or $1,027,747.

Since 2010, the students needs have changed. There is chronic poverty or situational poverty, high level of transience, exposure to crime, violence, drugs, conflicts, substance abuse, lack of quality child care, enrollment and attendance issues, negative encounters with school and school staff, negative encounters with peers, English language acquisition challenges, learning challenges, medical challenges, low birth weights, developmental delays, adjustment challenges, and nutrition and housing challenges.

Discussion ensues relative to increased supports that are needed but not included in the Pro Forma. They are: an ESL teacher, elementary registered behavior technicians for crisis/safety, a Special Education IEP and IDEA law, a van to transport families in need of IEP and 504 meetings and family events and to transport students in need to internships, chauffeur-licensed Teacher Assistants to drive vans, additional itinerant for Spanish language, health, and digital literacy/coding, teachers at Middle and High Schools responsible for student advocacy/adult coaching, addition of 15 career pathways and internships at SKHS for the student year 2018-2019, social/emotional learning teacher leader/coordinator and a family community engagement with focus on grades 5-12. The estimated cost of these is between $500,000 and $1,195,000.

Discussion ensues between the Town Council and School Committee in regard to what the property tax transfer should be for planning purposes.

Discussion ensues relative to housing challenges of homelessness.

Discussion ensues relative to what the budget would look like if all the increased supports were included in FY 2018-2019. The Superintendent is required by law to recommend a balanced budget. So if something is required by law then something else would have to be offset. If you used the 2% property tax transfer increase, the FY 2018-2019 Pro Forma would have to be reduced by $1,944,367. If everything on the increased support list were initiated an additional $1,195,000 in reductions would have to be made. These reductions would have to be reconciled by reducing salaries and benefits outside of contractual obligations.

Discussion ensues relative to the proposed career pathways and internships initiative.

Discussion ensues relative to the changes in Title 2 funding. There are concerns with the Federal education agenda. Title 1 and IDEA funds are still intact.

Discussion ensues relative to the different forms of homelessness.

Discussion ensues relative to the attrition rate for people that may be retiring this year. It is extremely difficult to predict due to the retirement changes.

Discussion ensues relative to the continuing enrollment reductions and the facilities study being conducted.

Discussion ensues relative to 2% COLA increases in wages, three more years of reduction in revenue from the funding formula, and the increased support list.

Discussion ensues relative to maintaining the level of education in South Kingstown and maintaining the status quo as far as funding required.

Discussion ensues relative to the GAP closing task force.

Discussion ensues relative to the increased support list being important issues and the cost to implement them.

The following members of the public comment:

James O’Neill

Tara Apperson

Discussion ensues relative to an appropriate property tax transfer percentage increase. The School Committee requests the Town Council to direct what percentage increase would be acceptable. The Superintendent requests the Town Council give direction in regard to the percentage increase. The Town Council is hesitant to give a percentage increase without seeing exactly what the needs are. It is a budget process. The School Committee needs to develop a budget based upon what the needs are. It will then be evaluated by the Manager and the Finance Director. The Town Council will have the final say based upon the needs in terms of the programs and services that are necessary, and what the community can afford. Two percent is a starting point, not a minimum or maximum.

Adjourn at 9:31 PM.

ADJOURNED,

Dale S. Holberton, CMC

Town Clerk