By Will Collette
NOTE: this article contains substantial additional information based on the budget discussion at the April 3 meeting. Those new items are contained throughout this article which was originally posted at 4 PM on Wednesday.
Charlestown's budget, which includes an overall increase of $750,353 and a 24-cents per $1000 property tax increase, was discussed on April 3 by the Town Council.
It will be discussed again at the regular Monday Council meeting, April 8. The Council will then decide what to include when the town has its special Budget Hearing on May 6.
Then, a final budget will be prepared for presentation to the voters in June. Ultimately, voters will decide whether to accept or reject the proposed budget.
Despite lower costs for Charlestown’s share of the operation of the Chariho School system and significant economies through town government, Charlestown taxpayers are still facing a tax hike of 24 cents per $1000 of assessed value. Using Zillow.com’s latest figure that pegs the average value of a Charlestown home at $294,100, that translates into an average tax hike of $70.58 per household.
The town’s
operating budget is set to increase by $750,353 or just under 3%. As a
consequence, our tax rate is slated to go up by just under 2.6%. Click here to read the entire budget.
According to information provided by the Budget Commission, Charlestown is currently running a surplus of about 27% of its operating budget. By my quick arithmetic, that amounts to around $7 million. The town's financial advisers recommend only holding 15-25% in reserve. So, like last year, Charlestown has collected more money in taxes than it needed and that money is burning a hole in their pockets.
Regular readers may remember that last year, we also had a significant excess of surplus funds and that the Budget Commission recommended - to the horror of most town taxpayers - that we use that excess surplus to pay cash for the trashed out campground at the core of the Y-Gate Scandal.
I suggested then, and suggest now, that with so many Charlestown residents out of work (11.2% of Charlestown workers) and many households still hurting from the recession, why not rebate the money to taxpayers?
But, nope, the Budget Commission is again recommending that Charlestown burn off its excess cash on capital costs. They want to use $2.8 million to pay off the remaining debt on the Charlestown Police station and $800,000 in cash to re-pave Klondike Road.
According to information provided by the Budget Commission, Charlestown is currently running a surplus of about 27% of its operating budget. By my quick arithmetic, that amounts to around $7 million. The town's financial advisers recommend only holding 15-25% in reserve. So, like last year, Charlestown has collected more money in taxes than it needed and that money is burning a hole in their pockets.
Regular readers may remember that last year, we also had a significant excess of surplus funds and that the Budget Commission recommended - to the horror of most town taxpayers - that we use that excess surplus to pay cash for the trashed out campground at the core of the Y-Gate Scandal.
I suggested then, and suggest now, that with so many Charlestown residents out of work (11.2% of Charlestown workers) and many households still hurting from the recession, why not rebate the money to taxpayers?
But, nope, the Budget Commission is again recommending that Charlestown burn off its excess cash on capital costs. They want to use $2.8 million to pay off the remaining debt on the Charlestown Police station and $800,000 in cash to re-pave Klondike Road.
Town Treasurer Pat Anderson reported that one reason to pay off the police station debt is that the lender, the US Department of Agriculture, has hinted that Charlestown may need to re-finance the debt in a year or two. Paying off the notes rather than re-financing might mean a long-term savings of around $2.7 million in interest costs.
As it is, the biggest major budget item growth was in “debt” service,” the amount we pay to address past borrowing. That is likely to grow by $124,015 which amounts to almost 20%.
As it is, the biggest major budget item growth was in “debt” service,” the amount we pay to address past borrowing. That is likely to grow by $124,015 which amounts to almost 20%.
In many respects, Charlestown’s budget proposal mimicked the debate in Congress
over debt, spending and the economy. Charlestown’s unemployment rate is 11.5%,
more than three points higher than Rhode Island’s 9.4% rate. That means a lot
of Charlestown households are trying to make ends meet with less income.
The idea
of saving $2.7 million in interest by spending $2.8 million to pay off the
remaining police station construction debt has its appeal, especially since our
debt service costs are rising rapidly. I applaud good long-term decisions, but
less so when we have very specific short-term needs.
Ultimately, it will be up to Charlestown voters to decide whether to approve a budget that clearly reflects only deficit-hawk priorities rather than provide at least some middle-class tax relief by not raising taxes.
Ultimately, it will be up to Charlestown voters to decide whether to approve a budget that clearly reflects only deficit-hawk priorities rather than provide at least some middle-class tax relief by not raising taxes.
Instead of using the excess surplus to pay down debt, the Budget Commission
could have given the 2000+ full-time resident households a one-time
$1000 Homestead tax rebate without the need to change the tax rate at all and
with at least another $100,000 in excess surplus funds left over.
Just imagine that you get a $1000 check in the mail as your share of the extra taxes Charlestown collected over the past year.
Just imagine that you get a $1000 check in the mail as your share of the extra taxes Charlestown collected over the past year.
Or Budget Commission could have applied those excess surplus funds toward covering the $750,353
increase in operating costs for the up-coming fiscal year – thus making the 24
cent tax hike unnecessary – and still have another $2+ million left to pay off debt.
Indeed, as Budget Commissioner Richard Hosp pointed out at the April 3 meeting, if not for the Budget Commission's decision to pay $800,000 cash for Klondike Road, Charlestown's budget would be balanced without the 24 cent tax hike.
Indeed, as Budget Commissioner Richard Hosp pointed out at the April 3 meeting, if not for the Budget Commission's decision to pay $800,000 cash for Klondike Road, Charlestown's budget would be balanced without the 24 cent tax hike.
The
135-page budget document is chock full of detail that includes such arcane
matters as the request for $100 from the Town Clerk for filing and organizing
equipment, with a letter opener given as one specific example.
Town Council boss Tom Gentz found one budget item to get all worked up about - $19,500 for proposed new lighting for the Senior Citizen/Community Center in Ninigret Park.
He didn't care about the cost, but was upset that there would be new lights in Ninigret Park. As you may recall, it was almost exactly a year ago when all hell broke loose and the Battle of Ninigret Park commenced over the issue of sports lights.
Maybe Boss Gentz thinks the seniors will want to stage the Senior Olympics in the Park and that these new lights are the camel's nose under the tent. If you light the walkway so seniors don't walk and get broken hips, the next thing you know is we'll have a 50,000 seat sports stadium.
As staff and other Councilors administered a sedative and tried to calm Boss Gentz down - after all, how many times can his head explode in one week? - they explained the lights would be dark-sky compliant and were needed for the safety and protection of the elderly folks who use the Center. Gentz started to calm down after being told the lights would not only be dark-sky friendly but could also be put either on a timer or a motion sensor.
He didn't care about the cost, but was upset that there would be new lights in Ninigret Park. As you may recall, it was almost exactly a year ago when all hell broke loose and the Battle of Ninigret Park commenced over the issue of sports lights.
Maybe Boss Gentz thinks the seniors will want to stage the Senior Olympics in the Park and that these new lights are the camel's nose under the tent. If you light the walkway so seniors don't walk and get broken hips, the next thing you know is we'll have a 50,000 seat sports stadium.
As staff and other Councilors administered a sedative and tried to calm Boss Gentz down - after all, how many times can his head explode in one week? - they explained the lights would be dark-sky compliant and were needed for the safety and protection of the elderly folks who use the Center. Gentz started to calm down after being told the lights would not only be dark-sky friendly but could also be put either on a timer or a motion sensor.
Legal costs are a major expense and the Budget Commission is recommending an additional $100,000 as a contingency for legal expenses. We already have $226,500 carried over from the FY2012 budget and set aside. And we also pay insurance to special insurance fund that covers municipalities for legal liabilities.
What with Town Council member Lisa DiBello’s $1.5 million claim against the town, former Council President Jim Mageau demand for $20,000-plus to cover the expenses of his criminal defense, the convoluted lawsuits over Larry LeBlanc’s property and his proposed wind farm and housing complex, and all the other cases involving the town, I guess the town Budget Commission figures we need to bank more money, just in case.
Plus there’s
the $25,000 we pay our special Indian Affairs lawyer, Injun Joe Larisa, to keep
his Bowie knife sharpened in case the Narragansetts cause any trouble.
I wish all our legal affairs could be like our new Municipal Court which only costs $6,800 to operate.
However,
the Municipal Court is turning out to be quite a cash cow. We had anticipated
$12,000 in revenue this year, but after only half the year (as of Dec. 31st),
the court brought in $14,538. So, for every one dollar we spend on the court, we get over $3 in return. Maybe that's where we should invest our pension funds.
Charlestown
outsources its services for low-income residents by making small donations to a
myriad of local non-profit organizations. Charlestown also gives a more
substantial stipend to RI-CAN and its director Deb Nigrelli who is designated
as the town’s public welfare director.
RI-CAN receives a town grant of $3,500 plus a stipend to Deb Nigrelli of $8,000, another $5,000 for client assistance and $100 for travel reimbursement.
