UPDATED: Charlestown Budget Meeting Monday Night

If approved, new budget will raise taxes again

By Will Collette

Tax rates in Charlestown under CCA Party control. Now add $9.87 for
2014 (from the Charlestown Tax Assessor webpage)

UPDATE #2: The CCA Party sent out one of its e-bleats tonight where they seem  a little bit nervous about yet another consecutive tax hike on their watch. They try to blame it all on revaluation - which isn't true. 

Plus, they repeat the claim that Charlestown still has a low tax rate, which is true only if you ignore the lack of services and the separate tax we pay for fire protection. And we're not nearly so low as we used to be, like before the CCA Party took office.

UPDATE: Town Treasurer Pat Anderson e-mailed me from vacation with answers to two questions I had about the budget (large amounts transferred among accounts and what seemed to be a dangerously small fund balance. I have added her responses in the appropriate sections below.

Charlestown’s annual town budget is a challenging document for most taxpayers to read and understand. It is worth a try, though, since this budget will determine what you will pay for town government and what you will get for your money. Click here to read the entire 134-page $26.5 million budget. 

I have reproduced the grossly simplified version the town ran in the Westerly Sun to advertise the budget and the budget meeting that will take place at 7 PM on Monday, May 5 (Cinco de Mayo) at Town Hall.

This budget plus two additional expenditure items listed as separate “Warrants” will be debated on Monday but the final vote on the Budget and Warrant Items belongs to the residents who turn out to vote at a special Town Financial Referendum on June 2.

I think most voters will be thinking a lot about the fact that Charlestown intends to raise the tax rate from $9.46 per $1000 in assessed value to $9.87 per thousand. That 41 cent increase amounts to a 4.33% jump. Charlestown also intends to collect $478,078 more in tax revenue, a gross increase of 1.85%.

Taxes are going up because raising taxes seems to be the general policy of the Charlestown Citizens Alliance (CCA Party) which has controlled the Charlestown budget since 2009 and has raised taxes every year, whether we needed to or not.

Let’s look at some of the key factors in this budget:

Taxes are going up despite a 2% drop in the single largest budget item, our share of paying for the Chariho school system. Our Chariho costs comprise 54.2% of the total town budget.

Taxes are going up even though the town government is attempting to portray the proposed budget as being 9.78% less than last year. In fact, the reason for that 9.78% drop is the one-time payment of that same amount to pay off the Police Station loan and not any economies or belt-tightening by the town government. We were told that paying off the Police Station loan early would reduce taxes later. Apparently much later, like maybe not in your lifetime.

Taxes are going up despite last year’s decision to pay cash for the re-paving of Klondike Road rather than low-interest road bonds. Again, we were told that paying cash would mean a savings for us on future taxes. And every Charlestown household would also get a pony.

Taxes are going up because generally, the cost of government is going up, but when you look at the rate of increase for various parts of town government, you’ll see a lot of inconsistency where general administration and the town’s public works department got large increases while very little went to Charlestown Police, Parks & Recreation or financial administration.

Taxes are going up because we are again paying cash for capital improvements – most of them quite important – instead of taking advantage of available low-interest borrowing.

From Tax Assessor Ken Swain

One factor greatly influenced this year’s budget - the town-wide property revaluation. This resulted in each Charlestown property owner receiving notice from the town that the assessed value of their property has changed. Most valuations went down and some went up. But overall, the value of Charlestown property went down by $60.5 million.

Click here for a detailed break-down of Charlestown property categories and the values each represents. This spreadsheet is courtesy of Tax Assessor Ken Swain.

Your actual tax is calculated by multiplying your assessed value times the tax rate. 

If your new valuation went down, you may see little change from last year’s tax bill. If you valuation went down a lot, you might even see lower taxes despite the big hike in the rate. However, if your valuation went up, you’re double-whacked because you will pay a higher rate on a higher assessment. If you don’t like how your new valuation came out, consider filing an appeal.

Part of the reason why the tax rate is going up is because lower property values means there is less to tax. To compensate, rates have to go up, although Charlestown intends to increase the total amount of tax it will collect by almost half a million dollars.

Let’s take a look at some of the gross numbers to see what’s up and what’s down.

UP

Capital improvements are up by $406,142 (+102.2%)

Public Works costs are up $144,213 (+9.1%)

Worker benefit costs are up $138,020 (+7.1%)

Charlestown Police costs are up $91,170 (+3.7%)

General Administration costs are up $67,450 (+8.44%)

Parks & Recreation costs are up $21,235 (+3.8%)

Expenses dumped into the category called “Other” are up $20,612 (+1.5%)

Financial Administration costs are up $15,490 (1.9%)

Down

Payments for Charlestown’s share of Chariho are down $293,940 (-2%).

Payments on interest and principal are down $2,779,312.

This number is an interesting one as it reflects last year’s one-time decision to make an early pay-off of $2.8 million on the construction loan that paid for the Charlestown Police Station. It seems to assume that the USDA would be calling in the loan early, although I have seen no documentation to support that assumption.

We paid $2.1 million for prevention

In the new budget, Charlestown has budgeted $355,000 for payments on principal and another $106,277 in interest payments ($462,277 total) just on its Open Space/Recreation bonds alone. 

As you may recall, the town used every nickel of its Open Space/Recreation bonding authority to finance the $2.1 million purchase of the proposed site for the Whalerock wind turbine project.

UPDATED: Several other numbers showing a decrease raised questions in my mind. I asked Town Treasurer Pat Anderson about two of those questions and she responded by e-mail while still n vacation (thank you, Pat). This isn't the first time that Pat has taken time out of her vacation to answer one of my complicated questions.

Revenue in the form of payments from the state are projected to go down by $244,270 (-10.6%) but General Assembly decisions on whether or not to continue to cut municipal aid have not been made.

UPDATED: This budget proposal assumes the town’s fund balance will go down to only $64,400 from $3,199,228. That kind of drop, if real, is not in keeping with the town government’s long-standing principle of keeping the town’s fund balance at around 20% of anticipated annual need. I am asking Town Treasurer Pat Anderson for a clarification and here's what she replied:

"What is listed in the ad is our expenses and revenues.  The fund balance listed as $64,400 isn’t our total fund balance.  It’s just the portion of it that we are using as revenue in this budget.  Our fund balance is still very solid.  No worries."  

I take this to mean that because budgets have to balance, Pat applied a portion of our actual fund balance to have it show as "income" to offset expenses and make the budget balance.

UPDATED: This budget also shows under expenses a category called “Transfers Out” with $1,782,500 in this year’s budget, but only $1,079,400 in next year’s budget. That’s a projected cut of $703,100 (-40%) in this mysterious number. I will try to find out from Town Treasurer Pat Andersen what this number means and report it to you (her answer below). 

The line items for "transfers in" and "transfers out" are listed on what is called page 22 of the Town Budget, but the several page 22s actually appear on page 122 through 124 in the pdf version of the budget. The page numbers within the budget draft do not line with the actual page numbers.

UPDATE: I had a feeling this was one of those matters that reflected money juggling necessitated by the need to draw or add to restricted accounts to cover costs when they are actually incurred. For the layperson, it's like the occasions where you either draw money out or put money in to an IRA, 401(k), Flexible Savings Account or Coverdell education account. Here's how Pat explained the details:

"Transfers out are for projects or other funds that the general fund funds. The last two years we set aside funds to repair Klondike road.  We couldn’t pay for it in one fiscal year cycle. So we broke it down into 2 year.  We transferred $650K in FY13 and $800K last year. Then Alan had enough to do the entire job. We transfer funds every year to cover employee severance, pond & beach preservation, revaluation and town maintenance so the funds are available when needed.  The expenses that relate to these transfers out are recorded in the separate fund."  

Finally, the budget assumed a drop of 6% in “All Other” kinds of income. Don’t panic. This is a small item and the revenue decline only amounts to $6,000.

Let’s look briefly at the two Warrant Items.

Don't sell out till the price is right

The first asks voters to approve the proposal by the CCA Party’s Town Council majority to sell a town-owned strip of land that serves as a public right of way to Town Beach and Breachway Beach to a group of mostly non-resident beach property owners who feel the users of that land are nasty people. The language of the item pegs the price at not less than $4,000.

Bad idea. Really bad, but it shows you where the CCA Party priorities are. I think voters should tell Boss Tom Gentz, Deputy Dan Slattery and George Tremblay that if you’re going to sell out to beach front property owners, at least wait until the price is right. $4,000? Geez! That's a taxpayer rip-off.

The second asks voters to approve spending $260,000 to rebuild the tennis courts at Ninigret Park. I don’t play tennis but understand that the courts are pretty popular. I also understand they are in terrible shape and that the efforts to make repairs have not worked. $260,000 seems like a lot of money for this work, but then I’ve never had occasion to build tennis courts. And, yes, it’s a good thing for town residents to get to use the park. In principle, this is a good idea.

But what about the long promised tax relief the CCA Party has promised the citizens of Charlestown?

One way to handle the cost of fixing the tennis courts is to take a very sharp pencil to the “Professional Services” section of the budget. These are listed on Page 22A (actual page #117) and show the town spending $200,600 for the services of Town Solicitor Peter Ruggiero ($55,200), Zoning Board lawyer Bob Craven ($40,800) and town Indian fighter Joe Larisa ($24,600) plus another $80,000 set aside for “Special Legal Services."

Peter Ruggiero

Ruggiero, Craven and Larisa have not had a good year, what with bad decisions on Whalerock, Copar, quarrying, open government and the constant, bitter warfare with the Narragansett IndianTribe. 

The Westerly Town Council came close to disallowing payments to Craven recently for botching his handling of Westerly’s fight with the Copar Quarry that forced the town into an extremely unpopular settlement. Plus, he was the presiding legal officer for the Zoning Board during their poorly conducted Whalerock hearings.

Judge Judith Savage called Ruggiero’s legal work on the Whalerock case “woefully deficient.” Plus, he lost an open meetings decision and an open records decision where he tried to justify violations by the CCA Council boys.

In my opinion, the town’s continuing use of Larisa to fight the Narragansett Indian Tribe is an embarrassment.

And let’s not forget that $80,000 “Special Legal Services” line item. Sound familiar? That’s how the town ended up making the secret decision to hire John O. Mancini to serve as Whalerock “special counsel” for the town and for “anonymous abutters.” These anonymous abutters are private citizens who received free legal services from Charlestown in violation of the Town Charter and whose identities, while known to many, is still officially secret. We paid $44,381 for that nonsense.

Surely within this line item, based on this track record, we can find most of the money to fix the tennis courts.