Officials Support Expansion of Chariho Reserve Fund as Charlestown Budget Heads to Hearing | Daily news alerts
CHARLESTOWN — A failed referendum earlier this month will reduce the city’s expected contributions to the Chariho Regional School District. As the school committee seeks approval for a final fiscal budget for 2022-23, city officials are proposing to set aside the funding difference to bolster the community’s Chariho reserve fund.
Members of Charlestown City Council last week unanimously approved a draft budget plan for 2022-23 that calls for a combined general fund of $28.94 million that would include a 1.63% increase in department spending and an additional 2.74% increase for the city’s share of Chariho’s funding.
The percentage increase for Chariho was based on the district’s initial request, which was rejected in the April 5 referendum, and Budget Committee Chairman Richard Sartor said the community should use the rejection as a opportunity to expand the city’s school reserve fund. Sartor noted that over the past two years, the community has seen a change in trend that has led to an increase in the number of students enrolled in the city, and having a strong fund would help protect the community against future unforeseen cost increases.
“For one of the first times in my experience, we had an increase in the number of students from Charlestown to Chariho,” Sartor told city council members. “We’ve been declining for a long time now, and maybe we’re finally reaching a natural point where that starts to change.”
Fortunately, he said, the community is well positioned to turn the rejected referendum into a positive while simultaneously maintaining some of the lowest tax rates in the state.
Even without reducing the proposed share for Chariho, reductions in major project financing and debt, as well as the use of excess reserves in the fund balance, helped to offset any costs that would have fallen on taxpayers. Therefore, the overall budget will reduce expenses by $1.3 million and allow the city to apply a flat tax rate of $8.18 per $1,000 in the next fiscal year.
Sartor noted that, as presented, the proposal would allow Charlestown to maintain Rhode Island’s third-lowest property tax rate and second-lowest motor vehicle tax rate.
Meanwhile, the city’s actual share bonanza in the coming fiscal year – the current proposal calls for a 1.92% increase in financial responsibility for Charlestown, up from 2.74% as originally requested and budgeted. by the commission – will serve to help protect the city against liabilities related to future student population growth without passing the risk on to ratepayers.
“It stands to reason that with a current reserve of $250,000, we could reasonably add to that, and that’s what the commission would recommend,” Sartor said.
Last week’s budget discussions also led to a conversation between Sartor, Council Chair Deborah Carney and City Administrator Mark Stankiewicz regarding the city’s undesignated fund balance, as well as when the city should moving forward with floating the $2 million bond for the previously approved open space acquisition. by voters.
Carney expressed concerns that the current proposal does not do enough to begin moving the city toward a newly established goal of having an undesignated fund that is approximately 23% to 33% of the general fund.
“I notice this budget doesn’t start to go in that direction, but pushes it back a year,” Carney said when asked about the commission’s reasoning.
Sartor said while the data would support Carney’s concerns, the city is in a position where it already has a healthy undesignated fund and would be able to “stay within range” of the overall goal this year. , while maintaining an appropriate schedule to improve the fund balance.
“I understand it could be read that way, but it’s not that we’re not making progress,” he said. “We will meet the new policy guidelines well within the suggested timelines. We might even be on the verge of doing it now.
Carney also asked Sartor if the commission had considered a floating bond for open space acquisitions. Since the bond was approved by voters in a referendum, the city has spent about half that amount, and it said it believes ratepayers could benefit from removing the bond now.
Sartor and Stankiewicz said doing so now would be premature and potentially result in multiple bail requests over time, which could increase bail-related expenses, such as legal and administrative fees.
“When we get to 70% of the $2 million, that would be the time to go bail,” Stankiewicz said.
The budget, which can be viewed on the city’s website, will now go to a public hearing on May 2 before final adjustments are made and a proposal is sent to the referendum.