The Town Council meets Thursday night for its first public hearing on the proposed Fiscal 2023 budget, with most discussion focusing on the school budget. Residents were asked to attend the second public hearing Thursday, June 23 at 6 pm in Town Hall.
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PLAN IN THE WORKS IN THE FISCAL 2023 BUDGET TO START ADDRESSING SCHOOL STRUCTURAL DEFICIT
MIDDLETOWN, R.I. (JUNE 15, 2022) – The proposed $79.7 million budget for Fiscal 2023 had its first public hearing Wednesday night.
From Town Hall before an audience of about 20 people — mostly town staff and education officials — much of the Town Council hearing was spent discussing the school’s finances.
Town Administrator Shawn J. Brown acknowledged most of this budget season was overshadowed by coming up with a fix for the $1.6 million projected school deficit in the current Fiscal 2022 numbers — and a plan to prevent those issues from occurring again without adversely impacting children.
According to a five-year plan part of the Fiscal 2023 budget, $900,000 would be set aside annually to cover the deficit in the education budget. A total of $4.5 million would come from a mix of tax dollars and American Rescue Plan Act (ARPA) money.
In Fiscal 2023, the deficit reduction plan would use $100,000 from not making extra payments for pension and Other Post Employment Benefits obligations along with $800,000 in ARPA funding. By year five — Fiscal 2027 — tax dollars would cover the entire $900,000 payment.
“We can get the school budget back to a place the schools can manage…” Brown said. “I feel positive about it. I think we’re managing the risk.”
Earlier this year, the town took over approval of the school’s finances after local leaders learned of the serious holes in the educational figures in Fiscal 2021 and Fiscal 2022.
Although the final number hasn’t been determined, the structural deficit was expected to top out around $3 million over the past two years. In Fiscal 2021, the schools used existing fund balance to cover most of the deficit. According to state law, any overspending of the educational budget is a violation of state law, but local leaders decided to work together instead of through their attorneys to find solutions.
At the same time, the council sought a performance audit to scour the school’s books, a project that no one bid to work on. In turn, Brown said the town was working with the office of the state Auditor General to find a suitable company to do that in-depth review.
Based on early reviews, Brown said what town staff has found in most cases wasn’t overspending, but under budgeting by the schools.
“For whatever reason, (the school) budget office booked the wrong number for a budget number,” Brown said.
If the budget numbers aren’t changed by the council, the proposed residential-owner occupied tax rate for Fiscal 2023 will be $11.93 per $1,000 of assessed value. That’s a 9-cent drop from the current rate, the result of the new Tiered Residential Tax Program (TRTP) approved this spring by the council. That means a home assessed at $400,000, could expect to see a $36 decrease in its upcoming tax bill.
For those who don’t benefit from the TRTP, the preliminary residential tax rate is $12.83 per $1,000, which is an 81-cent hike. On the commercial side, the proposed tax rate would be $17.68 per $1,000, a 45-cent increase.
No major personnel cuts are in store with the town’s portion of the budget. Residents, businesspeople and visitors can expect the same services they receive from the town, local leaders have said.
On the plus side for residents, Brown noted there would be no more motor vehicle tax bill from the town, which could be hundreds of dollars in savings per resident.
The second — and potentially final — public hearing on the proposed Fiscal 2023 budget is Thursday, June 23 at 6 pm in Town Hall. Traditionally, the council adopts a budget on the night of the second public hearing.
With the school deficit, Brown said he and the finance staff were sorting through the educational financials to determine what happened. Based on what’s been found so far and staffing shortages in the school’s bookkeeping office, Brown said the town’s finance staff would be stepping up even more with the educational books.
Resident Paul Mankofsky — a former School Committee member — reiterated his troubles about the school’s books, something he said an in-depth audit would help with.
Given the town’s interest on placing a $235 million bond for three new schools on the November ballot, Mankofsky said it was more important than ever to get the financials on the school side squared away properly. If approved on Nov. 8, the town’s share of that bond would be about $47 million after reimbursements from the state.
“The town’s financial system is exposed material weakness…” Mankofsky said. “We need answers to questions and assurances about the integrity of our public expenditures.”
Councilman Dennis Turano said in his mind, there were still questions with the school’s finances that need to be taken care of promptly.
“A lot of your questions still need to be answered,” Turano said, addressing Mankofsky. “Where did we spend the money?…We do need to investigate what’s going on there. We need an audit.”
Looking for more information about the proposed budget? Copies of the document are available at the Town Clerk’s office in Town Hall, the Middletown Public Library and the Middletown Senior Center.
Details are also posted at https://mdl.town/Shares online. That includes a complete copy of the proposed budget and a Question and Answer sheet about the Fiscal 2023 numbers.
Document Link: https://www.middletownri.com/DocumentCenter/View/5030/nycu-ph1-