Presentation to the Joint Municipal Shared Services Study - PDF document

Presentation to the Joint Municipal Shared Services Study Commission August 29, 2012 Joint Presentation by: John Simmons  Executive Director, RIPEC Susanne Greschner  Chief, Division of Municipal Finance, Dept. of Revenue 1 Presentation Outline  Overview of Responsibilities  Data Collection  Reports Published by Division  Challenges in Collecting Data  Act Providing for the Financial Stability of Cities and Towns  Local Pension Study Commission  Shared Services – Current Projects  Outlook 2 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance 1

Division of Municipal Finance – Overview of Responsibilities To monitor the financial conditions of cities and towns  To work with cities and towns undergoing financial  distress To advise Governor on matters relating to municipal  finances To maintain information on local finances and property  values To provide assistance and encourage compliance with  state laws and policies relating to municipalities To compute property value information  To annually calculate state aid  To staff the Local Pension Study Commission  3 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance Division of Municipal Finance – Data Collection Monitor and review municipal quarterly reports  which certify the status of municipal budgets Monitor and review adopted budget surveys  Monitor and review Five Year Forecasts  See handout for an example of each  4 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance 2

Monthly Reports (§ 45-12-22.2) Monthly reports have to be submitted to the municipal  CEO, each member of the town council, and school district committee, certifying the status of the municipal budget from all fund sources, including the school department budget from all fund sources, or regional school district budget from all fund sources. 5 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance Quarterly Reports (§ 45-12-22.2) Quarterly reports must be submitted on or before the 25th day of the  month succeeding the end of each fiscal quarter to the Division of Municipal Finance, the Auditor General, and the Commissioner of Education, certifying the status of the municipal budget, including the school budget that has been certified by the school department. Each quarterly report submitted must be signed by the chief  executive officer, chief financial officer as well as the superintendent of the school district and chief financial officer for the school district. The report has to be submitted to the city/town council president and the school committee chair. It is encouraged, but not required, to have the council president/school committee chair sign the report. 6 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance 3

Adopted Budget Survey (§ 44-35-10) Surveys are to be sent to Division of Municipal  Finance within 30 days of final action of the budget. Each survey submitted must be signed by the chief  executive officer as well as the chief financial officer. 7 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance Five Year Forecast (§ 44-35-10) Forecast to be sent to Division of Municipal Finance  within 30 days of final action of the budget Forecast to be signed by municipal CEO and CFO,  Superintendent and School Business Manager Two scenarios:  Scenario 1: Reflecting baseline revenue and expenditure – assumptions for current year (FY 2013) and forecasting for FY 2014 - FY 2017 Scenario 2: Reflecting fully funding pensions and Other Post – Employment Benefits 8 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance 4

School District Accounting Compliance (§16-2-9.4) – Article 12 The uniform system of accounting shall include a standardized budgeting  process required to ensure districts can annually assess investment priorities and incorporate long-range planning. Upon completion of the implementation of the UCOA, all school districts,  regional school districts, state schools, and/or charter schools, shall implement a regents- approved budget model, and use best practices established by RIDE for long-range planning, budget development, and budget administration and reporting. If a school district fails to install and maintain UCOA, including a chart of  accounts and approved budget model, the Auditor General and the Commissioner shall make a report to the Superintendent, school committee chair, mayor/town manager, and the president of the council, to the board of trustees or directors, as applicable, specifying the nature and extent of the failure, refusal, neglect, hindrance, or prevention and the Commissioner is authorized to review the matter so reported. If the Commissioner finds that failure, refusal, neglect, hindrance or prevention exits he/she will direct the district, state or charter school in writing to comply. If no change has been made within ten (10) days of written notice, the Commissioner may withhold distribution of state aid to said school district, regional school district, state school or charter school. 9 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance FY 2012 Property Tax Cap Report Above 4.25% Below 4.25% Below 4.25% Burrillville (1) 13.33% Foster 4.22% North Kingstown 2.79% Providence 5.68% Pawtucket 4.21% Exeter 2.76% Richmond 4.19% Scituate (3) 2.62% Woonsocket 4.16% Barrington 2.35% At 4.25% Newport 4.16% Smithfield 2.33% New Shoreham 4.06% North Smithfield 2.06% Central Falls 4.25% Bristol 4.01% Cumberland (4) 2.04% Coventry 3.86% East Greenwich 2.02% Warren 3.85% Jamestown 1.73% Warwick 3.81% Narragansett 1.71% Portsmouth 3.70% Little Compton 1.56% Cranston 3.26% Westerly 0.98% East Providence (2) 3.16% West Warwick 0.96% Johnston 3.14% South Kingstown 0.95% Middletown 3.12% West Greenwich 0.54% Tiverton 3.08% Hopkinton 0.46% North Providence 2.92% Glocester 0.05% Charlestown 2.83% Lincoln -0.76% (1) Burrillville was certified by the Division of Municipal Finance to exceed the cap by 12.17%. The town exceeded the cap by 13.33%. The additional tax levy increase is due to an expired payment in lieu of tax exempt property (PILOT) agreement. (2) East Providence fiscal year is Nov 1 to Oct 31. The City of East Providence levies its property tax in arrears; so the final tax rates will not be known until the spring of 2012. (3) Scituate fiscal year is Apr 1 to Mar 31. (4) Cumberland actual amount is an estimate reported by the town. Final levy will be set in May 2012. Source: Division of Municipal Finance based on Assessors Statement of Assessed Values and Tax Levy (12/31/2009 & 12/31/2010) and State Code Summary 10 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance 5

Division of Municipal Finance Other Published Reports Annual Salary Survey  Organization and Staffing in Municipal Finance  Offices (report from December 2009) See handout for reports  11 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance Challenges in Collecting Data No uniform reporting  Format of data  Timeliness of reports  Reduction in positions on municipal level  Interrelationship between city/town and schools  12 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance 6

Act Providing for the Financial Stability of Cities and Towns Legislation gives the State, acting primarily through  the department of revenue, the power to exercise varying levels of support and control depending on circumstances Creates three levels of State oversight and control  - Level 1: Fiscal Overseer - Level 2: Budget Commission - Level 3: Receiver 13 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance Act Providing for the Financial Stability of Cities and Towns Links to the following information, including bankruptcy filings, meeting agendas and minutes, can be found on the Division of Municipal Finance’s website listed below. Rhode Island General Law Chapter § 45-9  Central Falls Receivership  East Providence Budget Commission  Woonsocket Budget Commission  http://www.muni-info.ri.gov/finances/ 14 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance 7

Local Pension Study Commission Established by statute (RIGL 45-65-8)  Division staffing Commission  Commission charged with “making recommendations for the  improved security and funding of locally administered plans and OPEB of cities and towns” Statutory Requirements for local plans  April 1, 2012 - submit actuarial valuations and experience  studies May 11, 2012 – plans in critical status (<60% funded) sent critical  status notices to plan beneficiaries and others November 11, 2012 – Funding Improvement Plan to be  submitted to Commission Commission developed funding improvement guidelines to  assist municipalities in developing Funding Improvement Plan 15 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance Division of Municipal Finance – Municipal Sessions Recently, two municipal sessions have been offered  Jointly offered with the Rhode Island League of  Cities and Towns Topics ranged from new GASB standards on  pensions, issues regarding locally-administered pension plans, and recently enacted legislation 16 State of Rhode Island www.muni-info.ri.gov Division of Municipal Finance 8