Town of Middletown, RI Proposed Municipal Budget Fiscal Y ear July 1, 2012 – June 30, 2013 General Fund Parks & Recreation Fund S ewer Fund Refuse & Recycling Fund April 2, 2012
2 Town of Middletown, RI Proposed Municipal Budget FY2013 Table of Contents Page Town Administrator’ s Budget Message 3-5 Proposed Levy Allocation 6 Town of Middletown Vision S tatement/ Values/ Organizational Goals 7 About Middletown Residential/ Commercial Development 8 Census Data/ Economic Characteristics 9 Middletown Organizational Chart/ S taffing 10-11 Budget Process/ Calendar 12 Accounting and Financial Policies Fund Balance Policy 13-14 Revenue/ Expenditure Policy 15 Annual Appropriation to the CIP 16 General Fund Proposed Budget Highlights 17 Tax appropriation to the S chool Department 18 Levy/ Tax Rate/ Average Tax Bill 18-20 Expenditures 21-23 Consolidated Municipal/ S chool Department Report 24-28 Expenditures By Account Classification 29-30 Expenditures By Function 31-32 Enterprise Fund Budget Highlights Parks & Recreation Fund Highlights and S ummary 33-35 Revenues 36-37 Expenditures By Account Classification 38-41 Expenditures By Department 42-43 S ewer Fund Highlights 44 S ewer Maintenance Charges 45 S ummary 46-47 Revenues 48-49 Expenditures 49-52 Expenditure Trend – Personnel/ Operating/ Capital/ Debt 53-54 Refuse/ Recycling Fund Highlights and S ummary 55-57 Revenues 58-59 Expenditures 59-60 Expenditure Trend – Personnel/ Operating 61
Town of Middletown, RI 3 Proposed Municipal Budget FY2013 Town Administrator’s Budget Message Honorable President and Members of the Middletown Town Council: In accordance with the Town Charter, I respectfully submit to you the FY2013 Proposed Budgets for the Town’ s General Fund, Parks & Recreation Fund, S ewer Fund, and Refuse & Recycling Fund, and the FY2013 thru FY2017 Capital Improvement Program Plan. The FY2013 Proposed Budget was prepared with a focus on the following areas: Economic Development The Town continues to successfully implement its economic development program and the administration remains committed to working with existing Middletown businesses, as well as attracting new businesses to the community. The proposed budget includes a continued investment in the West Main Road redevelopment proj ect to include: • Funding to pay for a development plan for the 18-acre parcel identified for redevelopment • Funding for the development of a town facilities master plan which will enable the Town to consolidate its operations thereby allowing development on excess property Funding to develop the Boulevard/ Tibbets recreation master plan which will enable the • Town to consolidate recreational activities thereby allowing development of excess property Capital Proj ects The Town continues to fund infrastructure proj ects to ensure the essential maintenance and improvements to the Town’ s valuable assets are appropriately prioritized and necessary work is not deferred. This budget proposal includes a recommendation to increase the amount of funding that is appropriated to the Capital Improvement Program S pecial Revenue Fund (CIPS RF) by $1.0M over the next 5-years, so that the Town can continue to fund proj ects on a pay-as-you- go basis as opposed to asking voters to approve referenda to issue bonds, resulting in additional debt and cost. In reviewing the Town’ s capital improvement program, it became apparent that without increasing the ongoing funding to this program, the Town would have to resort to borrowing to address the communities capital needs. The administration is recommending that the Town put a referendum on the November 2012 ballot to renovate the Fire S tation, as planned for the past several years. The estimated cost for this renovation ranges from $6.0M to $7.5M, and will be determined as the design is finalized over the coming months. Like the Police S tation, debt service costs associated with this proj ect will be funded from the PPV S RF, and will not have an impact on the tax rate. No other borrowing is proposed in this budget due to economic uncertainties, budget constraints, and the need to formalize certain aspects of the Town’ s capital plan.
Town of Middletown, RI 4 Proposed Municipal Budget FY2013 Town Administrator’s Budget Message (cont’d) Personnel costs The administration continues to support legislative efforts to contain personnel costs, such as state and local pension reform initiatives. Over the past year, the administration has negotiated collective bargaining agreements that successfully contain and reduce the cost of personnel currently and in the future, as new employees come on board. The Town consistently funds its annual required contributions to the pension plans and to the other post employment benefits plan (OPEB). This budget proposal reflects annual required employer contributions to the state retirement plan for the municipal unit and the teachers unit in accordance with state pension reform legislat ion, the Rhode Island Retirement S ecurity Act (RIRS A). The annual required employer contribution to the Town’ s private pension plan has increased this year due to the impact of investment returns and mortality experience. The annual required employer contribution to the OPEB plan has improved as the Town continues to implement and realize long-term savings to retiree health costs. Process improvement The departments have been working diligently to reduce costs by reviewing operations and making improvements in their operations. S ignificant efficiency improvements with maj or cost savings include the Police Department migrating to a 12-hour shift schedule, and the Fire Department implementing civilian dispatchers. Another area of significant improvement is the redesign of the Town’ s website which includes an expanding suite of online services and web 2.0 social media integration. In the upcoming year, two of the main priorities of the administration will be to fully implement an asset records management system (RMS ) that is integrated with the Town’ s GIS to provide greater accountability and control over the Town’ s infrastructure, and realign the policies, procedures, and organization of the Department of Public Works so that the RMS becomes the central repository of all the department’ s work activity. There are numerous studies that demonstrate that managing assets at an individual level can reduce costs in excess of 30% ; the Town will need to realize these savings if it desires to sustain funding infrastructure maintenance, as well as enhancements that will become necessary and/ or required as new regulations and mandates are adopted. Revenues Town revenues have remained flat throughout the Great Recession. Additionally, the S tate has continued to shift financial burdens to the Town for both municipal and educational programs.
Town of Middletown, RI 5 Proposed Municipal Budget FY2013 Town Administrator’s Budget Message (cont’d) Revenues (cont’ d) This proposal does include a 3% increase in the property tax levy; note that we are not able to calculate the impact on the tax rate at this time because the results of the property revaluation are still pending. Expenditures The proposed 3% increase in the tax levy is $1.4M and is allocated to cover new recurring operating costs in FY2013 for the school department and for municipal operations. Of the $1.4M levy increase, $625K is proposed for the S chool department to fund increased water costs as a result of the rate increase implemented by Newport for the capital improvement to the regional water treatment facility, an increase in the employer pension contribution for the non-certified municipal unit and teachers’ unit at the state, to cover half of the unfunded state mandates for Out of District Tuition and MET S chool Tuition, to fund the loss of state education aid due to the funding formula implementation, and to fund increased school operating expenditures based on the CPI trend. For municipal operations, an additional $577K is allocated to fund increased pension costs for the Town’ s private pension plan as a result of investment returns and mortality experience, increased municipal hydrant rental costs as a result of the Newport Water rate increase to fund capital improvement to the regional water treatment facility, and to fund increased municipal operating expenditures based on the CPI trend. The remainder of the 3% levy increase is allocated to the CIPS RF for the purpose of maintaining the appropriate level of pay as you go financing for capital improvements . (See Levy Allocation Breakout next page). The Town’ s department heads and their staff have worked assiduously to address the Town’ s operational and capital needs in a thoughtful and cost-effective manner. While the economic climate prohibits us from addressing all of the challenges the Town faces, this budget is presented with minimal service reductions to residents. This budget proposal represents a continued measured and deliberate approach for future efficiencies and cost control. The proposal addresses priorities of the Town Council in a balanced manner, maintains reasonable expenses, and addresses the need to promote economic development and quality of life efforts within the community. Along with the department heads, I sincerely look forward to reviewing the budget with you and the community. Respectfully yours, S hawn J. Brown, CPA Town Administrator
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