Financial Town Referendum Monday, June 3

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What: Financial Town Referendum
When: Monday, June 3 from 8:00 a.m. to 8:00 p.m.
Where: Charlestown Town Hall, 4540 South County Trail

This year registered voters in Charlestown must appear in person at Town Hall to vote on the town’s municipal budget unless they specifically requested a mail ballot. If you were one of the few that did request a mail ballot, it must be received by the Town Clerk by 8 p.m. on June 3.

In previous years the Town Council sent a mail ballot via the U.S. Postal Service to each of the town’s registered voters to make voting on the budget better reflect the will of our voters. However, the town council has discontinued this citizen outreach, and significant reduction in participation is expected. Why?

Information About The Budget

The Budget Commission delivered its budget on time in spite of the upheaval in the town’s Finance Department caused when the Town Council president forced out its professional Town Administrator, lost its treasurer, and caused two auditing firms to decline to return. In addition, no audit of the fiscal year that ended a year ago on June 30, 2023 (let alone a forensic audit that had been called for by the Town Council president many times) was available. In fact, the town’s new auditor was unable to deliver the traditional audit at the end of December 2023 as required, or even complete it during the budget process.

The budget before the voters is not a forward-looking budget.

Expenditures are budgeted to increase by 6.17%, even though the town will not undertake a large project, such as the previous Council’s project to reconstruct Old Mill Road. The increase is primarily because of actions of the Town Council majority, none of which was vetted during the budget process.

Rather, the Town Council majority, in advance of the budget process, entered a contractual arrangement with the Charlestown Ambulance and Rescue Service that will double what the town will pay for these services over three years (to approximately $1.2 million); reclassified the position of Town Clerk, raising the salary; added a full-time person in the Assessor’s Office; and hired a seasonal employee for Ninigret Park.

At the same time expenditures have increased, the tax rate has increased only slightly to $5.78 per $1,000 of valuation (up from the current tax rate of $5.74 per $1,000 of valuation). However, because annual assessed property values have not increased significantly, tax revenues are projected to remain essentially flat.

Therefore, any potential increase in our fund balance (that is, our savings) in the upcoming fiscal year is limited, and it will not be possible to set aside some money in anticipation of future expenditures, such as those that may be necessary in the aftermath of a hurricane. This past practice of saving money has cushioned the impact of uneven spending on the tax rate. The practice has also made it possible to reduce annual debt payments, reducing the tax rate.

In all, the effect will be that in the future, large projects will need to be financed with debt and the costs of that debt assumed by taxpayers. This will mean fluctuating (and higher) tax rates in the future, and the increase in the tax rate likely signals the end of tax rates that have steadily declined for quite some time.

Recommendations to the Town Council from the Budget Commission

The Budget Commission made important recommendations to the Town Council in its transmittal letter. It appears that the Town Council will not allow most of these recommendations, even though funding is provided in the budget.

  • Reorganization of the financial operations of the town, including the hiring of a Director of Finance – The reorganization is authorized by the Town Charter, and it is needed because professional fiscal management is critical to our future well-being. The recommendation is supported by the independent study by an outside consultant of the financial operations of the town performed in 2021 and the advice of two past auditors. Although funding was provided in the budget approved by citizens last year, the money was used elsewhere.
  • Creation of a Job Classification and Employee Compensation Plan, with updated job descriptions – Current policies are inadequate and lead to unfair and unjust treatment of our professional staff. Creation of such a plan is recommended based on concerns voiced by several department heads, and others, about the fairness and equity of the present compensation system. Collective bargaining alone is insufficient to correct the inequities for all employees.
  • Addition of critical personnel in the Building Department – Urgently needed is the addition of an Assistant Building Official/Inspector and a half-time Certified Electrical Inspector because an employee holding both certifications has recently left. The Town Council chose not to implement these personnel adjustments that were approved by public vote in last year’s budget. The crisis needs to be addressed.
  • Renewal of the Hazardous Mitigation Plan – Renewal of the plan, which has expired, has reportedly been given a one-year forbearance by FEMA (Federal Emergency Management Agency). Not updating the plan as required could potentially risk insurance credits of 20% currently in place for property owners. Funds are available to complete this plan immediately.
  • Improvement in the town’s five-year Capital Plan, including a review of the RI reimbursement program for approved public works projects – The state has a 25% reimbursement program for municipal projects, and the Town Council has presented no plan to utilize this program.