A Decade of Good Financial Management and Planning in Charlestown Under CCA

Rhode Island’s Auditor General issued a report in September highlighting financial benchmarks for the 39 cities and towns. The report is entitled “Municipality Financial Trend Report for Fiscal Years 2019–2023.”

Regarding Charlestown, benchmark trends were positive. One exception was the lack of timeliness in the submission of the audited financial statements since the current Town Council assumed the majority.

One benchmark was the status of long-term financial obligations. The report showed that debt has been low. At the same time, however, because of prudent planning and budgeting, the town has been able to bring all of its roads up to modern standards, build an addition to the animal shelter, and the like, without incurring debt and saving borrowing costs.

In addition, the town’s retirement funds have been well funded. For example, the town voted to approve the recommendation of the members of the previous, CCA-endorsed Town Council to pay $1 million into the Police Pension Fund, and the other retirement fund, a trust, was fully funded.

In his report, the Auditor General discussed the need for cities and towns to address the risks that they face and maintain minimum fund balances that would be available for unanticipated, unbudgeted expenditures, such as large legal awards/settlements, natural disasters, unforeseen significant increases in costs, and the like.

In 2019, CCA-endorsed members on the Town Council and its Budget Commission were forward looking. They identified and analyzed the risks faced by our community, conducted a “stress test” of the town’s reserves, and developed a written Fund Balance Policy. Adopted in December 2021, the written Fund Balance Policy set a critical base threshold for the rainy-day fund of $4.3 million, which will enable the town to maintain adequate cash flow throughout the year without the need to raise taxes, and a target range for the reserves of between 23% and 33% of the town’s annual operating budget.

Charlestown was the first municipality in the state to adopt a written fund balance policy. This wise planning has already proved critical. Because the town built up and maintained adequate fund balances and because of the skill of town staff in planning for climate resiliency, Charlestown had the funds available for a temporary fix to the damage caused to the Charlestown Breachway by three large winter storms, and the town is well positioned to work toward the longer-term solution.

Members of the previous CCA-endorsed Town Council provided a decade of good financial management and planning in Charlestown while consistently providing one of the lowest tax rates in Rhode Island and improving town services.

The proposal by members of the current Town Council to reduce the target range for the rainy-day fund below 23% and 33% would again expose Charlestown’s taxpayers to large, unpredictable increases in tax rates.

---

Bonnie Van Slyke, the author of this post, is a candidate for Town Council in the 2024 election. She was a member of the Charlestown Town Council from 2014 to 2022. She was the Town Council Liaison to the Planning Commission, Parks and Recreation Commission, and Senior Citizens Commission. She is a former officer and member of the Board of Directors of the Frosty Drew Observatory & Science Center, a former Chair of the Zoning Board of Appeals in Harvard, MA and a former member of the Board of Trustees of the Harvard Conservation Trust. Bonnie is a freelance copy editor, technical writer, and publications specialist. You can learn more about Bonnie on her profile page.