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MAY 20, 2006 BUDGET PUBLIC HEARING #1

President Paul Roderiques called the meeting to order at 6:04pm. Councilman Robert Sylvia was absent. Councilwoman Barbara Barrow was absent at the start of the meeting but arrived some time later.

The room was quite empty as approximately 30 residents were in attendance, with Town employees, Council members, and School Committee members numbering about the same.

A brief introduction was provided by the newly appointed Town Administrator Shawn Brown who explained that revenues were uncertain with the downsizing of the State economy and budget. However, the Middletown $61.91M budget is projected as a 6.01% increase requiring a 4.13% increase in taxes. Without any changes made by the Council the residential tax rate would increase from $11.01 to $11.49 and the commercial tax rate would increase from $14.65 to $15.29. One significant change in the budgeting process has been the transfer of all school bonded indebtness into the Town’s General Fund. The School Department’s budget is projected at the maximum cap of 5% increase. School Superintendent Rosemary Kraeger reported that 16.7 positions had been eliminated as a result of the proposed budget and some of these positions are key for student support. Superintendent Kraeger added that this budget assumes level funding from the State and if State revenues are less than that, then “we are really in trouble.” School Committee Chairman Michael Crowley added that there is legislation afoot which would reduce State aid to Middletown by $6 million which “would be devastating.”

After these brief remarks, the Public Hearing was opened, whereupon seven residents spoke and asked questions about the General Fund. One major topic of discussion was the Town’s rainy day fund (Unreserved Undesignated Fund). After these speakers addressed the General Fund Budget, this portion of the meeting was closed and the Council received the General Fund Budget on its first reading and took a five minute recess. The Public Hearing on the Parks & Recreation was then opened and one resident addressed that budget. Next was the Sewer Budget and no resident addressed this budget. Finally, the Refuse and Recycling Budget was addressed and four residents addressed this budget primarily asking the Council not to increase the bag fees. With its work completed, the Council adjourned at 9:05pm.

Editor’s Note: the second and final public hearing on the proposed budget will occur at 6:00pm on Wednesday, May 28 in the Town Hall.

DETAILED ACCOUNT

Town/School Budget Hearing

Shirley Lally queried as to the Navy’s contribution for the War College students. The reply was that these students are claimed as impact aid and Middletown received $1500-$4000 per student based upon the type of student and his residency. However, at a $14,485 per pupil cost in Middletown, the Navy contribution is a mere stipend.

Arthur Benner noted that the senior citizens outnumbered teachers in the audience – a first in a very long time. Mr. Benner noted that the Council had recently issued a proclamation for Senior Citizens but has done nothing financially to assist them. President Roderiques asked Administrator Brown to look at the Senior Citizen exemption on the tax bill to determine if it needs to be increased.

Ronald Santa, as he did last year, spoke about the Unreserved Undesignated Fund Balance stating that it has been increasing at the rate of $1 million per year and did so again last year according to the Town’s audit. Mr. Santa said that the Fund is large enough, it does not need to increase another $1 million during this new budget and proposed that the Council CUT $1 million from the proposed budget in order to STOP the runaway increase in the Unreserved Undesignated Fund Balance. Mr. Santa contends that the Town could live with nearly no increase in taxes this year without creating a deficit but would simply stop the increasing the Unreserved Undesignated Fund Balance. As was the case last year, the majority of the Council was unsympathetic to Mr. Santa’s argument, although Councilman Edward Silveira Jr. did state that he “shared Mr. Santa’s concerns.”

Paul Lally queried whether the Town was earning interest on the monies it has in various funds, including the Unreserved Undesignated Fund. The reply was affirmative although the State places many restrictions on what the Town may invest in resulting in an average 2-3% interest rate. It is projected that the Town will net $360,000 in interest during the next year.

Payson Fugitt questioned the line item in the budget pertaining to IT and software purchase receiving the reply that it would be a one-time cost.

Carolyn Neary also questioned the Town’s interest, especially on its checking account receiving a similar reply as above.

Antone Viveiros also questioned the Unreserved Undesignated Fund Balance and the Town’s audits over the past few years. Mr. Viveiros contends that the audits show that the Town has “made profits” in the years 2003-2007 amounting to $20 million. Mr. Viveiros said “When are the taxpayers going to get some relief? Middle class on this island is becoming the poorer class because they can’t keep up with the taxes. Does anybody care?” President Roderiques responded “We do care” and chided Mr. Viveiros for making a political speech.

Park & Recreation Budget Hearing

Ronald Santa, as he did last year, inquired as to the increase in the Undesignated Fund Balance which had again increased by $200,000 and was now $900,000. Mr. Santa said that nearly a million dollars is enough excess in this budget and next year would he would scream to have it stop increasing. Mr. Santa has always urged that some excess beach fund should be returned to the General Fund to help the Middletown taxpayer.

Sewer Budget Hearing

No one spoke at this public hearing.

Refuse & Recycling Budget

Antone Viveiros asked the Council to delay any increase in the bag cost or user fees until a full year of data has been collected. Mr. Viveiros urged the Council to do considerable advertising, perhaps even a COX TV special program, identifying the advantages of the program so as to increase the participation rate.

Payson Fugitt indicated a need for an incentive for residents to participate in the program and suggested a yearly charge on the tax bill might be a good incentive.

Carolyn Neary asked why residents were not using the program and choosing to go elsewhere but received no reply.

Ronald Santa said that since the deficit is being caused by a too low participation rate (approximately 66%, 95% is needed for viability,) perhaps the Council should consider making the program MANDATORY. Mr. Santa asked why the Council has not made the program mandatory and received the reply that the Council had considered it but had decided on a voluntary program instead.

DISCLAIMER: The preceding account is a synopsis of the comments made by the residents. Every effort was made to identify each speaker and their comments accurately; however, the Middletown Newsletter apologizes for any errors that may have been made. Anyone desiring to correct any information contained within this newsletter is encouraged to contact us.

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