The town manager’s budget would raise the motor vehicle and property taxes rates as well as make cuts to departments.
He is recommending the tax rate be adjusted to the highest allowed by Senate Bill 3050, a 4.25 percent total increase and close to $800,000 in cuts town wide, as well as level funding to the school department.
The $2 million capital budget would go almost entirely to the town and the schools would be encouraged to go out to bond on their own to pay for extensive capital improvement needs.
Hoover began the presentation by saying that he would typically begin by telling the council he was “pleased to present this year’s budget,” but this time around he did not, instead saying “It’s not a good situation.”
“The economy continues to be poor,” he said, noting that it was not just in Coventry but throughout the state and the country.
Due to the fact that the Rhode Island General Assembly still needs to approve the governor’s budget, Hoover called the budget process “an estimation game.”
The two largest factors affecting the town are the three-year statistical revaluation, of which the results were also presented Monday night, and the loss of the motor vehicle excise tax reimbursement from the state.
This affected many municipalities in the state last year, but in Coventry the money was not spent until the year after it was received.
The loss to property values in Coventry was around $628 million, though that “is still being tweaked,” Hoover said.
Hoover explained that because of the revaluation the residential property tax per thousand, which is now set at $15.46, would have to be increased to $17.47 and the commercial property tax rate would need to go up from $18.63 to $21.05—“just to achieve the same tax levy as this fiscal year produced.”
Hoover said he was recommending that that adjustment be made as well as an additional slight “tweaking” or increase.
He said that it would maintain for most [a tax bill] at the same level, and that for some [the bill] would go up and for some it would go down.
The amount lost from the state no longer providing the motor vehicle excise tax reimbursement was about $2.7 million to the town of Coventry, Hoover said.
He also said there were stabilization funds that the town had last year that they would not have for FY12.
Due to those facts the town of Coventry was facing a total loss in expected revenue of $6 million, or a $6 million deficit.
To meet that is where Hoover came to his recommendation of the 4.25 percent of the previous tax levy.
The first item would be the reduction of the motor vehicle excise tax exemption from the current $6,000 down the lowest allowed amount of $500.
That in addition to the raising of residential tax up to $17.93 and commercial up to $21.61 per thousand, Hoover gets to the 4.25 percent allowed.
He gave an example of the motor vehicle tax; a car valued at $6,000 would now pay $103.13. A car over that would now have a $103.13 increase.
Even after this adjustment to both tax rates for property and vehicles there is still a $3.4 million shortfall.
With Hoover’s recommendation of level-funding the schools again this year and not giving them the additional $1.6 million they requested it would bring the shortfall to about $1.8 million, Hoover said.
He would raise this $1.8 million by making the following cuts in town departments:
Town general: $250,000. Police $244,950. Public Works: $123,647. Parks and Recreation: $73,327. Town Solicitor: $46,100. Planning Department: $13,781. Information Systems: $28,752. Town Manager: $2,100.
The cuts would total $782,857.
He would also change the target or predicted amount from tax collections to 99 percent. Up from 98 percent it would raise another $600,000, he said.
A fee would also be initiated by the DPW to charge residents for the pickup of items such as mattresses, box springs and tires, for example. Currently paying to dispose of those comes from the general fund, he said Tuesday.
That fee is estimated to bring in $100,000 in revenue.
The total saved or raised from the changes would be $1,382,857.
Still short, Hoover is recommending that $300,000 be taken from the General Fund balance to close the deficit.
What the budget would do, Hoover explained further in his budget message, is “keep all permanent positions,” as well as pay for the replacement of any patrol cars in the police department that have over 100,000 miles.
Those cars “are out everyday,” he said.
In the DPW cuts would involve things such as some street sweeping, catch basin clearing, street line painting, tree removal and asphalt repairs being impacted.
In the parks department some seasonal workers would be eliminated, new youth and family programs would not be added and the summer camp would be reduced from six weeks down to five. The town would also not provide the concerts and performances at the camp.
Replacing outdated computers and servers would be put off by Information Systems.
In his own department the town manager would cut his travel in half, he said.
An alternative to the cuts, Hoover said is to sit down with the bargaining units “to consider forgoing contractual wage increases” something he said he would be asking formally asking for.
The second significant part of Hoover’s presentation was that of what would be done with the $2 million dollars set aside by the previous council to be used only for capital improvements.
Hoover began by saying that $50,000 would be used to put smoke detectors in the high school.
He later said that he and Superintendent of Coventry Public Schools Michael Convery had met with Central Coventry Fire District Chief Robert Seltzer and that the high school could open in the fall if those smoke detectors were put in the rest of the high school. It had originally been reported that the high school would not be able to open, but Hoover said they found out differently. Every year they would continue to need to make improvements, but Hoover said a sprinkler system was not required in the high school.
The rest of the $2 million would be used for the town, he said, mentioning that he would still like to plan a day to invite residents in to see the condition of the public works department.
“To say its deplorable is an understatement,” Hoover said.
In total $1.7 million of the capital budget would go to the DPW to pay for things such as engineering, dump trucks, a front end loader, a street sweeper, a back hoe, snow plows; maintenance and repairs at 191 MacArthur Blvd., the town hall annex and the library; garbage truck chassis and bodies, a bulk truck and pickup.
The police department would receive $119,500 to pay for detective vehicles, police station repairs and a radio system.
Parks and Recreation would receive $114,500 to be used for fleet replacement, including a dump truck and tractors and mowers, as well as equipment for the playfields and playgrounds. Some of the playgrounds have Americans with Disabilities Act violations, Hoover said.
Hoover called the needs of the school department “so great” that he was going to encourage them to seek a referendum vote to ask for the issuance of bonds—not with the town, he said, but on their own “to take care of very critical capital improvement” needs.
He thought it would be better if it is “just the kids, just the schools.”
Hoover said Tuesday in a phone interview that in the past “too many things were put on the schedule,” such as replacement of a police station and vehicles for town departments, with the failed bond in 2008 being close to $20 million, he thought.
That bond the taxpayers had “readily turned down,” he said.
Anther item Hoover addressed was the pension fund, which for the municipal is only funded at 27.5 percent and for police at just over 15 percent, something Hoover said is not a secret.
He suggests that the town council pass a resolution that anything in the general fund that brings it over 10 percent, about where it is now, be dedicated to brining up the funded portion of retirement in the pension.
Coventry has an independent pension and it being under funded can affect their bond rating, Hoover said.
The total proposed budget is $86,742,845 with the municipal budget at $21,678,648.
The town also receives $119,995 from the state in library aid and pays just over $43,000 each year to pay off debts, though Hoover said the town does not have very much debt.
Councilman Raymond Spear was the first to ask a question about the budget, asking what the tax increase was for taxpayers should the council pass the budget as proposed.
Hoover answered that it was not the same for everyone in the community, but would depend on what the residence was like, what the business was like and what sort of vehicle the resident had.
Hoover said the cuts were minimal on the town side, but acknowledged that it was a drastic cut on the school side by proposing to level fund them.
Councilman Thaddeus Jendzejec said he was “not buying into it right now,” and would need to do some more research.
Union representative Kelly Erinakes brought up the recent NEASC presentation and the fear of Coventry losing accreditation for not addressing physical plant needs.
School Committee Member Thomas Hetherman said he had been asking for a bond for two years and that “the timing couldn’t be worse” and that he didn’t think there was a possibility of it passing.