Council reviews ‘uncertain’ town budget for 2021

Thu, 06/11/2020 - 5:30pm
Category: 

Uncertainty and flexibility. Adjustments. “Everything is speculative.”

These were the phrases hovering over the Town Council’s review of the 2021 municipal budget at its meeting on Monday, June. 8.

“Before we get into the details of the budget, I want to pick up on the theme of uncertainty and flexibility because those are probably the two defining characteristics of this budget. We don’t have a great sense of what the next three to six months are going to be, and we need to preserve the flexibility to keep the town running in the most fiscally responsible way. When you talk about what those revenues might be, they could be at the levels we project, lower, or higher, or the even greater unknown in the opportunity for state and federal aid to flow through the town,” said Finance Director Amy Land at the outset of the meeting.

“We’ve been careful with the budget to preserve flexibility on the spending side,” said Land. “The second part of that is acknowledging the responsibility and obligation we have if things do not shape up at the levels we’ve projected. If the revenues are lower than we are looking for and outside aid is not available, then we need to sit down in the fall and winter and trim back this budget even further. I want everyone to be prepared for that, to keep it in the back of their mind. We need to be ready if that second step presents itself.”

The recommended 2021 budget, which will kick in on July 1, 2020, is projected at $15,241,210. For the first time in more than 10 years, Land said that the town would be dipping into its cash reserves to help balance the budget. Land forecasted that $350,000 would have to be taken from the $2.5 million the town currently has in its reserves account. Once the economy begins to recover, Land said it is town policy to have those monies restored. Land has also recommended using $353,000 from a Transfer In/Infrastructure account. That account, said Land in a later note to The Block Island Times, “was established in 2015 by the Town Council with the proceeds related to the easements/options with Deepwater and National Grid — a fund set aside to finance the renovations and improvements to the infrastructure of the Town of New Shoreham. The reserve fund balance of the General Fund will need to be replenished over time to get back to appropriate levels. The Infrastructure Fund, in contrast, represents one-time dollars — once spent they are gone. The current balance of the infrastructure fund is $508,000.”

The real hit to the budget came in the town fees and income section and in the sales tax revenue aid. In line item after line item, numbers were projected to go down: fees from the North Light, shellfish licenses, rental moorings, public wharfage, Camp Mohegan fees, sports camps and other events, rental collections at the Fred Benson Beach Pavilion and so forth. Under hotel and cottage tax sales, a line item that brought in $662,610 in 2020, is expected to bring in $329,929 in 2021. Under the meals tax aid line, that number dropped from $388,621 in 2020 to $273,583 for 2021.

Recognizing the current uncertainty of the economic landscape, salary line items across all town departments saw some level of reductions.

There was some discussion on the proposed budget for the Police Department, which saw an increase in the salary line item to $349,717, up from $296,109 in 2020. Councilor Chris Willi said he had no information as to the reason behind the increase.

West Side Road sidewalk restarted

First Warden Ken Lacoste announced the West Side Road sidewalk project will resume construction.

“I will point out they are reigniting the work on West Side Road, to get the sidewalk project done… we ask for everyone to pay attention [with the work],” said Lacoste.

Fred Benson Town Beach to open

The Fred Benson Town Beach Pavilion and Rebecca’s at the Beach are set to open on June 13 and June 20, respectively, according to Facilities Manager Sam Bird.

The Town Council will continue its budget hearing on Monday, June 15 at 6 p.m.