WESTERLY — Town officials are projecting a $135,601 surplus from the 2018-19 budget. The surplus would have been greater, but funds had to be redirected to make up shortages in the transfer station budget as well as an overage in an insurance fund.
“The positive news is we did finish still in the positive not in the red,” Town Manager J. Mark Rooney told the Town Council Monday during an overview of the fiscal year that ended June 30.
Rooney noted that the council had approved in December the use of $334,000 from the surplus or fund balance to use as a deposit to secure the town’s option to purchase 100 acres of land off White Rock Road. The land is the designated site of a planned public-private solar power project.
“Otherwise, staff did a great job of staying within budget items, and revenues came in a little more positive [than projected],” Rooney said.
The transfer station will require an infusion of $211,481 from the municipal general fund to balance its books for fiscal year 2019. Finance Director Dyann Baker said the facility’s overage could be due to the facility running as an enterprise fund for the first time. The move to run it as an enterprise fund means costs that might have been paid through other parts of the municipal budget are now accounted for as part of the station’s expenditures. Enterprise funds are government services that charge a fee for the service and are sometimes self-sustaining. Rooney has proposed new measures to reduce costs at the transfer station.
Councilor William Aiello said the transfer station was not expected to become fully self-sustaining in its first year as an enterprise fund. Council President Christopher Duhamel said the facility seemed to face the same financial challenges that have existed for years. Rooney said officials, before his arrival, appeared to have underestimated the costs associated with running the transfer station.
The insurance fund required expenditures of $93,699 to cover the town’s responsibility for claims made against the town such as slip-and-fall cases before the town meets its deductible and its insurer takes over payment.
“What was not budgeted in 2018-19 was anything to support claims. We have a high-deductible plan to keep our premiums low, and that requires more out of pocket for small claims and we saw more than usual in this particular fiscal year,” Baker said, noting that Rooney sought a special fund to help cover the claims costs in his budget proposal for 2019-20 but the fund did not survive the budget deliberation process.
Expenditures on legal fees of $491,684 were more than twice the $234,680 that was budgeted. Baker attributed the overage to legal work on contracts, including for labor unions and the lease agreement for the planned solar project on White Rock Road.
Tax revenue, Baker said, was “pretty much in line with the budget,” and she noted revenue from invested funds exceeded projections by $200,000.
“Investment revenue was very strong this year, and we can thank Barbara Perino for the work she did on that,” Baker said, referring to her predecessor.
Licensing and permit revenue was up as a result of increased permits for solar projects and mooring permits, Baker said. Competing with the gains were lower than anticipated hotel and meals tax revenue and lower than expected revenue connected to the state motor vehicle tax phase-out.
Duhamel praised the work of both Rooney and Baker.
“I’d like to acknowledge how well Dyann Baker and the manager, Mark Rooney, and his department heads, have followed this budget in the last months of the fiscal year to bring us within this target,” Duhamel said.