Questions and Answers?

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At the end of fiscal year 2004/2005 the city's surplus position had dropped three consecutive years to approximately $5,000,000. The current recommended guideline is 10% of proposed operating expenditures (approximately $7,000,000). Will you support additional surplus funding to reach and maintain the 10% level? If not, why? If yes, what expenditures would you reduce or level of tax increases would you recommend

At Large	Answer:
Connolly	The FY 2007 budget included $1 million dollars to fund balance surplus. The FY 2006 budget included an appropriation of $1.5 million dollars to the fund balance. I support additional surplus funding to reach and maintain the 10% level. My hope is that future additions to fund balance can be accomplished through expenditure reductions as a result of increased efficiency in operations. The 10% fund balance level is important, especially in the face of possible flu pandemics, hurricanes or other natural disasters. The fund balance is a reserve of about 3 month revenues. This would allow the City to continue operations in the event revenues were interrupted.
Coyne	I will support additional surplus funding to reach our goal of 10%. I believe this will best be accomplished by working to ensure that the Water Fund continue to pay back its loans and begin to operate in efficiently so as not to need any additional loans.
Dias	This yrs surplus is as of 6/30/06 estimated $5,756,820, appox 8.2%. Fund balance estimate 6/331/07 $6,756,820, 10%. Portsmouth uses 8% as their goal. I believe in a contingency fund for unexpected expenses, but if we can do that and use some of the surplus for tax relief, that would be my goal. $670,000 can lower our taxes by 10 cents. Still leaving a reserve of $6million in 07.
Napolitano	While the 10% level is a number which has been recommended by some individuals, it is not an ultimatum or requirement by the government, I would therefore, not support additional surplus funding. To maintain a reserve position of 10% is a challenge, which may, or may not be achievable considering all of the demands on our city budget. We need to allocate current funding sources to this reserve, and at times unexpected revenue from the state can help. More important, there are ways to realize savings in the future, which may be allocated toward our reserve. 1. We must continue to use and develop Best Practices within our departments to make them more effective and efficient. 2. Pension and benefits, which account for a sizeable future liability, should more closely reflect pension and benefits received by other sectors in our community. Current and future negotiations should include some savings on this future liability. 3. Outsourcing should be considered, when it makes sense financially and physically. 4. We should continue to have discussions with the other Island communities, for opportunities to collaborate for better efficiencies and savings.
Oliviera	Based on the current set of mandates facing Newport, I do not believe the 10% level is workable. However, I do believe that 8% is both workable and responsible.In order to maintain the 8% number, we must begin thinking long-term.1.) Newport has to make sure that when it borrows, it gets the best deal available. This is done in the preparation phase, not the shopping phase.2.) Performance audits, done internally on all programs must be the standard of the day.3.) Not for profits must do a better job of directing tourist revenue into streams that have local tax benefits. If that is not possible, they must be much more aggressive in paying their fair share.4.) Every citizen must be given the opportunity to understand what are financials goals are.5.) The city must take be ready to take advantage of a.) The one casino in West Warwick model; b.) The two casinos, one in Newport, one in Lincoln model; c.) The no casino, Massachusetts opens ra-cinos model depending on what the future holds.6.) Newport must streamline the procedure regarding the turnover of property from the School Administration to the City.
Slee	I do think we need to have a budget surplus to create funds for use on unexpected and approved capital expenditures. With the potential closure of schools freeing up salaries and facilities costs and with the use of regionalization of expensive services, we can reduce our cost of government and allow this surplus. I also think we need to operate a lower cost of government through reducing unnecessary studies and creating a more efficient cost of production in public works projects and in day to day government tasks.
Waluk	"Surplus funding" is a euphemism for "tax increase." I agree that the city needs to maintain an adequate fund balance but this can be developed by unused revenue at the end of the fiscal year and by one-time revenues such as after the disposition of public property an unexpected state or federal revenue increases. However, I do not support raising taxes to the maximum amount possible just to reach a threshold of 10% of operating expenditures.
Abney	Having a surplus or reserve is part of sound financial planning. The amount of that surplus is directly related to the financial ability of the city. At present, I would be hesitant to support additional funding specifically for reserves if it meant an increase in property tax to do so. I would entertain the notion to additionally funding the reserves if it is as a result of a surplus after all other priorities are met. It is important to maintain a well-balance budget with adequate reserves in order to maintain a good financial rating relative to city financial ratings. One of the areas that the city must address in order to achieve some savings is in the cost of employee benefits.
Duncan	Support maintain (illegible)/ an increase to the tax income provided by the state - provided that those elderly on modest fixed incomes are protected.
Cullen	I would not support dramatic allocation of limited city budget to replenish the city's surplus when the city is in need of more services. However, we can reduce spending in certain areas that might allow in the future for the city's surplus to return to 10%. To see some expenditure reductions, please see question 10.
McLaughlin	Maintaining a surplus fund is a prudent management practice for two reasons: (a) to have funds available with which to respond in a timely fashion to unforeseen emergent needs and (b) to ensure that Newport has as low a bond rating as possible to control the overall cost of borrowing. It isn't clear that the level required needs to be as high as 10 percent and it may, in fact, be closer to 7 to 8 percent. The council and city manager need to discuss this and agree on what is the appropriate level. With respect to how this surplus should be funded, maintaining a surplus should be an explicit and integral part of developing an annual balanced budget, not a line item that competes one-on-one with all other lines items.
Leonard	This may be tied into the issue of buying down the TMS Bond and the selling of city buildings. If the City decides more school buildings can be sold due to the declining enrollment/need/condition of the buildings, then some of this money may be better spent by increasing the surplus, as recommended. Many aspects must be evaluated, i.e. our bond rating, the cost of carrying the debt. I do not think that the residents of Newport can afford any new tax increases. I think that a State Cap needs to be implemented to disallow further properties from being removed from the tax rolls by non-profits. We need to re-look at staffing positions throughout the city and ensure that job descriptions are created to provide greater productivity and accountability. We may need to suggest re-organization of departments to our City Manager. Some departments have fewer staff than needed and others may have more staff than needed. We have a poor system of evaluation that has seldom been used proficiently by past city managers. We also need to continue to look at health care costs. The private sector deals with health care costs much differently than the government sector.

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