Middletown council adopts FY2026 budget with modest levy increase, approves library and school additions

The Town of Middletown Town Council adopted the fiscal year 2026 consolidated budget on May 28, approving amendments that reduce the originally proposed levy increase and that add targeted funding for the schools and library.

The council voted to amend the administrator’s proposed budget in several ways: hiring and staffing changes at the public library, an increase in the school appropriation to cover transportation and shared-service costs plus a one-time use of school fund balance, additional civic appropriations (including conditional funding for the Aquidneck Island Planning Commission), set-asides for the Atlantic Beach District TIF and the Middletown Prevention Coalition, and an accounting maneuver using fund balance to smooth a near-term debt-service impact tied to the town’s school/library construction reimbursements.

Why it matters: The council’s actions change how much property taxpayers will pay next year and allocate funds to several community programs. The budget as proposed earlier included a $2,006,255 levy increase; after council amendments the increase was reduced (the staff presentation showed the levy increase moving from about $2,006,255 down to roughly $1,704,000). The council approved figures that the town finance staff said translate to about a 42-cent per $1,000 increase for a resident’s assessed value (described in the presentation as a 4.85% change on the resident real-estate tax rate), with comparable percentage increases for nonresidential and commercial rates.

Most important actions and details

- Levy and tax-rate impact: Finance staff presented an original proposed levy increase of $2,006,255 (reported in presentations during the hearing). After the council’s motions the staff showed a reduced net levy increase of approximately $1,704,000 (a change described in the meeting as lowering the levy by roughly $306,912 via use of fund balance for this fiscal year). The council’s amended package produced per‑parcel impacts the finance slides summarized as about a 42¢ per $1,000 increase for resident real estate (4.85%), about a 55¢ increase per $1,000 for nonresident real estate (4.88%), and about a 63¢ increase per $1,000 for commercial property (4.85%). These figures were presented by town finance staff during the hearing and affirmed as the results after the council’s motions.

- School department adjustments: The council approved an increase of $700,000 for the school department. According to the town’s presentation, that total includes roughly $300,000 for higher-than-budgeted transportation bid costs and $100,000 in additional identified revenue (including an increase in the school CIP appropriation), with the school proposing to use $500,000 of its assigned fund balance as a one-time source. Councilors and the school committee noted that high-cost special-education placements and a recent large transportation bid drove most of this increase, and the school committee chair said the district is actively pursuing ways to reduce out-of-district placements.

- Library staffing: The council approved an amendment to add $115,610 to the library line to support hiring one full-time librarian and two part-time circulation assistants while reducing the library administrative assistant by approximately 0.5 FTE (the presentation described the net effect as roughly 2.0 new FTEs offset by a 0.5 FTE reduction, for a net cost shown as $115,610). The additional personnel funding was taken from the non‑department specific contingency line.

- Use of fund balance to smooth debt-service timing: The council approved using $306,912 of unrestricted fund balance in FY2026 to offset a projected increase in debt service tied to the second tranche of school construction borrowing. Finance staff explained the town expects state reimbursement for school/library construction (they referenced the Rhode Island Department of Education reimbursement schedule) with material reimbursements beginning in fiscal 2028; the council codified the use of the fund balance in the ordinance language and stated that the expectation is to repay the appropriation from future reimbursements once they are received.

- Civic appropriations and Aquidneck Island Planning Commission (AIPC): The council adopted the civic appropriations committee’s recommendation to fully fund a small shortfall in the civic appropriations program ($9,377 total across general and parks & recreation funds). During public comment, Steve Johnson (identified in the hearing as the chair of the Aquidneck Island Planning Commission) requested restoration of AIPC funding. The council added $18,000 for AIPC on the condition that the two neighboring municipalities (Newport and Portsmouth) approve matching contributions; the council specified that the contingency line would fund this amount if the match occurs.

- Atlantic Beach District and Prevention Coalition funding: The council set aside $200,000 for the Atlantic Beach District TIF; the motion specified transfers and line-item adjustments (the final motion moved $100,000 from a public-works line and $100,000 from beach operations to fund the TIF set-aside). The council also increased annual funding for the Middletown Prevention Coalition to $127,534 (an increase of $95,264 toward last year’s funding level); councilors agreed they would revisit that line if the nonprofit’s anticipated grant funding arrives.

- Enterprise funds and fees: The council approved adjustments reported in the budget presentation for enterprise funds. The sewer maintenance fee was proposed to increase to $19.39 per 1,000 gallons (an increase of $1.34); the sewer customer service charge was shown to increase to $44.93 (an increase of $5.06). The presentation also showed the average single-family user sewer fee rising to $889.98 (an $83.85 increase). For refuse and recycling, the council adopted changes to the town fee schedule ordinance: the ‘‘pay‑as‑you‑throw’’ permit was proposed to rise to $185 (a $5 increase) and staff proposed eliminating the 8‑gallon bag option; the council approved the ordinance changes on second reading.

Votes at a glance (motions and formal actions recorded in the meeting)

- Approval: $250 for Middletown High School class volunteers’ lunches (request to be funded from council president’s discretionary fund). Outcome: approved (voice vote). Evidence: council took and seconded the motion and voted “Aye.”

- Library staffing amendment (increase $115,610; hire 1 FTE librarian + 2 PT circulation assistants; reduce 0.5 FTE administrative assistant): Outcome: approved (motion and second recorded). Vote: majority (no detailed roll-call tally provided in the transcript). Funding source: contingency (non‑department specific line).

- School department adjustment (net $700,000 increase): Outcome: approved. Breakdown per motion: increase education appropriation by $700,000; increase school revenue by $100,000; increase school CIP appropriation by $100,000; authorize $500,000 use of school fund balance. Vote: approved (motion seconded and passed).

- Civic appropriations adjustments (increase $9,377 across funds) and $18,000 AIPC conditional funding: Outcome: approved; the $18,000 for AIPC was approved with the condition that Newport and Portsmouth also fund matching amounts; funding source: contingency if match occurs.

- Use of fund balance to offset FY2026 debt-service increase of $306,912 (and addition of an ordinance subsection to document the planned future reimbursement repayment): Outcome: approved and added to ordinance language (motion passed). The council recorded that reimbursements from RIDE are expected to begin in fiscal 2028.

- Middletown Prevention Coalition increase to $127,534 (increase of $95,264) and plan to revisit if grant funds are received: Outcome: approved; council indicated they will revisit in October if grant funds have been awarded.

- Atlantic Beach District TIF set‑aside $200,000 (amended to identify funding offsets): Outcome: approved. The final motion specified transferring $100,000 from public works and $100,000 from beach operations to cover the set‑aside.

- Sewer/refuse fee changes and fee-schedule ordinance amendment: Outcome: council adopted the fee-schedule ordinance on second reading (motion approved). The changes include the sewer maintenance and customer charges shown in the presentation and the refuse permit increase described above.

Quotations (selected, attributed to speakers as recorded)

- On using fund balance to smooth debt-service timing: "...instead of raising the levy this year...we would use fund balance basically to...smooth out the cash flow," (Councilor speaking during motions discussion).

- On school budget pressures: "We are required to fund special education regardless of what it costs," (Greg Hewitt, chair, School Committee).

- On AIPC funding request: "Now that you understand that we are alive and well and active, we respectfully request that our funding be restored to the budget," (Steve Johnson, AIPC chair, public comment).

What’s next

- The council adopted the budget ordinance on its second reading as amended. The school committee must adopt its budget within the statutory 30‑day window, and the town will submit the five‑year forecast to the Division of Municipal Finance.

Ending note: The council’s package included targeted, one‑time uses of fund balance and contingency funding to reduce the near‑term tax increase while adding line items the council identified as priorities for FY2026. Several items—for example, the AIPC funding and Prevention Coalition increases—were tied to conditions or future grant outcomes that the council said it will revisit if outside funding is not secured.