Some Budget Thoughts for Town Meeting

As I am on the finance committee, several people have asked me about the budget that will be brought to us at town meeting this Saturday. I offer them to you here, as democracy works best when we all have a better understanding of what is before us. What follows are my thoughts only, from my involvement on the finance committee, but not from the committee in any official way. If you aren't going or interested, just ignore this email. Feel free to pass it along to others if you find it useful.

This has been a challenging budget year. The budget process has filled every week for the last couple of months, some weeks we have met twice, at times until 11pm. The budget process included meeting with all the town departments to understand their requests and discuss together where we might make reductions. All departments were asked to present options with 5% and 10% reductions. It has been a good collaboration between the finance committee and the Select Board (SB) - we do not all agree on all line items, but we have had respectful and helpful discussions, and mostly do agree. It has been a challenging budget to pull together, on top of the substantial mid year cuts and transfers we already made.

Town budgets are complex and involve many elements. We have to consider our potential expenses in terms of what we want, need, and are mandated to provide – and what we can afford. Funding for those expenses comes from available funds (free cash, stabilization, and several other smaller funds) and from revenues (state aid, local taxes, fees, and calculations for growth and overlay). This year we anticipate about a 4% reduction in state aid, less growth than usual (ie. new houses which increase the tax base), a lower amount in overlay, and have much less free cash and stabilization to draw from than usual. We also have some significant increases in expenses – especially in vocational education.

Our vocational education expenses increased by $70,600 to $370,600 this year and we expect it to go up to $430,000 next year. We paid for over 1/3 of the increase this year from the unused police chief salary line which is not available going forward. Note that only $93,413 will get reimbursed to us as CH 70 state aid. This gives you some idea of how much the burden of all education expenses is weighted on the town.

In terms of available funds: We have much less than usual. In several prior years we have had about $250,000 in Free Cash to use to balance our budget. This year we started with only $111,000 and used about $61,000 for the budget, leaving us with only about $50,000 for emergencies (which is scary). In addition, we still have to find about $32K this year to pay the balance for the Dec 2008 ice storm - we hope to find as much as we can in unspent balances at year end in June (maybe $25K???) but will have to take the rest from free cash, reducing it even further. And with all the tightening we have done this year and in next year's proposed budgets, free cash will again be pretty limited next year. It is a kind of reverse snowball effect, getting smaller and smaller. Stabilization is low too. The past several years have been balanced on these accounts, depleting them already farther than it is prudent to do.

The expenses must fit within the projected funding. And that bottom line was a hard task master this year as we faced decreases in funding sources along with increases in expenses that are beyond our control. This necessitated significant reductions in the parts of the expense budget that we can control – including 10% or more reductions for most departments, and some staffing cuts – that we did not want to make, but are necessary.

We worked VERY hard trying to arrive at a budget that would NOT require any cuts to employees. We took $100 here, $3,000 there, tightening nearly every line. We cut uniforms from the highway, paper and supplies from offices and more. All the people who get stipends for their services volunteered to go without. Towards the end, we still fell about $50,000 or so short of what we will have funding for.

We then explored any further options we could think of that might still help to avoid laying anyone off, and started with reducing the % of health insurance the town pays from 75% to 65% - a reduction for all town employees. Still that did not save enough to bridge the gap. We explored reducing hours for all staff, but some positions are already at or below the minimum to get the job done (or in some cases to meet state requirements). In fact, we discussed adding hours in a few cases where the reductions made previously are not working out (like assessors and the sewer assistant - the latter pays for itself with sewer fees).

The only place left to cut was personnel. We have only 2 departments that have more than one employee - Police and Highway. We researched data on employees for these 2 departments in surrounding towns. We found that we have been spending significantly more and have more personnel than comparable towns in our area - about equivalent to one person in each of these departments. We cut one position from each department. Cutting just one position was not enough, as one of the crappy realities is that when you cut staff, you usually have to cut more in order to compensate for the increased cost in unemployment. I suspect that the 7 of us (5 Fin Com and 2 SB) represent a spectrum of perspectives about the police issues of the past year, yet we all agreed at the end that this was what we need to do.

Do we still need the new highway truck if we are cutting employees in the highway department?
Yes, it is still a good time to buy the truck because it will make the work easier for those who remain, the interest rates are really good now, and all the trucks are getting old and it is better to spread out the purchases. If we wait, we could end up having to pay for more than one all at once.

I hope this is helpful. See you at Town Meeting: This Saturday, May 1 at Sanderson Academy. And remember to vote too.

Mary Link