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|Town Budget Balanced Using All Free Cash|
|Monday, November 29, 1999 07:00 PM|
The news is bad: town officials are scraping the bottom of the barrel
and emptying the town's free cash account to balance the fiscal year
2008 budget, which totals $55.5 million, a 3.65 percent increase over
the last fiscal year.
The news is bad: town officials are scraping the bottom of the barrel and emptying the town's free cash account to balance the fiscal year 2008 budget, which totals $55.5 million, a 3.65 percent increase over the last fiscal year.
In his annual balanced budget presentation to selectmen Monday night, Town Manager Richard MacDonald painted a grim picture of a tight budget with slim increases for every town department including the schools. With revenues leveling off due to declining new growth and ever increasing expenses, MacDonald did what only a few years ago was unthinkable ï¿½ he used all $1.7 million in the town's free cash account to balance the budget. This represents a shift in thinking at town hall. The past budgeting policy has been to try to save at least a million in free cash after the Annual Town Meeting in March to be prepared for unforeseen changes in the budget during the year. The emptying of free cash means there will be no more last minute budget additions on the floor of town meeting unless a citizen can offer a different source of money to fund his town service need.
Spending all free cash is a policy shift from past years, said Finance Director John Madden, who was instrumental in forming the FY08 town budget. Free cash is money generated by the town from things such as money not used in town budgets and returned back to the general fund at the end of the year. Calling free cash "an accident of budgeting," Madden said the town is always faced with two choices: spending all free cash to balance the budget or keeping some in reserve in case of emergencies ï¿½ or to fund union contracts, as happened at the November Special Town Meeting, when voters used $571,458 in free cash to supplement the school budget.
MacDonald's goal in the FY08 budget was to provide the same level of service as residents of Duxbury have been receiving in the past few years. However, his hands are tied by the revenues, which have increased less than in past years. For revenues, MacDonald is projecting a total of $53.58 million, including $1.7 million in free cash, and over $38.5 million from the tax levy, money raised from real estate taxes. This represents a 3.77 percent increase over the current FY07 budget.
Declining new growth ï¿½ the money raised from the cost of creating new houses and doing renovations ï¿½ is one factor contributing to the downward trend in revenues. MacDonald is projecting new growth figures to decrease almost 18 percent over the last fiscal year. The amount is $400,000 versus $486,966 in FY07 and $531,288 in FY06.
A bit of bright news is that state aid will increase this year by over 6.6 percent to almost $4.9 million. Yet, local receipts, which include beach and transfer station sticker fees, excise taxes, and revenue from ambulance and crematory fee, will increase only 1.2 percent.
In addition to cleaning out the free cash account, MacDonald must also take money from the pension reserve fund to offset a $300,767 assessment from the Plymouth Country retirement pension system. This is a 20.6 percent increase over FY07. Fortunately, this is what the town's pension reserve fund has been set up to do.
Across all departments, MacDonald has allowed budgets to increase only slightly. There are no new employees proposed for any town department and MacDonald said he might potentially call for a hiring freeze and also make forced reductions in town staff through attrition to save money.
The general government budget of $1.8 million represents a 1.5 percent increase over FY07. MacDonald said salaries will increase less than one percent, or $7,465. Expenses will rise 3.7 percent, or $19,443. MacDonald added $5,000 for pond maintenance and $24,000 for replacement computers, etc. These items used to be capital expenses but since they appear annually he moved them to the operating budget. Legal costs will decrease by $20,000 since union negotiations have been completed.
The public safety budget is projected to increase 3.6 percent, or $198,797. It totals $5.7 million. Salaries will rise 3.2 percent over FY07, or $162,952 and there are no new employees proposed. The police department has a level service budget for FY08 of $2.9 million, a 4.6 percent increase. It includes raises for union employees as provided by the approved contracts. The fire department budget totals $2.1 million and also includes union raises and a full complement of paramedics. Expenses in the fire department have risen due to higher ambulance billing costs, but the town recoups some of that in money collected.
MacDonald highlighted some decreases in the public safety budget, including a $7,011 decrease in inspectional services created by a reduction in the building inspector's hours and a $1,151 decrease in the harbormaster's budget due to lower expenses. The animal control budget is showing some savings because the rabies inspection position was eliminated.
The proposed public works FY08 budget of $3.6 million represents a 3.7 percent increase, or $131,411. There are no new employees and much of the gain comes from fuel costs, which are up 14.2 percent, or $28,400. MacDonald has instituted better controls at the central fuel depot and this has helped mitigate costs during the current fiscal year, he said. The higher cost of natural gas and its use at the crematory has pushed up the cemetery budget by 22.5 percent, or $30,300. A spot of good news is that changes in regulations at the transfer station for construction materials have resulted in an $18,046 decrease in expenses.
The water department budget is projected to be $2.2 million, a 3.9 percent increase. The DPW budget including water is over $5.1 million, with a 3.4 percent increase.
The library and recreation budget was given a 1.3 percent increase, for a total of $1.5 million. The library budget was allowed a 2.1 increase with most of the money going toward salaries. MacDonald said the library will have to continue to count on support from its Friends of the Duxbury Free Library group to supplement its budget.
The Human Service budget, including the Council on Aging, will rise 3 percent, totaling $451,210. Increased building maintenance and food supplies needed at the senior center pushed the COA's budget 3.5 percent higher than FY07. It totals $396,208, which includes an extra $13,457 over last year.
For the education budget, MacDonald allotted $25.5 million, or a 2.6 percent increase of $650,000. The School Committee recently voted to support a $26.4 million budget, a 5.57 percent increase over the current FY07 of $24.3 million.
School Committee member Anne Ward, who attended the meeting, said: "It's going to be very difficult for us to provide level service with a 2.5 percent increase."
A large portion of Duxbury's operating budget goes to the employee benefits (health insurance, workers' compensation, etc.), town and schools shared costs (fire, liability and insurance), and debt service, or the cost of repaying borrowed money. This line item will increase 6.1 percent for FY08, totaling over $13.5 million.
MacDonald also slashed capital budget requests from over $1.4 million to $178,000. He did this by refusing the majority of requests and by funding six items with $130,000 in free cash and $48,000 from "other financing sources." The six items include $20,000 to replace the old Town Hall's heating/AC system; $25,000 for portable radios for the fire department; $10,500 for a new outboard motor for the harbormaster; $47,500 for a new DPW truck; $30,000 to reline the crematory retorts, or ovens, and $45,000 for the cemetery columbarium.Madden told selectmen that creating the FY08 budget "was a difficult process." However, MacDonald and selectmen predicted that next year's budget will be even more challenging. If the town wants and expects the same level of services next year, then a Proposition 2 1/2 override may have to be considered, he said.