After years of fiscal belt-tightening, Duxbury’s financial outlook is slowly brightening as shown by next year’s budget, which has expanded by over $2 million.

At the Annual Town Meeting March 10, voters approved Duxbury’s fiscal year 2013 budget of $57 million, which includes two new positions, evidence that the hiring freeze instituted by the town manager in recent years has thawed.

Town officials were cautiously optimistic about this budget, which becomes effective July 1, but said it has taken a lot of hard work and sacrifice by every town department, including the schools, to get to this level. “I consider this year to be one of opportunities,” said Town Manager Richard MacDonald during his annual address of the town’s financial situation. “Through conservative budgeting, Duxbury has positioned itself to be able to take small steps forward.”

However, he added, “None of this came by accident. We are proud of our accomplishments against the backdrop of state, federal and international turmoil.”

As part of the town management’s ongoing goal to make Duxbury’s government more professional, two new full-time positions were funded in the FY13 budget: a facilities director and a human resources assistant. Only the assistant position will be funded in next year’s budget with a salary range of $43,500 to $63,500.

The facilities director’s job will not be funded until July 2013 (the FY2014 budget). The salary range for this job is $60,000 to $85,000, and the position will probably also have its own departmental budget, but officials have not yet discussed these costs. The facilities director will decide the needs of the town’s 50 buildings and be responsible for their routine maintenance and for planning for their long-range projects.

Under MacDonald’s leadership and the direction of Finance Director John Madden, the town has been quietly changing the way it manages its money by carefully putting away cash for the future.

At the Special Town Meeting, voters approved a deposit of $300,000 to the stabilization fund, the town’s savings account. Adding money to the stabilization fund helps Duxbury build up its reserves, which allows it to receive favorable interest rates when borrowing money for larger projects. This deposit brings the fund to over $2.1 million, an amount that will equal slightly more than 4 percent of the town’s operating budget not including debt. Town officials have said their goal is for the fund to equal five percent of the operating budget by fiscal year 2014. 

Voters supported recommendations from town leadership to make deposits into other accounts that will help the town counter any unforeseen spikes in the costs of pensions and unemployment claims. 

In addition, Duxbury residents decided to take pro-active steps to offset the costs of paying for health care and other benefits for the town’s retirees by creating an irrevocable trust fund for these costs. Although the town is not yet required by the state to cover these expenses, town managers feel that this mandate will be forthcoming, and they wanted to stay ahead of the costs. Funds in this account come from reimbursements from Medicare, part D for retirees.

During MacDonald’s tenure, he and Madden instituted the policy of using renewable resources, i.e. property tax levy funds, for ongoing expenses and one-time revenues (i.e. free cash) for one-time expenses. This philosophy represented an about-face from the previous town manager’s use of free cash to balance the budget.

This formula has proven to be successful because it has allowed free cash to accumulate each year to a level that lets officials use this money to fund capital items for the town and schools. All of the school department’s level-one priority capital items received funding as did those from Department of Public Works.

Voters approved over $1.46 million in capital expenses for FY13. The school department will receive $350,251, which will be distributed throughout all schools and will pay for a new gym floor and new lighting at Chandler as well as new computers, furniture, carpets and classroom needs.

Voters agreed to purchase a new front end loader for the DPW, a new ambulance, a new pumping engine for the white fire truck, and a new police K-9 equipped vehicle. They also invested in their buildings and assets by supporting improvements to the interior of the senior center (painting, new carpet, a renovated lobby), and for painting the trim at the library and at the Ashdod fire station and by approving upgrades at the North Hill Golf Course.

Financial planning is on the minds of the town’s volunteer committees that deal with the town’s money. Both the Finance Committee and the Fiscal Advisory Committee are doing more long-range planning than in the past. Finance Committee chairman Ken McCarthy said his board has been working to develop financial management policies and will present these in writing to next year’s Town Meeting.

Frank Mangione of the Fiscal Advisory Committee said his board is working with the town to address its long-range capital planning needs. This committee recommends that the town set aside $1.5 million each year with the tax levy to pay for expenses such as vehicles, equipment, building maintenance and debt service. He said it should also establish a central maintenance budget for annual minor repairs to the town’s buildings.

In response to requests from residents, Mangione led voters through the town’s capital projects payback schedule, detailing each of the large construction projects and how much they will cost, the loan payback schedule and the impact on the owner of a median-valued home.

He estimated that Duxbury will spend more than $96 million over the next ten years on its approved capital projects: the new combined middle and high school, the new crematory, the new police station, and the renovated fire station. The state will provide a $55 million reimbursement for the school buildings. 

Property taxes will increase to pay for these projects. The year with the largest impact on tax bills will be 2015; that is when the town will begin paying back all the loans at the same time. Taxes are expected to increase by 17 percent that year. For a resident in a home with the median value of $459,700, this means an extra $1,100 in taxes during 2015. This is in addition to the current FY12 bill of $6,339, which will also have increased in three years.

The debt for all five projects will be paid off by FY2038, said Mangione. But he noted that there are other capital projects on the horizon such as a new DPW building and yard currently estimated at $6 million, possible seawall repairs and also fixes to the town’s older buildings.

The Fiscal Advisory Committee’s report and other Town Meeting reports and slide shows can be seen on the town’s Web site.