If the town’s financial state doesn’t improve soon – and that depends on variables such as winter weather, a lawsuit and firefighter health – Londonderry may be looking at a spending freeze and rolling furloughs.
Finance Director Sue Hickey outlined the quarterly budget review for the Town Council on Monday night, noting a concern over the rate of expenditures.
She said the Town has expended 64 percent of its budget, where it should be at 58 percent. Revenues collected stand at 48 percent, but she added, “we don’t collect big revenues until the spring.”
But heavy snowfalls, firefighter illness and the resulting overtime, and a longstanding lawsuit are eating away at the town’s budget.
Town Council Chairman John Farrell said that as of the end of January, the Town had spent $189,521 for snow removal. Town Manager Kevin Smith said that figure was about 118 percent of the snow removal budget and did not include February’s multiple snowstorms.
Farrell said that as of Jan. 31 last year, $44,305 had been spent for snow removal. “A difference of over $100,000 due to the change in weather, and we had been averaging between $60,000 and $80,000 over the past several years,” Farrell said.
Hickey said Public Works as a department was running on average based on the past five years’ trend analysis and the fire department was running the same. “The police department is below compared to the previous year,” she added. “I know that they have postponed some spending due to snow removal, trying to put off some expenditures.”
Hickey said the legal expenditures include forensic audit fees in July and August, the first two months of FY 14. Those were not part of the budget the previous year.
“So (legal expenses are) significantly higher, however as time goes on between now and June, I think we’ll see that the trend will be coming closer, as we have no forensic audit this year,” Hickey said.
Farrell noted that the forensic audit was the result of a lawsuit regarding impact fees, in which the court required the town to conduct the audit. Hickey said the cost of the audit was approximately $230,000.
But legal fees are not over with yet. Farrell said the plaintiff has appealed a decision issued by the court earlier this month that had dismissed a lawsuit over impact fees and found in favor of the town.
“We’ve probably spent $275,000 of the taxpayer money because of a lawsuit that was dismissed,” Farrell said. “For clarification, this was from impact fees that we returned that by statute we only had to return for three years and we returned them all the way back to 1994 in order to do the right thing. It’s cost us $275,000 because someone questioned that.”
Councilor Tom Dolan asked if it were possible to ask the court for a return of legal fees and Smith said he would look into it.
Hickey said she also looked at overtime expenditures for the police and fire departments, and while police were fairly consistent over five years and as of Jan. 31 had expended 62 percent of that budget, fire was at 91 percent for the same time period, a little higher this year than last.
“My understanding is that as of now they will be over-expended over 100 percent of their overtime budget by the end of February,” Hickey said.
Smith noted the fire department has 15 percent of its personnel out on sick leave.
Fire Chief Darren O’Brien said that translates to seven personnel, including dispatchers, firefighters, paramedics, and lieutenants. Their absence is putting a strain on other personnel and increasing overtime costs over and above projected figures.
“Last year we were $204,000 over in fire department overtime,” Smith said. “We under-expended our entire budget by $33,000, so it was close. Unlike the federal government, we don’t print money, and we can’t run a deficit. We cannot overspend our bottom line.”
Smith said he has spoken with O’Brien and asked what it would mean if they kept a staffing level at 10 until the end of June, and the chief said they would overspend the overtime budget.
“We cannot do that,” Smith said.
Smith said the chief offered a plan to drop the personnel to nine from 8 p.m. to 8 a.m. From 8 a.m. to 8 p.m. the level of staffing would remain at 10.
O’Brien said that means three firefighters at South Station, three at North Station, and two at Central Station at night. Also on duty would be a shift commander/battalion chief.
“With my operating budget, 93 percent is personnel and 6.3 percent is operating costs,” he said. “There’s not a lot of play to come up with in that budget so what I’ve done is to put a spending freeze on and taken $43,000 out of the operating budget – things like vehicle maintenance – to try and make up some of the shortfalls there.”
Farrell asked if the battalion chiefs could run equipment and O’Brien said they do.
He then asked about using on-call firefighters, and O’Brien said they had three, with most working full-time jobs, with firefighting something they did as a hobby and to help out the town when they could.
Councilor Tom Freda asked about shutting down the library for a couple of days a week to help the budget, and Hickey said that would not make a difference because heating and associated costs would still have to be paid and staff would take vacation days.
Dolan then asked about a rolling furlough.
“The way I see it,” Smith responded, “all options are on the table,” including the hope that winter and its related expenses would be over soon, the firefighters out on sick leave would be returning quickly, and the impact fee litigation would end fast.
“The most likely scenario is that we’re going to see a spending freeze sometime very soon, but if things keep going the way they are, even with a spending freeze, we’re going to have to look at more drastic options such as doing the furloughs,” Smith said.
Councilor Joe Green said they needed to figure out what had to be done to keep the firefighters safe. He said he had done an analysis of similar communities and had given it to the town manager, and noted some towns had as few as six on a shift.
Farrell sad that they needed to stay ahead of things and “batten down the hatches, but there’s no need to panic just yet.”