The Town’s proposed FY17 budget represents about a 2 percent increase over the FY16 budget, Town Manager Kevin Smith reported at the Town Council’s department-wide budget meeting last weekend.
Overall, increases among the various departments are minimal, with the primary drivers of the increase being a significant increase in health care costs, as well as salary increases and an increase for waste collection.
Additionally, the Town will not receive a surplus refund from Health Trust in FY17, which has in previous years helped to offset health care increases.
Smith reported additions to this year’s budget include $30,000 for Police expenses, including money needed to beef-up community outreach programs; $6,465 for Fire vehicle repairs; $12,000 for the Department of Public Works for overtime costs associated with snow storms; and $505 for increases in senior programming expenses.
The Senior Center has also been allocated in the Town Manager’s proposed FY17 budget $350,000 for the Senior Center expansion, a Priority 2 project on the Capital Improvements Plan (CIP).
Chairman John Farrell asked that by Dec. 7, a specific plan be presented for how the allocation, to be funded from the Town’s Undesignated Fund Balance, would be used to improve the Senior Center.
Smith said the project was initially proposed to be funded at $700,000, but they think it can be completed for less by keeping much of the labor in house.
Councilor Joe Green said while he is in favor of keeping project costs down, the Town has seen some cases where moving forward with the lowest price resulted in future costs – for example, South Fire Station required repairs not long after initial construction because some materials used were not durable enough.
“We feel confident with (Administrative Support Coordinator) Steve Cotton on the job (the expansion) will be completed in a way that it won’t have to be re-done shortly after,” Smith said.
Because the Senior Center expansion is to be funded with undesignated funded balance, which Smith reported is “very healthy” at $8.2 million, the project would not impact the tax rate.
The proposed allocation would go to the voters for approval as a separate warrant article in the Town’s March election.
Also proposed to be funded from the Undesignated Fund Balance in the amount of $1.5 million are allocations for Fire lease vehicles, fire equipment, highway trucks, highway heavy equipment, Phase II improvements at the Pillsbury Cemetery and a flyover next year to update the Town’s GIS (Geographic Information System) mapping.
Smith also proposes investing $100,000 into the Expendable Maintenance Trust Fund, double the Town’s FY16 investment; as well as $650,000 into the Roadway Maintenance Trust Fund, an increase over the Town’s FY16 investment of $150,000.
Special warrant articles proposed as part of the FY17 budget include a $38,000 allocation for resurfacing the recreation basketball and tennis courts, with a tax impact of one cent; $350,000 from Undesignated Fund Balance for the Route 102 sewer expansion west toward Hudson; six collective bargaining agreements; and $300,000 from Undesignated Fund Balance for improvements to the Town Common proposed by the Master Plan Implementation Committee.
Councilor Tom Dolan said he would like to see any future funds allocated to improvements to the center of Town used “for action and construction, rather than more planning.”
“We want as much of that money being spent on construction rather than meetings and designs,” Smith agreed.
On the revenue side, estimated non-property tax revenues for the proposed FY17 general fund operating budget are $11.4 million, a 1.3 percent increase over the FY16 adopted budget.
In the last year, the Town’s assessed property values have increased 2.3 percent.
“It’s going in the right direction,” Smith said, projecting FY17 will be “another good valuation year.”
Since 2013, the Town’s tax rate has been decreasing, Smith reported, noting there’s only one neighboring community, Litchfield, that has a lower tax rate than Londonderry.
“I can tell you, as a Litchfield resident, we don’t have nearly the number of services Londonderry has,” Smith said. “Londonderry is getting a pretty big bang for its buck with the amount of services we’re offering, and having one of the lowest tax rates in the surrounding communities.”
In addition to Smith’s proposed FY17 municipal budget overview, the budget workshop included presentations from Fire, Police, Public Works and the Leach Library.
Fire Chief Darren O’Brien reported the Department has proposed an operating budget of $7.5 million, an increase of $585,555 over FY16.
Of the increase, $402,000 is the addition of the capital lease lines being added to the Department’s operating budget, which is to be reimbursed from the Capital Reserve Fund, according to O’Brien.
Additionally, the Department will continue to see the increased cost of hiring four additional firefighters, as approved by the voters last year; as well as the cost of vehicle maintenance, utilities and increases in salaries and benefits per contractual agreements.
On the revenue side, O’Brien reported ambulance billing is up $585,000 this year.
“We see that number continually trending up, and we hope to see it continue to do so,” he said.
Although fee collections are lagging, the Department is developing a request for proposals for a new billing agency in hopes of increasing its collection rate and decreasing cost for the billing agency.
Also notable is O’Brien’s plan to refurbish, rather than replace for $1.7 million, the Department’s 2001 tower truck.
“We need to do something with the aerial we currently have,” he said. “Rather than replace one piece of equipment for $1.7 million, I plan to refurbish the aerial and buy a smaller, medium duty ladder truck for residential use and getting into the smaller driveways, as well as the addition of a tanker.”
“This plan the chief has come out with is a very smart and prudent plan, I think,” Budget Committee member Dana Coons said.
As the Department looks to future planning and challenges, O’Brien advised the Town to begin planning for substantial increases in demand for services they anticipate with the construction of an assisted living facility, the future expansion of Interstate 93, the development of Woodmont Commons and continued residential construction throughout town.
O’Brien noted the beginning of construction at Woodmont Commons has already required Fire services for three significant incidents in the last three weeks.
“My understanding is Woodmont has been advised, and the fire chief and town manager are getting together to discuss the potential impacts,” Farrell said. “We have a development agreement in place.”
The Police Department also reported a strain on resources due to the Town’s rapid growth, as well as the increased demand for services to combat the heroin and substance abuse crisis in Southern New Hampshire.
Lt. Kim Bernard noted the Department has seen a 100 percent increase in calls for drug overdose, and the number of drug-related arrests has also increased substantially.
Like O’Brien, Police Chief Bill Hart recommended the Town be planning now for the impact commercial and residential growth will have on Police resources, before some of the significant projects in the pipeline come online.
“If we’re going to hire someone in 18 months, we need to do it today. We say that to put a sense of urgency, even though we’re not asking for personnel today. Next year, we will be coming and likely saying, look, we need to plan for this,” he said. “We’re very planning intense. We plan for those times we’re going to have a gap in personnel to deal with the increased service – we’re there now.”
Early projections of the Police Department’s FY17 default budget include an increase of between $150,000 and $200,000, for a total budget of $8.4 million.
Retirement and health care costs account for the bulk of the increase, with the remainder to cover contractual increases, according to Bernard.
Public Works Director Januscz Czyzowski emphasized in his presentation to the Council that lack of funding to maintain roadways in town continues to be a challenge for his department.
“Just for shim and overlay, if I want to maintain roads every 12 years, because pavement oxidizes and gets brittle, with this funding I’m doing a 100-year cycle,” he said.
The total proposed FY17 budget for Highways and Streets is $1.23 million, a $10,000 decrease from the Department’s FY16 amended budget; and the total proposed FY17 budget for Public Works is $3.2 million, about a $100,000 increase over the FY16 budget.
Presenting the proposed Environmental Solid Waste Recycling budget of $2.2 million, a slight increase over the FY16 budget of $1.9 million, Czyzowski noted the proposed budget could increase or decrease, as the Town’s curbside contract is set to expire this year.
“We’re hoping for good numbers, we’re looking for different options. I asked for four different possibilities that I will come and present to you,” Czyzowski said. “Until July 1, we are running on the old contract.”
Before concluding the presentation, the Council asked Czyzowski when Pettengill Road will be open to the public.
“I’m hoping after Thanksgiving,” he said. “There’s no other person in this room who’s more anxious for this road to be open than me.”
Noting substantial growth in reference transactions and participation in the library’s adult and youth programs, Leach Library Director Barbara Ostertag-Holtkamp said the proposed FY17 budget of $1.3 million represents a modest increase of $77,112 for salaries, insurance and other benefits.
“In the last six years, the library budget has only gone up 3.1 percent, or half a percent per year,” she said.
Additionally, worker’s compensation has seen a decrease of $65.
Ostertag-Holtkamp noted the cost of salaries has in part increased because she is encouraging staff to take payment for their vacation days as a result of strains on resources created by the Affordable Care Act.
Down to eight full-time and nine part-time staff members, Ostertag-Holtkamp said where she previously was able to cover a staff member’s vacation time with a part-time staff-member, she is now restricted in the number of hours a part-time staffer can work before she is required to pay them benefits.
She noted the ability to cash out vacations is only available to employees who have been working at the library for at least 10 years.
Moving forward in the budget planning process, the Council will hold its next budget workshop, to include preliminary budget recommendations, during its Nov. 23 meeting at 7 p.m.