Town Manager Kevin Smith brought his Fiscal Year 15 budget overview to the Town Council on Monday night.
“On March 8, 2011 voters approved a revised process which culminates with all budget items voted on by ballot, similar to the way the school district does it,” he said. “A deliberative session this year will be held on Feb. 8, 2014, when voters will finalize budget items and voters will have a choice between the Council’s budget, which may be amended at the deliberative session, and a default budget.”
Smith said the default budget is the FY14 operating budget adjusted by contractual items like collective bargaining agreements, contracts, and medical benefits, and reduced by any one-time expenses in the FY 14 operating budget.
“The directive from the Town Council was to develop a budget keeping the bottom line of each department within the FY 14 default amount,” Smith explained. He noted the FY 14 budget is $27,626,281 and when contracts were added in along with salary adjustments, benefits and insurance, it makes the FY 15 default budget $28,086,186.
“Then there were adjustments that I made, to result in a budget of $28,018,488, or $67,698 below the default budget,” he said. “One of the things that I had each department do prior to submitting their budgets was to put together a list of items that if they could have above the default, what would those things be. The fire department overtime request was $204,457. They made that request given the historical amount that the fire department has gone over in previous budgets. I have asked finance to prepare a 10-year trend analysis to be made available for the Nov. 16 budget workshop.”
Smith said that as far as the Capital Improvement Plan (CIP), the CIP committee recommended improvements to the highway garage for $260,000 and he included $250,000 for those improvements, which will be funded out of the Undesignated Fund Balance (UFB) and would have no tax rate impact.
“Aside from that, the budget does not include other CIP-identified issues,” Smith said.
Under Special Revenue Funds, Smith said police outside details are funded at $490,322, slightly lower than the last fiscal year, and the Sewer Division expenses are $2,629,815, also slightly below the FY 14 funding. Both are paid for by user fees, with no taxpayer support.
Capital Reserve and Maintenance Trust Funds allocate an additional $350,000 from the Undesignated Fund Balance and raise $400,000, for a total of $750,000 to Capital Reserve amounts. The CIP recommendation was for $1.36 million.
Smith noted the town voted to authorize $500,000 out of the UFB and raised $310,000.
“Program funding acceleration began in FY 14 in anticipation of future large equipment purchases – for example, the fire department ladder truck at $1.386 million in FY 18,” he continued. “Annual funding allocation will not be distributed evenly between the funds, but apportioned based on immediate needs. The current balance is $2.3 million and a 10-year trend analysis by Finance will be ready for the Nov. 16 budget workshop.”
Smith said the Expendable Maintenance Trust Fund continues to have a $200,000 annual investment in maintenance and upgrades of town facilities, with $150,000 to come from UFB and $50,000 raised.
The current balance is $200,000. A 10-year trend analysis is also being done.
“As for Special Warrant Articles, we do anticipate two collective bargaining agreements, one for the Londonderry firefighters and the other for the Londonderry police,” Smith said. “We are in the last stages of finalizing for the management side of the unions. We will have something prepared for the council sometime this month.”
Smith said the Roadway Maintenance Trust Fund is funded at $250,000, with $150,000 from the Undesignated Fund Balance and $100,000 to be raised. He said that in FY 14, $250,000 came out of the UFB and $250,000 was raised. The current balance is $750,000.
The Commercial/Industrial Assessment update is $145,500 to hire consultants. This is done every five years and is funded 100 percent from the UFB, Smith said.
The Overlay/Veterans Exemptions has a budgeted amount of $225,000 for the fund overlay account and $472,500 for the Veteran’s Exemptions to maintain individual exemption amounts to a maximum level of $500.
Estimated revenues for FY 15 are just under $11 million in non-property tax revenue, a decrease of just over 1 percent from FY 14, Smith said. Of the UFB, $50,000 would go for the operating budget, $150,000 for Expendable Maintenance Trust Fund, $350,000 for Capital Reserve, $150,000 for the Roadway Maintenance Trust Fund, $250,000 for garage improvements and $145,000 in commercial assessments for a total of $1,095,500, he said.
The current UFB balance is $3,352,325.
Smith said the 2013 estimated tax rate of the town would be $5.19, a zero increase, on a budgeted $35,428,342, with $4.84 from the operating budget, 3 cents from Capital Reserve/Maintenance Trust Fund, 3 cents from Special Warrant Articles and 19 cents for Overlay /Veterans.
Chairman John Farrell asked if health insurance would be increasing by 10 percent and Smith said it was slated to go up 9.9 percent and the town would be looking at different options, including self insurance.
The town would be up $246,000 in total health insurance, Finance Director Sue Hickey said.