Councilors continue to look for cuts
The Town Council Monday continued to grapple with the budget for the upcoming fiscal year that starts July 1. Although the councilors deferred a vote on the spending package until later this month, they indicated at the meeting they want staff to whittle the tax-levy increase down to zero.
The potential levy increase had ballooned to $183,000 on paper last week after the councilors added several expenditures to the proposed budget.
The council’s additions included extra money for affordable housing and paving roads, but the councilors also asked Town Administrator Bruce Keiser to help offset the spending increases by finding savings in other line items.
The School Department helped the effort by cutting its budget request by an additional $83,000, Keiser said.
However, Keiser said the increase had actually been moving towards $283,000 after department heads asked to resubmit several other expenditures.
For example, the library wanted the councilors to reconsider a staffing change that would have eliminated five part-time positions and created two new positions: one for 30 hours a week and the other for 35. The change would not have resulted in any salary increase, Keiser said, but did impact the budget because the two employees would be eligible for retirement and health benefits. He estimated those costs would increase spending by $30,000.
“Last week we got updated numbers on workman’s comp and liability” he said. “Our premiums are going up $20,000.”
Keiser explained previously that the town’s insurance rates are based on Jamestown’s actual claims, as well as on the state’s overall rating. The town has made several claims recently due to damage from Hurricane Sandy and other storms.
Labor negotiations are in progress with three unions, said Keiser. Money was being set aside in anticipation of salary increases. “We believe $15,000 will be enough to settle the three labor contracts,” he said.
The councilors had also discussed going out to bond to finance North Road maintenance. If the plan went forward, the costs in 2013 would increase the budget by $100,000, Keiser said. He went on to explain the original plan was to borrow $600,000 to pave North Road and Carr Lane, but work has been scaled back to $450,000. The decision was made to drop the work on Carr Lane. The street is in relatively good condition, said Keiser, although there are some drainage issues.
The bond would be in addition to the town’s pay-as-you-go program to maintain roads that was budgeted at $325,000 for 2013. Although the “true cost,” Keiser said, was expected to run around $354,000. Overall the town would spend $804,000 on paving, up from $300,000 in the current year’s budget.
“That’s a biggie,” said Keiser. He noted the town could pay only interest for the first two years of the bond and put the repayment on a 12-year schedule. At 2.75 percent interest, he anticipates the payments would run around $50,000 a year.
Councilor Mary Meagher questioned the amount of interest on the bond.
“I thought it was only $8,000,” she said.
Finance Director Tina Collins said the $8,900 figure being used was an estimate. She added the line item should really say “bond/ lease” because the purchase of some heavy equipment for the Highway Department is going to be included.
“I’ll need $10,000 to close on that,” Collins said, indicating the plan was to buy the equipment in January.
Mihaly asked why Keiser opted to keep the pay-as-you-go program budgeted at $325,000 for 2013.
“What is the logic for keeping the $325,000 figure instead of dropping it to $300,000?” Mihaly asked.
Keiser said the cost of the work is really $354,000, based on the cost of asphalt at $80 a ton. The $325,000 was budgeted in the expectation the town could “stretch” its dollars and do the work for the lower amount. He said $300,000 would probably be too low to complete the job.
Finally, Keiser suggested adding $15,000 for the conceptual designs to improve East Ferry.
All those additions would have brought the tax-levy increase to $283,000, Keiser said, but then the department heads reviewed the capital budgets again. The School Committee reduced its budget request by more than $83,000, and Keiser was able to find $49,000 in the general fund that had not previously been counted.
Then, the staff identified projects that could be postponed beyond the upcoming fiscal year.
For example, Town Clerk Cheryl Fernstrom reduced her department’s budget request by $10,000 by putting off a project to microfilm records. The Police Department cut its budget request by $16,500 when Police Chief Ed Mello agreed to delay the purchase of a new squad car. Also, Keiser said, the Recreation Department saved $20,000 by deferring for another year the project to replace the Mackerel Cove bathhouse.
Other changes included deferring the purchase of a generator for Town Hall.
The revised budget numbers slashed the levy increase to $12,000, and Keiser went on to say the councilors had the option of tapping the “rainy day fund” – known as the undesignated fund – to reduce the increase to zero.
Councilor Blake Dickinson said he wanted the Fire Department to help the councilors get to a zerobudget increase by cutting some money from its spending request. Keiser said he approached Fire Chief Jim Bryer about making reductions, but Bryer said all expenditures were necessary.
Dickinson wanted some concessions, however.
“The Fire Department should be asked to match us,” Dickinson said. “All the other departments have more than given their share back to the taxpayers.”
Keiser said he felt confident the Fire Department would cooperate with the efforts to rein in spending.
“They are team players,” he said.