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Town manager submits recommended FY20 budget to selectmen

by | Feb 20, 2019 | News

Following the established budget timeline, Town Manager Norman Khumalo submitted his recommended FY20 comprehensive budget, totaling $93,840,941, to the Board of Selectmen at its Jan. 29 meeting.

“The intention today is to hand the budget over to the selectmen,” explained Khumalo, who pointed out that another two months of discussion will take place before the board votes to adopt and submit the final budget to the Appropriations Committee on March 5.

Setting the stage for the discussion, Khumalo relayed information from his conversations with various town departments including the ever-increasing enrollment numbers affecting the school budget and the inability of the fire department to adequately respond to the 2,505 requests for service received last year. In addition, Khumalo pointed out that the services that are funded through the FY20 budget are intended to sustain assets that are worth over $4 billion.

The FY20 budget includes an operating budget of $79,022,920, a $250,000 transfer to the general stabilization fund, a $500,000 transfer to the other post-employment benefits (OPEB) trust, debt service of $8,439,226, and a proposed capital budget of $5,628,795.

The recommended expenditures by category in the operating budget are listed in the accompanying chart.

DEPARTMENT

EXPENDITURE

PERCENTAGE INCREASE

General Government

$4,581,604

 7.54%

Public Safety

$6,933,166

10.18%

Education

$48,517,506

6.64%

Public Works

$5,724,765

6.98%

Human Services

$873,680

8.26%

Culture & Recreation

$615,798

11.59%

Employee Benefits & Insurance

$11,776,402

10.46%

In order to help the community better understand the proposed budget and tax impact, Khumalo said he asked his financial team to look into this topic and to refine the methods and tools for looking at tax impact. Presenting a new approach for the team was Tim O’Leary, the town’s newly hired chief financial officer, and senior accounting manager David Nalchajian.

O’Leary gave an overview of how and when the tax rate is set; both after Town Meeting approves the budget and after the final valuation of the taxable property is known. His summary to the board was to show where the budget was likely to land the tax rate at the end of the day. According to O’Leary, changes in the tax rate do not have a big effect, but the general rise in valuations that occurred this year, at just over 3 percent, will have a larger impact. Based on his preliminary calculations, the projected tax rate increase from $17.17 to $17.25, coupled with the 3 percent increase in valuations, will result in an average tax impact of 3.5 percent.

“And average is really not a good predicator for any individual property owner,” said O’Leary.

Citing his experience working on a total of 12 town budgets, Brian Herr told the financial team members that while he agreed with what they were saying, he was approaching the budget process from a different angle.

“I think what you are saying is what we are going to do in October or November, after we get through Town Meeting in May,” Herr said. “It all comes from what we spend, what we appropriate, and that is still in play. We are far from done.”

Herr also disagreed with the projected average tax impact of 3.5 percent, saying his calculations, incorporating using $1.5 million of excess levy capacity, would result in a tax impact of 4.7 percent.

As the board’s discussion came to an end, Herr summarized what he thought was the board’s position, saying that while the selectmen recognize the cost challenges in town for FY20, they are struggling with the revenue to pay for those costs.

“That’s kind of where I think we are,” Herr said. “We get it, but this is still an awful lot of money on the taxpayer.”

Chair Claire Wright agreed, saying, “I do believe we owe it to the townspeople to make the very best effort to give a hard-eyed look with a sharp pencil at every single item.”

The budget now is in the hands of the selectmen, and the next step in the process involves scheduling different town departments and boards to come before the BOS. If any questions arise from there, Khumalo said they will be addressed through the budget advisory committee and reported back to the board.

“We are hoping we will continue our ‘one town, one solution’ approach,” said Khumalo, “and present a forward-looking budget to Town Meeting come May.”

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