MANCHESTER — Town officials gathered for an all-day meeting Friday, Dec. 18, to begin developing a municipal budget that voters will eventually be asked to approve during March Town Meeting.
The proposed budget remains a work in progress and will likely undergo several changes before the Select Board approves it sometime in January. The discussion on Friday represented a starting point for the Select Board to mull the numbers and information presented to it by Town Manager John O'Keefe, who prepared the initial draft for the board to consider.
As is often the case, the budget proposal is a contest between keeping the municipal tax rate as low as possible, while providing the services residents want and expect, O'Keefe said.
"I gave them the most financially responsible budget I could, which doesn't mean it's gentle on the tax rate though," he said. "It does present what people are looking for — investment in roads and infrastructure, but it comes at a price that anyone who collects taxes or sets the tax rate isn't really happy with."
Under the starting point proposal, the overall bottom line of the fiscal year 2017 budget would rise by $338,768, from the current fiscal year's $4.924 million to $5.262 million, about a 6.9 percent increase. The main driver of that increase is capital expenditures for items like road paving proposed for several town streets and replacing one of the town's trucks. Roads slated for paving and other structural improvements include Richville Road, Center Hill, Spruce Street and Deer Meadow.
At the same time, the draft proposal calls for scaling back the use of the town's reserve funds to keep that money available for future use if needed to help stabilize the town's municipal tax rate in the event of a future financial crunch. The upshot of those two factors — more capital improvements and less reserve funds — translates into a projected tax rate rise of about 3 cents per $100 of assessed property value, with the rate going from .235 cents to .264 cents, or about a 12.5 percent increase.
That would still keep Manchester's municipal tax rate among the lowest in the state, and less than most, if not all comparable-sized towns, he added.
As it goes along through the process of finalizing the budget proposal it will present to voters in March, the board might decide to cut back on some of the proposed paving projects and other capital projects and add revenues from the town's reserves, to drive the projected tax rate lower, O'Keefe said.
The current budget proposal the Select Board studied on Friday excludes any special appropriations which may be petitioned for by various organizations. If approved by voters at the annual Town Meeting, those sums would be added to the budgetary bottom line.
Other highlights from the budget proposal include a 2.5 percent wage increase for town employees, and some changes to the municipal health insurance plan. The fire department may also see an increase of $7,000 in funding from the town based on a restructuring of how they are compensated for meetings and fire calls.
For the Parks and Recreation Department, the proposed fiscal year 2017 budget includes funding for a second access point for those with physical disabilities at the municipal swimming pool. With the other improvements made in recent years to the town pool, which have not been offset by increased user fees in recent years, the time may be at hand to consider upping those fees, according to the budget memorandum O'Keefe prepared for the board.
The proposed new budget also contains items approved during last year's Town Meeting, such as $25,000 for a marketing initiative, $4,000 for street fests and $6,000 for the 4th of July fireworks. The budget also makes some revenue assumptions for next year which include a 3.2 percent jump in sales tax revenues and a 3.5 percent increase in revenues from the rooms and meals tax.
The town's debt service load will lighten as a result of the final payment having been made on the public safety facility which houses the fire and police departments and the rescue squad. That will help shave $84,520 from that line item.
"I guess the simplest way to summarize the Fiscal Year 2017 budget is like this," O'Keefe stated in the budget memorandum. "Overall, the budget increases by $338,768. Debt service decreases by $84,520, use of reserves decreases by $122,500 and capital expenses increases by $296,500. Between these three factors, the net impact on the budget is $334,480, almost the entire amount of the budget increase."
The Select Board will get its next crack at fine-tuning and revising the budget numbers at its first meeting in 2016, currently scheduled for Tuesday, Jan. 5. What the board winds up settling on later that month is likely to be different from its starting point, O'Keefe said.
"There are more balls up in the air that are in hand right now," he said. "I'm sure we'll land in a good place."