CHATHAM – Selectmen have begun digging down into the proposed fiscal 2018 budget, last week reviewing general government, debt and capital spending plans for the coming year.
At $2.1 million, the capital budget is up $158,000 over the current year's capital spending, but for the first time since 2012, will be funded completely outside the tax rate. Finance Director Alix Heilala said the source of money for the expenditures will come from free cash, the waterways improvement fund, cemetery lots sales and public television access funds.
The capital budget represents 7 percent of the total operating budget, which has decreased by $182,000 to $30,053,026, Heilala said. Part of that decrease is due to changes in the school department budget, as well as a drop in anticipated health insurance rate hikes from 15 to 12 percent.
The recommended capital budget contained only about one-third of the spending requests made by town departments. It includes vehicle and equipment purchases, highway maintenance money and small projects. Among the requests that were included in the recommended budget are a new ambulance at $248,000; $35,000 to replace a fire department staff four-by-four vehicle; new jaws of life for the fire department at $35,000; an natural resources department oil pollution trailer replacement at $18,000; $40,000 for a custodial crew van; $75,000 for dredging; $151,000 for a transfer station container roll-off truck; $150,000 for road resurfacing; $100,000 for engineering and consulting; $75,000 for sidewalk construction; $78,000 to replace two police cruisers; replacement of police portable radios ($29,000) and laptops ($34,000); $58,000 for a transfer station pickup truck/plow replacement; and upgrade and replacement of Channel 18 equipment at $35,000.
Two major capital projects will appear as separate articles in the warrant for the May annual town meeting. Design and engineering for improvements to the infrastructure at the Ryder's Cove town landing are proposed at $100,000; the work includes upgrading the bulkhead and boat ramp and installing rest rooms. Construction will likely be funded in fiscal 2019 at an estimated $700,000.
Replacement of the south jog bulkhead at the fish pier is likely to be even more costly, perhaps as much as $2.4 million. Officials are still exploring the extent of that project, how it will be funded and whether it will be deferred, said Heilala.
There are also several other capital items that could potentially be separate warrant articles, including $90,000 for improvements to the 90 Bridge St. property the town purchased for $800,000 in 2014, $350,000 for repaving of the town offices parking lot and a “significant amount of money” for expansion of Seaside and Union Cemeteries, Heilala said.
Other pending capital expenditures include improvements to the Eldredge Trap Dock property purchased by the town last year and a new council on aging facility. “We have to keep that in mind as well,” Heilala said.
The town offices parking area work includes upgrading the sidewalk and area around the chamber of commerce information booth. Selectman Seth Taylor asked for a breakout of the different aspects of the project, noting that the town contributed $75,000 to the chamber last year. Meanwhile, voters last month agreed to buy the Eldredge Garage property down the road for public parking.
“We just as a town paid $2.5 million to buy something that is in principal in part going to be supporting downtown merchants in parking this year,” Taylor said. “It may be one of those years we ask them for a bit of relief from some of the other expenses.”
The general government budget is proposed at $2 million, up 2.25 percent. Major increases include a 13 percent hike in the legal budget, proposed at $125,000, based on actual prior year's spending, and an $11,137 increase in the treasurer/collector budget. The election budget is down by 19 percent, or $8,235, reflecting the fact that there are fewer elections scheduled in the coming year.
Total debt service is down 4.36 percent to $7.5 million, which reflects principal payments of $5.3 million, a 5.9 percent decrease, and interest of $1.8 million, down nearly 5 percent. Another $250,000 in short-term borrowing, to cover the Eldredge Garage purchase, is included in the overall figure. The total includes $64,000 in savings due to general bond refinancing done by the town last September.
Debt costs are forecast to drop to below $5 million by 2028, although that doesn't include additional long-term debt for the Eldredge Garage and future sewer infrastructure. According to the budget figures, 52 percent of the current debt is due to town building projects; 33 percent for wastewater; 11 percent for land bank purchases; and 3 percent for roads/sidewalks/bike path construction.
Taylor asked if revenue from the anticipated sewage treatment agreement with Harwich will be used to pay down wastewater debt or for some other purpose. Heilala said the money, the total amount of which has yet to be determined, could be used to refinance sewer debt or as a direct offset to the tax levy.
“It's going to be very important for us to understand that as a piece of the discussion,” Taylor said. “What we would choose to do with that money...is something that is necessary to that discussion.”
Selectman Dean Nicastro, a member of the subcommittee negotiating the agreement with Harwich, said he's like to see the money used for general municipal government purposes.
Chatham and Harwich selectmen were scheduled to meet to discuss the intermunicipal agreement for sewage treatment today (Thursday, Feb. 16).
Selectmen will continue reviewing individual budgets over the next few weeks.