ORLEANS — In planning their budgets for the fiscal year that begins next July 1, department heads can propose up to a 4 percent expenditure increase over the current year. Selectmen set the standard, which applies to town and school budgets, last week.
“Last year, I told the board we were at a crossroads,” Town Administrator John Kelly told selectmen Nov. 1. The standard 2.5 percent annual increase was becoming unsustainable without “significant revisions, including layoffs and reorganizations.” To preserve current service levels in the next fiscal year, he said, he recommended up to a 4 percent increase, which “barely maintains the status quo.”
Kelly and Finance Director Cathy Doane gave the board an update on revenue, expenditures and debt for the town, with Doane noting that bonds for $29 million in borrowing had been sold that day at a favorable interest rate; they will pay for the new DPW/natural resources and police buildings along with a number of less costly projects. The sale was at a premium, which reduced the town's actual debt for this bonding to $26,570,000. Adding in borrowing already on the books, the total debt for the town is $53 million.
“These increases aren't unexpected,” said Selectmen Chair Jon Fuller. “We've been talking about this for several years. When town meeting voted for these, they had to expect the tax increase.”
Many of the projects, Kelly said, “were deferred for many years.” Current indebtedness doesn't include “other buildings we'll need to address, (including) the fire station, the library, and the elementary school. The last renovation at the library was in 1991. We're at a point where we're trying to keep the buildings going in terms of safety and maintenance. Right now, they are not in the capital plan.”
“Shouldn't (the library) last longer than 25 years?” Selectman David Currier asked. “It seems like these buildings should be lasting longer than that.”
“We're not talking about new buildings,” said Kelly. “The big issue they have at the library is space and whether to try to add an addition. It's the same with the fire department, the space.” The town administrator noted that a previous board had set a goal of extending the life of town buildings by an extra decade. “We are already at that 10-year period,” he said.
The town's total indebtedness could increase to more than $111 million by fiscal year 2024, Doane noted, as borrowing for wastewater projects goes forward.
Meanwhile, costs in annual operating budgets are rising. Kelly said Cape Cod Municipal Health Group, which will set health plan rates in January, is predicting another 11 to 12 percent increase. Pensions administered through the Barnstable County retirement system are projected to go up 8 percent. Also, all five town union contracts end June 30 and new three-year pacts must be negotiated.
In his presentation, Kelly had recommended a 4 percent increase cap for non-school budgets and 3 percent for Orleans Elementary, the Nauset regional schools, and Cape Tech. Selectman Mark Mathison argued that school costs were dropping as a percentage of towns' overall spending and that “it's only fair and right that they be accorded the same leeway every other department is.” His colleagues agreed, as did Kelly, who said. “I do like the idea of having the same number. Then it's not us vs. them.”
The administrator will provide a draft FY19 budget to the selectmen by Jan. 15, with a copy to the finance committee. The boards will hold a joint public hearing on the document on or before March 20.