CHATHAM – In a wide ranging discussion, officials launched into preparations for the fiscal 2018 budget last week, touching on topics ranging from staffing levels to ways to fund the town's post-employment benefits obligation.
If the current fiscal year is anything to go by, Chatham is doing well financially. Overall growth in property values of 3.8 percent plus higher than anticipated revenue kept the tax rate increase to one cent, while leaving nearly $2 million in excess levy capacity – the total amount that could be raised through property taxes without a Proposition 2½ override – on the table to provide relief to taxpayers, said Finance Director Alix Heilala.
Because of high property values, Chatham's $4,300 average tax bill, while below the state average, is right in the middle for Cape towns, said Heilala.
Last Tuesday's fifth annual budget summit, which included the board of selectmen, finance committee and Monomoy school administrators and school committee members, formally kicked off the budget process and provided a forum for budget strategies as well as long-term goals, said Town Manager Jill Goldsmith. She said officials anticipate putting together a level services budget, as in the past, but were looking for policy decisions in some areas.
Goldsmith said she asked departments to report on what they would need to be fully staffed to meet all the town's service needs. Currently, the the town has 129 full-time or full-time equivalent positions. That's down from a high of 144 in 2009-2010; many positions were eliminated after early retirement incentives in 2012. Fifteen years ago, in 2001, there were 122 full-time employees.
To meet full staffing needs, department heads said they'd need another 14.5 employees, Goldsmith said. Those include one in general government; four in the fire department; one in the police department; three in the natural resources department; four in the department of public works; one in community/social services departments; and a part-time person in community development.
“I don't want to freak you out about this,” Goldsmith said. “It's not a proposal. We were working to balance organizational needs and the services people desire.” Thirty-eight percent of the town's workforce has less than five years on the job, while 28 percent has from 16 to 40 years' experience, she added. “That's something we need to pay attention to, to look to that transfer of knowledge and continuity with services being provided.”
Selectman Cory Metters said the information is worth looking at as “a wish list,” but Amanda Love saw it as “what [departments] need.”
“We need to listen to our professional, our department heads, that's why we have them,” she said.
Selectman Seth Taylor asked for an analysis comparing staff levels in Chatham with other similar towns. “Does a town of 6,000 people have a human services director, or does the town manager handle that?” he said. “If we don't have a valid comparison, we're not making sound decisions.”
Finance Committee member Florence Seldin said while staffing levels should be discussed, there needs to be more information, such as what the new positions would do, how they would enhance the staff and services delivery. She asked for that data in writing.
Funding other post-employment benefit (OPEB) obligations of the town – some $16 million in benefit costs for retired employees – is something town officials have been puzzling over for several years now. The town created an OPEB trust fund to put money aside to meet the obligations and has appropriated funds for it at recent town meetings.
Taylor said he favors eliminating the community preservation 3 percent tax surcharge, which raises about $800,000 a year, and devoting that money to OPEB. That would result in no increase in taxes, he said. The community preservation act surcharge, which can only be spent on historical preservation, open space, recreation and affordable housing, has been “kind of a slush fund,” he said, recently going to preserve private properties, and would be better spent eliminating the “horrible” deficit that OPEB represents.
He added that that Cape Cod Land Bank, which also adds a 3 percent surcharge to tax bills, is slated to expire in 2020. When that expires, the town could once again adopt the CPA. While town meeting could vote to eliminate the CPA surcharge, the legislature would have to approve home-rule legislation to continue the 3 percent surcharge for the OPEB trust.
Heilala said only four towns in the state have fully funded their OPEB obligations: Wellesley, Newton, Westwood and Dover. Chairman of Selectmen Jeffrey Dykens said the liability needs a funding mechanism, but it can't endanger the town's AAA financial rating.
“We need to do something about it, no doubt, but will we lose our AAA if we don't fund it?” he asked.
Heilala said that probably wouldn't happen; the state is not requiring that towns fully fund OPEB at this time, since the state can't fund its own OPEB obligations. But it would behoove the town to get ahead of the curve by continuing to put money into the OPEB fund; other sources could include that nearly $2 million in excess levy capacity.
Taylor called on action on the OPEB issue as soon as possible. “There's no reason for us not to have this done, and we should be able to have this done by May,” he said.
Budget packages will be distributed to department heads on Oct. 26, Heilala said, and are due back Nov. 23. Goldsmith will deliver her recommended budget to the board of selectmen on Jan. 19.