ORLEANS — Town Administrator John Kelly's recommended operating budget for the fiscal year beginning July 1 includes the maximum 2.5 percent increase allowed by state law.
“We're at a crossroads,” Kelly told the board of selectmen Jan. 18. “There is nothing left in the operating budget that we can reduce to maintain 2½ unless we reduce staff. At the end of the day, we will have to talk about what services we will not provide.”
To help maintain funding for services for this coming fiscal year, Kelly recommends moving all “durable equipment” (lasting more than five years) costs from the operating budget to the motor vehicle and equipment stabilization fund. Examples include computer equipment, police and fire radios, and fire department turnout gear.
As proposed, the council on aging would see its day care center program reduced from five days to four while receiving an increase in transportation program staff. Other anticipated decreases include offsets for electricity charges as the town's solar project reaps net metering credits and for heating fuel as the town now owns its own propane tanks.
Kelly is projecting a property tax increase of 8.4 percent that will cover not only the 2.5 percent operating budget boost but also debt exclusions, an adjustment of water fees that were applied to general fund revenues and debt in error, and the proposed increases in the the town's stabilization funds. Non-property taxes would rise 3.9 percent to account for nearly 28 percent of total revenue, up from 25.5 percent.
“In addition to reviewing user fees in general, specific attention should be directed at increasing revenues at our beaches and transfer station so that these facilities are fully supported through user fees in a manner similar to an enterprise fund,” Kelly told selectmen.
The recommendation factors in a 2.5 percent increase for the Nauset schools, which is in keeping with the town's budget policy. The school committees are still putting together their budgets for the upcoming fiscal year, but a preliminary report from the elementary school carries a 2.81 percent increase.
Along with the recommended operating budget, Kelly submitted the capital budget for the upcoming fiscal year as well as the Capital Improvements Plan (CIP) for fiscal years 2019 to 2023. As with the operating budget, certain expenses – for example, design of an HVAC system for the elementary school and a new traffic signal at the fire station – were moved to the buildings and facilities or the motor vehicle and equipment stabilization funds.
“The goal of implementing a pay-as-you-go strategy using our stabilization funds is to reduce the town's use of debt exclusions to pay for smaller capital projects and equipment, while at the same time continuing to meet the operational needs of town departments by creating a level funding mechanism that avoids budgetary spikes,” Kelly told selectmen. “The debt service for the items removed from the CIP would otherwise amount to almost $1 million over the next 15 years.”
Projects budgeted in the FY18 CIP include $5.9 million for planning, engineering, and adaptive management activities to implement the amended comprehensive wastewater management plan; $13.6 million to construct the DPW/Natural Resources building; and $2.5 million to install a larger water main on Beach Road.
Selectmen have scheduled four additional meetings (Jan. 30 and Feb. 6, 13, and 27, all at 6 p.m. save for a 7 p.m. start on Feb. 6) to work on the operating and capital budgets before meeting with the finance committee at a public hearing on Feb. 16. The committee that's been identifying ways to increase revenue to the town is expected to deliver its report to both boards that night.
“You have reduced operating expenses by transferring operating expenses into the stabilization funds,” Selectmen Vice Chair David Dunford told Kelly. “You won't be able to do that (the following fiscal year). You're trying to stay within our policy without cutting people. There are a lot of one-shot (actions) here. We'll evaluate this as we go forward.”