Goldsmith Proposes $30.4M Operating Budget For FY19

By: Alan Pollock

Topics: Municipal Finance

Harwich is trying to stem the loss of employees to other Cape towns. PIXABAY PHOTO

CHATHAM Thanks to a strong property tax base, a recovering economy and the town manager’s tight purse strings, selectmen Tuesday heard some good news about the draft FY19 town budget.

Town Manager Jill Goldsmith is proposing an operating budget of $30,427,418, an increase of 0.57% over the current year’s spending plan. The draft budget not only stays within the constraints of Proposition 2½, but leaves almost $1.5 million on the table in allowable property tax increases.

The level-service budget does not include an expected $8.88 million assessment for the Monomoy Regional School District or $195,000 for Cape Tech, which will be voted as a separate town meeting article. In all, education expenses are expected to increase by about 4.45 percent in FY19.

Goldsmith also proposed a capital budget of $2.1 million, funded entirely through free cash and other available funds, without relying on the town’s tax levy.

While some revenue amounts remain uncertain for FY 19, including state aid, Goldsmith said she took a conservative approach when predicting new growth. The town’s property tax values have increased over the past two years and are at their highest level since fiscal 2010, she noted.

The general government operating budget saw a 9.14 percent increase, related in part to the centralization of all departmental computer expenses under a single technology budget. The natural resources budget increased 8.37 percent, largely to account for the hiring of North Beach bird monitors, a truck and a four-wheel ATV to be used when the town resumes patrolling the barrier beach. Elsewhere, the community development budget was up 3.58 percent and public safety saw a 2.35 percent increase in the draft operating budget, but all of those increases were offset by a more than 6 percent drop in debt service.

Other significant cost centers include the expense of retirement programs and pensions, which were up 10 percent, or $193,323 for FY19. While there are no new full-time positions included in the draft budget, “we are rapidly approaching a point where the number of town retirees exceeds the number of active employees,” Goldsmith wrote in her budget report. The town has an unfunded liability for other post-employment benefits, known as OPEB, of $16.8 million, and a trust fund to pay those costs has a balance of just $748,250.

Insurance continued to be a big-ticket item for the town. By increasing employees’ health insurance premium contributions from 30 to 35 percent, the town has actually reduced the budget line item for health insurance, Goldsmith reported. But property liability insurance increased 4.2 percent last year and is expected to jump much higher this year, and worker’s compensation insurance is also increasing.

Salaries and wages increase 2.77 percent in the draft budget, with jumps in seasonal staffing levels and wages, offset by the recent retirement of several long-time employees.

Though the Monomoy Regional School Committee has yet to vote a budget for FY19, Chatham’s assessment is expected to increase almost $450,000, including debt service. Part of that increase is linked to a slight increase in Chatham’s share of the regional budget, thanks to a small shift in enrollment numbers. Chatham’s percentage increased from 26.52 percent to 27.75 percent, based on a three-year rolling average of enrollment figures. Cape Tech’s assessment is about steady, with a 5 percent operating budget increase offset by the net loss of two Chatham students from the district.

Voters at the annual town meeting will face a number of warrant articles for big-ticket capital expenses, including funds for water main replacements, a study of the feasibility of building a new water storage tank, a Nantucket Sound beach nourishment program, a feasibility study for a new senior center, funds for the Eldredge Public Library master plan, and the acquisition of land at 45 Bridge St. Capital expenses of $250,000 or less are included in the capital budget, which is set for $2,098,945 for FY19.

Among the larger items in that capital budget are $177,000 for a new six-wheeler truck, $150,000 for road resurfacing – $100,000 less than the public works department requested – and funds for airport taxiways, telecommunications upgrades, dredging, sidewalks and work on the heating, ventilation and air conditioning system at the library.

“I’m thrilled that the operating budget is at 0.57 percent,” Selectman Jeffrey Dykens said. “Where I struggle a little bit is with capital.” Dykens said while the capital projects all seem worthwhile, some appear to be maintenance items that better fit in the operating budget. Goldsmith said that goal will likely be accomplished in the next revision of the five-year capital plan, which is being prepared in cooperation with the Collins Center for Public Management at UMass Boston.

The $2.76 million draft water department budget is funded by water receipts and voted as a separate town meeting article. Costs are expected to decrease by nearly 7 percent in FY19.

Goldsmith said the town continues to look for new ways to cut costs. Solar electric installations around town have proven very successful, with the solar arrays at the landfill and at town buildings generating about 86 percent of all the town’s municipal energy demand. Officials are exploring opportunities to install solar panels on the roof of the new fire station, she said.

Selectmen and finance committee members will now begin their detailed review of the budget in preparation for the town’s vote at the May 14 annual town meeting. Detailed budget information is available for the public to review in the “budget central” section of the town’s website.