HARWICH — Town Administrator Joseph Powers presented selectmen with a balanced FY 22 budget Monday night. The $71,165,144 budget is up 3.3 percent, with funding sources covering the proposed increase.
The draft budget has had some paring down since a few weeks ago when Powers unveiled a preliminary version, which had a more than a $1 million deficit between revenue sources and funding requests. The capital plan, which a few weeks ago was at $20 million, has been reduced to $7.5 million, with two of the four debt exclusions contained in the plan removed.
“Despite the significant headwinds we continue to be buffeted by as we are still in the throes of the coronavirus disease 2019, and the related effects on our local, regional, state and national economy, the message I wish to convey is one of cautious optimism,” Powers said.
The first phases of vaccination offer hope the worst of physical effects may soon be behind the community, he said, but he cautioned that he could not envision what the post-COVID-19 economy and society will look like.
Town departmental budgets show an increase of just 0.60 percent. The majority of departments level-funded budgets, he said. Compliance in some departments would have created labor issues, including reductions in hours and staff, Powers said. There is need for substantive discussion on hour and staff reductions among the board of selectmen, he said. The draft budget, he said, is “the starting point to develop a level funded budget to provide some relief to Harwich taxpayers.”
Overall, the 3.3 percent increase is driven by a 3.7 percent increase in the Monomoy Regional School District, a 12.1 percent increase in debt service and a 7.7 percent increase in fixed costs.
Anticipated reductions in health insurance costs have had a major impact on the deficit in the preliminary budget. The Cape Cod Regional Technical High School budget is down 2.8 percent. There are reductions in the streetlight account and administration costs relating to salaries. Powers said there would also be a saving in the salary when hiring a new health director. A zero percent cost-of-living adjustment planned for FY22 for employees also keeps the increase down, though there are negotiations underway with two employee unions and three more union contracts are scheduled to expire at the end of June.
Powers put forward a spending plan for the $3,915,365 certified free cash. The majority of that money is proposed for a $1,394,740 capital plan. The $574,171 taken from the stabilization fund in FY21 to assist in balancing the budget will be returned using free cash funds. Another $273,260 will be used to cover the town’s share of the Monomoy school district's capital plan requests.
Powers identified related topics which he is looking to have selectmen evaluate, including implementing the health insurance “premium holiday” allowing a one-time savings. Funding wastewater operations and maintenance through the use of short-term hotel and motel taxes is another issue for the board to address, including a potential room tax increase from 4 to 6 percent. The creation of a water investment implementation fund to support wastewater operations and maintenance is also on the list.
Powers provided a sketch of tax impacts and property values during his presentation. The average single-family home value is now $584,732 with an annual tax bill of $5,029. The tax bill is mid-range among the six closest towns, with Orleans topping the list at $6,593 for the average single-family home. Chatham’s average home tax impact is $5,030. Brewster, Dennis and Yarmouth are below Harwich.
Year after year there has been growth in the average single-family home tax bill, but in the past year, Powers said, there was a surprisingly modest increase of just 1 percent.
“We’re going to make sure there are not wild swings in the tax bills,” Powers said.
Selectmen are scheduled to complete their budget assessment and forward the spending plan to the finance committee by Feb. 23.