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FY16 town budget anticipated to yield base-level figures

Date: 3/5/2015

LONGMEADOW – The town's fiscal year 2016 (FY16) budget is anticipated to be base-level for both the town and school district. The overall draft budget shows minimal increases for operations.  

Town Manager Stephen Crane told Reminder Publications the town worked with the school department closely this budget season to determine where the budget stress points were.

“On the school side, they have more employees than we do and so personnel costs and I think increased utility costs were big stressors for the school,” he added.

The budget preparation process began in October 2014 with a joint meeting between the Select Board and the School Committee, Crane stated in his FY16 budget message.

“At that time there was a projected budget shortfall of $56,000,” he added. “On the sources side, the projection included the utilization of the town's full property taxing capacity, level funding of both state and local recipients, and no use of reserve funds.

“On the expenditure side, collective bargaining agreements were funded at the current staff level; employee benefits were expected to increase at various levels; debt service was funded at the actual amounts; OPEB funding was increased in accordance with the Select Board policy; and capital has been increased to 2.5 percent of anticipated general fund revenues –  an increase of $287,000,” he continued.

Crane said one factor yet to be determined are the state aid figures, which are anticipated to come in sometime this week. State aid is the second largest source of revenue, which accounts for 10 percent of the FY16 revenue budget.  

“Some of the numbers may change, but not in a meaningful way unless the state gouges us or gives us a huge boost,” he added.

Property taxes are the largest source of revenue for the town, composing approximately 83 percent of the FY16 General Fund revenue budget, Crane said.

Property taxes in FY16 are expected to rise by $1.2 million to $47.7 million. The increase includes the allowable 2½ percent debt limit plus “a conservatively estimated $125,000 in new growth.”

“Many communities have much better new growth,” he added. “New growth is when a building gets built or when a piece of land gets developed. It usually takes a fiscal year or two for it to become a part of the new growth number, but because we’re mostly built out, we don’t get new growth numbers [beyond] $125,000.”

Crane’s recommended budget includes $1.4 million for general government, $2.7 million for public safety, $184,985 for planning and community development, $3.5 million for Public Works, $1.5 million for community services, $7.7 million for employee benefits and liability and property insurance, as well as $1.4 million for capital program.

Additionally, the water and sewer budgets are $2.1 million and $1.8 million respectively. The solid waste/recycling budget is also more than $1 million.

“For us, we had to small I would call relatively minor personnel changes that we would be making with this budget,” Crane said. “One; we have contracted custodial services for town buildings. Schools have custodians who are town and school employees.”

The level of service the town has received from its contracted custodial services, specifically at Greenwood Park, hasn’t been satisfactory, he added. The town has proposed to have a full-time  custodian who would focus on Greenwood because it sees the largest amounts of residents.

“The cost of the wages are nearly 100 percent off-set by a reduction in the contracted cost,” Crane noted.

Finance Director Paul Pasterczyk said no reserve free cash funds would be used to balance the FY16 budget.

Currently, the town has $75,000 in free cash and $2.8 million in its Operational Stabilization Fund, according to the draft budget.

Crane said additional services the town seeks to offer residents is incredibly difficult with the levy cap and limited new growth.

“The challenge is maintaining our service obligations today while planning for future obligations and making sure those two competing demands balance,” he added.