Budget Committee Meeting ~ February 7, 2023

2023-02-07 · Budget Committee · 2:07:40 · watch on YouTube →

Third and probably final Budget Committee meeting on the 2023 budget, held February 7, 2023 at the request of members who wanted more detail before town meeting. Select board members Kevin, Joe and Josh attended to answer questions on the administration salary lines, the 23.61 percent requested increase in the administration budget, the state of the undesignated fund, the emergency fund, and $60,000 that appeared to have left the municipal capital account. The committee voted 5-3 to reopen its earlier administration vote and then set the figure at $535,924, cutting the election payroll line by $3,700 on top of the $15,000 contingency it had already removed. A motion to reopen the undesignated fund transfer and bring it back to the select board's $200,000 failed on a 4-4 tie. Members also aired concerns that operating costs are growing into permanent commitments while ARPA money runs out, and heard about a possible policy setting a minimum undesignated fund balance.

No written minutes could be matched to this meeting. The transcript records that the speaker changed but never who was speaking, so any name attached to a statement below is inferred from context and is marked (?).

What was discussed

1. 0:01
   Why the meeting was called

   The chair listed the items members had asked to revisit: certain salary lines in the administration budget, the 23.61 percent requested increase and how the inherited payroll compares with what is proposed for 2023, the state of the undesignated funds, whether the town has an emergency fund, and where $60,000 moved out of the municipal capital fund had gone. He had asked select board members to attend so that any decision would not rest on wrong information.

2. 0:01
   The town manager's and code officer's pay

   A member noted the town manager said his salary is $93,000 and would go to $97,000, but that the papers also mention a 5 percent COLA. The select board explained he was hired at $93,000 with a six-month probation that had just ended, after which a satisfactory review takes him to about $95,500, and that his contract gives him 3 percent or whatever COLA the town gives, whichever is greater, on his July 28 anniversary. The $97,000 in the budget is not a contractual figure and the board said he would make it work within the budget. The code enforcement officer, at $55,800, has no contract and is eligible for the 5 percent like other employees.

3. 5:04
   Raises embedded in individual lines

   Heather (?) said that because the increases are built into each position's line rather than shown as a raise pool, the committee's only tool is the bottom line, and that costs which the voters did not approve have become recurring. The select board answered that the town manager intends next year to present wages as a single line with benefits so the year-on-year change is visible, and that a pool was hard to administer in Trio because money approved in one article then has to be allocated across others. Members acknowledged the labour market and that most of the change happened before the current town manager arrived, but called the jump from the 2022 budget unusually large.

4. 15:49
   Family health plan for the open position and the emergency fund

   Jane (?) asked whether the roughly $24,000 budgeted for a family plan on the currently open position could be reduced to a single plan, with something else available if a family plan turned out to be needed. The select board explained the options: absorb it within the article, hold a special town meeting funded from undesignated, or use the emergency fund, which holds about $16,000 and can be spent with select board and budget committee approval under what they believed to be an ordinance. They noted a $15,000 contingency article had been proposed for exactly this purpose and was voted down.

5. 21:24
   What a budget is for

   A select board member argued a budget is not a list of known expenses but a plan for what may reasonably be needed, so an open position should be budgeted at family coverage and unspent funds roll back to undesignated. Another member said it is not a matter of trust but of treading new ground, and that facing the townspeople with a 36 percent increase is difficult. The select board asked members to allow a new town manager some slack in his first year, noting the town is likely to come in at a flat mill rate. It was also mentioned that pipes had burst at the Eureka Center that day.

6. 26:54
   Senior property tax freeze and town office staffing

   Members confirmed this is the lock-in year for the senior citizen tax freeze, with the state picking up the cost from next year, and expressed doubt about whether the state will actually pay. On staffing, a member described a manning plan that added up to about four and a half people, roughly 8,100 hours a year, to do the work currently done behind the counter including IT, and said the town manager proposes to do it with three plus outsourcing the treasurer's function. A member asked why two part-timers would not be better than making one part-time post full-time, given vacation and sick coverage, and was told the staffing model is the town manager's to determine.

7. 32:36
   ARPA and next year's capital spending

   A member asked whether using ARPA this year sets the town up for a large increase next year, since the operating budget has grown by roughly the amount the town normally puts into capital. The select board answered that bond payments start coming off the schedule next year, freeing money already being raised, and that the CIP schedule out to 2027 shows what is coming. Members noted the ARPA purchases were items already on the plan rather than new commitments, and that most add no recurring cost.

8. 38:20
   Mill rate and why individual tax bills changed

   The select board said the mill rate has been 20.70 for two years and is likely to stay at or near that, so where bills have gone up it is because of assessment changes or a shrinking homestead exemption caused by valuations being out of sync. Several members said their bills had risen. Members also pressed that when bond payments fall off, residents do not want to see that money simply spent elsewhere.

9. 43:41
   Whether the increase is now permanent

   A member set out the concern precisely: the administration budget is up by something over $240,000 on last year, which is about what the town is spending through ARPA this year and about what it normally puts toward capital reserves, so if that increase is recurring the town will be squeezed when ARPA is gone. The select board answered that the undesignated fund is now healthy enough to use a larger share each year and that bonds dropping off will offset it, but agreed that at some point taxes go up. Members were told the undesignated fund contribution will be smaller next year: $75,000 was used last year, against about $252,984 this year once the solid waste and fire department overages are counted.

10. 54:32
    State revenue sharing, Trio and the election payroll line

    State revenue sharing is an estimate based on sales tax and this year's is slightly lower than last year's; the town manager budgets 80 percent of the state figure for planning while 100 percent was used for the levy limit calculation. A member reported that Monmouth budgets $13,000 for Trio while Durham's figure is around $21,000, and nobody present could explain the difference. The same member noted $7,500 is budgeted for election payroll, which had doubled from about $3,700 because of the federal election, and that non-federal years historically run $3,500 to $3,700.

11. 1:00:42
    Motion to reopen the administration budget vote

    Jill (?) moved and Heather (?) seconded that the committee consider revisiting its administration vote, which it had already taken twice. Members debated whether a motion to reconsider needs a two-thirds vote and concluded a majority is enough. Several said the town manager had asked that arguments be hashed out at the committee rather than at town meeting, and that a member speaking on the floor after voting is awkward.

12. 1:06:44
    How many elections there actually are

    The town clerk texted in during the discussion to say there are three elections this coming year, the same as last year: municipal, school and the November referendum, with polls open 12 hours each time. Members countered that the workload in a non-federal year is lower because counting takes less time, and that the line had gone from about $3,700 to $7,500 for the primary and the general.

13. 1:12:18
    Reconsideration vote and the alternatives on the table

    The committee voted to reconsider the administration budget. One member proposed $520,000, arrived at by not applying the COLA to people hired within the last year and by removing the $15,000 already cut, which he said would be a 5.92 percent increase on an inherited budget of $490,925.27. A select board member objected that comparing administration's percentage with fire and public works is not like for like, because those are status quo budgets while administration has real operational changes proposed.

14. 1:22:54
    Vote on the administration budget

    Milt (?) moved and Neil (?) seconded $535,924, being the already reduced $538,624 less $3,700 from the election payroll line, leaving the family health plan in the budget on the argument that if it is not needed for the open position it may be needed for someone else. Members noted that using the $16,000 emergency fund to cover an ordinary operational cost is not good practice, and that there is no warrant article this year to put money back into the emergency fund. It was also said that the outsourced accounting service is expected to cost $65,000 to $70,000.

15. 1:28:29
    How much should stay in the undesignated fund

    The committee could not say exactly what is in the undesignated fund, because Trio shows a higher figure than the auditor's report, which put it at about $1.95 million at the end of 2021; members were confident it is at least $2 million. Neil (?) described a proposed policy of holding 16 percent of the town's budget, about $1.6 million on a $10 million budget, and said Gray and another town have similar policies. A select board member reported the auditor had told him there is nothing magical about 16 percent or two months of expenses and that she has seen towns as low as 8 percent.

16. 1:33:37
    Changing the fiscal year

    Members discussed moving from a January to December year to a July to June one, which would mean either a six-month budget or an 18-month one and taxes collected twice a year. The select board explained that residents would effectively pay 18 months of taxes within a 12-month period but would be paying part of the next year early rather than in advance of anything, and that the select board has sole authority to set tax assessment dates, though a change of this kind would need to be announced and explained roughly a year ahead. Cash flow and the risk of having to take a tax anticipation note were given as reasons to be conservative with the undesignated fund this year.

17. 1:44:44
    Motion to reopen the undesignated fund transfer

    Jill (?) moved and Rod (?) seconded that the committee revisit the amount to be taken from the undesignated fund balance, saying she wanted to be in line with the select board's $200,000 rather than the $230,000 the committee had voted. Josh (?) said his own figure would be $236,000 to cover the solid waste and fire department overages and the fuel increase, but that the board would settle it at its meeting on the 14th. Members debated whether ARPA money is being used appropriately and whether to smooth the increase across two years.

18. 1:50:05
    The remaining ARPA money and the Eureka Center

    Heather (?) asked that the unallocated remainder of the ARPA money be put on this year's warrant for technology upgrades at the Eureka Center, saying that is what she has heard residents and committees ask for and that it would save calling another special meeting. Others said the board was not ready because there are no cost figures, and that the building also has no ADA restroom, no parking lot and no lighting. Members were told voters must decide how to allocate the money by the end of 2024 and it must actually be spent by the end of 2026 or returned.

19. 2:01:03
    The $60,000 in the municipal capital account and a proposed reserve policy

    The reserve fund balance sheet shows the municipal capital account at $97,632 on January 1, 2022 and $30,512 at year end. The answer given was that $60,000 was appropriated and not spent, so it is still in an account somewhere, possibly the newly set up assessing reserve, but no clear answer was reached. A member raised a similar discrepancy on the miscellaneous revenue line, which was put down to postings not being made properly in Trio and described as part of re-establishing the baseline. Neil then outlined his proposed minimum undesignated fund policy and the chair reminded members they are free to speak at town meeting on their own behalf before the committee adjourned.

What was decided

• 1:12:18
  Reconsider the committee's earlier vote on the administration operating budget, moved by Jill and seconded by Heather; the chair counted five to threepassed
• 1:22:54
  Recommend $535,924 for the administration operating budget, moved by Milt and seconded by Neil; the count was taken twice on the recording and finally given as five to threepassed
• 1:44:44
  Reconsider the committee's vote on how much to appropriate from the undesignated fund balance toward the 2023 budget, moved by Jill and seconded by Rod; the chair counted four to four and said there was no majorityfailed

An outcome reads "unclear" where the recording does not state it plainly. The recogniser drops short words, and "the motion does not carry" is one missing word from its opposite.

Worth knowing

• 0:01
  The town manager was hired at $93,000, goes to about $95,500 after a satisfactory six-month review, and his contract gives him 3 percent or whatever COLA the town gives, whichever is greater, on his July 28 anniversary. With this year's COLA at 5 percent that would put him near $100,275, while the budget line shows $97,000; the select board said he would make it work within the budget.
• 54:32
  Durham's figure for the Trio accounting software is around $21,000. A member found that Monmouth budgets $13,000 for the same product, and nobody at the meeting could explain the difference.
• 1:28:29
  The town does not know precisely what is in its undesignated fund, because Trio and the auditor's report disagree; the auditor's figure was $1.95 million at the end of 2021. Members also could not get an answer on $60,000 that appears to have left the municipal capital account, and on a miscellaneous revenue line that does not match what went into it. All of it was attributed to postings not being made properly.
• 1:50:05
  The remaining ARPA money must be allocated by voters by the end of 2024 and actually spent by the end of 2026 or returned. Heather pushed to put the unallocated balance toward technology at the Eureka Center on this year's warrant; others said there are no cost figures yet and the building also lacks an ADA restroom, a parking lot and lighting.

Motion language found in the transcript

Located by pattern matching, with no model involved: "I move that", "I'll second", "all those in favour". This is an independent check on the summary above: 8 passages of motion language, against 3 decisions summarised.

Elsewhere

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