Budget Committee Meeting ~ December 19, 2022

2022-12-19 · Budget Committee · 2:06:53 · watch on YouTube →

This was a special budget committee meeting called not to work on numbers but to meet Jerry Douglass, the town manager who had started four months earlier, and to agree how the 2023 budget would be handled. Members introduced themselves and explained why they serve, and the manager set out how budgeting worked in Gardiner, where he came from, pressing the committee on what services the town actually wants to buy rather than the line-by-line detail members defended. He reported that the town's financial records are in poor order, with reserve accounts kept in spreadsheets that do not reconcile with the accounting system, and said he is working with the auditor to establish real numbers before he can answer questions about fund balances. He also floated moving Durham to a July 1 fiscal year to align with the school, county and state, which drew questions about what a transition year would do to taxpayers. The meeting ended by fixing the budget calendar: material to the committee on January 5, joint presentation meetings on January 10 and 12 with the 17th in reserve, the committee's own meetings on January 31 and February 2 with February 7 held back, recommendations to the manager by February 9, and all articles in by February 15. No formal votes were taken.

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. 0:03
   Purpose of the meeting

   Milton Simon opened by saying this was a special meeting, not to discuss the budget but to meet the new town manager and to talk through the committee's role and its strategy for preparing the town's 2023 budget.

2. 0:03
   Committee introductions

   Members introduced themselves in turn. Milton Simon of Stackpole Road, a resident since 1982, said this was his 24th year on the committee; Jane Rice of Bowie Hill, here since 1986, was serving a second stint; John Talbot was in his first year; Neil Berry (?) of Stackpole Road, here since 1983, was in his fifth year; and Allan Purinton of Day Road, a lifelong resident, was noted as having more years on the committee than Milton Simon, though not consecutive. Jill was absent.

3. 0:03
   Why one member came back

   Jane Rice (?) said she returned after watching a meeting at home in which a selectman said he did not see why the board needed to go line by line as long as the town was below the debt ceiling. She said that struck her as alarming enough to put her name forward again.

4. 0:03
   The new town manager introduces himself

   Jerry Douglass (?) said he was four months in and had been digging into Durham's financials. He came from Gardiner, a larger community with a council and a very different budget process, and said he was not trying to change Durham's process but that it would be different for him, bringing 20 years of public service and other communities' budget cycles.

5. 5:19
   Why members serve

   Members said in turn that they joined to be informed voters, to understand a process they could not otherwise take part in before town meeting, to add another perspective, and out of a concern for transparency and accountability. One member said she advocates for transparency relentlessly because she feels there is often more opportunity for it than the town takes.

6. 5:19
   How the committee's work has changed

   Milton Simon (?) said he first ran because he was told at town meeting that he was asking too many questions and taking up too much floor time. He recalled the committee once being involved with the school budget as well, and said his long-standing push has been for the committee to be involved with town finances throughout the year rather than for two or three weeks, and for the public to be shown how the committee reached its conclusions rather than just the result.

7. 10:46
   How members used to be chosen

   A member recalled that budget committee members were once appointed from the floor of town meeting, three from different sections of the town, before the ballot was used.

8. 10:46
   What the budget is for

   Jerry Douglass (?) asked what members understood the committee's role to be, and pressed a prior question: what services does the town want to provide. He gave paving, trash pickup and whether residents want bare roads after a storm as examples, and said that in his previous community the elected officials met in a recorded session to set direction and a target tax impact, after which the line-by-line detail mattered less to them.

9. 10:46
   Why members defend line by line

   Members answered that the municipal budget is only about 25 percent of the tax bill, the school driving the rest, so a thousand here or there has little effect on taxes, but that they still want to know what a $10,000 miscellaneous line is for. They also noted that once an article is approved the town can move money within it, which is another reason to understand the lines beneath the total.

10. 10:46
    Coming in at the end of the process

    A member said part of the committee's frustration is that by the time matters reach them it is a done deal, using the cost of trash collection as an example of something already committed by contract before the committee sees it.

11. 16:12
    Moving to a July 1 fiscal year

    Jerry Douglass (?) said the trash contract ends June 30, so the town will not have a number in time, and argued Durham should move to a July 1 to June 30 fiscal year to line up with the state, county and school. He said this would need either a six-month or an 18-month transition budget, with taxes then collected twice a year in April and October, and that he would talk to MMA; Kevin (?) had already looked into it.

12. 16:12
    Cash flow and the tax anticipation note

    Asked about the effect on individual homeowners, Jerry Douglass (?) said twice-yearly collection would ease cash flow for residents and for the town, which runs lean and is short of cash by May and June. Members noted this is why Durham borrows on a tax anticipation note, one member remarking that the town borrows money to pay its light bill.

13. 16:12
    The school vote and where residents have a say

    A member observed that Durham and Pownal together cannot outvote Freeport on the school budget, which always passes, so residents feel outnumbered there. That, she said, is why the municipal budget, only a quarter of the tax bill, gets scrutinised so heavily: it is the part residents feel they can actually vote on.

14. 21:22
    Justifying the committee's numbers

    Members explained that going line by line is how they justify a recommendation, so that a cut is not simply a round number taken off a departmental total. They said that if the committee proposes taking $50,000 off an article it should also suggest where, while acknowledging the select board and manager retain flexibility to adjust within the article.

15. 26:35
    Departmental capital versus one town capital fund

    A member said he was not convinced by a single town-wide capital budget, arguing that a department that cannot carry its savings forward will spend every dime. Others said the Capital Improvement committee looks at the whole town and prioritises better than departments looking only at their own needs. Members credited Bill St. Michel, as fire chief, with starting the five-year rolling schedule that other departments later adopted.

16. 26:35
    The limits of the committee's role

    A member noted the select board has made clear year after year that the budget committee's job is to recommend on the budget, not to propose policy or decide where money is spent, and that the forward-looking work sits with the capital committee.

17. 26:35
    The Eureka Center door

    Members recalled recommending a new double door for the Eureka Center in last year's budget, which the select board cut, and noted that the door still has not been provided. It was raised as a small but concrete example of the follow-up members would like to be able to do.

18. 26:35
    Incentives to hand money back

    A member noted that public works has been the only department to give money back, and asked where the incentive lies if returned capital is then spread across all departments. Members agreed there is not much slack in the budget as it stands.

19. 31:38
    Last year's culvert money

    A member asked what became of the culvert work funded last year, when about $50,000 was moved from another account into a capital improvement account to cover an emerging need. Members identified the projects as the culverts on Quaker Meeting House Road and Swamp Road, neither of which went ahead because the state changed the requirements, citing salmon passage, so the work would have to become a much larger structure.

20. 31:38
    A written process and a public hearing

    A member asked for the budget process to be written down, and proposed a public hearing on the budget before town meeting, modelled on the land use hearings, so residents could ask questions and get answers rather than only speaking at town meeting. She volunteered to give up an evening to help run it. Jerry Douglass (?) said he would ride out this year's process and make small changes along the way.

21. 36:47
    Why the process starts so late

    Jerry Douglass (?) said he had been told the process starts in the eleventh hour because the committee wants actuals, which members disputed as their doing. A member explained that actuals matter because you need to know whether a department had money left over or overspent, while the manager argued he could give percentages spent without waiting for final figures.

22. 36:47
    The budget as a forecast

    Jerry Douglass (?) argued the budget is a forecast and that both sides will usually be wrong about any given number, giving fuel prices during the year as an example. He said wages are the largest unknown and drive workers compensation and FICA, and that setting a direction on wages is another goal-setting question the town has not answered.

23. 36:47
    Budget the position, not the person

    Jerry Douglass (?) said two employees decline health insurance and take a stipend of about $1,200, and the budget is built around that rather than around what the town would owe a replacement, a difference between roughly $1,500 and $11,000 or $20,000. He said correcting that will hurt because it has not been done that way for a long time; a member said that was exactly the kind of explanation the town floor needs.

24. 42:43
    The trash contract

    The previous three-year contract ran 2019 to 2021 and has expired, with a one-year extension members recalled but the manager could not locate the amendment for. The hauler will not give numbers while the work is going out to bid, so the line has to be estimated.

25. 42:43
    The state of the town's records

    Jerry Douglass (?) said he had come in behind two administrations and that their records do not line up: there are perhaps 25 spreadsheets holding the same information with none matching, and the reserve accounts sit in Excel rather than in the Trio chart of accounts. He said he is working with the auditor to get to the bottom of the real numbers and invited the committee to the following Tuesday's select board meeting, where the auditor will present.

26. 47:59
    What a transition year would cost taxpayers

    Members pressed on the 18-month option, asking what a single year with six extra months of taxation would do to residents on fixed incomes and to mortgage escrows. Jerry Douglass (?) said the impacts still have to be worked out with MMA, that around 80 percent of Maine towns are on a July 1 year, and that he might raise it at town meeting in April to start the conversation.

27. 53:28
    Two separate questions

    A member drew a distinction between changing the fiscal year and simply starting the process earlier, arguing staff could begin in August with seven months of actuals and refine the numbers later. He said department heads already know much of what they need by then, and that the committee need not become involved until November.

28. 53:28
    How compressed the schedule is

    A member said the timetable does not do the process justice, recalling a night last year that ran to about 10:30 because the work had to be finished. Others said they want a fresh set of eyes on it; Jerry Douglass (?) replied he would not turn the town on its head in his first year but would suggest changes as he goes.

29. 58:35
    Fund balances the committee cannot see

    A member said that when the committee is asked to approve a transfer it needs to know what is left in the fund, which was not readily available last year; the figure supplied was the balance at December 31 and did not reflect what had since been voted at town meeting. Jerry Douglass (?) explained the reserve accounts exist only on paper, and said he will add them to the Trio chart of accounts once the balances are settled with the auditor and Ruth.

30. 58:35
    The animal control line

    A member recalled a $500 animal control line that nobody could explain until Jill remembered that when a dog is put down and the owner does not claim it, the vet bill falls to the town.

31. 58:35
    How the budget was loaded

    Jerry Douglass (?) said the budget loaded into the accounting system last year is not well developed, giving as an example the fire department workers compensation line, entered at about $5,500 against an actual cost nearer $50,000. Members noted the town had two administrators leave and two people with no municipal experience learning the work at once.

32. 1:04:13
    Restructuring the budget

    Jerry Douglass wants a three-tier budget built on about four departments, administration, fire, public works and buildings and grounds, with proper sub-lines beneath. He said fuel, propane and heating oil are currently bundled under utilities so that finding what the town pays for heating oil takes a page of arithmetic.

33. 1:04:13
    Trio and the spreadsheets

    Changing a loaded budget in Trio is not like editing a spreadsheet, because the software feeds state systems, so Trio itself will have to walk the town through it. Jerry Douglass also said many of the spreadsheets circulated each year simply recreate reports Trio already produces, and confirmed that nobody currently in the office is proficient in Trio, which he linked directly to the state of the data.

34. 1:09:43
    The audit

    The report in members' hands was 2021 data, only received that August. The auditor presents at the select board meeting the following Tuesday and returns on February 6 for a week to work on 2022, sitting in the meeting room and calling for records as needed.

35. 1:09:43
    The manager's own emphasis

    Jerry Douglass (?) said his main concern when the budget comes together is the tax impact rather than every line, and that he does not want to bring in a first budget that goes through the roof. He pointed members to the pie chart showing the school and county tax as the largest pieces, with public works next on the municipal side.

36. 1:09:43
    Putting trash out to bid

    The contract is going out to bid, with packages to Casella, Waste Management, Riverside and one other hauler, and a notice on the town website. With no numbers forthcoming from the current hauler, Jerry Douglass has used a placeholder of around $350,000, saying it is better not to run the line too tight because anything unspent rolls forward.

37. 1:15:34
    Bulky waste day

    Bulky waste day, budgeted at about $10,000, was taken out last year. Jerry Douglass (?) said he has asked Calvin to get a price from the hauler for reinstating it, while noting nobody can say what it would cost now.

38. 1:15:34
    Recycling costs and a transfer station

    Members discussed why the town pays to recycle, the $3 bag tags that push people to recycle, and the collapse of the market since China stopped taking contaminated material. Jerry Douglass (?) said he would look at how Yarmouth set up its transfer station in Gray, but cautioned that going that way would need the right people involved, a feasibility study, permitting and DOT if the site were off a state road, and should not be a knee-jerk decision at town meeting.

39. 1:15:34
    Telling residents what a line costs them

    A member asked to be able to say what a $10,000 item costs an individual taxpayer, arguing that if residents knew dropping bulky waste day saved them about $20 many would rather pay the $20. Members recalled the old rule of thumb about what every $100,000 does to the mill rate, and said people can relate to $10,000 in a way they cannot to $1.5 million.

40. 1:20:52
    Roadside dumping

    Members disagreed about whether more rubbish appears on the roadsides since bulky waste day was dropped, one saying it is anecdotal and that dumping was already happening and may come from outside the town, another saying his road plainly has more on it than it used to. It was suggested someone monitor it and ask Calvin.

41. 1:20:52
    Why the two bodies show the same number

    Asked why the select board and budget committee usually reach town meeting with the same figure on each article, members explained the town has historically looked to the committee to lower increases. Within roughly the last decade, when the committee recommends a lower amount the select board changes its own recommendation to match, so residents see one figure rather than two, and joint meetings over the last three or four years have opened up the communication.

42. 1:26:39
    The year the levy increase was voted down

    Members recalled that the year residents refused to raise the tax levy was the year there was no in-person town meeting because of COVID, and that it taught people the levy vote is a way to hold down spending. Jerry Douglass (?) noted some managers are pushing to remove the tax levy limit because costs are rising faster than the cap allows.

43. 1:26:39
    Revenue sourcing by article

    Jerry Douglass (?) proposed dropping the practice of naming a revenue source in each article, listing revenues and expenditures separately with the balance raised in taxes, on the grounds that the per-article figures are estimates that will be wrong and that other managers he asked had never heard of doing it that way. A member pushed back that article wording differs depending on whether money is raised or transferred, and he offered to bring an example.

44. 1:31:54
    Working the calendar backwards

    The schedule is driven by the annual report, which Kimberly, the public information officer, must have ready for the printer by March 1, allowing two weeks to print and about ten days for residents to have it before town meeting. That puts all articles in by February 15, with a few days' flexibility.

45. 1:31:54
    Material to the committee

    Jerry Douglass set January 5 as his target for getting the budget material to the committee and the select board, in hard copy and electronically. He warned the actuals will be year to date with some invoices not yet on the books, but close.

46. 1:37:19
    Joint presentation meetings

    Joint meetings with the select board were set for January 10, at the Eureka Center, and January 12, with January 17 reserved if needed. Members asked that draft articles be available for the 10th, having found last year that they met without knowing what the articles would be, and established that the administration budget would be presented on the first night and public works and fire on the second.

47. 1:37:19
    The squeeze on the committee's own meetings

    If the select board votes on its recommendations on January 24, the committee cannot meet until after that and would have roughly one week, where it normally has two. Members suggested asking the select board to take its vote on January 17 instead; Jerry Douglass (?) said he would see what the board thought and would try to make it work either way, warning only that a late warrant article might have to go into the annual report as a supplement.

48. 1:42:26
    Choosing meeting nights

    Members weighed running January 30, 31 and February 2 against spreading the meetings out to avoid back-to-back nights after full working days. One member noted last year's 10:30 finish was an anomaly and meetings normally end by nine, and acknowledged that her own questions had lengthened them.

49. 1:47:42
    Dates settled

    Working around Jill, who cannot do Mondays, the committee settled on Tuesday January 31 and Thursday February 2, with Tuesday February 7 held back if a third meeting is needed, running six to nine. Jerry Douglass agreed to move his deadline for the committee's recommendations from February 7 to February 9.

50. 1:47:42
    What the committee wants supplied

    Members asked for three years of budgeted and actual figures, the undesignated fund balance, a five-year projection and the Capital Improvement committee's ranking. Jerry Douglass (?) said the CIP committee meets the following evening and should be able to complete its ranking in time.

51. 1:53:59
    How capital funding is decided

    Members clarified the division of labour: the CIP committee ranks projects by priority, while the budget committee recommends how much money to put into the capital funds, normally as a raise article. Their only real control is to decline to fund.

52. 1:53:59
    How last year's capital total was set

    A member explained that last year the committee was holding the total raised across the capital improvement accounts to about $150,000, roughly $50,000 across three, but public works needed $100,000, so the other two were cut to keep the overall figure.

53. 1:53:59
    Reserve balances still unknown

    Jerry Douglass (?) said he cannot yet state the reserve account balances because the audit figures and the town's own records do not agree, and that he is working with the auditor and Ruth to reconcile them. He has not added what was passed in 2022 until he knows the starting point.

54. 1:59:11
    Why the culvert work was funded

    A member said she never got a satisfactory answer on why the culvert work had to be done or what would happen if it were not, and would not vote $200,000 without knowing. Members explained it was about taking advantage of state grant money rather than a state requirement, and that the money would be entirely the town's if the work waited five years.

55. 1:59:11
    Rules governing the committee

    A member asked the committee to develop a written work process or flow chart, saying it was vague to him what the committee is required to do and what its inputs and outputs are. Members said the bylaws are on the town website, signed off in 2015, with the committee established in 1933.

56. 1:59:11
    Fire capital reserve cut for the bridge

    A member recalled that money intended for the fire capital reserve, put at $100,000 or perhaps $60,000, was cut at the last minute to cover the bridge and culvert project. She asked why, the project not having gone ahead, it does not go back to fire; members said the voters would have to approve that.

57. 2:04:26
    Where the culvert money stands

    The roughly $101,000 the town raised for the two culvert projects is in reserve. Members said the fish passage standard requires the structure to be 1.2 times the channel width, which pushed the project from about $202,000 to about $300,000, so Calvin is expected to ask for another $49,000 or $50,000 to reach the $150,000 the town must match against a $150,000 state grant.

58. 2:04:26
    State bridge work on Route 125

    A member raised the state's plan to rebuild the bridge near Tracy Brook on Route 125, close to the Durham and Lisbon Falls line, and her concern about how residents would get around if that and Swamp Road were closed at the same time.

59. 2:04:26
    Closing

    Jerry Douglass closed by saying the budget is not his and not the select board's, but the people's, and asked members to keep that in mind as it is put together.

What was decided

• 16:12
  Moving Durham to a July 1 to June 30 fiscal year was discussed at length, with a six-month or 18-month transition budget as the two options. Nothing was decided: Jerry Douglass is to work through the impacts with MMA and may raise it at town meeting in April to start the conversation.tabled
• 31:38
  A public hearing on the budget before town meeting, modelled on the land use hearings, was proposed by a member who volunteered to help run it. Jerry Douglass (?) said he would ride out this year's process and make small changes along the way; the proposal was not taken up or refused.outcome unclear
• 1:09:43
  The trash and recycling contract is to go out to bid, with packages sent to Casella, Waste Management, Riverside and one other hauler and a notice posted on the town website, and a placeholder figure carried in the budget in the meantime.passed
• 1:15:34
  Jerry Douglass to ask Calvin to get a price from the hauler for reinstating bulky waste day, so the committee has a number to consider.passed
• 1:26:39
  Jerry Douglass (?) proposed dropping the practice of naming a revenue source in each warrant article in favour of listing revenues and expenditures separately. A member questioned how the article wording would then work and he offered to bring an example; nothing was settled and he said any change would be discussed first.outcome unclear
• 1:31:54
  Agreed that all warrant articles must be in by February 15, working back from the annual report having to reach the printer by March 1 and residents needing it about ten days before town meeting.passed
• 1:31:54
  Jerry Douglass to get the budget material to the committee and the select board by January 5, supplied both in hard copy and electronically.passed
• 1:37:19
  Joint budget presentation meetings with the select board set for January 10 at the Eureka Center and January 12, with January 17 reserved if a third is needed, and draft articles to be available for the first of them.passed
• 1:37:19
  Members asked that the select board be requested to take its vote on budget article recommendations on January 17 rather than January 24, so the committee is not left with a single week. Jerry Douglass (?) said he would see what the board thought; the change was not agreed at this meeting.outcome unclear
• 1:47:42
  Budget committee meetings set for Tuesday January 31 and Thursday February 2, running six to nine, with Tuesday February 7 held back as a third meeting if needed, the dates chosen around a member who cannot meet on Mondays.passed
• 1:47:42
  Jerry Douglass agreed to move his deadline for the committee's budget recommendations from February 7 to February 9.passed
• 1:47:42
  Agreed the committee would be supplied with three years of budgeted and actual figures, the undesignated fund balance, a five-year projection and the Capital Improvement committee's ranking.passed

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

• 16:12
  The town manager wants Durham to move to a July 1 to June 30 fiscal year, aligning it with the school, county and state, which would mean either a six-month or an 18-month transition budget and taxes collected twice a year, in April and October. Members raised what a year with six extra months of taxation would do to residents on fixed incomes and to mortgage escrows.
• 16:12
  Durham and Pownal together cannot outvote Freeport on the school budget, which members said always passes. That is why the municipal budget, roughly a quarter of the tax bill, is scrutinised so closely: it is the part residents feel they can actually influence.
• 42:43
  Jerry Douglass (?) said the town's financial records do not reconcile. He described roughly 25 spreadsheets holding the same information with none matching, reserve accounts kept in Excel rather than in the town's accounting system, and said he cannot yet tell the committee what is in the reserve funds until he has worked it through with the auditor.
• 2:04:26
  Neither of the two culvert projects voted last year, on Quaker Meeting House Road and Swamp Road, went ahead. The state's fish passage standard requires a structure 1.2 times the channel width, pushing the cost from about $202,000 to around $300,000. The roughly $101,000 raised sits in reserve and Calvin is expected to ask for another $49,000 or $50,000 to reach the $150,000 the town must put up against a $150,000 state grant.

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