Budget Committee Meeting ~ March 4, 2024

2024-03-04 · Budget Committee · 54:16 · watch on YouTube →

The budget committee met on 4 March 2024, the recording beginning partway into a discussion, to reconsider one figure: how much of the general fund balance should be used to offset the 2024 budget. The select board had raised its recommendation to an even $668,000 after the county tax came in far above the 3 percent that had been assumed and the school budget was published at 6.5 percent up. Several members argued it is not the committee's job to cover increases from the county and the school, and the motion to match the select board's figure failed 1 to 7, leaving the committee's earlier recommendation of $628,475 in place. Members acknowledged this puts them in the unusual position of recommending a higher tax bill than the select board. The meeting then agreed to review the committee's bylaws alongside the next auditor's report, 60 to 90 days after it is issued, and that a recommendation would be drafted to the select board on giving it clear authority to pay bills that must be paid.

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. 0:21
   The revised fund balance figure

   The select board's original recommendation was about $633,475 and the budget committee's was $628,475. The board's new recommendation is an even $668,000, reflecting a $5,000 reduction to match solid waste and an increase in the county tax figure now that the real number is known.

2. 0:21
   School and county numbers

   Members learned the school budget has been out for some time and is significantly above the estimate, at a 6.5 percent increase, adding about $120,000 to what the town had assumed; last year's increase was 4.9 percent and Durham's share does not necessarily track the announced figure. With education taken out, the 2023-24 variance to budget was put at 12.5 percent and the variance to actual at 15 percent, though about $100,000 of unspent road money carried into this year accounts for part of that. With education back in, the property tax levy would rise about 2.3 percent.

3. 5:30
   The county tax increase

   The county was estimated at 3 percent in this budget cycle, described as an educated guess based on history, and came in far higher, given in the discussion as 9.6 percent. Members said no one had been told what drove it and that somebody should ask, noting the town elects county commissioners by district but does not vote on the county budget.

4. 5:30
   Long-term use of the fund balance

   Asked whether the select board has discussed a long-term plan, a member said the change from a calendar year to a fiscal year has been discussed but the town manager recommended waiting until the revaluation is done rather than aim at a moving target. The largest foreseeable call on the fund balance is expanding the town hall or otherwise addressing office space, with plans from around 2007 to be dusted off and a committee likely to be formed.

5. 5:30
   Motion to match the select board

   Allan (?) moved and another member seconded that the committee agree with the select board's recommendation to use $668,000 from the fund balance to offset the 2024 budget.

6. 10:47
   Objections from committee members

   Jill (?) said this was the second or third meeting called just to change the fund balance figure because new spending had appeared, and that the fund balance needs a plan rather than being used to absorb every increase; she said she would rather see it used to ease the eventual change to a fiscal year. Jane (?) said the committee had not dug deep enough this year, that estimates had been rounded up by thousands on every line and that raises above 10 percent went unchallenged, contrasting this with earlier years when the committee found waste. Others said the committee should not be seen to cover the county's increase, and that declining to match is the only way to make residents ask why.

7. 15:53
   How the surplus arises and how much is needed

   Asked how a surplus comes about, members explained the town overestimates costs, raises the money in taxes anyway and ends the year with more than it needed. One member put the working buffer at about $2 million, leaving roughly $1.7 million available, of which $668,000 would be used this year. Members explained the buffer has to be large because the town votes its budget in April but bills do not go out until July or August, so it runs for eight months on cash in hand, and that moving to a fiscal year might reduce the need.

8. 21:12
   The select board's reasoning

   Members of the select board present said the aim had been to flat fund the year so residents saw no municipal increase, using money already collected from taxpayers, and that the county figure is outside the town's control. They accepted taxes will rise in the next couple of years and described this as one more year of reprieve. Another member noted revenue came in about $270,000 above budget, so the surplus is not all over-taxation, and suggested the committee decide what level the reserve should sit at, noting standard practice of 17 to 18 percent of the budget, or about $1.7 to $1.8 million.

9. 26:39
   Recommending a higher tax bill

   Members observed that residents normally look to the budget committee for the lower number, and that on this article the committee's position would mean a higher tax bill than the select board's, which they expected to have to explain. One member said the committee is not saving anyone taxes, only delaying them, and warned that if the habit continues the town will one day face a large county and municipal increase at once with no funds to transfer. A member also complained that money sitting idle should have been in a six-month credit union certificate paying 4 percent, and that the town manager should have moved on it months ago.

10. 26:39
    Vote on the fund balance

    Allan (?) moved and John (?) seconded to call the question, which passed. The motion to match the select board's recommendation of $668,000 then failed 1 to 7, leaving the committee's original recommendation of $628,475 as its position. The chair noted there are no warrant articles yet to make the recommendation official.

11. 32:13
    Review of the committee's bylaws

    Neil had circulated the bylaws and suggested changes: adding the town website to the requirement to post notice of meetings at the town office, and reflecting that the committee has not had warrant articles for the last couple of years where the bylaws say it votes on each warrant article. Members said they see no reason not to have draft articles, since many are standard year to year, and preferred to fix the practice rather than water down the bylaws.

12. 37:45
    The auditor's report

    Members noted one of the committee's responsibilities is to review the auditor's report, which would also answer what the fund balance ought to be. The audit began the previous week and, if the paperwork is in order, could take six to eight weeks rather than the months of searching required in past years; reports have historically arrived in the autumn or December. The committee agreed to meet 60 to 90 days after the report is issued to review it and to take up the bylaw changes at the same meeting.

13. 43:24
    Authority to pay bills that must be paid

    Neil (?) said the recurring question at meetings is what the select board may spend, and that there is an emergency reserve nobody can touch because the warrant article authorising its use expired and was never renewed. He wants either an ordinance or an annual warrant article giving the board clear authority to pay bills it has no choice about, such as contracts, the solid waste bill and workers compensation, without discretion to spend on other things.

14. 48:24
    What the law already allows

    Members went through Title 30-A on municipal reserve funds, and disagreed over whether the select board, as trustees of the reserve fund, can already spend from capital improvement and capital equipment accounts without further permission, and whether that extends to the emergency reserve. Members also referred to the accountant's suggestion of allowing up to 5 percent of a budget line to be moved. Neil agreed to put the recommendation in an email for the committee to bless and send to the town manager and the select board chair.

What was decided

• 26:39
  Call the question on the fund balance motion; moved by Allan, seconded by Johnpassed
• 26:39
  Agree with the select board's recommendation to use $668,000 from the fund balance to offset the 2024 budget; failed 1 to 7, leaving the committee's earlier recommendation of $628,475 standingfailed
• 37:45
  Hold a meeting 60 to 90 days after the auditor's report is issued, to review that report and to take up amendments to the committee's bylawspassed
• 48:24
  Have Neil draft a recommendation to the town manager and select board chair on formalising the select board's authority to pay bills the town has no choice about, for the committee to review before it is sentpassed

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

• 5:30
  The county tax was budgeted at 3 percent, an estimate based on history, and came in far above that, given in the discussion as 9.6 percent. No one at the meeting could say what caused it, and members said the question belongs to the county commissioners, whom Durham elects by district but whose budget the town does not vote on.
• 0:21
  The school budget has been published at a 6.5 percent increase, about $120,000 more than the town's figures assumed, which will push the mill rate up regardless of what the municipal budget does.
• 26:39
  The committee voted 1 to 7 against matching the select board's $668,000 draw on the fund balance, so it recommends using less and therefore raising more in taxes than the select board does. Members noted residents usually expect the opposite.
• 43:24
  The town has an emergency reserve that cannot be spent, because the warrant article that authorised the select board and budget committee to use it expired and was never renewed. The balance figure given in the recording is garbled.

Elsewhere

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