Budget11519chap1

2019-01-15 · Budget Committee · 1:40:37 · watch on YouTube →

The first budget meeting of the 2019 season, and the first held jointly by the Budget Committee and the Select Board. The two bodies agreed to try hearing department presentations together rather than having department heads present the same material twice, so both work from the same information and hear each other's questions. The budget committee opened by electing officers, then Ruth gave an overview of the 2019 budget: an increase of about $607,750, which after appropriating more from other revenue leaves an additional $394,369 to raise, roughly 1.12 on the mill rate or 5.7 percent. The rest of the evening was a line-by-line examination of the public works operating budget with the road commissioner, dominated by why winter equipment maintenance ran about $50,000 over budget and by a committee member's argument that routing operating surpluses into the department's capital reserve amounts to over-taxing. No recommendations were made; the select board will produce article-by-article recommendations by the end of January and the budget committee will then produce its own.

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. 0:02
   Introductions and officers

   The budget committee opened its first meeting of 2019 with introductions around the table, including chair Milton Simon of Stackpole Road, a resident since 1982. Nominations were taken for chair and vice chair for the year.

2. 0:02
   Minutes for budget committee meetings

   Members asked whether a secretary would be provided when the budget committee meets. The answer was that either Tammy or Kathy would take minutes, with the goal that minutes are available at the start of each meeting, which members said had been a problem in the past.

3. 0:02
   A joint format this year

   Rather than have department heads deliver detailed presentations twice, once to the select board and once to the budget committee, both bodies will hear the same presentation at the same time and hear each other's questions. The budget committee then works separately on its own recommendations. Members said they would return to the old way next year if it does not work.

4. 5:21
   How the season is organised

   Major categories such as public works and the fire department get their own nights, with administration and smaller categories grouped together. Tonight is public works, opening with an overview from Ruth, who apologised that there was less material in the books than usual because she is in the middle of the audit.

5. 5:21
   Two changes to the warrant structure

   Instead of a separate raise pool for each department, which meant a department could only spend from its own, there will be one raise pool for all departments as its own article, so the money can be divided between departments and some raises made on merit. Debt service will also go on the warrant as a single article with the components broken out, rather than one article per debt line.

6. 5:21
   Revenue highlights from 2018

   Excise tax revenue, which the town appropriates for public works, rose 7.66 percent and has been rising every year. The homestead reimbursement rose 8.53 percent after the state raised the exemption to $20,000 and lifted the reimbursement rate from 50 percent to 62.5. Interest income rose sharply, though from a small base, as bank rates rose and the town began placing spare cash in fully insured short-term certificates of deposit.

7. 5:21
   Grant revenue and the culvert project

   Grant revenue was up very steeply, mostly on a payment from Maine DEP for the culvert work associated with Auburn Pownal Road. Two DEP grants together came to about $190,000.

8. 10:41
   Where the money comes from

   Ruth walked through appropriated revenues and capital funds, including excise tax, the fire and public works capital funds, revenue sharing, the local roads assistance programme and income from interest and registrations, with the remainder raised by property tax. She promised a fund balance sheet showing the balance of every fund at year end, which had not been printed.

9. 10:41
   What is driving the increase

   The 2018 road bond accounts for about 39.16 percent of the total budget increase and road capital, for an anticipated plow truck purchase, about 36.77 percent. The first payment on the fire truck bond is the third largest driver, followed by public works roads operating and fire rescue. Telecommunications rose 26 percent, which members noted affects the budget but not necessarily the tax bottom line, since some items are funded by appropriation rather than taxation.

10. 10:41
    Cost pressures across all budgets

    A three-year propane contract at $1.13 a gallon expires in August, and propane is no longer anywhere near that price. Electricity was overspent in fire, public works and administration. Low unemployment has created competition in the labour market, requiring higher wages, and is felt most in public works and in fire department per diem, where the town competes with surrounding communities.

11. 16:01
    Estimated tax impact

    Ruth stressed the estimate assumes no change in the town valuation, which was $351,407,600 last year, no change in state reimbursements for homestead and revenue sharing, and takes no account of the county assessment. The budget difference is $607,750, offset by $213,381 more appropriated from capital and revenue funds, leaving an increase in the commitment of $394,369.

12. 16:01
    What that means on a tax bill

    The proposed budget raises the mill rate by 1.12, about 5.7 percent, all else held constant. That is an extra $1.12 for every $1,000 of valuation, so a home valued at $200,000 would pay roughly $224 more.

13. 16:01
    The 2018 road bond programme

    The first year of the bond work is complete, with finish paving, shouldering, radius paving and transition paving left for 2019. That spending falls in 2019 but is funded by the 2018 bond rather than new money. Against a $2,000,000 bond, the accounting presented totalled $1,865,973.73.

14. 21:28
    Davis Road and engineering costs

    About $17,600 went on widening the hill on Davis Road heading towards Old Brunswick Road, taking out large oaks by the farmhouse at the crossroads and ditching so the road lasts with proper drainage. Engineering came to $30,943, and an estimate of about $8,500 covers going back to finish ditching and drainage.

15. 21:28
    Maintenance paving and the fish passage project

    Last year's maintenance work included chip sealing Swamp Road, shim and overlay on Brianna Drive and another road, a half-mile section from Davis Road, and work on the Route 136 stretch. The open bottom culvert fish passage project funded by the $190,000 DEP grant was completed. A 2017 special town meeting had set aside $100,000 for associated expenses, of which $53,897 was spent and the balance went back into the capital fund.

16. 21:28
    Why some lines were underspent

    Vacant positions for part of the year left both wages and insurance underspent. Cab refabrication was done on trucks three and five at about $5,000 each, $10,000 in total, expressly to get them through the winter rather than to extend their life; the rest of those trucks continues to deteriorate.

17. 26:52
    Condition of the older trucks

    Calvin (?) described brake and air lines rotting from the inside out: a line came off and oil poured out because the steel looked sound but had thinned to blow holes. Replacing individual lines is possible but there are thousands of components, and the crew is replacing parts to extend the trucks as far as they can.

18. 32:01
    Wages, overtime and staffing

    Overtime was moved onto a separate line so it can be tracked rather than being buried in wages, which means the apparent percentage increase overstates the real one. The department is running short of its full complement of labourers, with one applicant able to start the following Tuesday. Workers compensation insurance is down about 3.8 percent.

19. 37:06
    Communications and vehicle maintenance

    Cell phones were split out of the communications line, which still covers truck and portable radios and their maintenance. Vehicle and equipment maintenance overspent by $6,382; the request is a $2,000 increase, which still leaves about $4,000 less than was actually spent last year.

20. 37:06
    Why maintenance jumped

    Asked why the line jumped from the low thirties in past years to the mid forties, members explained that Calvin and his mechanics went through every truck and listed everything that needed doing, including work deferred for years, and the town committed to it to get the fleet ready for winter. Two trucks also had cab body work at about $5,000 each, which is not a recurring expense.

21. 42:46
    Equipment rental and facility maintenance

    Rented equipment includes a roadside mower used about three times a year at roughly $1,200 a week, and a compactor when the crew does a box cut. Facility maintenance would have been on target but an insurance company inspection required anti-compression devices on the doors.

22. 42:46
    Facility plans for 2019

    Planned work includes LED lighting in the cold storage building, replacing exit lights the inspection flagged as a safety issue, furnace repairs, and pumping out the floor drain tank that catches oils, fluids and sediment washed off the trucks, which has to be handled as hazardous waste.

23. 48:17
    Signs and training

    The department is on the state's list for speed limit signs, having been on it for some years, and wants to bring the town's signs up to the federal standard, which would mean about a 30 percent reduction in the sign it was discussing. A welcome to Durham sign was delivered late in the year and is in the garage waiting to be installed. The training and safety line drops slightly on the year.

24. 48:17
    Fuel

    Gasoline and diesel were budgeted at $46,000 and $36,657 was spent, leaving over $9,000 unspent. Calvin (?) proposed holding the same figure because fuel prices are unpredictable. The town buys jointly with the fire department to get the best rate for the whole town.

25. 48:17
    Where operating surpluses go

    Members clarified that for public works and the fire department, any operational surplus goes into that department's capital fund rather than to undesignated funds. A new member asked how the budget total relates to where the money comes from, and was told that is a second question: whether each item is appropriated from undesignated funds or a reserve, or raised through taxes.

26. 54:14
    Professional services and engineering

    The line was underspent because engineering for the bond projects was charged to the bonds rather than to operating. About $15,000 is proposed, with a small culvert on Meadow Road identified as needing engineering because it involves a stream. Engineering for Davis Road and the other bond work has already been done and paid from the bond.

27. 59:45
    Engineering and a possible new road bond

    Members drew a distinction between preliminary engineering to develop cost estimates for a bond proposal, which comes out of operating expenses, and the detailed design of culverts and cuts once voters approve, which is charged to the bond. If the town does not put a bond forward, perhaps $10,000 of the $15,000 would go unspent. The roads the department would like to do this year come to over $2 million.

28. 59:45
    Whether to ask the town again

    The last road bond failed at the polls. Members said the board has not had the discussion again, but the thinking is to recompute what needs doing and what it would cost and then decide whether to put it to the town this year or wait, on the basis that the question should at least be asked.

29. 59:45
    Traffic control

    Nothing was spent on hired flagging last year, partly held back in anticipation of the truck overruns and partly because the crew handled it themselves on side roads with little traffic. On Runaround Pond, traffic control was covered by Crooker as part of their paving work area. A member questioned whether it makes sense to pay the town crew to flag when the department is short-handed.

30. 1:04:55
    Tree work

    The tree cutting line is separate from storm work and covers roadside vegetation management around town, including a large tree that would have cost $1,200 to $1,300 had the crew not handled it with a contractor dropping and the crew clearing. Another removal is needed on the same property next year. Tree removal after storm events is charged here as well. The line stays at about $7,000 against $6,911 spent.

31. 1:10:13
    Erosion control and a spreadsheet error

    Erosion control came in about $19 under budget and stays flat. Calvin (?) noted a formula error in the maintenance paving sheet where a row had been deleted and the total did not carry through, so the correct figure is $372,000 rather than what was printed. The roads on that list are maintenance work, not bond work.

32. 1:10:13
    Late-year spending on materials

    A member noted that in October the department was around $30,000 underspent on materials, culverts and erosion control and had spent it by the end of December, and asked whether that was stockpiling or a timing issue.

33. 1:15:40
    Sand, salt and plow blades

    Sand came in $1,104 under budget and stays at $9,000, though the sand pile is disappearing quickly with the amount of ice this winter. Plow blades were budgeted at $9,000 and only $2,660 was spent because a stockpile bought in earlier years was drawn down; restocking is expected to cost around $4,000 to $5,000 next year.

34. 1:15:40
    Winter equipment maintenance

    Budgeted at $25,000, the line was overspent by about $50,000, coming in near $75,000. Calvin (?) proposed raising it by $25,000 to $45,000, still well below what was actually spent. Members asked what went so badly wrong and were told the trucks are simply old and the failures were not foreseeable, and that the department should probably have been more aggressive on maintenance in earlier years.

35. 1:20:50
    Catching up versus annual cost

    Pressed on how much of the $75,000 was catch-up and how much is a genuine annual figure, members traced the hole to budgeting only about $20,000 for repairs in 2016 and 2017. Calvin (?) offered to provide the line item list of every truck and what it needed. The board had asked the department after town meeting to produce a thorough to-do list on all the trucks and then found the money within the existing budget by holding back elsewhere, which members described as re-establishing the baseline.

36. 1:20:50
    Fleet age

    Calvin (?) observed that trucks only five years old are now needing significant work, such as taking a bed chain apart and fitting new pistons and pumps, where previously they needed little beyond routine maintenance. Members noted a ten-year lifespan is often quoted, some towns stretch to twelve or fifteen, and twenty is well beyond expectation for the work these trucks do.

37. 1:26:22
    The public works bottom line

    The department's total operating budget is $1,279,889. Of that, $53,128 from the state local road assistance programme for plowing state roads and $916,529 from 2018 auto excise together make $969,657 that is appropriated rather than raised, leaving $310,232 to be raised in taxes. That is down from $394,853 raised last year, even though the department budget is up 3.16 percent.

38. 1:26:22
    Dispute over capital reserve transfers

    A member calculated that over the last four years $532,259 of public works operating surplus has gone into the department's capital fund, a little over $133,000 a year, and argued the town has been over-taxed to build a fund that now makes the plow truck look free. Others responded that capital reserve money cannot be spent on the operating budget or used to reduce the tax commitment, only on capital items, and that surpluses have gone that way since public works was founded and for a long time in the fire department.

39. 1:32:27
    A capital improvement policy in the works

    Members observed it is not unusual for towns to make planned annual contributions to capital rather than sweeping operational surpluses into it, which would give the town more say in how much sits there. A Capital Improvement Committee has been appointed and charged with developing a capital improvement policy to bring back to the board, which may then propose changes to how surpluses are handled.

40. 1:32:27
    Keeping the operating budget flat

    A member said he would challenge public works to keep its operational budget flat, on the view that there is flexibility within it. Others noted the town votes only the bottom line of the article and it is up to the department head to move money within it, which Calvin did this year by holding back in other lines to fund the maintenance work.

41. 1:37:53
    What happens next in the process

    No recommendations were made tonight. The select board aims to have its finished article-by-article recommendation by the end of January, after which the budget committee meets to decide whether it agrees or wants its own numbers. Every budget article on the town warrant carries both recommendations, and where they differ the town discusses which to accept.

42. 1:37:53
    Maintenance paving mileage

    Members worked out roughly what the maintenance paving programme covers: the town has around 60 miles of paved road, so at four to five miles a year everything gets touched about every ten to twelve years. The chip seal work on Swamp Road and elsewhere costs about half what conventional paving does. The meeting broke for five minutes before turning to capital.

What was decided

• 0:02
  Milton Simon was nominated to continue as chair of the budget committee. The chair called for those in favour and any opposed, and thanked the committee, with no count stated.passed
• 0:02
  Brian Pike was nominated and seconded as vice chair of the budget committee. The recording moves straight from the second to calling the select board meeting to order, so it does not capture a vote or a result.outcome unclear
• 0:02
  Either Tammy or Kathy will take minutes for budget committee meetings, so that minutes are available at the start of each meeting.passed
• 0:02
  The budget committee and select board will hear department presentations jointly this season rather than having each department present twice, with the budget committee then working separately on its recommendations. Members agreed to revert to the old way next year if it does not work.passed
• 5:21
  For 2019 the warrant will carry a single raise pool article covering all departments, replacing the separate pool per department, so money can be divided between departments and allocated on merit. Debt service will likewise go on the warrant as one article with the components broken out rather than an article per debt line.passed
• 1:37:53
  No recommendation was made on the public works budget tonight. The select board will complete its article-by-article recommendations by the end of January and the budget committee will then meet to agree or set its own figures, with both recommendations appearing on the warrant.tabled

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

• 16:01
  As (?) presented, the budget rises $607,750 over last year. After appropriating $213,381 more from capital and revenue funds, the amount to be raised goes up $394,369, which adds 1.12 to the mill rate, about 5.7 percent, or roughly $224 on a home valued at $200,000.
• 1:15:40
  Winter equipment maintenance was budgeted at $25,000 and came in around $75,000, about $50,000 over. The request for the coming year is $45,000, and members traced the overrun to budgeting only about $20,000 for truck repairs in 2016 and 2017 while deferred work accumulated.
• 1:26:22
  A committee member calculated that $532,259 of public works operating surplus has been swept into the department's capital fund over four years, a little over $133,000 a year, and argued the town has been over-taxed to build a fund that makes the proposed plow truck look free. That money cannot legally be used to reduce the tax commitment or fund operations.
• 10:41
  Two items account for about three quarters of the whole budget increase: the first payment on the 2018 road bond at 39.16 percent, and road capital for an anticipated plow truck purchase at 36.77 percent. The first payment on the fire truck bond is the next largest.

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