Select Board/Budget Committee Meeting ~ January 12, 2023

2023-01-12 · Select Board · 3:05:07 · watch on YouTube →

A Select Board meeting held as a workshop with the Budget Committee, working through the capital and operating budgets for 2023. Paul, chair of the capital improvement program committee, presented the committee's project ranking and its recommendation that reserve accounts be tracked separately in Trio. Road commissioner Calvin then took the Public Works budget line by line, and town manager Jerry covered telecommunications, the website, the fire department budget, wages, the administrative budget and solid waste. Much of the evening turned on the reliability of the town's accounting records: budget committee members questioned whether figures in the spreadsheets could be relied on, and Jerry (?) said he intends to rebuild the chart of accounts over the summer and may contract the accounting work out. No budget line was voted on; the Budget Committee set two further meetings, for January 31 and February 2, to make its recommendations.

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
   Opening and order of business

   The chair opened the Select Board meeting as a workshop with the Budget Committee, led the Pledge of Allegiance, and noted that warrants voted at the previous meeting still had to be signed during the evening. Town manager Jerry set the order: the capital improvement program first, then the road commissioner's budget, then telecommunications and solid waste.

2. 0:03
   CIP committee report and project ranking

   Paul, chair of the capital improvement program committee, described the fourth year of the process: an initial meeting to review staff applications, a second meeting with the road commissioner and the fire chief, then independent scoring by the committee's four members. He ran through the resulting ranking, which had the fire department second, a Public Works one-ton truck fourth, then assessing (saving toward the revaluation), the fire chief's truck, the fire department generator, the Public Works reserve, and the town office generator last.

3. 5:25
   CIP committee's own recommendations

   The committee would like reserve requests to rank higher and plans to meet again, probably next fall, to adjust a scoring regime that favours projects with an immediate public safety benefit. It also asked that each reserve be set up as a separate account in Trio so balances can be tracked.

4. 5:25
   How capital requests reach the committee

   Asked whether other committees can submit applications, Paul (?) said requests come through the town manager, and that both the schedules and the applications go to the Select Board for an initial review before they reach the CIP committee. The 'potential funding sources' field on each application is filled in by staff; the committee deliberately stays out of whether ARPA money, reserves, taxes or undesignated funds are used, since that is a Select Board decision made before town meeting.

5. 11:20
   Reserve requests, project requests and reserve balances

   A reserve request builds savings for future years; a project request buys something in the coming fiscal year. Balances were not trusted when the CIP committee began its work, but the manager worked with the town's bank representative at Androscoggin Bank and with the auditor, and the balances are now considered reliable even though the money largely sits in one account.

6. 16:39
   Saving for a future Quint

   A member asked whether the town should be building a reserve toward a replacement ladder truck, put at roughly $1.5 million, given that the current Quint was repaired this year and is expected to last seven to ten years. The answer was that department schedules run about fifteen years out, that reserves are only one funding route alongside bonding and taxation, and that the aim is to keep the capital tax impact steady rather than spiking.

7. 22:17
   The reserve tracking spreadsheet

   A member recalled a spreadsheet from last year that projected balances out to 2039. Jerry (?) said it is not accurate enough to rely on, that interest rates in it were estimates, and that a town running a $21,000 accounting system should not be tracking this on spreadsheets. A multi-year reserve savings plan was described as a later step in the CIP work.

8. 27:43
   Reading the capital budget columns

   A member queried a figure that appeared higher than last year yet showed as a decrease; the explanation was that the current-year column has not been filled in yet. It was also noted that any tax impact figure the committee sees is an estimate, because state valuation is not known until taxes are committed in July, and the actual rate usually comes in lower.

9. 33:08
   Ranking reserves separately from projects

   Several members argued that reserve funding should be set on a schedule and taken off the CIP project ranking, so that voters judge projects on their own merits. The CIP chair said this is one of the things the committee will look at when it revisits its methodology.

10. 38:29
    Existing debt service

    Paul (?) noted the town is already paying about $950,000 a year on past capital through its bonding, which limits how much can go into reserves now. Bonds start coming off next year, which was described as the opening to begin building the accounts up.

11. 44:05
    No fire department reserve request this year

    The fire chief explained he asked for a large amount on the capital side and wanted to keep his operating budget level, so he did not add a reserve request. He said the question of whether to save, bond or raise for future apparatus is not his to decide, and that he had written ARPA on an application only because the form asked for a potential funding source.

12. 44:05
    Why the market adjustment was not performed

    Jill (?) asked why the market adjustment the town had funded was never carried out. Jerry and the board said the assessor, Donna, advised holding off through the pandemic run-up in property values and then recommended saving for a full revaluation instead, since a market adjustment now would be followed almost immediately by the full revaluation. Durham's last full revaluation was about twelve years ago and would be about fifteen years old by the target date of 2025.

13. 49:13
    Homestead reimbursement and the assessing money

    A member said the town's Homestead exemption reimbursement keeps dropping because the revaluation keeps being postponed, and objected that money approved for a stated purpose was not spent on it. The board said the money remains in the assessing account and is not going anywhere else.

14. 54:28
    Public Works: salary, labour and fixed costs

    Calvin went through his budget line by line. The road commissioner's salary was set at $73,500 by interim town manager Mitch Fryer with an added facilities manager role, which he said had brought attention to rusted-through floor supports, HVAC work at the fire station and town office, and a furnace over the general office that had caught fire. Labour is budgeted at a 5% increase, workers compensation is down $7,182, Medicare up $491, and insurance up $4,446 to $95,650.

15. 54:28
    Public Works: utilities, equipment and facilities

    Utilities to be cut by $1,000, most of the remaining communications money going to employee cell phone stipends since no new truck radio is needed. Equipment repair up $8,800 to about $60,000, partly for new rubber tracks for the excavator after six years' use; rental equipment held flat; facility maintenance cut $2,000, with work this year on the salt shed front door, garage doors and rotted pine trim and fascia.

16. 59:31
    Tree work, training, culverts, signs and paving figure

    Tree work up $1,500 to get back toward the $4,000 he needs for a project waiting at the start of the year; training up about $1,000 now that Maine Local Roads is offering classes again; culverts and drains cut $4,000 to $5,000 after most of the old metal culverts were replaced with HDPE; erosion control and signs held flat. The paving figure for the year, with an adjustment for liquid asphalt, was given as about $331,229.

17. 1:04:54
    Fuel, winter materials and carry-over paving

    Gasoline up $4,000 to $40,000 after the contract lapsed last April; uniforms held flat at $1,800; traffic control held flat although flagging companies cannot supply staff; professional services down $1,789; liquid de-icer down about $2,000; sand down $4,000; salt up about $26,000 on a $10-a-yard increase under a cooperative bid, which only holds the town level; plow cutting edges down $3,500 after switching to a more aggressive edge; winter equipment maintenance up $2,000. Shoulders and road striping not completed in 2022 carry into 2023.

18. 1:10:02
    Undesignated fund balance and cash flow

    Unspent money lapses to undesignated and can be applied against the coming budget; the auditor reported a healthy balance. The roughly $4 million on hand was explained as a timing effect of a calendar budget year against taxes not collected until August, and Jerry (?) noted that August is therefore the best time to buy.

19. 1:15:27
    Whether the figures can be relied on

    A budget committee member pressed on whether Calvin enters the Public Works numbers himself and whether lines could be misallocated, saying it is hard to make an informed decision if the figures are wrong. Calvin (?) said the totals are his actual spending. He confirmed the sand stockpile has been drawn down so this year's figure is a working baseline, and that the salt increase reflects price, not volume.

20. 1:15:27
    Flaggers and the unspent $90,000

    Asked whether local young people could be hired as flaggers, Calvin (?) said employees must be trained on a Department of Transportation video but do not need certification, and Jerry cautioned against hiring minors given the liability. A member commended Calvin for leaving about $90,000 of his budget unspent, knowing it would lapse to undesignated rather than return to his department.

21. 1:21:00
    Cell phone stipends and the paving contract price

    A member suggested the town add employees to a single cell phone plan rather than pay stipends, which she said costs substantially less. On paving, the contract signed in March 2021 priced work at $75.50 a ton when liquid asphalt was $552; asphalt is now $665, which Jerry worked out to roughly $86 a ton, and he warned that a three-year price is not a real price once escalators apply.

22. 1:26:01
    Paving mileage and the maintenance cycle

    About 2.47 miles a year is being budgeted, adjusted by the engineer for expected asphalt prices. The discussion covered a ten-year shim-and-overlay cycle with rebuilds at roughly thirty years, and Jerry (?) warned that towns commonly spend heavily rebuilding roads and then fail to maintain them, which he called a waste of money.

23. 1:31:18
    Public Works labour line discrepancy

    A member said the summer road repair and maintenance payroll shows $224,800 while the total Public Works labour line is $274,800, which would leave only about $50,000 for all other labour, and said it must be a mistake. She left the table to find the line reference; the point was not returned to on the recording.

24. 1:31:18
    Union Church

    Asked about the building's deterioration and whether money is going into a rabbit hole, the board said the position is much as it was a year ago. There is no long-term plan, the site has no parking, and moving the building onto town-owned land at the municipal complex has been floated. A series of public meetings and a committee were suggested as the way to settle it.

25. 1:36:27
    Break-fix maintenance and ARPA on the warrant

    In the short term the town will keep Union Church watertight and do nothing beyond that. On ARPA, any item funded that way must be identified as such on the warrant by law, and the Select Board will decide in April what to put before voters.

26. 1:36:27
    Telecommunications budget and the access channel

    The meeting secretary and public information officer lines, previously spread across several articles and totalling $26,300, were consolidated into a single $25,000 line. Jerry (?) raised whether to keep the public access channel at all, since meetings are streamed; the board wanted to check what obligations the Comcast contract imposes first.

27. 1:41:31
    Franchise fees and internet providers

    Members noted residents switching to a cheaper fibre provider, which does not carry cable television, would lose access to the local channel, leaving only Comcast customers able to watch it. Franchise fee revenue is trending down while telecom expense is not, so the fees will no longer cover the article.

28. 1:41:31
    IT services

    Two lines, one for email and one for services, were combined into a single $15,000 line. The town pays about $829 a month for email and file backup and is billed per call on top of that. Staff now call Trio directly for some problems: when new computers could not print vehicle registrations, a call to the vendor produced no answer for hours while an in-house call to Trio fixed it in ten minutes.

29. 1:47:01
    Website and the Drupal upgrade

    The move from Drupal 7 to Drupal 9 takes the website line to $3,000. Staff cannot edit the header and footer, including office hours and phone numbers, without going through the vendor; a member suggested making hours their own tab so staff can update them.

30. 1:58:00
    Pooled revenues and a new chart of accounts

    This year all revenues are pooled and applied to the budget as a whole rather than mapped to particular articles, so which article carries which expense matters less than it used to. Jerry (?) said he wants to rebuild the structure into three departments with a three-layer chart of accounts, so that fuel, wages and supplies roll up and can be read in one place.

31. 1:58:00
    Permits and subdivision fees

    A handout of permit counts was circulated in response to an earlier request. On subdivisions there has been one application and one amendment pending, with agreement that the town does not charge enough in fees.

32. 2:03:41
    Fire department budget

    The only line change in the fire budget is the chief's salary, going from $73,500 to $77,175, a 5% increase. Department members received 5% at last year's town meeting through a specific warrant article; the chief said he was asked and did not want an increase for members this year.

33. 2:03:41
    Wage pool, merit and cost of living

    Members questioned how a wage pool works alongside salary lines. It was explained that the pool was set up so raises were not a flat percentage and, chiefly, to stop open debate about individual employees' raises on the town meeting floor. Jerry (?) said he does not believe in withholding raises as discipline, and for this year is proposing an across-the-board 5% rather than merit increases.

34. 2:14:06
    Benchmarking wages

    The comparison sheet circulated shows what other towns are proposing but not what they currently pay. Members said Durham's real competition is its neighbours, naming Brunswick, Lewiston and Auburn and New Gloucester, and that benchmarking against demographically similar towns misses that people will drive across the bridge for a few dollars more an hour.

35. 2:19:40
    The increase and decrease columns

    Members objected that the percentage columns show figures well above 5% for some positions and asked why they were being given a sheet with wrong numbers. The explanation was that the columns compare the 2022 budget to the 2023 budget rather than hourly rate to hourly rate, and that a mid-year raise or a vacancy distorts the prior-year actual. Raises are not retroactive and take effect after town meeting.

36. 2:25:13
    Explaining the numbers to voters

    Members warned that residents read those percentages at town meeting and will move to cut the bottom line if they think someone is getting a 40% raise, and asked for a plain explanation to be ready. The counter-argument was that town meeting approves an article rather than a line, and cutting the article only reduces the total the manager has to work with.

37. 2:30:39
    Funding the position, not the person

    Jerry (?) said he stands by funding the position rather than the person, but agreed to reduce the benefits lines for the clerk and the code enforcement officer, who do not take them, as a way of keeping the request reasonable. He noted the town clerk had been approached about a head clerk job in Gray at $70,000, and said he would take the risk for a year.

38. 2:35:54
    Office hours and benefits

    The office is closed Wednesdays although staff are in; Jerry intends to open 36 hours a week once positions are filled, which is part of the increase shown. The benefits figure of about $24,500 represents 80% of the cost of a family plan, which the town pays; whoever is hired may not take it.

39. 2:41:20
    Contracting out the accounting

    Jerry (?) said an accounting firm could take payroll, accounts payable and the books for an estimated $65,000 to $70,000 a year, and that he would eliminate the deputy treasurer position if that happened. Members raised the loss of counter coverage and noted the town had looked at contracting payroll before and been told it would not save money because the data still has to be entered in Trio.

40. 2:46:30
    Counter staffing and pay rates

    The tradeoff was put as three window staff with the accounting as it is, or fewer staff and someone who knows the accounting. A position now paid $17.50 an hour would go to about $21, and the two people previously doing the work were paid $23.79. The accounting firm is due before the Select Board on February 14.

41. 2:46:30
    Whether the 36-hour week depends on the current clerk

    A member said that having stated he funds the position and not the person, Jerry then appeared to make the move to 36 hours contingent on whether the current clerk would work them. The reply was that the position needs 36 hours regardless and the question was only whether the current holder is willing, which she is.

42. 2:51:45
    Solid waste contract

    The hauler is moving to automated collection within a couple of years because it cannot staff rear-loading crews, citing injuries and workers compensation costs. The town's contract expires June 30 and a price for a one-year extension at current service levels has been requested but not yet received; bulky waste would be handled separately.

43. 2:51:45
    Why the town's books are in poor shape

    Asked for a thumbnail, Jerry (?) said ARPA money had been posted to revenue, where it is cancelled out at year end, rather than to a general ledger account, and now has to be journaled back. He and the board attributed the wider problem to years of successive administrators changing the chart of accounts, to hiring on the cheap, and to nobody in the office having an accounting background; voided checks to the same company had turned up in payroll and someone has been brought in to reconcile the bank statements.

44. 2:57:34
    Budget Committee schedule

    The Budget Committee set its next two meetings for Tuesday January 31 and Thursday February 2, moving the start from 6:00 to 6:30 to accommodate a member, at the Town Hall, aiming to finish by 9:30.

45. 3:02:48
    Order of remaining budget reviews

    The fire department budget and part of the administrative budget will be taken on January 31, with the fire chief invited; whatever is left of the administrative budget, then Public Works, will be taken on February 2. The committee will receive budget numbers rather than final draft articles, and will make recommendations at the article level.

What was decided

• 54:28
  Road commissioner Calvin (?) presented the Public Works budget line by line, with proposed increases and decreases across roughly two dozen lines. The Budget Committee asked questions but took no vote on any Public Works line at this workshop.outcome unclear
• 1:31:18
  A budget committee member raised an apparent error in the Public Works labour lines and asked whether the figures could be relied on. She left to find the line reference and the question was not resolved on the recording.outcome unclear
• 2:03:41
  Town manager Jerry (?) proposed a 5% increase for the fire chief, from $73,500 to $77,175, with no change to the fire department labour line. This was put to the Budget Committee as a proposal and no vote was taken.outcome unclear
• 2:46:30
  The accounting firm Jerry has approached about taking over the town's payroll, accounts payable and books will come before the Select Board on February 14.passed
• 2:51:45
  The town will not go out to bid for solid waste this year. Instead it will seek a one-year extension of the current contract, which expires June 30, at current service levels, while it works out what it wants to do longer term.passed
• 2:57:34
  The Budget Committee set its next two meetings for Tuesday January 31 and Thursday February 2 at 6:30 p.m. at the Town Hall. No objection was raised to the later start.passed
• 3:02:48
  The Budget Committee agreed to review the fire department budget and part of the administrative budget on January 31, and to finish the administrative budget and take Public Works on February 2.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

• 49:13
  Durham's last full revaluation was about twelve years ago and would be roughly fifteen years old by the target date of 2025. The market adjustment the town funded was never carried out, and a member said the town's Homestead exemption reimbursement is falling as a result.
• 1:21:00
  The paving contract signed in March 2021 priced work at $75.50 a ton when liquid asphalt was $552. Asphalt is now $665, which Jerry calculated as roughly $86 a ton, and roads not paved in 2022 carry into 2023.
• 1:04:54
  Salt is up about $10 a yard, roughly a $26,000 increase, which only keeps the town level on quantity. It is a cooperative bid, so every town in it pays the same rate.
• 2:51:45
  ARPA money had been posted to revenue rather than to a general ledger account and has to be journaled back. The town has brought someone in to reconcile bank statements, and Jerry estimated $65,000 to $70,000 a year to contract the accounting work out entirely.

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