Town Administrator expands approach to town budget
Published on April 3rd, 2002
STONEHAM, MA – Town Administrator David Berry says he’s doing everything he can to balance the fiscal 2003 town budget.
People inside town government worry about their jobs. People outside government ask, “What are we getting for our money?”
A lot, according to Berry, and he said he’s trying to maintain services without cutting jobs.
Berry’s proposal balances the budget up four percent from last year at $53.5 million, primarily through creative spending and rejecting requests for new staff. Fiscal 2003 runs July 1, 2002, through June 30, 2003.
REVENUE
To balance the town budget Stoneham officials must calculate revenue and expenditures.
Revenue comes from property taxes, motor vehicle excise taxes, recreation fees (primarily the golf courses), licensing and permits, investment in-come and state aid.
Taxes and local receipts
Berry said the Town uses a guidebook to project tax revenue and other local receipts based on historic data and anticipated changes in the economy. For fiscal 2003 Stoneham anticipates $27 million in taxes and $4.8 million in local receipts.
State aid
The state aid figure is still unknown because the fiscal 2003 state budget is not final. Stoneham is assuming no increase in state aid, or $9.7 million; the Governor’s budget proposed level funding, but Berry warns aid could decrease as the State struggles to balance its budget.
Each year the State sends the “cherry sheet” — the form is pink — to communities, tallying charges and aid. In theory communities could end up owing the State money, but this is not a real threat. What communities are worried about, though, is a decrease in aid. But Berry questions whether even this will occur, or if State Legislators are just talking about decreased local aid to justify increasing state taxes or delaying the scheduled roll back of the state income tax.
EXPENDITURES
On the expenditures side healthcare, salaries, utilities and capital projects are the big ticket items.
Health insurance
Stoneham is in the final year of a three year contract with the Massachusetts Interlocal Insurance Association (MIIA). Rates will climb 17.4 percent in fiscal 2003. This translates into a town health insurance bill of $1.2 million.
“By aggregating with many communities through the MIIA, we get a better rate, or that’s the idea,” Berry said. He added that Stoneham would rebid the town’s health insurance contract for fiscal 2004 and beyond.
Salaries
Salaries must be examined in two parts because there are two separate contracts, the schools and the municipal workers.
•“The schools are more like the whole Town than any one department,” Berry said. “They have so many facilities and responsibilities.”
The schools are in year three of a three-year contract in fiscal 2003. Salaries will increase four percent this year. In fiscal 2002 school salaries increased four percent, and in fiscal 2001 the salaries increased two percent. Berry proposed a $21 million total budget for the schools, an increase of around 4.75 percent from fiscal 2002.
•The municipal contract is up this year, and the Town has just opened negotiations with the eight unions representing municipal workers. Berry has proposed a two percent salary increase for fiscal 2003.
•In addition to the discretionary raises given to town employees, 2.5 percent increases are automatically granted to all employees as they move through the “steps,” or years, in their positions, or “grades.” There are eight steps for each grade.
“This isn’t part of the contracts; it’s an accepted practice in town government,” Berry said. He added that the Town may reevaluate job grade classifications later this calendar year.
Utilities
•Electricity costs surged from $25,000 for fiscal 2002 to a projected $40,000 for 2003, an 80 percent increase.
In an attempt to reduce the cost of electricity Berry has been working with energy consultant John Shortsleeve. Shortsleeve is attempting to broker a deal in which Stoneham would be one community among many getting a cheaper bulk rate on electricity from one of the competing providers. Shortsleeve gets paid by the provider if the deal is made. This way Stoneham looks for a good deal without paying for the search.
A new deal could mean thousands in savings.
The town uses NStar now as do most homeowners, but under deregulation consumers big or small can contract with any provider. Berry was close to making a change last week, but at the last minute price projections rose sharply, and the provider backed away from the deal.
Berry may also ask NStar to do a free evaluation of all the lights used by town buildings. The company will replace old lights with more energy efficient models free of charge.
•Gas has remained stable... for now.
Capital projects
To pay for capital expenditures, one-time improvements to infrastructure, Berry said the Town favors using the money left over at the October Special Town Meeting. This “free cash” as it is called is left over from the operations of the previous fiscal year. Sometimes things don’t cost as much as expected or more taxes than anticipated are collected.
The Town also borrows funds for building projects, like the Police Station, Oak Street drainage and the elementary schools. This way the impact of the expense is spread out over the life of the structure.
Solutions
Another source of money is the Town’s rainy day account, the Stabilization Fund.
“I know it’s not good policy to use stabilization funds for reoccurring expenses, but I think if we cut jobs, we may realize later that we could have weathered the storm with a little help,” Berry said. “We’re talking about people here.”
Berry’s budget proposes using $600,000 of the $1.8 million Stabilization Fund to help Stoneham through fiscal 2003 without laying anyone off or cutting positions. Berry is also exhausting the Overlay Surplus Account — $380,000 left over from projected tax abatements and rebates — and spending $69,000 from a legal settlement won by the Town.
The Police and Fire Department want more men, the Fire Department needs a new station, and the DPW complex needs a new roof. Berry said town officials struggle to keep the day to day operation going while keeping an eye on the big projects on the horizon.
The DPW roof was on the October 2001 Town Meeting warrant. They had been waiting for a year and were told to keep waiting until this May. Berry said the Town plans to recommend borrowing the $225,000. But surprises are around every corner. For example, the Town just paid an additional $50,000 for an eminent domain claim from land seized to build the Town Common.
Learn more
The town budget is discussed regularly by the Selectmen and Finance Board at their open meetings. Citizens get the last word, either approving or amending the budget on the floor of the Annual Town Meeting in May.
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