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Welcome To Toy Town News Flash!>
Town Manager's FY 2009 Budget Memorandum
April 16, 2008
“Uglier Yet- The Fiscal Year 2009 Budget”
Town Manager’s Budget Memorandum
Fiscal Year 2009
April 8, 2008
Dear Taxpaying Citizens of the Town of Winchendon:
This is my ninth budget cycle working for you, the
taxpaying citizens of the Town of Winchendon, through your
Board of Selectmen. While it has been my pleasure to
serve, balancing this year’s budget, perhaps more than
others before it, has been a very difficult and arduous
task.
Once again we see that the Governor and the Legislature did
a very commendable job with scraping together funds
sufficient to live up to last year’s promise relating to
education funding. Our local school system, with a revenue
increase of $475,000+/- for next fiscal year, stands as a
beneficiary of that good work.
In this fiscal year yet again, however, the same did not
come through for the general government side of the budget
which places us where we are this evening.
Town Finances-
The general trend in municipalities, like Winchendon,
statewide has been that the percentage of revenue that goes
to funding education each year continues to increase while
the percentage for all other municipal purposes generally
decreases or remains about constant. As you can well
imagine, a fixed or flat revenue stream is very problematic
when the general government has fixed cost expenses that
increase every year. This too is the case in Winchendon.
This problem is further exacerbated with the artificial and
arbitrary limitations of Proposition 2 ½ as relates to
local real estate tax revenues and the unpredictable nature
of State aid overall.
Real Estate Tax Revenue-
The fixed costs contained within the general government
budget, which by and large are private market driven,
continually increase each fiscal year by more than 2 ½ %
yet the real estate tax revenue stream is capped at that
percentage of increase.
State Local Aid-
The portion of revenue that comes from state local aid can
be very volatile. While prior to last year we had seen an
average increase in state local aid of $260,000 over the
past three years, last year we saw a net increase of only
$19,000 and this year the net increase is roughly $70,000
of which $60,000 is non-discretionary and tied to veteran’s
benefits leaving a net discretionary local aid increase of
just $10,000.
Where is the Money Going?-
As if the limited and unpredictable nature of general
government revenues wasn’t problematic enough we next look
at the issue of exactly how we are mandated to spend those
revenues.
In Massachusetts, a great deal of the discussion
surrounding the distribution of these limited resources
between the school and general government sides of the town
are clearly spelled out in the Commonwealth’s Education
Reform Act of 1993 and as further amended in 2006. Under
this law, a formula determines what portion of the town’s
available revenue gets appropriated to the school system
each year. The balance is left for all other municipal
purposes.
In fiscal year 09, the education budget in the Town of
Winchendon is set to be the beneficiary of a net increase
in revenue---both from the Commonwealth and from the local
taxpayers here in Winchendon.
Specifically, the Winchendon Public School system is set
to receive an increase of $286,000 in state aid and an
additional $186,000 from local revenues for a total
increase of $472,000. That increased revenue plus some
very careful budgeting on the education side of the house
has provided an opportunity for the School system to
present a nicely balanced budget for FY09.
In fiscal year 09, the same revenue picture does not exist
for the general government---Police, Fire, DPW, Human
Services, Administration, Debt, etc--- side of the house.
In fact, our revenue growth picture is very bleak. We
expect to see the following increases/decreases in revenue,
by source:
+$ 70,000 State Aid (recent average is $260,000
increase per year)
+$250,000 Local Property Tax increase under Prop 2 ½
-$ 328,000 Local Receipts-Permit fees, Excise Tax, etc.
- $8,000 Total Projected Increase in Revenues for FY08
Out of this total projected decrease in revenue we have to
further deduct these following mandatory non-general
government, or education, expenses which only serve to
deepen the deficit:
-$186,000 Increased Local Contribution to the Schools
System
-$ 42,000 Increased School Transportation Expenses
-$ 24,000 Increased Monty Tech Assessment
-$252,000 Total Projected Non-General Government Cost
Increases
This paints a pretty clear picture that demonstrates the
crux of the problem in trying to balance our general
government budget this upcoming year. As shown above, when
trying to balance the general government budget we start
out $260,000 in the hole before we even begin to look
at---Police, Fire, DPW, Administration, Human Services,
Health Insurance, Debt, and other general government
expenses.
You can well imagine that with increases in our general
government fixed costs, such as energy, retirement
assessments, health and property insurances alone, that
beginning the general government budgeting process with a
projected deficit of $260,000 is a very daunting prospect.
As you can plainly see, the system within which we are
working leaves little choice when a balanced budget is the
goal and the law---we can cut services or we can increase
revenues.
Balanced Budget-
As has always been the case, my objectives in this budget
process were few and simple. Under the terms of the town
Bylaws and the town Charter, I am obligated to prepare and
present a balanced budget and tonight I have done so.
In each of the budgets that I have balanced on your behalf
I have taken clear direction from the Board of Selectmen.
Above all, the Board’s battle cry has been to attempt to
retain the current level of services provided to the town’s
citizens while doing so in a cost effective and efficient
manner. The Board’s vision, as shared with me through
policy framework, was instrumental in guiding me in this
process. In this year’s budget, however, more than others
in the recent past, substantial cuts could not be avoided.
In my tenure serving as your Town Manager I have clearly
heard the mantra---“Live within your budget.” I have heard
from the floor of town meeting to the seats in the coffee
shops that “a proposition 2 ½ override will not be
supported and that we just need to make the necessary cuts
to live within our means.” These sentiments have been
repeated so often and so loudly that they are now somewhat
of second nature to me in my budget calculus here in the
Town of Winchendon.
If I have misheard, or if the message is now different, I
am going to need someone to let me know.
Absent such a new understanding, I was left to make the
cuts in the fiscal year 09 budget that would preserve as
much of the service delivery as possible while striking
balanced budget as is required of me by bylaw and charter.
How Big of a Hole Was It Actually?
As earlier described, before even beginning the General
Government Budget we started out $260,000 in deficit based
upon reduced revenues and increased education related fixed
costs. As if that was not a troubling enough scenario, we
also had to wrestle with several significant increases in
general government fixed costs for next fiscal year. After
the dust has settled, these fixed cost increases are
primarily:
• Regional Retirement- $ 86,000
• Health Insurance- $ 20,000
• Electric- $ 20,000
• Heat- $ 19,000
• Gas- $ 27,000
• Veterans- $ 50,000
• Snow and Ice- $ 30,000
• Unemployment- $ 20,000
$ 272,000
Accordingly, if you combine the deficit of $260,000 with
the fixed cost increases of $270,000 you can see that the
complete picture of the hole that we started in is closer
to $532,000.
How Are We in Balance?-
Even given the above, the budget that I am presenting this
evening is in balance, but that balance is precarious and
is predicated upon several factors. They are primarily:
1. Closing the Transfer Station- $250,000+/-
This budget contemplates the transfer station as we know of
it today being closed effective July 1, 2008.
2. Student Transportation Deficit- $42,000+/-
This budget includes a $42,000 increase in Student
Transportation costs. This budget is balanced predicated
upon this deficit being covered creatively outside of the
general government budgeting process. Based upon initial
discussions with members of the School Committee I
anticipate a cooperative effort and a satisfactory
resolution.
3. Municipal Salaries and Positions- $240,000+/-
This budget strikes deep into the municipal workforce with
reductions in personnel expenses in the form of static
salaries, reduced hours of positions, not funding vacant
positions and ultimately in the form of not funding
positions in which there are currently employees serving.
• Static Salaries-
This budget contains no salary increase for any employees
with the exception of one collective bargaining group of
seven (7) full-time employees who are entitled to a 3% cost
of living adjustment per signed contract.
You should note that all of your municipal department heads
have graciously, and in a display of leadership that is to
be commended, offered to forego the raises that they would
be entitled to by their respective contracts in an effort
toward lessening the impacts of cuts in services and
personnel.
• Positions-
In addition to positions that were reduced or eliminated in
last year’s budget, in this budget you will note that
several salary lines yet again appear different. This is a
result of our reducing the hours of positions, of not
funding vacant positions, and of not funding additional
positions that are currently staffed.
This budget reflects a reduction in staff of 8 ¼ full-time
equivalent positions. These are very deep cuts that will
significantly decrease the ability of this organization to
continue to provide the same level of public service.
Equally as devastatingly, these cuts have real life human
impacts on those employees affected and those left behind
to carry the extra weight.
These changes are as follow:
Reduced Hours-
1. Building Commissioner - reduced to half-time
2. Animal Control Officer- reduced to half-time
3. Assistant Town Clerk - reduced to 3/4-time
Unfunded Vacant Positions-
1. DPW Mechanic- full-time
2. Council on Aging Driver - half-time
3. Council on Aging Dispatch - half-time
4. Council on Aging Aide- quarter-time
Unfunded Staffed Positions-
1. Planning Secretary- full-time
2. Assistant Assessor- half-time
3. Transfer Station Foreman- full-time
4. Transfer Station Operator- full-time
5. Transfer Station Laborer- full-time
6. Cable Operators- quarter-time
While this budget reflects the above listed cuts it is
important to also note that our public safety
departments---Police, Fire and Ambulance---were once again
held harmless.
Conclusion-
While no one would wish this to be the end product given
another choice, we have accomplished the legally required
balanced budget. We have reached this end as a result of
aggressively budgeting in every department on the general
government side. Each department manager should be
commended for the effort that has gone into balancing this
budget. Together, as a team working on your behalf, we have
reached a balanced budget against decreased general
government revenues and increased fixed cost expenses that
does its best to control the damage to the existing level
of services that you have come to expect.
We all wish we could do more.
Board of Selectman and Finance Committee Public Hearings-
It is very worth noting that this budget will yet be the
subject of public hearings of the Board of Selectmen and
the Finance Committee.
I would like to close by offering my thanks to each of the
managers in the Town Hall that have worked so very hard to
see that this budget got before you this evening:
specifically, Town Accountant Liz Gilman, Assistant Town
Accountant Barbara LaFrennie and Town Treasurer Collector
Joan Bousquet.
Sincerely,
James M. Kreidler, Jr.
Town Manager Website Copyright 2006 - Town of Winchendon, MA DISCLAIMER Questions? Suggestions? CONTACT US
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