FROM THE TOWN ADMINISTRATOR’S DESK – October 4, 2016
By Gregory T. Federspiel
While April and the Annual Town Meeting seem like a long way off, the development of the Fiscal Year 2018 (FY18) Budget, which runs from July 2017 through June 2018, has begun. The Selectmen and Finance Committee have discussed broad goals for the new budget and department leaders have been given their budget sheets in order to start crafting their new budget requests.
Goals for FY18 include staying within the limits of a 2.5% increase to property taxes, (avoid an override of the Proposition 2 ½ levy limit) plus taxes from new construction, trim operational costs; redirect funds to capital needs which can be used in the future to fund large capital projects through bonds (e.g.: elementary school, seawalls, other town facilities) work collaboratively with the School District to support a level services budget while targeting spending increases to a maximum of 3.25% for Manchester’s share, and bolster citizen engagement and communication through better utilization of the Town’s website and social media.
Department leaders have been instructed to develop two budget scenarios. One is a level services budget where today’s services are continued into next year. In order to fund a level services budget, increased dollars are needed to pay for anticipated salary increases and higher benefit (health insurance, pension) costs, as well as for increased operating costs (fortunately inflation remains low thus most operating costs need little change.) A level services budget typically requires a 2.5 to 3.0% increase in expenditures. Finding operational savings without impacting services can help offset some of this increase.
The other scenario department leaders are being asked to develop is a 1% increase budget. This means less than half of the usual new dollars will be available as we try to build reserves for future capital needs. Under this scenario, some reduction in services will likely be necessary. Paying contractual obligations for staff salaries and absorbing higher health insurance and pension costs with only a 1% funding increase means additional savings must be found. Departments are being asked to identify potential savings and to discuss what impact these would have on their delivery of services to the public. The Selectmen and Finance Committee will assess these impacts to see if they are acceptable or if they cut needed services too deeply – choices that ultimately voters make at the Annual Town Meeting when final budgets are approved.
The crafting of the FY18 budget begins with department leaders assembling their requested funding. Members of the Finance Committee, the Town Accountant, and I sit down with each individual department to review the requests in early November. In December a preliminary budget will be presented at a public forum. This preliminary budget is reviewed in detail and fine-tuned by the Selectmen and Finance Committee from December through February. A second public forum will be scheduled in February to present a revised budget, affording an opportunity for additional fine-tuning. The proposed budget is finalized by early March and presented to the voters for debate and approval at the Annual Town Meeting on the first Monday in April.
You can follow the steps of developing the Town Budget at the Town’s website. A timeline with meeting dates, background information, and draft budgets will be on the site in the weeks and months to come.