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Dec 13

From the Town Administrator's Desk - December 14, 2017

Posted on December 13, 2017 at 9:44 AM by Elizabeth Dukes

At Monday’s Selectmen’s Meeting, the Town’s Preliminary Budget for FY19, which starts July 1, 2018, will be presented at 7PM.  This preliminary budget has been compiled by Department leaders and me with an initial review by the Finance Committee members who are teamed up with a particular department.  This budget will be further reviewed and refined during January and February by the Board of Selectmen and Finance Committee in preparation for the Annual Town Meeting where voters will have the final say on town expenditures for the new fiscal year.

A number of assumptions and projections are built into the proposed budget. One important assumption is that residents desire to maintain the current high level of services being provided by the Town.   For example, we assume that we have at least two police officers on patrol and three career fire fighters on duty 24/7, 365 days a year; that roads and sidewalks are plowed within a few hours of a snowfall; that Singing Beach is staffed with lifeguards and parking attendants; that the COA vans provide rides to doctor appointments and shopping excursions.  All these services come at a cost.  In total, town and school expenditures top $33 million annually, putting Manchester as one of the higher per capita expenditure communities in the state.

To provide the same services next year we need to increase our revenues to cover the higher costs driven substantially by negotiated pay raises for staff and the increased cost of benefits, namely health insurance and pensions.  To cover these higher costs, our main income source, the property tax, is typically increased by 2.5%.  A second major assumption is that residents are OK with such an increase to their property tax bill.  For the median home owner (a house valued at $735,000) the annual increase is roughly $200.  A 2.5% increase to property tax collections means we have an additional $590,000 to apply to our increased expenses.

Town revenues are also increased by taxing new construction, whether this is a new home or upgrades to existing homes.  A third major assumption is that new growth will continue to add at least an additional $250,000 in property tax revenue or close to another 1% increase.

Charges for services (e.g.: water and sewer fees based on the volume of water one uses) represent a third significant source of revenue town operations.  Given the large backlog of system improvements needed we are raising the user rates in the 3-4% range in order to generate the new funds necessary to pay for the capital projects.

We also continually look for greater efficiencies in our operations.  For example, the installation of LED streetlights should save us some $60,000 in annual electric costs. Employees have agreed to pay a higher share of the health insurance the Town makes available.  The contracted operation of the water plant is up for renewal and we will compare new bids to what we may be able to do with in-house staff.

In total, we project that we will have some $940,000 in new revenue, a 2.8% increase, to cover new expenses in the new fiscal year.  Roughly $500,000 of this is targeted to the school district, which represents a 3.6% increase in school spending by the town.  (Due to the District formula and student enrollment patterns, this is higher than the projected 3.2% increase to the overall district budget .)  $440,000 in new spending for Town operations and capital needs represents a 2.4% increase.

At Monday’s meeting details about how these new dollars are projected to be spent will be provided.  The preliminary budget and other budget materials will be available for all to review at the Town’s web site.