Warner Budget Committee

Meeting Minutes

August 27, 2007

 

Meeting opened at 7:02 p.m.

In attendance: Mike Cutting - Chair, John Warner, Harold Whittemore, Peter Newman, David Karrick, and Selectman David E. Hartman

Absent: Marc Violette, Barbara Bartlett

Recorder of the minutes is Mary Whalen  

Others present:

Selectman Richard A. Cook

Laura Buono � Town Administrator

Martha Mical

Richard Senor  

1. DEPARTMENT OF REVENUE MEMO

The memo informed the Town that the 2007 bottom line has been adjusted to include $20,000 drawn from a Capital Reserve that is funding the sprinkler system installation at the Fire Department.   

2. REVIEW

Mike asked if the municipal software has been installed.  Laura said yes, the software will be used beginning January 2008.  Mike asked if the Bookkeeper will run a redundant system between now and 2008.  Laura said no, because when the first payroll is run a representative from Munismart will be available.  Currently the system is being set up with accounts.  Mike confirmed that the audit has been completed.  Laura is waiting for the final management letter from the audit company.   

Mike asked how the change from Finance Director to Bookkeeper is going.  Laura said the Bookkeeper came on board at the end of last year and transitioned very well.  

Mike asked about the two large purchases, a loader for the Highway Department and the Ford Expedition for the Police Department.  Laura said the equipment has been purchased and are both operational.  Also the new fire truck is currently being assembled.  

Mike asked the Selectmen if they are going to consider single-stream recycling.  Selectman Hartman explained that the Concord Regional Co-op is studying the impact of single-stream recycling.  General discussion took place.  The main concern surrounds the proposed capital projects for the Transfer Station.  There is a substantial amount of funding requested for projects and facility expansion.  Should those projects be placed on hold until there is a better view of the single-stream recycling program?  Laura added that as far as the cost of the scales ($65,000) those will be utilized even if the Town changes to single-stream and the need for expansion will be reviewed by a Facility Committee.  Richard Senor added that the lease for the Transfer Station is due to expire, the State is generating a cost for either leasing or purchase.  Selectman Hartman said that the Selectmen have been working with DOT since January of 2007 in regards to the lease that expires in December 2008; the State has indicated that they will not lease the property for another 20 years in the amount of $1.  The Town is currently waiting to hear from the State on their proposed figures.   

Mike asked if the Highway Department has done any reclamation at the gravel pit.  Selectman Hartman does not believe that the Highway Department has done a lot about reclaiming the embankments that have been excavated.  What has been taken from the original area is being used as a processing area.  The Highway Department has used the compost material from the Transfer Station at the gravel pit.  Laura explained that the area dug out on the left of the processing area that has been sloped.  The Committee is concerned about the potential large cost for reclamation.   

3. MEETING SCHEDULE

Mike passed out a proposed Budget Committee schedule for review and input.  Conflicts were noted.  

4. YEAR TO DATE SPENDING AND REVENUE

Laura explained that advertising is running high this year, there is also an increase from last year in workers compensation insurance, all other spending is on target.  Laura reviewed the projected revenues.  

5. 2008 BUDGET PLAN

John Warner presented a taxation history from 1998 to 2006 with estimates for 2007.  The important number is the amount raised by taxation.  John�s recommends the Budget Committee focus on not just how much gross appropriations go up but how much the Town is asking the townspeople to pay.  Mike Cutting asked Martha Mical what she has seen for real estate sales.  Martha said values are not going down, she has seen only 4 sales in Town that have sold for what they were assessed for or lower. John Warner recommends educating the voters by explaining how approved expenditures at Town Meeting will impact the tax rate. This may help the decision process.  John said if you constrain certain budget items to meet a target then the most flexible item is salary increases, you then end up balancing the budget on the backs of the employees.  Selectman Hartman stands firm by saying employees are the most important possession that a Town has and does not see salaries as flexible.  Selectman Hartman feels that capital investment holds the most flexibility; last year at Town Meeting an additional $187,000 for the Precinct and an employee salary petition was approved by the voters that resulted in an 11.4% increase from the previous year.  Without those items the budget would have increased close to a flat rate.   

Mike Cutting asked if the dates indicated in the Capital Improvements Program are realistic.  Selectman Cook said that he went through the CIP and laid everything out on a spread sheet.  This exercise was helpful to move numbers around and see what the effect is.  Selectman Cook feels that capital expenses could be lowered by bonding some items in a planned rotation in order to keep bond payments and capital investment level.  

The Committee discussed bonding the entire CIP, it was agreed that bonding for more than 6 years would not work because the CIP is projected for only 6 years.   Laura explained that if the Town bonded for road projects, the amount borrowed would not be spent all in the first year, the debt that is not spent will earn interest hopefully more than what you are paying on which will help on the revenue side.  Because bonding has a minimum term of 10 years the CIP would need to be expanded.  Laura feels that bonding is a good idea as long as the interest made is more than the interest paid.  

Mike Cutting asked if the Selectmen have looked at the budget process.  Selectman Hartman said that salary and benefit discussions have begun, next will be capital expenses.  Laura has asked the Department Heads to create a budget that is needed without a percentage.  Last year a budget cap was discussed (amount raised by taxation).  A limit on salary increases was discussed along with a fixed limit for capital expenses and a limit with a goal trying to maintain a stable increase in taxation.  Laura recommends if the Committee is looking at a percentage increase it should be applied to the bottom line of the operating budget.   

Mike asked the Selectmen if they are considering bonding for road construction.  Selectman Cook explained that no money has been spent on a preliminary cost estimate, the funding for that is not clear at this time because money that was set aside may be needed to finish paving on Newmarket Road .  The Selectmen as a Board have not discussed in length bonding for road construction.  The road projects are known, it�s the cost to bond that is not known.  

Discussion continued about the effects of establishing caps on the budget and the effects that the voters have on the budget at Town Meeting.   Selectman Cook commented that the Board of Selectmen and the Budget Committee have showed good faith in trying to maintain limited growth in the budget.  Selectman Cook struggles with what more can be done when last year the budget was kept to a 1.5% growth and yet the amount raised by taxation increased by 11.4%, Selectman Cook does not see how the Selectmen are going to control that.  John Warner explained the variables, one is revenues, the other is applied surplus and the results of Town Meeting.  Selectman Cook added that the Town is not spending unnecessarily; he doesn�t know how to change that with the current tax system.   

Martha Mical recommended that since both the Selectmen and the Budget Committee have been working well why not let the Selectmen create a budget, present the proposed budget to the Budget Committee and go from there.   

Richard Senor feels that it would be none productive to sit back and let the Selectmen create their budget; Mr. Senor thinks the Budget Committee should also create a budget.   

Selectman Hartman reflects to his first year doing the budget as an extremely tedious process, since then the process has wound down.  Last year the Budget Committee was receptive to have the Selectmen prepare the budget working within a cap, the final budget presented was a little below the target.   

Mike is wondering if all the scheduled meetings are necessary, maybe sitting down on October 15th and looking at the prepared Selectmen�s budget is enough.  Laura recommended having the Department Heads attend the meeting in order to be available for questions and also highlighting the changes that have been made. Laura asked what the Committees concerns are by not establishing a cap on the budget process.  One concern is not being on the same page.  Mike is concerned about not meeting with the Department Heads; they may feel left out of the process.  Laura does not feel that would be the case.  John Warner felt that the Department Heads have more of a strong input during the CIP process.  Martha Mical added that if a Department Head wants to attend the Budget Committee meeting they can, let it be their decision.  Mr. Senor added that it should be known to the Department Head that if they don�t come to the meeting they may not get what they want or what they need.  Mike said they won�t have any input, not that they won�t get what they need.  

Mike asked the Selectmen to present the total operating and capital budget along with impact including revenue on October 15th.  Laura said the insurance numbers will not be available on October 15.   The Committee agreed to still meet on October 15th.   

Next scheduled meeting is October 15th, the balance of the meeting schedule will be determined.

 

Motion to adjourn at 9:17 p.m.