Warner Budget Committee

Meeting Minutes

September 10, 2008

Meeting opened at 6:05 p.m.

In attendance:   Marc Violette – Chair

                        John Warner – Vice Chair

                        Mike Cutting

                        Brenda O’Brien

                        Harold Whittemore

                        Peter Newman – Warner Village Water District Representative

                        David Karrick Jr. – Selectman’s Representative

Absent:             Clyde Carson       

Others present:

Laura Buono – Town Administrator

JD Colcord – Merrimack County Commissioner

Clark Lindley – Kearsarge Regional District School Board Rep.

Karen Merrill-Antle – Kearsarge Regional District School Board Rep.

Selectman David E. Hartman

Selectman Richard A. Cook

James Hand – Warner Rep to KRSD Municipal Budget Committee

Jeanne Hand

Martha Mical  

1. Purpose – Foundation for 2009 Budget

The Budget Committee is meeting with the County Commissioner and KRSD reps in order to get an understanding of what their budgets and potential increases may entail.   

2. Kearsarge Regional School District – School Board Representatives

KRSD School Rep. Clark Lindley explained impact to the towns within the district is based on population in the schools.  Simonds School has increased its population by 10 new students.  Mr. Lindley also explained that school expenditures are factored on 18-20 months unlike a 12 month municipal budget.  Commonly this time of year, September & October the school budget is usually frozen because of unexpected costs that are brought onto the District, by placing a freeze on the budget it prevents the District from coming to the voters with a special warrant article for extra funding to complete the year.  Currently the School Board is on the first edition of the 2009/2010 budget, at this point the increase to the budget is estimated at 10.82%, extremely preliminary.  Mr. Lindley spoke about how the School Board will work towards reducing the percentage keeping in mind that there are fixed costs.  Mr. Lindley said out of the 10.82%, 8.22% is hard costs made up of retirement (2.51%), teachers contract (3.32%), fringes (2.39%).  The balance includes transportation costs, out of district expenses and operating costs.  Commonly the School Board reviews the last 4 years where they have consistently over budgeted as well as consistent deficiencies.  This year the school will be returning money back to the taxpayers.  Mr. Lindley explained that he gets concerned when people say to cut the staff, he said this School Board looks at class size and whether there are areas that could be trimmed.  Mr. Lindley said the School Board will be looking for at least an additional $3,500,000 for the 2009/2010 budget.   

Karen Merrill-Antle added clarified that the 10% is not what the School Board is proposing, the 10% is being proposed by the District to the School Board.  Marc Violette recommended another meeting with the School Board reps in November when they would have more information.  

Mr. Lindley added the Municipal Budget Committee begins meeting on October 7 and every Tuesday there after, public attendance is highly encouraged but unfortunately public attendance is always low.  

Mr. Lindley said the last two years there was 0% percent increase for health insurance and last year 1.7% increase in health insurance costs.      

Budget Committee member Mike Cutting proposed to the School Board the same proposal he made to the Town, 0% increase.  What services would be effected by a 0% increase.   Mr. Lindley explained that there are costs that have no controls such as employee contracts & fuel.  JD Colcord added that the school is in the same position as the county most of the costs are mandated.  Karen Merrill-Antle encouraged attendance at the next School Board meeting to pose the 0% increase question.   

John Warner asked Mr. Lindley how he held down health benefit costs, was it by negotiating with the provider or with the teachers.  Mr. Lindley said it was both along with knowledge that he has.  Mr. Lindley explained that the rates decreased because the co-pay amount was changed.  Also, within the benefits contract the District is allowed to review benefits and the cost.  Mike Cutting asked if the Town can piggy back onto the school’s benefit carrier.  Mr. Lindley offered his expertise to the Town.   

Jeanne Hand asked Mr. Lindley how a 0% increase would impact the School District .  Mr. Lindley said sports would be eliminated, all handling of the facilities, teachers, staff and guidance counselors would be let go, those are areas that would be immediately reduced.  Ms. Hand said why not do it.  Mr. Lindley said he feels he has the responsibility to educate the students within the District and give them opportunities, he also feels the mainstream American believes in education.  Ms. Hand is not saying not to educate the children, she is saying there are administrators making large salaries, and she is saying the same services could be provided at a lower cost.  Ms. Hand feels the million dollar budget increases have to stop.   

Mike Cutting asked if the 10% increase is for operating costs or for the total budget, Mr. Lindley said the total budget.  

Mike Cutting asked Mr. Lindley if he has a conflict of interest between the School Board members and the Assistant Superintendent.  Mr. Lindley said there is a conflict of interest and there will be discussion at the next School Board meeting.  

3. Merrimack County Commissioner – JD Colcord

Mr. Colcord began by explaining the 2008 County’s expenses increased by $6.163 million dollars of which $1.844 million was the bonded indebtedness for the jail and nursing home.  Revenues increased by 2%, $558K; the delegation at the final budget meeting added $1million in surplus to help offset the tax increase.   The amount to be raised by taxes in 2008 increased by 15.33% ($5.574 million); the 2007 equalized valuation for Merrimack County increased by $385,911,000.   In 2007, Warner paid 1.859% of the County operating budget ($675,960.).  The total amount collected from taxes for 2007 was $36,354,000.  In 2008, Warner paid 1.6598%, the tax amount increased by $19,978 to $695K; the total tax amount collected from Merrimack towns and cities is $41,928 million.   

Mr. Colcord said there will be a minimum increase in taxable property, there are a number of foreclosures in Merrimack County and property transfers are at lower value.  The County budget process will begin at the end of September; the Commissioners will present their budgets to the Delegation in early December, the Delegation will reach their final decision at the end of March.  Mr. Colcord keeps an open invitation to anyone in Warner that is interested in the process.  

Mr. Colcord explained that the County is mandated by both State and Federal Governments.  The County is mandated to house prisoners which costs $65 per day for each prisoner.  A new jail was built to house 230 inmates, there are 250 inmates.  Because the judicial system is under funded people sit in jail longer waiting for their trial.   When Mr. Colcord said when he first became a representative for the Town of Warner on the Merrimack Delegation costs for jails was $2 million now the cost is over $10 million.  The County has not had a contract with the Correction Officers since 2005; a contract is expected this year which will surely impact the budget.  The contract with the nursing home staff is coming to a close, negotiations are presently on-going but it looks like there will be an impasse between the two but negotiations will continue.   

Mr. Colcord said the cost for salary and benefits is about $58 million a year, there are about 700 employees.  The County pays 80% of the cost for a family plan, 85% for two person and 90% for a single plan.  The County is looking at a 15% increase for retirement costs.  The County is experiencing extra transportation costs for the supplies they receive on a daily basis.  Mr. Colcord’s biggest concern is utilities; the new nursing home is geo-thermal, pay back is expected within 5 years possibly less.   The new jail however is heated with oil, this is a concern.  Fuel costs have increased for the Sherriff as well as a potential vehicle.  In July the old nursing home was hit by lightening which destroyed the fire alarm system, the cost to replace the system is $150K.   

Mr. Colcord’s prediction on the 2009 budget increase is 10%.  As of July 1, 2008 Counties are now required to pick-up 100% of the cost for long term care and home care that isn’t paid by the Federal Government.  Funding is based on the population that is in nursing homes and in-home care.  Mr. Colcord does not foresee any changes in how the State of New Hampshire pays for services nor does he see a push to come up with another revenue source.   

John Warner asked if Mr. Colcord knows the 100% cost for a single individual for health care (benefit package).  Mr. Colcord said approximately $11K.   

Ms. Hand confirmed that most of the employees are unionized; this is a right-to-work State why does the County deal with unions?  Mr. Colcord said large organizations usually unionize which is their right and is allowed by the State of NH .  Ms. Hand said the County should re-think unions.  Mr. Colcord explained that negotiations with the unions have been fairly reasonable.  Mr. Colcord said most of the building maintenance is maintained by inmates, they are also used at the nursing home in the kitchen, laundry and building cleaning.  Inmates have been sent out to Towns; Warner has used the inmates for projects at the Transfer Station.  

Mike Cutting asked how the Budget Committee can justify to the Town holding the budget to 0% when the County and the school are looking at a 10% increase.  JD Colcord, having been a Selectman for 13 years said 0% cannot be achieved, there’s fuel, insurance and labor costs that continue to rise.  Mr. Colcord said what needs to be done is create another revenue source, something other than property taxes.  What Mr. Colcord would like to see is an income tax that is tied to a constitution amendment that pays for education.   

Mike Cutting asked Mr. Colcord how efficient is the tax cap in Franklin .  Mr. Colcord thinks it is a disaster, he thinks it’s alright to have a tax cap on town or cities but not on county and schools.  

Jeanne Hand noted that New London has very little land available, in Warner there is a lot of land available.  Marc Violette said the available land in Warner is mostly in conservation easement as apposed to land in New London in conservation.   Selectman Cook explained that land developed does not produce what it demands in cost.  

4. Capital Improvement Plans

To date the CIP is not complete; the Planning Board is working diligently toward completion.  Marc Violette has explained to the Planning Board that the Budget Committee needs the CIP in order to move on with the budget process. 

Motion to adjourn at 7:35 p.m.      

Respectfully submitted,

Mary Whalen

Recording Secretary