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Dec 06

From the Town Administrator's Desk - December 5, 2019

Posted on December 6, 2019 at 2:42 PM by Tiffany Marletta

Preliminary Budget Presentations

By Gregory T. Federspiel

With the early snowfall on the ground, next July seems a very distant future!  However, work is well underway on the budgets for the new fiscal year beginning July 1.  Preliminary budget proposals for the new fiscal year will be presented next week.  On Monday, the Town's FY2021 draft budget will be presented at Town Hall at 7:00 PM and, on Wednesday, the School District's preliminary budget will be presented at the Essex Elementary School starting at 6:30 PM.

The draft Town Budget assumes that residents want us to continue the current level of services.  With just a couple of exceptions, most department operations remain as they are now with the same level of staff and flat operating expenses.  It also assumes that residents are willing to pay a bit more for these services.  Higher costs are due to modest pay increases for staff, increased pension costs as the county retirement system catches up to become fully funded, higher liability and workers compensation insurance costs, increased technology costs (cyber security is a pressing issue), a 22% increase in garbage disposal costs due to market dynamics and more funds for public tree maintenance.

Regarding staffing, the preliminary budget proposes to restore a half time clerk position in the Selectmen's office as well as restoring one of the laborer positions in the Highway division.  One position each in the water and sewer divisions is also proposed.  These new DPW slots are being sought as the department is facing a number of retirements in the next few years.  We want to ensure a smooth transition as we transfer the knowledge of our long serving staff to the next generation of DPW workers.  The increased staffing will allow the department to complete more tasks internally without the use of outside contractors as often, including the option of running the water plant ourselves to save money.  Even with these three additional staff, the new number of staff is still lower than the number prior to reductions made during the last recession. 

To help off-set these new hires we are not filling a vacant part-time and one full time position in other departments. 

The details of the new School District budget will be presented next Wednesday.  The Town budget assumes that our share of the District budget will grow 3.25 percent, a bit higher than this year but closer to the average increase in recent years.  The School Committee is responsible for crafting the annual District budget.    

To pay for the new budget, a 2.5% hike in property taxes is proposed along with the additional taxes derived from new construction.  This year we saw lower than expected new growth thus we are lowering our expectations for next year.  Indeed, there are signs of a slow-down in the economy which we will want to be mindful of as we project ahead for the next few years.  We have some capacity in our local receipts (various fees, the largest being the vehicle excise) which we traditionally have been very conservative in estimating.  We plan on raising these estimates to make up for the lower amount of new construction and to avoid new taxation up to for the full amount voters approved for servicing the debt on the new elementary school bonds. (This will be the second year we will be able to reduce the full tax impact of the new school for residents. We hope to be able to do this for a few more years when lower debt service on the middle high school begins allowing us to continue this reduced impact.)   

As always, budgets are about choices and as we begin the review of the preliminary budgets in earnest between now and the April Annual Town Meeting, the numerous choices represented in the proposed numbers will be debated. Your input is most appreciated. Can’t make the meetings? You can find the preliminary budgets on the Town and School web sites and can send in comments.