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Oct 16

From the Town Administrator's Desk - October 16, 2020

Posted on October 16, 2020 at 3:05 PM by Tiffany Marletta

Budget Development for FY22 Underway
By Gregory T. Federspiel

While still over 8 months away from the start of the FY22 Fiscal year, work is getting underway on crafting the budget for next year.  We are likely to be still feeling the impacts of the pandemic but to what degree is hard to predict with much certainty.  As the fall and winter progress these impacts will become clearer and may require us to make adjustments to the budget similar to what happened this past spring. 

The budget process starts with the Selectmen and Finance Committee establishing various goals and priorities for the new Fiscal Year (July through June.)  Re-occurring parameters include staying within the confines of proposition 2 ½ , maintaining reserves equal to 10% of total expenditures, keeping debt payments to a maximum of 10% of total expenditures, capping exclusion totals at their current level, and staying the course on funding our retiree liabilities.  These five points remain the foundation of our fiscal policies.

More specifically for FY22, both the Selectmen and Finance Committee members are anxious to restore funding to our capital improvement plan.  Due to COVID 19 and the uncertainties it presented, the decision was made to reduce capital and operating expenses for this current year in order to have a 0% increase in the tax rate.  To do this, numerous capital items were deferred.  This is contrary to the concerted efforts that have been made in recent years to begin catching up on much needed infrastructure improvements. We are hoping we can get back on track before slipping too much on our multi-year capital improvement plan.

Other priorities are to pursue possible regional services, advance efforts for a senior center and continue to implement recommendations of the recently completed Master Plan.  

This means that a more normal 2% to 2.5% tax increase probably will be needed.  For the owner of a median priced house this means a tax bill increase of just over $200.  The good news is that, besides the loss of revenue from Singing Beach not being open to non-residents, most every other town revenue stream has remained unharmed.  Normally communities like to have a more diverse revenue stream but, an advantage of being so dependent on property taxes is we do not see much change year to year in property tax payments.  This has been the case in Manchester even in today’s troubled economy.  

With these policies and goals in mind, department leaders will craft their initial requests for funding in FY22.  In consultation with department leaders and liaisons from the Finance Committee, I assemble a preliminary budget that will be presented to the Selectmen and Finance Committee at the Selectmen’s regular meeting in early December (open to the public.)  Detailed reviews of the preliminary budget are undertaken by both bodies throughout January and February.  A final budget proposal is agreed upon in early March and prepared for voter review and approval at the April Annual Town Meeting. 

A similar process is undertaken by the School Committee.  They, too, will have a preliminary budget drafted by the end of December and a final proposed budget in February.  There is more uncertainty in the school budget given COVID and whether we will be able to return to a more normal academic arrangement.  This year the District faces higher expenses as they grapple with both remote and hybrid (combination in person and remote) learning models.  Reserves will be able to cover this year’s unexpected costs but could be significantly depleted leaving a much more challenging fiscal situation next year if we are not back 100% to in-person learning.

July 2021 seems a long way off but our budgeting process for FY22 begin now.  Thoughts and ideas you may have for the budget are best made at this early stage thus you are encouraged to share them now!

A note about the 40B Apartment complex proposal and the 40R zoning study:  These are two distinct projects, one being proposed by a private developer (the 40B project) and the other a town initiative that arises from recommendations contained in the Master Plan.  While separate, we may be able to link the two by using the housing from the proposed 40B project as part of the total housing that ultimately gets built in a new 40R overlay district applied to the current Limited Commercial District. This could allow the rest of the 40R district to focus more heavily on non-residential development as we seek to grow our tax base and allow additional state funds to flow to Manchester.   More on this in future articles.