Budget News: • $571,000 Under the Levy Limit • 11% Reduction in State Aid Expected • Tax increase of 2.43 % in Coming Year • Health Insurance Reform Helps Stabilize Budget
Town Manager Mark Haddad presented the proposed 2014 fiscal Year budget to a joint meeting of Selectmen and Finance Committee, as is required by the Town Charter. He stressed that the 'needs budget' is designed to maintain the same level of services as in FY13, while addressing some areas that could, in fact, improve delivery of services.
While the FY13 approved budget is $571K under the levy limit, Haddad told the boards that he anticipated an 11 percent reduction in state aid to the town for the coming budget cycle and, as a result, to maintain services, he is recommending that $70,612K of the unexpended tax capacity be used to cover reduction in state aid.
The bottom line for the FY14 budget if approved as presented - is that the tax bill on a home valued at $400K will increase from $6740 this year to $6904 for FY14 - an increase of 2.43 percent.
The FY14 levy limit is expected to be $24,721,030. This is calculated by using the FY2013 levy limit of $23,920,810, adding 2.5 percent or $598,020 and adding new growth of $202,200. The FY14 expected levy limit of $24,721.030. plus the debt exclusion for the town of $816,448, plus the debt exclusion for the Groton-Dunstable Regional School District of $1,233,324 brings the total tax levy to $26,770,802.
Other sources of revenue include some state aid, motor vehicle excise taxes, ambulance receipts, and general revenue for a total $4,308,669. He noted that health insurance reform legislation continues to stabilize the budget.
There are some staff increases that Haddad is recommending as part of the budget. He is proposing to add manpower to the Information Technology department for $57K, and a new full-time dispatcher in Police and Fire Communications Department. "We have seen a dramatic increase in calls. In 2011, there were 23,997 calls for a full year. In 2012, from January through November there were 31,159 calls, an increase of 30 percent in call volume," Haddad said.
He noted that FY2014 is the first year of the Employee Performance Incentive Program with a budget impact of $44,758. All but one union contract has entered into the second year of a three-year agreement. The contracts call for a two percent wage adjustment, "and we are recommending the same amount of increase for bylaw employees with an impact of $112, 845," Haddad advised.
The Library will join the Merrimack Valley Library Consortium, a move that that will provide access to town residents to more than three million volumes. Cost for this membership is $35K.
Haddad was emphatic that the plan of setting aside levy capacity to pay the debt service for the proposed new Center Fire Station has been successful, with the FY14 budget showing half a million under the levy limit and 2.5 percent already set aside for a possible increase for the schools. He advised that the School Superintendent was still doing planning, and indicated the need to spend funds on technology. Haddad said that even if there were an increase in taxes for the schools, "Groton has the capacity and the schools would not be forced into an override. The new Fire Station is not going to impact the schools at all."
One of the big decisions for Selectmen is what to do about the change to the Government Accounting Standards Board (GASB) that sets requirements to ensure that town's begin to save for any liabilities for post-employment expenditures. Groton, along with many others in the Commonwealth, handles this on a pay-as-you-go basis. Haddad cautioned that not having the beginnings of a plan in place could have a negative impact on the town's bond rating. "There is currently no obligation to fund this liability," he said, which in Groton's case, is $7,150,656. Haddad suggested that the town could start by building up some funds earmarked for this in the Stabilization Fund, and recommended as a start $100K.
There is still much that is not known about a timetable for this GASB requirement. "I am 100 percent opposed to what amounts to an unfunded mandate from the federal government," Selectman Josh Degen said, adding, "We need to know what the impact is to our bond rating." Haddad advised that he believes that GASB savings account could become mandatory at some point.
Selectmen and Finance Committee will continue their discussions and public hearings regarding the FY14 budget.