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Crunching the numbers

Department heads, Selectboard grapple with FY 2014 deficit

BRATTLEBORO — Selectboard and department heads met on Dec. 8 for what was slated as the final budget meeting before 2013.

After four hours, the board voted to table the budget until its Dec. 18 meeting.

Board members asked Town Manager Barbra Sondag to assemble additional information for the board on the capital plan and whether to use undesignated funds, or “surplus” money, to ease pressure on the budget.

Sondag said she had tried to assemble a budget that wouldn't significantly decrease town services, but cautioned that further cuts to the budget could do just that.

Board and department heads picked through line items in the town's general fund and capital five-year capital plan.

As of Dec. 8, the fiscal year 2014 general fund expenses totaled $15,232,074 after further cuts by board members and Sondag. This proposed total represented an increase over fiscal year 2013 expenses of $586,950.

According to a Dec. 8 memo from Sondag issued that morning, the impact on the tax levy stands at $570,370.

This levy is composed of three chunks of figures.

The first is an increase from recalculating the current tax rate with the addition to the Grand List of $90,000. According to Sondag, the $90,000 would “have no impact on the tax rate.”

The second is $325,000 from the first payment of the $14 million bond for the police and fire facility upgrade.

The final piece is $156,370 from other operating expenses.

Tense moments

The meeting's atmosphere grew tense between board members in the meeting's second half.

Board member Christopher Chapman said the board should approve the budget that Sondag had compiled, trusting that she had done due diligence.

Member Dora Bouboulis said she was happy with the general fund but felt that cuts should happen to the capital improvement plan.

She added that she would probably vote against the budget as long as the debt service for the police and fire station upgrades remained.

“The Town Manager did not take what we stated as fact [when revising the budget],” said Selectboard Chair Dick DeGray.

If Sondag had followed the board's direction, then the meeting would have finished, said DeGray. He pledged to continue progressing through the budget line by line, finding more reductions.

“I'd rather have another vertigo attack than be here this morning,” said DeGray.

Sondag expressed frustration, saying that the board needed to tell her the level of cuts she needed to make to the budget. She added that the next round of cuts could have implications on level of services or staffing.

If the town needs to cut services or staff, then the Selectboard needs to say that, Sondag said.

By meeting's end, the board had reduced expenditures by more than $200,000.

In a Dec. 11 memo, Sondag assured staff that despite a budget gap, the town remains fiscally strong.

“When preparing a draft budget for the Selectboard's review, the administration typically starts with a review of current and past year revenue and expenditures,” she wrote.

The board also focuses on not raising taxes unless necessary, she said.

Expenditures placing pressure on the fiscal year 2014 budget include health insurance, municipal debts, contractors who helped with aspects of a rewrite of zoning ordinances, and workers' compensation insurance.

According to Sondag, the budget process typically begins with level funding based on the amount raised by taxes. She said having expenses outpace revenues at this stage is typical.

“The budget process typically starts with a budget gap,” she said. “That is quite different from being in a deficit situation.”

Sondag said that she had suggested early on an increase of the tax levy by $300,000. The number reflected the debt incurred by the police and fire facilities project.

“This cost was clearly identified during all public hearings on the project,” she wrote in her memo. “In fact, the public was provided with a spreadsheet illustrating the impact of the debt on individual property owners. This increase should come as no surprise.”

Funding capital projects

The board will next turn its attention to funding capital projects and improvements, Sondag said.

According to Sondag, the town's general fund surplus is over $1 million. The capital fund has a surplus of over $300,000. Using a portion of the town's fund balance, sometimes dubbed a “rainy day fund,” to offset other expenses, is not unusual.

Board members had questioned the proposed use of the $300,000 from the capital fund because it would come from a bond that the town took for a bridge project that was then paid for by the state. Board members questioned whether using the bond would incur added interest.

Siphoning the fund balance toward expenditures requires approval from Town Meeting members.

In the same memo, Sondag also said she saw a statement that “indicates the Wastewater Treatment Plant Upgrade project is over budget by $1 million.”

“That is not the case,” she wrote. “This project continues to be under budget, and we expect it will end under budget.”

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