Chopping Wood

Seems there are a bunch of people unhappy with the concept that if we are being told we have a "deficit" we shouldn't be looking at giving out raises.  

There are currently three revenue scenarios being bandied about by administration in town.  A maximum, a mid-range and a conservative.  All three start from the point that costs for all requests are larger than revenue.

All three need to be adjusted to reflect the reality that not all requests will be funded.  In good years, not all requests are funded.

Now when you do that, if you are willing to spend everything you have, you can manage to get through town meeting with some change in your pocket, and not much else.  Throw in a 1% raise and maybe, assuming the governor's tax and fee plan which funds his proposed budget is passed, if you turn that pocket inside out, you might find some lint, but nothing else.

But since the governor's budget is not going to get passed in total, you would be rolling two dice hoping to throw a 14.

The difference between the maximum spending level and conservative spending level is $1,367,420.00 ($44,056,816.33 vs. $42,689,396.33). No scenario provides the tax payer and break   on the taxes to be raised by the general levy.  It is being put forth that the conservative level is the best chance for the town to maintain its current bond rating, thus giving it the best chance to borrow up coming debt at the lowest possible interest rate.  

The conservative level also phases in over three years the associated costs shortfall for the water and sewer enterprise funds.  It spreads the cost out over three years.  The mid-range does it over two, and the maximum recoups the cost in one.  What this means is in all likelihood a rate increase, taken all at once over spread out over a maximum three year period.  

As of right now, or I should say as of last Tuesday, because that was the day I obtained the most up to date numbers, total funding requests were at $44,305,127.00. Under the various revenue plans, we are at this point looking at a shortfall of either: $248,310.67; $1,031,437.37, or $1,615,733.67.  Throw in a 1% raise and add another $210,000 to $240,000 to each.

Based on various comments heard during meetings and discussions, it seems everyone is leaning toward trying to come in somewhere between the mid-range and the conservative revenue projections.

Under any scenario you can pretty much knock off $500,000.00 in spending without working up a sweat.  From that point on, it requires some serious decisions.  If you propose to give out a raise, don't forget to add that amount to the shortfall.

Plus, don't forget the Special Town Meeting.  We all ready know of about $100,000 in needed expenses.  That figure has been planned in the available revue scenarios.  Any requests over the $100K though are going to add to the potential shortfall.

And quite frankly there will be more requests.  There is a shortfall in the snow and ice removal budgets.  There are several other potential matters which could affect the bottom line.

But when we get to that bridge, we will have to figure the figures in.  For the meantime, let's see where we are at with what we know.

In my scenarios there are no raises.  Sorry, but I don't know how you add to the salary base when it is pretty clear you are going to be cutting it, and even more than you have to to give a raise to the people who are left.

After you get through with the easy reductions to request, you might be able to find another $150,000 +/- that can go from various budgets without exerting to much effort in the attempt.  

If I am following my own progression correctly, we now need to find $381,000 to $965,000 +/- (shortfalls using mid-range and conservative revenue).  Easy answer, cut all budgets a percentage equal to the shortfall.  An easier answer, cut all spending outside of article 4, then cut the budgets a smaller percentage.

Keep in mind though, some budgets are simply cut proof.  The debt line items under article 4, retirement under the present funding schedule, along with health insurance, town insurance, voc tech and several others.  Water and sewer are enterprises, so any cuts affects the water and sewer rate, not general fund operations.

It may be we simply go one of the easy routes.  We shouldn't, but it may in fact be what gets proposed.  

If real reductions are needed for the long term financial well being, then real solutions need to be found.  If we cannot afford to continue to support doing what we are doing, the reality is cutting a little bit from everything, only delays the problem a year or two. 

The mid-way point between the estimated mid-range and conservative revenue shortfalls is $673.000.00 (remember, if you are inclined to hand out raises, add the cost of the raises to the figure).  

Who gets the axe? Time will tell.

That is it for today.  Be safe.