Budgets

Post date: Feb 07, 2019 9:33:16 PM

I'm still working through final numbers on Town budget. It does appear that a small increase on the town side is unavoidable. Last year's Town budget was somewhat of a unique opportunity given stable employee population and limited operational changes. It also was important to leave enough space to consider the impacts of a new Police Station as well as the complexity of unraveling local school to regional school budgets.

However, we are not in the same position year. A few general observations:

As promised, the Police Station debt service has no tax impact - we have allocated free cash as anticipated to cover this.

There will be, though, carrying costs for the building as a new building without any measurable offset from a vacant building. This means we're planning on costs associated with cleaning & utilities.

We're making a one time jump to address telephones and internet connectivity -- both of which have been limping along with approaches that were cost effective and creative at the time but are now really showing their age and limitations. Again, the PD move has created the opportunity to address as it made little sense to deal with these in one building only to then have to separate. We'll have new modern phones that can effectively handle and route calls and voice mails and dedicated fiber will connect all town buildings for internet and internal connections as opposed to indirect radio relay of internet now.

We are also addressing a handful of staff issues in several areas. By leaving Civil Service, we have been able to finally address filling some vacant positions in Police Department. We added some critical capacity back into the Accounting department by recognizing work of one member was more akin to Asst. Accountant and adding in an Accounting Clerk. This is also allowing greater time to be put into maximizing the value and capacity of our financial software. As we have filled some positions and plan for multiple staff transitions, we have needed to address wages for some positions that have lagged market or no longer are consistent with comparable positions within the organization. Lastly, we expect some staff retirements in 2020 which has prompted us to plan for some extra coverage to bring new staff on board with overlap with the impending retirees in order to maintain continuity in operations.

ENTERPRISE FUNDS

Mixed news on this front too. Recall that the Enterprise Funds, Water, Sewer and Transfer Station are "self funding" through fees and charges and do not receive general fund property tax dollars. Since they are a closed system, they maintain their own reserves and any new funds they may require need to be generated within the auspices of the department's operation.

You may recall that we have been in a position the past several years of holding the sewer and water rates flat. Part of that will continue this year. We are currently projecting no change to the sewer rate again. While we expect a slight increase from the charges from the Hoosac Water Quality District, a small adjustment of transfers to reserves will offset that. In terms of the water rate, we will be proposing a decrease of 15 cents per unit from $3.85 to $3.70. This is attributable to the savings in electric costs thanks to the solar credits. The water department uses a lot of electricity to run pumps, so water users are among the biggest beneficiaries of the savings.

The challenge among the funds is the Transfer Station. As we noted when discussing free cash, this department has no meaningful reserves to use as cost offsets. We are seeing continually increasing costs for recycling. This is not unique to Williamstown but reflects a national problem based on China's limitations on importing recyclables for processing. Before that event, revenues for recycled materials were not strong anyway. In many cases, we have watched items swing from revenue producing to expense generating as we move to pay for their disposal. Currently, we fund Transfer operations in two ways - annual stickers and pay by bag. The intention of these two charges has been to have a fixed charge (sticker) to roughly cover cost of recycling which is largely unlimited for users with stickers and bag charges to roughly cover the cost of non-recyclable waste. This is variable and to some degree controllable by users depending on how few bags they can use. In reviewing the impacts in this year's budget for the the Transfer Station, I allocated the line items changes between the two subsets, recycling and trash. I split shared costs evenly and separated recycling only and trash only charges accordingly. At the end of this exercise, it showed an increase in recycling costs of $17,000 and a decrease in trash costs of $1000. Thus, when we looked at fees, it did not seem appropriate to pass along recycling increases to trash bag charges. In order to yield the additional funds for recycling, we will be recommending increasing the sticker charge to $120 per year, $10/month, from the current $90.