Hancock Advisory Committee Meeting
Tuesday, December 7, 2010
Present: Ben Billings, Don Klug, Marsha Kono (Secretary), Rich LeFebvre (Chair), and Pat Payne. Invitees: Barbara Caverly, Town Administrator; Jeff Wilder, Chair of Recreation Committee.
The meeting convened at 6 p.m. at the Town Office, to continue our meetings and reviews of preliminary budgets for 2011.
Town Administrator Barbara Caverly presented preliminary figures for the 2011 Town Administration budget (Acct. # 4130) totaling $171,905, reflecting an increase of $3307 or + 1.9% over the 2010 budget. However, she cautioned that further adjustments were expected in the lines for Meetings/Seminars [line 240] and Bookkeeper Wages [line 395].
>> Barbara noted that major efforts have been devoted in 2010 to reorganize the town's accounts, including breaking out previously aggregated general expenses to the appropriate office (e.g., Tax Collector) or expense type (e.g., Software/ IT Support vs. Equipment). This reorganization makes year-to-year comparisons difficult.
>> She also noted that when the Bookkeeper position was created in 2010, the number of hours needed was a "best guess." She and the Select Board now agree that about 25% more hours are needed for 2011. The expectation is that this cost will be partially offset by lower outside auditing costs, but the value of improvements in financial management and reporting are priceless.
>> Specific areas of budget change include the following:
á Auditors Fees (line 301), down $5K from the 2010 budget to $25,000 (due to better town accounting due to the new bookkeeper).
á Increase of about $3,000 in Bookkeeper wages, reflecting increased hours. Preliminary budget is $15.9K, up from $13K in the 2010 budget. Barbara noted that this line is likely to increase a bit more.
á Equipment (line 740) includes plans to replace the five Town Office computers ($6K estimated cost). Barbara noted that repair costs have been significant in 2010 and replacement is likely to be more cost-effective.
>> Select Board stipends will remain flat for 2011 at $7.2K, but the 2011 budget does include provision for "step increases" of about 2.5% in employee salaries/wages.
>> However, Barbara noted that, for the first time in 2011, employees will contribute 5% toward their health insurance premiums. That line (Acct. # 4155, line 000) is up 6.61% after the employee contributions.
>> Overall Employee Benefit costs (Acct. # 4155) are projected at $260,512, up $29,209 or +12.6%, including increases in the lines for Long Term Disability premium, FICA, Unemployment Compensation, and the town share of Police Retirement. (Barbara noted that the State of NH is cutting back/eliminating its contribution toward police pensions; the impact for Hancock is an increase of $11.8K or +66%!)
>> Committee members asked about plans for the required 2011 Property Revaluation/Statistical Update. Barbara replied that projected costs of $35,000 to $40,000 are not yet included. The Select Board is still deciding how to handle this – one alternative is to present it as a Warrant Article to be funded from the Town's Unreserved Fund Balance. (Earlier, Barbara informed the Advisory Committee the current Fund Balance is about $322,000, substantially higher than expected.) Barbara also noted that the outside auditors have finally finished the 2009 audit and the report is in typing.
>> Rich LeFebvre, Advisory Committee Chair, thanked Barbara Caverly for her presentation and candor.
>> Discussion then moved to the Select Board's invitation to the Advisory Committee to attend its December 13 meeting to share our initial thoughts on the budget and to join in an overall discussion with the Select Board and Department of Public Works Director Kurt Grassett bout his 10-year Reconstruction Plan for paved roads, especially as regards timing, doing the work in phases, and alternative approaches to funding.
The Advisory Committee then welcomed Jeff Wilder, Chair of the Recreation Committee, to discuss his proposed 2011 budget and also the Advisory Committee/Select Board's questions as to whether the Recreation Committee still needs three separate special revenue funds:
1. Recreation Fund, established in 1971 and amended in 1993 to a special revenue fund, to receive recreation user fees (non-tennis) and donations and to be used for recreation purposes, with specific appropriations subject to vote at Town Meeting.
2. Tennis Fund, established in 1975 and amended in 1993 to a special revenue fund, to receive user fees/donations and to be used for work on the tennis courts, subject to Town Meeting approval of specific appropriations.
3. Baseball Revenue Fund, established as a special revenue fund in 1997, to receive revenues from baseball team participants, with expenditures earmarked for baseball equipment/uniforms and repairs/maintenance of the baseball fields, subject to Town Meeting approval of specific appropriations.
>> Jeff said the Recreation Committee has discussed the issue and believes their needs could be met by one combined fund, in the form of a Recreation Revolving Fund, whose revenue source is fees/charges for recreation programs, services and facilities, and whose expenditures are for the purpose of recreational programming. Jeff believes this approach (a single revolving fund) will meet the Recreation Committee's needs while allowing simplification of the Town's accounts. He plans to pursue this approach with the Select Board. This approach will still allow recreation-specific funds to be accumulated (presumably including donations and grants) separate from the Town's (unreserved) General Fund, while still subject to management oversight by the Select Board and the Recreation Committee, and to financial oversight by the Town Treasurer.
>> The Advisory Committee members said they support the approach, and thanked Jeff for his willingness to meet with the Committee and for the information shared. The only Recreation budget items discussed were apparently unavoidable increases in the lines for Telephone (increased charges for seasonal connect/disconnect) and increased charges for water testing at Norway Pond.
>> Also, at the Recreation Committee's request, "Hancock Happenings"is being moved to its own budget, since the Recreation Committee has no control over it. [Informational Note: The town newsletter is increasingly self-supporting from advertising revenue to offset printing costs.]
>> Following Jeff Wilder's departure, the Committee briefly discussed points to be raised with the Select Board on December 13:
á Our concern that local, state, national and international financial conditions continue to be fragile, with the very real possibility of further cutbacks affecting town finances.
á Our belief that, in light of the above, the proposed 2011 budget is "careful" but by no means an austerity budget. At some point, it may be necessary to stop doing things and actually cut back on non-essential expenses.
á Our concern that town revenues are not increasing to the extent that projected expenses are increasing – creating a widening gap between revenues and expenditures that can only be met by property tax increases.
á Need for clarification on how the State's Highway Block Grant ties in with the expense budget for the Highway Department, and how spending of Highway Block Grant dollars are accounted for. (Same with Bridges.)
á Need up-to-date information on Warrant Articles to be submitted by the Town, in order to get a complete picture of planned financial demands for 2011.
The meeting adjourned at around 7:45 p.m.
Respectfully submitted, Marsha Kono