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Hancock Advisory Committee Meeting Tuesday, January 17, 2012 Minutes
The meeting convened at 6 p.m. at the Town Office. Present: Ben Billings, Matthew Hale, Don Klug, Marsha Kono (Secretary), Ron Mack, Pat Payne (Chair). Revenue: 2011 Actuals and 2012 Projections We began by reviewing the Revenue reports we received on Jan. 17 – the one dated 1/12/12 also includes most recent revenue forecasts for 2012. The 1/17/12 report appears to include updated (I.e., higher) actual 2011 revenue figures. However, both reports include revenue lines that do not appear to belong in the Operating Revenue Budget – e.g. property tax revenue and revenue that applies to Warrant Articles – which distorts year-to-year totals and throws off totals, comparisons to budget, and variance calculations. There also appear to be a number of account numbering discrepancies – revenue booked in accounts added during 2011 with no tie-in to the 2011 revenue budget – therefore left out of calculations vs. budget. The only way these reports would yield meaningful information would be for us to manually "back out" accounts that don't belong in the 2011 Operating Revenues, and try to reconcile account numbering differences – which we don't consider part of our job. Thus, at this point we still don't have an Actual 2011 Operating Revenue figure which can be compared to the approved $631,191 Operating Revenue Budget for 2011. The January 12 report does include projected Operating Revenues for 2012 -- $656,996 – which is $25.8K higher than the 2011 budgeted figure. On the surface this is about 4% "to the good" over 2011B. However, review of the detail seems to indicate that continuing shortfalls in normal operating revenue (including a $15K reduction in the NH Highway Block Grant) are being made up for primarily by a $49.9K projected increase in Sale of Town Property (from the sale of a house taken by the town on the corner of Forest Rd), and a $4.2K increase in rent from the Post Office. We note this because we believe it's important to understand that "normal/ongoing" revenues do not appear to be recovering yet to pre-recession levels. Expenses: 2011 Actual Spending vs. Budget Similar problems appear to exist in the most recent 2011 Actual Expense Reports we have received, and make it difficult to analyze proposed 2012 spending vs. 2011 Actuals. We have repeatedly asked for the Operating Expense Budget in "workable spreadsheet form" so the Committee can add columns for comparisons of 2012 requested spending vs. both the 2011 budget and 2011 actuals – though obviously, our preference would be that the reports from the Town Office already include these comparisons. Proposed Warrant Articles We concluded it was not a good use of Committee meeting time to try to sort out the revenue & expense reports and decided to move on to discussion and preliminary voting on proposed Warrant Articles for 2012. As in prior years, voting was done by secret ballot because we do not believe committee members should be singled out for voting one way or another. A) FD Tanker Repair: $5,000. Voted unanimously in favor. The FD makes a compelling case for the need of the second tanker and this proposal is lower than the initial $35K proposal for "rebuild" or the $225K estimate for replacement. (The 24 year old vehicle is now 5 years beyond its planned replacement date.) B) PD SUV Cruiser: $35,000. Voted 1 in favor, 5 opposed to a new cruiser in 2012. We noted there are really two issues: Does the Town need a third cruiser? And does the 2007 SUV really need to be replaced in 2012? Based on the PD's initial proposal to retain it as a 3rd vehicle for a few more years, we believe the case can be made that it could be kept another year or so before replacement. C) Transfer Station Compactor: $16,500. Voted unanimously in favor. Comments: DPW has been nursing this machine along for years, but potential for catastrophic failure due to metal fatigue is very real. The consequences of failure would be drastically increased hauling fees for household waste which could not be compacted, until a replacement could be ordered & installed. D) Bandstand Renovation: $20,000 gross; maximum to be raised through taxes $10,000. (Tabled until after the Committee's Jan. 30 meeting with the Select Board.) The Committee is confused that the full $20K would need to be included in the tax calculation even though $10K has already been pledged by the Hancock Improvement Association. We do not understand why this differs from the 2011 Warrant on the Library Roof. While we recognize this project has been "on the list" for a number of years, the warrant write-up is silent on the consequences of waiting for another year, especially since more fund-raising is planned – Is the structure dangerous? Unusable in 2012? E) Meetinghouse Steeple: $24,720. Voted unanimously in favor. We understand the full cost of this project to be $41,040, of which the Town's share is $24,720. The project includes work to paint, repair and replace cladding on the steeple exterior which is necessary to prevent further deterioration and to repair the face of the Town Clock. The Committee believes protection of this landmark structure is critical. F) Meals on Wheels (St. Joseph's) $520. Voted unanimously in favor. Our understanding is that this is in essence a "replacement" for the Senior Luncheon Program at Sargent Camp, budgeted for years, that was closed down with the property's change of hands. However, the Committee would like to see both the Town Welfare Officer and a representative from St. Joseph's (the provider in this area) speak to this warrant at Town Meeting. G) Meetinghouse Capital Reserve Fund: $5,000. Voted unanimously in favor. The Committee recognizes that this is merely "seed money" toward the major fund-raising and grant-seeking that will be needed to deal with Meetinghouse roof and structural issues. H) The Grapevine: $5,000 (up from $3,750 in 2011). Voted unanimously in favor. The Committee is strongly supportive of the services provided, especially to young working families, and believes that without The Grapevine, the Town's direct costs for social services would be significantly higher. We noted that The Grapevine, along with many other social service agencies, is being hit hard by State cutbacks – but we recognize that the Town can't be expected to make donations to all agencies that have suffered loss of state funding. We would like to see both the Town Welfare Officer and a representative from The Grapevine speak to this warrant at Town Meeting – with a quick overview of numbers of Hancock families served and sources of agency funding. I) Bridge Capital Reserve Fund: $5,000. Voted unanimously in favor. We think a report at Town Meeting on the fund balance and a priority list of bridges would be helpful. J) Contoocook Valley Transportation Company: $500. (Decided to table until after our meeting with the Select Board on Jan. 30) While the Committee is supportive of the organization, and notes it has been added as a United Way agency, and that several area towns made donations in 2011, we are unclear how many Hancock residents are being served. K) Operating Budget Warrant [net of Water]: Based on the most recent numbers available to us (i.e. $1,788,863, which is $9,836 or 0.5% lower than the 2011 budget), the Committee voted 4 in favor, 2 opposed. While the Committee acknowledges that this is a "flat budget," we would also point out that 2012 Debt Service will be a net $19.6K lower than 2011 due to the payoff of two notes in spite of adding the first year payment on the 2011 Road Program – and overall Highway Department/Bridge/Highway Block Grant spending for 2012 is projected at $3.5K lower than 2011. Thus we really shouldn't congratulate ourselves on a "flat" operating budget since we in fact have "filled in" about $23.1K of increases in other areas. The Committee believes that the most meaningful figure to be looked at from year-to-year is the "Total to be Raised From Taxes," which is typically presented on the Preliminary Tax Calculation page of the Town Meeting Handout. This number consists of the proposed Operating Budget (excl. water) plus Overlay & War Service Credits, minus projected Operating Revenues plus the first year cost of proposed Warrant Articles. The Committee did an "approximate" calculation, prior to receiving the January 17 Revenue & Expense reports, using the 2011 budgeted figures for Operating Revenues, Overlay & War Service credits, but using the new Town Valuation resulting from the 2011 Statistical Update and all 10 warrants submitted for our review. This calculation yielded an approximate increase of 4.1% in the "Total to be Raised from Taxes" or about $0.44 increase on the current tax rate. All agreed this is too high. Previously, the Committee had opined that an increase of 1-3% would probably be reasonable, considering unavoidable increases in fuel, dispatch service, and insurance costs – plus critical equipment and infrastructure needs. Unanimously, the Committee voted to recommend to the Select Board that the proposed amount to be raised from taxes in 2012 be no more than 2.5% over last year's figure of $1,251,108. The Committee recognizes that staying within this cap would require either trimming of the proposed Operating Expenses, elimination of Warrant Articles, or some use of the Unreserved Fund Balance We believe this is achievable. We noted that a number of expense lines have projected increases for 2012 in spite of the fact that previous years budgets have been underspent. Additional possibilities include: deferral to 2013 of the replacement Police Cruiser; funding the Bandstand restoration from the Unreserved Fund Balance (which would also keep the full cost of the project out of the tax rate calculat6ion); and funding the "cyclic revaluation" from the Fund Balance on an ongoing basis. We recognize that Department and Committee heads have worked hard to come up with "thrifty" operating budgets – but when all are added together, and with continued shortfalls in normal ongoing revenues, and with proposed Warrant Articles added, the total proposed is excessive. We look forward to discussing this approach with the Select Board on Jan. 30. We noted corrections to the Jan. 3, 2012 minutes: Meeting was at the Library; Don Klug did attend. Respectfully submitted, Marsha Kono, secretary
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