The opening session of the Board of Selectmen’s 2013-14 budget deliberations were as much an analysis of municipal spending over the past seven years as it was a review of anticipated spending for the upcoming fiscal cycle.
And for the seventh consecutive year, it appears funding for local road improvements will come up short — further building a deficit officials fear could trigger future bonding to cover the mounting costs, possibly as soon as next year.
Selectmen headed out of the gate during their January 22 budget session requesting a budget increase of 0.3 percent, or a increase of $117,014 from the current approved budget of $39,024,523.
The 2013-14 request of $39,141,537 incorporates an actual municipal operations request of $28,798,543, an overall reduction of 0.6 percent, coupled with $10,324,994 in debt service on capital bonding, an increase of 2.8 percent.
During her presentation to the board, First Selectman Pat Llodra used a spreadsheet to illustrate the snail’s pace of municipal budget spending growth since 2008.
“Each year we have struggled to keep the budget as low as possible — some years at less than zero,” Mrs Llodra said. While the selectmen’s budget includes all debt service on capital project bonding, including for school district projects, the school budget is presented, and voters can support or reject it separately at referendum.
Mrs Llodra said school projects will generate about 53 percent of the town’s current debt service in next year’s budget.
Over the last six budget cycles, Mrs Llodra illustrated, municipal spending has grown just 0.5 percent, with an average 0.1 percent increase annually. Incorporating debt service, the overall selectmen’s budget has also only increased an average of 0.1 percent since 2008.
“If you totaled the CPI [Consumer Price Index], growth has been 12.6 percent since 2009, while the change in operational resources for Newtown since 2009 has been just 0.5 percent,” Mrs Llodra told Selectmen Will Rodgers and James Gaston. “But the costs we face are not static.”
Minimal Wage Increases
Among the items pressuring the selectmen’s budget is a 1.75 percent wage increase for most nonunion municipal employees, after several years of wage freezes.
“I think you will be stunned at how little our employees have received over the years,” Mrs Llodra said, adding that the virtually stagnant rate of wage increases is beginning to take its toll in several ways.
Since average nonunion wage increases have not kept up with cost of living increases, something Mrs Llodra said she is “not proud of,” Newtown is losing quality employees, open positions are not being filled, and it is putting a much higher demand on remaining town workers.
“We’ve got high quality people here we are undercompensating,” Mrs Llodra said. “With just a 1.75 percent increase, we are going backwards.”
Since she took office, Mrs Llodra said the town workforce has shed 15 people either through retirement or attrition — positions that have remained open.
“Newtown had a small workforce already. I can’t cut any more staff. In fact, we need to add staff,” she said. “We’ve been asking people to work at a level that they can’t sustain for much longer.”
Mrs Llodra explained that the municipal budget can neither reduce debt service commitments, nor contractually negotiated union wage increases, “so we have to find other places to cut to mitigate these mandatory increases.” To accomplish that, the capital roads budget has been the perennial well from which the selectmen have drawn funds to offset spending in other areas of municipal operations.
But Mrs Llodra said those days will soon be over.
She said ten years ago, officials identified a need for $2 million per year to be infused into the capital roads budget to bring the town up to a point where all necessary road reconstruction is complete, at which point ongoing road maintenance would require $1.5 million annually.
After concerns about property tax increases, Mrs Llodra said complaints about the condition of Newtown’s roads are the number two generator of calls from residents to her office. She said without taxpayer endorsement of requested increases to the capital roads line, in a year or two, Newtown will be forced to float a bond to finance road reconstruction projects to get caught up.
“I’ve resisted it,” Mrs Llodra said of bonding for road improvements she and the selectmen agree should be an operational expense. “Once you get in the practice of bonding for road projects, it’s hard to get out.” The first selectman also pointed out that the practice adds borrowing expense to each associated road project for the subsequent 20 years of a project’s bonding cycle.
That said, Mrs Llodra said she was pressed to cut in half the $2 million request for next year.
“But this is the last year we will put a decreased amount for capital roads,” she said. “After that the community has to decide to fund a larger cost or to bond.”
She said selectmen will also reduce the town’s contribution to a capital nonrecurring fund from $250,000 to $100,000. The practice of incrementally putting money aside for large capital purchases like highway department or fire apparatus has helped save debt service over the past few years as the town has been able to pay for some pieces of equipment or projects that otherwise would have been bonded.
Mr Gaston said the capital roads program has been the “scapegoat” since the $2 million annual spending plan was crafted 15 years ago, and the perennial reductions “have caught up to us.”
Mrs Llodra said with the $1 million budgeted in the current fiscal cycle, only three miles of Newtown’s 275 miles of town-owned roads (versus state roads) were reconstructed.
“Just drive around,” Mrs Llodra said, “you’ll feel the impact of not investing in our roads.”
As she reviewed a budget document summary, Mrs Llodra pointed to a blank section designated for a purchasing agent, saying the town has carried the proposed new position for several years. Finance Director Robert Tait said once the town hires a dedicated purchasing agent, he is confident the savings that individual develops will more than pay for the cost of the new office.
Responding to a question from Mr Rodgers, Mr Tait said the expense for a purchasing agent would be shared between the town and school district, because that office would serve both departments.
The next selectmen’s budget session will be January 29. at 7:30 pm. in the Newtown Municipal Center main meeting room, which will include examination of public works, highway and building maintenance, library, fire, and Edmond Town Hall, as well as several other municipal departments.