, Newburyport, MA

April 17, 2014

As revenues increase, balanced budget will go to Town Meeting

Proposed FY15 budget is $1 million more than this year


---- — SALISBURY — The frigid, snowy winter, as well as overages related to veterans benefits and police overtime, are presenting challenges to this year’s operating budget. But with revenues picking up, town officials will have a balanced budget for next year to present to Town Meeting next month.

According to finance director Andrew Gould, last year Town Meeting approved a $20,065,266 town operating budget for this fiscal year that ends on June 30. The budget included the money needed to run the town, as well as pay the town’s education assessments from Triton Regional School District and Whittier Vocational Technical Regional High School.

But the town’s in a $100,000 hole due to the amount it had to spend to keep the roads and buildings clear of snow and ice this winter. In addition, veterans benefits are up about $40,000, and the police department’s overtime budget is in the red by about $50,000.

Gould thinks that the money needed to cover the police overtime can be found within the current budget. A transfer of monies from one line item to another to handle that problem will be a warrant question Town Meeting will consider in May.

The ability to do that is because revenues are coming in a bit stronger this year, Gould said.

“Revenue from building permits is up, much of that due to some big projects in town,” he said. “And motor vehicle excise tax is way up.”

In addition, he said, after Town Meeting agreed in October to adopt the local .75 percent option on meals tax, which began in January, Salisbury will realize about $10,000 a month in new revenues from meals sold in town.

“Revenues are picking up. They aren’t great, but they are picking up,” he said.

According to state law, the only two line items municipalities are allowed to overspend are the snow and veterans benefits budgets. But the money must be made up. That can happen by finding money within the budget that can be transferred, adding the overages to the next fiscal year’s budget or taking overages out of free cash — money left unspent from the prior year’s budget.

Town Manager Neil Harrington is considering taking a portion of the snow and ice budget overage from free cash, while adding the remainder and the unexpected increase in veterans benefits to next year’s budget.

Even with veterans benefits and snow budget issues, the first draft of the fiscal year 2015 budget presented to the Warrant Advisory Committee on Tuesday night was balanced.

Salisbury is looking at an FY2015 budget of $21,151,813, about $1 million more than this year.

More than half the increase can be attributed to three expenses that will go up next year, Harrington told the committee, which acts as the town’s financial watchdog. The three include a $418,268 increase in Salisbury’s educational assessments, a $71,390 rise in its Essex County Retirement assessment and a $70,000 increase in insurance costs, made up of health, workers compensation and general liability coverage.

Salisbury’s Triton assessment went up 2.4 percent, or $229,376, for a total of $9,716,786, about 46 percent of the proposed operating budget. Added to that is a $97,422 increase in the Whittier assessment, bringing Salisbury’s costs there to a total of $760,000.

The merger of North Shore Tech, Essex Agricultural and Technical High and Peabody’s high school vocational programs has caused a jump in Salisbury’s assessment for the students who will attend the new school from $52,500 this year to $91,470 next year. The new school, currently under construction, is set to open in the fall.

The budget includes raises that have been, or are currently being negotiated, with the town’s seven employee unions. Salary increases include a 2.5 percent increase for this fiscal year, and 3 percent increases for both fiscal 2015 and 2016 under a three-year contract.

Also included are equity raises for a number of department heads and assistant department heads whose salaries were deemed to be significantly below the regional average, Harrington said. Those projected to receive equity raises are the town treasurer/tax collector, head librarian, the assistant and children’s librarians, Council on Aging director and assistant town clerk.

One savings seen throughout the drafted new budget proposal is a drop in the cost of electricity, Harrington said. That’s due to the 20-year agreement Salisbury made with the solar farm in town. Salisbury negotiated 15 percent credits that discount its electric costs with the solar farm developer.