WEST NEWBURY — The Board of Selectmen worked with the finance director and Finance Committee late into the evening on Monday to find the best way to obtain a new ladder truck for the Fire Department and still balance the '09 budget.
Ultimately, selectmen agreed to recommend that voters at the annual Town Meeting next month fund the truck with a 15-year lease. The plan is to put $300,000 down and cover the remaining cost through an annual capital outlay expense in the Fire Department's line item budget.
The recommendation is to have the down payment covered with $200,000 from the stabilization account and $100,000 from free cash.
Finance Committee Chairman Dave Kapturowski favored limiting the amount used from the free cash balance because as an interest-bearing account, it is a working asset for the town.
"We are a nation on the brink of recession; we have a state with a billion dollar deficit," said Kapturowski. "We don't know what the future is going to bring."
Selectmen Chairman Glenn Kemper agreed that minimizing use of the town's savings was important.
"We're trying to hold onto the sacred egg, so to speak," Kemper said.
Finance Director Tracy Blais estimated the cost to cover the annual lease would be around $46,000, but stressed that final numbers would not be known until a bid was accepted. The Board of Fire Engineers anticipates opening bids from truck manufacturers on April 15.
The lease option provides the certainty of fixed rental payments and the ability of the town to return the asset in the event voters don't approve the annual expense at a future Town Meeting. However, the associated risks to the leasing company "generally translate into a higher effective interest rate" than with borrowing, Blais explained.
On the other hand, "bond anticipation notes would afford the town lower interest costs and some flexibility in the timing and amount of principal repayment" but come with hefty issuance costs, Blais said.
At the end of the evening, selectmen approved several actions to ensure a balanced budget. The goal, said Selectman John McGrath, is to "allow the public to prioritize how they spend their money."
If the line-item budget and all warrant requests are approved at Town Meeting on April 28, the balance in the free cash account would be $591,465, with $229,755 left in the stabilization fund.
Selectmen are recommending level-funding all departmental expense budgets, except reductions in the following expense accounts:
Finance Committee, $1,000; telephone; $10,000; Finance Department, $2,800; Inspection Department expenses, $1,000; animal care and control expenses, $1,000; and GAR Memorial Library, $1,000.
"We've level-funded for a number of years. Everyone is limping by with what we have," Blais noted.
The selectmen's professional and technical services account was cut by $3,000.
The board is recommending a 21/2 percent increase in wages for nonunion employees or employees not under employment contracts. A proposed 22 percent increase in wages for the health agent is the result of "a misunderstanding," according to selectmen, and will be discussed at their next meeting.
A new administrative position in the selectmen's office was cut to save $7,000, and a Department of Public Works position eliminated for $45,700.
The DPW's road improvement program was slashed by $40,000 and capital outlay for that department was eliminated, saving $32,000.
The Police Department's cruiser replacement program was eliminated, saving $29,914.
In the Fire Department, drills were cut by $6,320; stipends, $15,350; and expenses $10,000. Blais factored in $46,493 for an annual lease payment for the ladder truck.
In a memo following Monday's meeting, Blais recapped the selectmen's budgetary recommendations and re-emphasized her serious concerns over the elimination of the capital accounts in the Police and DPW departments and the significant reduction in the road improvement program.
"All of these programs have proven themselves effective in managing replacements in a timely and efficient manner," she said. "In addition, we have found that deferral of these items only leads to additional costs in the future."
She asked selectmen to consider using the available $28,000 in levy capacity to reinstate one of these cuts.
She also warned selectmen to expect to see an increase in reserve fund transfer requests in the upcoming year.
"With no allowance in either the police expense or the DPW road machinery expense accounts to fund increasing fuel costs, we are likely to see overruns," Blais cautioned.
