A municipal budget for Fiscal Year 2011 which will maintain all current services, continue the current level of spending, and allow a three percent reduction in the tax rate has been proposed by Town Manager Mike McGovern.
The $8.5 million budget proposal came in a February 22 “Budget Message” delivered to the Town Council and posted on the town Web site. The message is packed with graphs and charts and includes extensive supporting documents.
Several factors permit flat budget
“The FY 2011 proposed budget is flat at a time when the CPI-U has increased 2.6 percent over the 12 months preceding,” McGovern said, a feat attributable to a combination of things. Nonunion employees and public works bargaining unit employees are not receiving pay adjustments. Debt service costs are decreasing by $151,332, due to bond refinancing and debt retirement. The cost of refuse disposal is decreasing by $79,961 as trash put in the hopper has decreased more than 10 percent. Street lighting costs are decreasing over $12,000 with last year’s light reduction initiative “more effective than planned,” and the cost of the remaining lights put out to bid. Likewise, the electricity cost for the community pool is down $18,000. “We also have been aggressively obtaining bids for a number of other services to take advantage of a more competitive bid environment,” McGovern said.
McGovern gave “special recognition” to the town department heads and staff “who are adjusting to our budget restraints while maintaining exceptional services to our citizens.”
Some increases necessary
Spending increases are also detailed. These include a $66,000 13 percent increase in health insurance costs due to a 7 percent rate increase and changes in the marital status among staff as well as an increase in the cost of unemployment insurance from $3,200 to $16,500. General assistance for local families and individuals in need is also up from $12,000 to $25,000. The collective bargaining agreement with the Cape Elizabeth Police Benevolent Association will result in about $30,000 in additional costs. Family Fun Day is budgeted for $5000 after no budgeted funding in FY 2010. Capital outlay for infrastructure needs is increased by $66,178.
Spending and revenue trends
McGovern details trends in municipal spending and the tax rate since 2008. From FY 2008 to 2009, spending rose 3.9 percent with a 10 percent rise in the tax rate for municipal services attributed to declining revenue. From FY 2009 to 2010, spending was down 3.1 percent with a slight municipal tax rate decrease. McGovern’s proposal for FY 2011 keeps spending at just $17,864 more than in FY 2008, an increase of 2/10 of 1 percent since FY 2008.
Declining revenue from sources other than property tax is identified as a continuing challenge. “We are at a lower level than ten years ago,” McGovern said in his message. “During the ten-year period, municipal spending has increased 28 percent and municipal revenue from sources other than property tax decreased 9 percent.”
The proposed budget, which does not include school, county or community services expenditures, also specifically does not reflect changes that may result from upcoming recommendations from the Health Benefits Review Committee, the Municipal Operations Review Committee and the Alternative Energy Committee. Nor does the budget take into account any potential revenue from pending policy considerations, including pay/display parking at Fort Williams Park and pay per throw at the Recycling Center. McGovern said that those pending initiatives could “reverse” the 10 year declining trend of revenue from sources other than property tax.
Looking ahead
The budget will be formally presented to the Town Council at its regular meeting on March 8. The council will review the budget in public sessions beginning Thursday, March 11, at 7 p.m. in the William H. Jordan Conference Room at Town Hall, 320 Ocean House Road.