Kicking off the start of the FY21 budget cycle in town hall, the town room was filled to capacity. Uniformed Fire Department staff occupied the seats along the back wall and their supporters were scattered throughout the audience. Their presence made clear what the big issue of the night would be.
Smartly, the council had decided to hold the first forum on the new budget at the beginning of the cycle. They also moved it from the overly big auditorium in the middle school to a more appropriately sized room. This was a big improvement over last year’s forums, which were poorly attended and took place too late in the process for the public to effectively participate.
Town Manager Paul Bockelman gave a detailed presentation on the last several years of the budget to members of the council, the Jones Library Trustees and the School Committee. There were few surprises. Little has changed financially in town during the last two years.
Bockleman reported that in FY19, the general fund’s final budget was $80,861,109 with a net gain of about $4 million based on increased revenue of about $3 million and about $1 million in savings. The town repaid the $2 million it had borrowed in 2018 via a tax override to cover the deficit in the Health Claims Trust Fund. The savings were due to unexpectedly low health care premiums and staff turnover. In FY20, the general fund is projected to grow by about $3 million, to a total projected budget of $83,672,923. The budget for FY21 is projected to grow about the same amount, to $86,068,505.
Bockelman cautioned that throughout FY20 and into FY21, the town’s health care expenses are likely to be higher, as are its staff expenses. He expressed concern that rising health insurance costs and salary increases might affect the town’s ability to support its current level of services.
The town relies on property taxes as its largest source of revenue—currently 66%—and these continue to grow on average slightly higher than the rate of inflation, although not necessarily enough to keep up with rising health care costs and staff salaries. The town’s second largest source of revenue—currently 20%—comes from state aid, which is notoriously unreliable and has been declining relative to inflation.
Staffing is one of the Town’s biggest expenses and staff salaries are being affected by the rise in the Massachusetts minimum wage to $12 per hour. This will affect the budgets of departments such as the library and LSSE (Leisure Services and Supplemental Education) that rely on part- time, minimum wage workers. Bockelman said his goal is to raise the town’s minimum wage to $15 per hour, although he cautioned that this might have a ripple effect on all low-end staff salaries.
While town staff has grown, the Fire Department remains understaffed. EMS makes up 80% of the department’s workload. A 2017 study concluded that its level of staffing was inadequate to meet ambulance needs during peak hours. The study’s authors recommended adding a minimum of two more personnel to staff extra ambulance service at a cost of $200,000. In 2018, Hadley started running its own EMS, reducing the number of calls covered by Amherst. During public comment, firefighters and their supporters made the passionate case that increasing Fire Department staff remains necessary.
Firefighter David Clooney said that more studies have been done on the Amherst Fire Department than new staff hired. He recounted a recent call where a sole firefighter responded, which he described as unsafe. He told of the high level of despondency among firefighters and asked that the minimum number of on-duty staff be immediately increased. Relatives of Amherst firefighters choked back tears as they movingly appealed to increase staffing for the safety of both firefighters and local residents. Denise Barberet asked how the town can afford to spend $100 million on new capital projects in the coming years without spending $200,000 on Fire Department staff.
Barbaret’s comments addressed what Bockelman described as “the elephant in the room”—the four big capital projects looming on the horizon: major Jones library renovations, and new buildings for the town’s elementary school system, Fire Department and DPW. After pushback from councilors at a previous meeting, Bockleman is no longer referring to these projects under the rubric of “One Town, One Plan” and he emphasized that are other significant capital needs in town, including replacement vehicles for the Fire Department and DPW, as well as the upkeep of roads and sidewalks.
The good news—although it’s the same as in the recent past—is that interest rates are low and that Amherst has very little debt. Our bond rating is high (AA+) and we’re on track for increasing the amount of our budget for new capital projects to 10%, a long standing goal. The biggest piece of new good news was that the town has extremely high reserve funds. At $16.5 million, reserves make up 19.7% of our operating budget, well above the target level of 5-15%. This money will help offset the costs incurred by a recession or other crisis.
It’s too early to draw conclusions about where the FY21 budget is headed. Because of the grant cycle that the Jones Library is on, its renovation is like to be the first big capital decision confronting the Council. How they handle this relative to other needs in town, including staffing, will be the first real test of their leadership.