The next fiscal year will bring flat budgets across all Town of Amherst departments, if recommendations from the Town Council’s Finance Committee are adopted by the full Council on December 7th. In addition, the allocation for capital spending would be set at 8% of the property tax levy (~$5.2 million for capital), which is lower than the usual target goal of 10% but higher than this fiscal year’s 5%.
Flat budgets could mean personnel cuts as costs continue to increase. “Maintaining services would be a challenge with level funding,” said Finance Director Sean Mangano at the Finance Committee meeting on November 17th.
Discussion was focused on drafting budget guidelines for Fiscal Year 2022 (FY22), to be provided to the Town Manager and town departments. Suggestions from Councilor Cathy Schoen drove much of the discussion, which included considering a capital maintenance fund, and a revolving fund for solar and energy cost-saving measures. The need for a grants coordinator was discussed, along with analysis of open collective bargaining agreements for potential cost reductions, and estimating staffing costs for Community Safety/Racial Equity and Social Justice efforts.
Resident member Bob Hegner suggested that the Council consider capping salaries and benefit costs for all departments as a percentage of the overall town operating budget — noting that it has hovered at around 55% — a proposal that received some support from Council President Lynn Griesemer and other members. When discussion later delved into salary steps and cost-of-living-adjustments, Mangano cautioned against including specifics in the guidelines because such matters are typically negotiated by department heads and other town staff. Mangano said that providing level-funding guidance was sufficient, and that it was up to the department heads to determine how to control costs.
Resident member Bernie Kubiak supported many of Schoen’s suggestions, adding that reserves should not be used for operating expenses. Schoen suggested restricting the use of reserves to covering shortfalls in state aid and for temporary spikes in capital project debt service. As of July 1st, 2020, reserves were a “healthy” $17.5 million, or 21.5% of the operating budget, having been intentionally built up over time to cover unforeseen budget shortfalls or extra debt service for major capital projects.
For the coordination of grants, Schoen asked if it could be the responsibility of an economic development director — if one is hired. The position has been vacant since Geoff Kravitz resigned in January. Griesemer added that “the business community is very focused on the Town hiring an economic development director, and that person should be going after grants to improve downtown.” “This is a conversation that’s larger than the group of us,” she said.
Mangano noted that currently one person in the accounting department helps with grant facilitation, but the seeking of grants is the responsibility of each department. Committee Chair Andy Steinberg asked, “do grants drive our priorities or do our priorities drive grants?” With funds in short supply, some members felt that greater scrutiny is needed before applying for grants that commit other town funds, as was the case with a playground for Kendrick Park, which required swift approval of a match of $259,000 when the town was awarded a PARC grant of $400,000 last year.
Griesemer echoed the concerns about grants that require matching or contributory funds from the town. Referring to the controversial Jones Library renovation and expansion project, Griesemer said, “I think we are all very aware that the previous legislative body committed to a proposal for a library, and we are now trying to figure out how we are going to deal with that.”
In April 2017, Town Meeting narrowly passed an authorization for the Jones Library to apply for a grant from the state for the renovation and expansion proposal. The vote was 105 in favor and 94 against, with the six Town Councilors who were members of Town Meeting at that time — Andy Steinberg, Steve Schreiber, Mandi Jo Hanneke, Pat De Angelis, George Ryan, and Alisa Brewer — all voting in favor. Bernie Kubiak, Town Manager Paul Bockelman, and Jones Library Trustees also voted for the article. The state grant for $13.7 million would require that the town contribute about $22 million, a borrowing that would cost the Town more than $1 million annually in debt service.
Although discussion of the four major capital projects was discouraged by Griesemer, there was acknowledgement of the need to emphasize investment in capital in this year’s guidelines, with broad support for increasing the allocation to 8% of the tax levy, and a brief mention that there will be a need for a debt exclusion override for at least one of the big capital projects.
“There is a point where we cannot continue to ignore repairs and new buildings or they’re just going to come back and bite us,” said Griesemer. “If we end up with a school building that we can’t even occupy, or a DPW or fire station that we can’t even repair anymore — which is about where we are by the way — then we’ve gained nothing,” she said.
This fiscal year the capital allocation was slashed from 9.5% to 5%, which left only $1.4 million available after servicing existing debt. Half of that was put toward roads and sidewalks while the remainder was kept in a budgeted reserve account for emergencies. Raising the capital budget to 8% of the levy (equal to about $5.2 million) will still be “a drop in the bucket,” according to Schoen, but she said it would allow the town to get through some of the backlog of deferred projects.
The Town Council will discuss and vote on the FY22 budget guidelines at their meeting on Monday December 7th.