Town Administrator's FY 2004 Budget Message continued:

Most budgets see a reduction of varying degrees in FY'04, while some others did reflect slight increases. In preparing these budgets, cost of living and required step increases were included by department heads, and where appropriate merit increases were included as part of my recommendations. All non-union increases were favorably recommended by the Personnel Board as well. One might ask why increases are being considered in a time of fiscal cuts town and statewide. The answer is that these increases, most of which are contractual, are a cost of running a municipality. Over the last year, we have negotiated with our bargaining units, with all but two unions now under contract. The increases afforded as part of these agreements, namely a split 2/2 percent cost of living raise, are less than what one would expect to see in better financial times. Further, it would be completely inappropriate to consider honoring a union contract but not providing the same type of adjustment to non-union staff. We must function as a cohesive team, and that is especially true in times of reductions, as all staff will be called upon to "pick up a little more of the slack." That means everyone, when it comes to compensation, should be treated equally. Finally on this subject, we as leaders and unions too recognize even before we negotiate the demand that we must work with whatever revenue is available. That means that we will fully fund contracts even if it means some level of staff reduction results. This is the law. Simply using a collective bargaining agreement as a reason to avoid budget cuts is not a solid argument and I cannot present that argument to you.

I have met with most departments to review their budget requests and subsequent reductions. As of this day, the general fund operating budgets are "balanced" at $48,489,686. This figure is $839,581 higher than the current FY'03 budget. However, when you notice that insurances and benefit costs alone are $1,127,946 above '03 totals, you quickly see how significant these cuts are. Operating, non-discretionary budgets have been reduced by over $782,000 from current years levels. When contractual obligations are factored into the equation, the actual impact below level services funding is over $2 million dollars. The calculation used to determine general funding cuts and allocations is set at 66% school and 34% municipal. On the surface view, it appears that the school budget is approximately 50% of the overall town budget. While this is one manner of determining percentages, I believe that it is more appropriate to use a formula that deals with strictly discretionary funds. The accounts related to insurance & benefits, debt & interest, Tri-County Vocational School and our solid waste contracts are in fact fixed costs that are neither "town" or "school" related. As such and because those budgeted increases can not be adjusted, we must remove them from the calculation. Therefore, you will see that the school department budget is in fact 66% of our operations spending. With that in mind, I have worked with our Finance Director and Town Accountant to keep a watchful eye on all revenue sources to ensure that any changes, increases or decreases, are allocated appropriately. In this budget proposal, some additional cuts above the original municipal projection have been necessary to allow us to address a potential increase in municipal borrowing costs and to allow for some reserves in the event that our two outstanding contractual matters are settled.

The area that we all clearly had hoped to avoid in balancing this budget is, as noted earlier, personnel cuts. If the budgeted projection of a 15% cut in local aid becomes reality, then numerous positions, perhaps as many as 55 or more, will need to be eliminated. On the municipal side, thirteen full-time and four part-time positions are to be cut. Five positions will see a reduction in hours, and all seven Library Page positions will be cut by September 1st. Those are 29 individuals who will be affected by these cuts. Included in the cuts are funding for two police officers, two firefighters, the Superintendent of Parks & Cemeteries, the Administrative Secretary to the Town Administrator, the Health Sanitarian, a Public Works Mechanic and Highway Craftsman, the Deputy Building and Zoning Inspector, and so on. Please be assured that these layoffs are significant and the loss of these positions will be felt. In the event that additional funding becomes available, some positions may be restored on a priority basis. At this time I cannot speak to specific school department position cuts, but it is clear that with a $2.3 million dollar gap between the School Committee's request and my recommendation, there will certainly be a need to reduce positions. We are hopeful that early retirement will again be made available to cities and towns to assist us in this regard.

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