Town Manager Presents Recommended Budget

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At a joint meeting of the Board of Selectmen, the School Committee and the Appropriation Committee, Town Manager Norman Khumalo presented his recommended budget for Fiscal Year 2013. According to Khumalo, the budget is based on a realistic projection of revenues and expenditures and meets several established goals, such as investing tax resources based on priorities set by the boards and the community and spending within the town’s means while proposing a responsible level of taxation.

Khumalo said the rationale used to develop the budget was to control costs and spending, while preserving the town’s excellent services and educational system, and, at the same time, making progress towards Hopkinton’s strategic goals in services, education and infrastructure.

The total operating budget for FY2013 is $64,094,931 which represents an approximate two percent (2%) increase in the operating budget over Fiscal Year 2012. Percentage breakdown by department is as follows:

Education -         	$33,957,721	(53.0 %)
Employee Benefits - 	$  8,038,142	(12.5 %)
& Insurance
Debt Service - 		$  5,180,904	  (8.1 %)
Public Safety - 		$  4,193,330 	  (6.5 %)
Public Works -          $  3,822,140	  (6.0 %)
Sewer Ent. Fund -	$  2,953,791	  (4.6 %)
General Govt. -		$  2,239,832	  (3.5 %)
Water Ent. Fund -	$  1,876,049	  (2.9 %)
Keefe Tech -		$     516,441	   (.8 %)
P&R Ent. Fund	-	$     453,078	   (.7 %)
Health & Human Svs. -	$     353,711	   (.5 %)
Culture & Rec.	-	$     346,972	   (.5 %)
Comm. Pres. Fund -	$     162,820	   (.3 %)

Also discussed was the rationale for capital projects, which according to the presentation, was based on priorities and being able to continue to fund the Stabilization Fund. Individual capital requests for the coming year were not reviewed in detail, but will be discussed at future meetings as the budget process continues.

The subject of tax impacts to residents was also discussed and projections presented through Fiscal Year 2016. For FY2013, the tax increase represents a 1.6% increase in total over last year, but this percentage is only possible due to the excess levy capacity from last year.

After the presentation, questions and comments were taken from the board. Selectman Brian Herr said he thought the presentation was fantastic, even if he didn’t agree with all the numbers. Herr spoke in favor of a 0.0% increase, once again not using any of the 2.5% increase allowed by Proposition 2 ½. He was also not in favor of adding the $100,000 to the Stabilization Fund as recommended by Khumalo.

“Why would we need to tax the residents to put the cash in the savings account when we have $1 million in the savings account already?” asked Herr.

Herr also wanted to know why the town couldn’t spend the money already in the Stabilization Fund in lieu of raising taxes 1.6%. Suzanne Marchand, Interim Finance Director, explained that the philosophy was to level the tax impact and that not taking the 1.6% increase this year, while it would lower the tax impact for FY2013, would cause greater increases in fiscal year 2014 to almost 5%.

“The recommendation that I would make, is to level the tax impact and avoid the peaks and valleys,” said Marchand.

Also raised as a concern by the board was the total dollar amount in articles that goes before Town Meeting each year. Herr was concerned that all of the work to keep taxes low is lost if too many articles are passed at Town Meeting. Selectman John Mosher agreed, but had a slightly different perspective. While he said he would prefer more control over the articles, he was in favor of using the money in the Stabilization to help offset costs, rather than returning it to the taxpayers.

“If we can’t pay for the maintenance of the town, then we are fooling ourselves with a low tax rate,” said Mosher.

In the next step in the budget process, selectmen will review and recommend a budget to the Appropriations Committee by March 15, followed by a public hearing to present recommendations of the Appropratioins Committee by April 11.