The town administrator has recommended an operating budget for the pending fiscal year of more than $70 million.
The administrator, Anthony E. Schiavi, appeared before the board of selectmen and the finance committee Tuesday night, January 14.
Mr. Schiavi proposed a $70,856,022 budget for the fiscal year starting July 1. The recommended budget represents an increase of 3.452 percent over the current operating budget, which was approved by residents at Annual Town Meeting last May.
Tuesday marked Mr. Schiavi’s first annual budget message after being hired in October to replace longtime town administrator Thomas M. Guerino.
He told the selectmen and the finance committee that the Town of Bourne, in general, is in a good financial position with healthy reserves.
Mr. Schiavi added that Bourne is able to maintain a good core level of service to residents across all town departments. However, the increased budget, he said, can be attributed in part to higher fixed costs.
“The rate of rise in fixed costs is outpacing the rate of rise in our revenue,” he said.
He noted a 3 percent increase in health insurance, a 9.46 percent increase in the county pension assessment, a 3 percent increase in general insurance, and contractual increases of 3 percent and 2.75 percent for the town and the schools, respectively.
There is also a 14 percent increase in the town’s contribution to Upper Cape Cod Regional Technical School’s budget with enrollment of an additional 22 students from Bourne next fall, he said. Unknown, Mr. Schiavi said, is the cost of a new contract with the Bourne firefighter union, Local 1717. The current union contract expires on June 30.
Given those increases, Mr. Schiavi recommends keeping general government spending nearly level, with a proposed increase of 0.03 percent, or $5,689. That means no new staff or programs will be added in the coming year, he said, including an economic development director or a human resources director.
Mr. Schiavi explained that he takes a “requirements or outcomes-based approach” to budgeting for new town resources. He said that he needs time to “consider, study, and establish a set of requirements” for each of those positions before authorizing them.
“These requirements will serve to better inform me,” he said, “as to the exact expectations for each before adding personnel and taking on the associated costs with doing so.”
He said that his plan in the interim is to use contracted services to assist in the town’s economic development plans.
For the school side of the budget, Mr. Schiavi has recommended a 2 percent increase over the current budget. The school department, he said, is at the beginning of its budgeting process. The department will “need some time to analyze their needs against the backdrop of the current financial landscape,” he said.
While developing the budget, Mr. Schiavi said, he uncovered “a number of caution flags.”
Chief among them, he said, was the town’s reliance on free cash to balance the budget. The new budget proposes the use of $906,169 in free cash. That is less than the current budget, but still more than he would like to see used.
“It is my suggestion and goal moving forward that we work to end the reliance on free cash in the operating budget,” he said.
Mr. Schiavi also cautioned that he anticipates the current fiscal year as being the last for significant turnbacks contributing to the free cash account. Turnbacks are funds appropriated to departments that are not used and returned to the town’s free cash account at the end of the fiscal year.
Given an anticipated decrease in turnbacks, Mr. Schiavi said that the continued use of free cash to balance the budget “would present budget sustainability issues in a short amount of time.”
Finance committee member Richard A. Lavoie suggested the final budget indicate that the increase in contribution to UCT’s budget is an expense over which the school department has no control. Mr. Lavoie said the funding should be reflected in the budget as a town expense rather than as an education expense, which is how it currently appears.
“It makes it look like the increase in the schools budget is more than it really is,” he said.
Selectman Peter J. Meier pointed out that the Bourne School Committee is in the process of interviewing for a new school superintendent. Mr. Meier asked if the recommended school budget has enough money to cover the salary of the new superintendent as well as the contracted services of the interim superintendent, Dr. Perry Davis.
“Is there enough money to cover that,” Mr. Meier asked, “or will there be a reserve fund transfer, or are we looking at an article at Special Town Meeting, or even go into the next budget?”
Mr. Schiavi said he has not had discussions regarding the school budget yet. Mr. Meier’s question, he said, can be addressed once it is known that a person has been selected, when that person will start, and what the contract requires.
“There’s a number of ways to attack that,” he said.
Selectman James L. Potter asked that attention be paid to the operational costs of the new wastewater treatment facility off the bypass road in Buzzards Bay when it comes online. Mr. Potter said that the cost, at present, is being funded through the sewer enterprise fund.
The treatment plant has also been seen as an economic engine for the town, he said, so costs should be appropriated from other funding sources. Mr. Potter said it is too early to know what the operating costs will be, “but it’s something to look at.”
The recommended budget will be scrutinized by the board of selectmen and then delivered to the finance committee for its deliberation. The committee is expected to meet with department heads through the winter as its members work on the budget ahead of Annual Town Meeting, scheduled for Monday, May 4 and Tuesday, May 5.
Residents get the final say on the budget at Town Meeting. The new budget would go into effect July 1.