Finance board to provide ‘not-to-exceed’ figures

Town and school budget planners will be given spending levels that they shouldn’t surpass.

The Board of Finance decided during its Aug. 25 special meeting to provide the Board of Education and Board of Selectmen with a “not-to-exceed” number for the 2017-18 budget proposals.

The board agreed to have Chairman Jeff Rutishauser work with Chief Financial Officer Anne Kelly-Lenz to create a model that starts with a 0% mill rate increase and adds and subtracts non-operating changes to come up with how much funding would be available for the selectmen and education boards’ operating budgets.

Non-operating changes include non-tax revenues, debt service and additional revenue from the grand list increase of 50 basis points, Rutishauser told The Bulletin.

Board of Finance member Richard Creeth believed the word “guidance” was misleading and suggested a “not-to-exceed number” be used instead.

Creeth said there are two aspects of the not-to-exceed approach — “one is not to exceed, and the other is we don’t expect [the selectmen and education boards] to just come to that number — we expect [them] to build up the budget based on the factors that drive the budget.”

Enrollment is one of those driving factors, said Creeth.

Rutishauser noted that student enrollment is declining at about 100 pupils or 2.3% a year, while the cost of school employees’ contracts are up around 3%.

“But when you have senior teachers retiring and junior people being hired, you get an average increase of less than that — of about 2.5%,” he said.

A 2.5% per-staff increase and a 2.3% student decrease, Rutishauser said, “that comes to around 0% to 0.2% as a target.”

With staff accounting for about 80% of the school budget, the other 20% would be would helm to a flat number for operating — “so you can get to around a zero- or negative-percent increase,” said Rutishauser.

State money

“The debt service increase over last year’s budget is about $1 million,” said Rutishauser said during the finance board meeting. “However, there was improvement in the actual over the budget, so the year-over-year is more like $700,000.”

At the state level, Rutishauser said, the 2015-16 and adopted 2016-17 budgets showed the town budgeting 1.46% in educational cost sharing.

“We dropped up to $250,000 off of that before the state started their action, which got us down to around $1.2 million,” he said, “and then the state surprised us down to $665,000.”

The town expected nothing for revenue sharing from the state, said Rutishauser, but “they surprised us with a $380,000 from the sales tax sharing, which is an offset from the $665,000 off of educational costs that we did expect.”

Once the mill rate model is finished, the finance board will decide on a maximum not-to-exceed number before sharing it with the selectmen and education boards.

The finance board’s next meeting is scheduled for Tuesday, Sept. 20, at 7:30 p.m. in Room B of Town Hall.