In a 6-1 vote the Derry Town Council removed another $235,625 from the working budget for 2015, a move that Acting Town Administrator Larry Budreau called a “travesty.”
The action took place as part of a budget discussion listed on the agenda, and was the result of a proposal by Councilor David Fischer. Chairman Mark Osborne, Fischer, Thomas Cardon, Michael Fairbanks, Joshua Bourdon and Albert Dimmock voted to remove the funds, with Phyllis Katsakiores the dissenting vote.
The funds represented money set aside for possible raises when the five unions that are working without a contract reach a settlement with the town.
Fischer introduced his proposal by reminding the Council that he thinks the budget process should be year-long. “We started two months ago, and I have concerns and reservations about that process,” he said. “Can we make improvements for 2016? We’re a $37 million business. If a business that big doesn’t evolve, it will go out of business.”
Fischer recommended that budget goals be aligned with the town’s Master Plan. “If we don’t talk about the Master Plan, we’re being reactive instead of proactive,” he said.
Fischer said in particular that he has expressed concern about, and requested information on, town employees’ salaries. “Town employees exist to serve the residents of the community, and not vice versa,” he said.
His most recent proposal was not to cut staff, not to cut services, but to reduce the $235,625 Budreau had built into the level-funded budget to provide raises to the members of the five disputed unions, should their contracts be finalized.
“Employees are valuable,” Fischer said. “But I don’t think we should be budgeting for raises that are not approved.”
“This would be a travesty,” Budreau, who is also Human Resources Director, said. “The five union contracts are unsettled, and many of these employees have not had a raise for four years. We have to be able to negotiate with them in good faith.” Budreau added that the town has always funded the anticipated costs of a settlement.
When Fischer said he thought Derry salaries were “skewed” by the surrounding towns, Budreau said it was true but not in the way Fischer meant. “Manchester would pay someone in a similar position more because it’s a bigger town,” he said. “A town of 5,000 people would pay less.”
He added that in the past decade the town had streamlined services and reduced the number of employees.
“This is more a procedural discussion than substantive,” Osborne said, to which Budreau replied, “It is extraordinarily substantive.”
In addition to keeping workers at the same pay they’ve had for up to four years, the removal of the money would wreak havoc under the town’s tax cap, he and Chief Financial Officer Frank Childs said. Budreau explained it this way: “Suppose it costs $100 to run the town, and you budget $90. Next year you find you need $100. But the tax cap limits you to 2 percent, so you can only budget $92.”
If that happens, essential services will have to be cut, he and Childs warned.
Childs said, “This is the reason we’ve included projected raises in the past. This is already a lean budget. What you’ll be facing next year is cuts in services and delivery.”
Osborne countered, “I heard this same thing last year and we’re doing all right.”
The “all right” comes in part from increased revenue, Childs countered, including more motor vehicle registrations and more Rooms and Meals reimbursement. The two revenue streams total an additional $650,000, in this year’s budget.
“Also,” he said, “the department managers do an outstanding job of keeping expenses down.”
Katsakiores said, “Dave’s proposal sounded good until I listened to Larry and Frank. Before we do this, we need to sit down with these people and understand the impact.”
“It is extremely important,” Bourdon said, “to understand the implications of the tax cap. If we go forward, we’ll have to live with the consequences.”
“I wish I had a crystal ball,” Fairbanks said. “It’s a tough decision.”
Dimmock said to Budreau, “You’re asking us to put money to something we haven’t agreed to yet.”
The vote was 6-1 in favor of the reduction.