The budget that Town Administrator Galen Stearns will present to the Town Council on April 21 is poised to reduce the tax rate by $1.01 per $1,000, while leaving essential services essentially untouched.
While it doesn’t provide for the $2 per $1,000 cut requested by the Town Council, it will if approved mean a savings of $250 per year on the taxes for a $250,000 home, according to Stearns’ introductory memo.
Highlights of the proposed FY 2016 budget include proposed expenditures of $36,249.090, a .8 percent drop from FY 2015’s $36,547,738; a 2.2 percent increase in projected revenues, from $12,240,074 in 2015 to $12,509,699 for 2016; and an increased use of fund balance, from $1,011,831 in 2015 to $2,781,105 in 2016, an increase of 183 percent.
Stearns wrote in a memo that some of the savings were effected by the following:
• Transferring $414,000 of hydrant rental charges from the town general fund to the water users.
• A $200,000 smaller capital outlay for Public Works; and
• A $345,000 savings in the Fire Department by not filling four vacant positions.
There are no personnel cuts to the Police Department under this plan and both libraries, Taylor and Derry Public, will continue to be funded, Stearns said.
In an e-mail Friday, Stearns said that eliminating the four vacant fire positions would not result in the closure of a station.
Also, he wrote, the elimination of the positions by attrition would “possibly reduce overtime, as with these positions eliminated, we are not filling them with overtime. This reduces the shifts to 15 per shift instead of the current staffing of 16 per shift,” a permanent reduction.
Stearns has responded to residents’ call for more business and industry by including a position of Economic Development Director at a starting salary of $115,000.
Stearns said the $200,000 decrease in Public Works is from cutting back on some of the work, including “maybe a little less paving” and miscellaneous savings.
The working budget uses more of the Fund Balance than is customary for Derry, but Stearns said the current Fund Balance is “hovering near $11 million” and it will not hurt the town to use some of it to reduce taxes.
“It will not put us in a bad situation,” Stearns said. “We can make it up, perhaps with utility reassessment.”
The Council originally asked Stearns to craft a budget based on a cut of $2.50 from the tax rate. When the changes from such a budget appeared to be drastic he was asked to work out a scenario based on a $2 cut. Residents protested that scenario because it would have resulted in several personnel cuts, primarily to police and fire, and also to the funding of nonprofit agencies.
At the April 7 Town Council meeting, Councilor David Fischer, the originator of the $2.50 cut concept, said, “There is a drastic difference between this proposed budget and the ones we’ve seen in the past.”
Fischer said he had expected something along the lines of a “pre-budget hearing.” He added, “I am very disappointed we did not get that discussion tonight.”
Councilor Mark Osborne said, “We received our ‘budget books’ this week and the budget in there is unrecognizable.”
Councilor Al Dimmock said, “Galen has proposed a budget and not discussed it with the Council. He should give us insight as to where he’s coming from.”
Stearns responded, “The Council asked me to present the impact of a $2.50 cut, then a $2 cut. The Town Charter requires me to turn in the budget I feel is the budget for the town.”
Stearns said the budget he plans to present is “reasonable for the town and meets the expectations and needs to operate the town.”
He reminded the Council and audience that on April 21, they have the opportunity to adjust the working budget up or down.
The public hearing on the budget will be held in the April 21 Council meeting, and the Council will vote on it May 5.