While a proposed Fiscal Year (FY) 16 budget could possibly eliminate 39 full-time and seven part-time jobs and close one fire station, Town Councilors and Administrator Galen Stearns say job cuts are not the only way to bring about a desired $2 per $1,000 cut in the town’s tax rate.
Stearns presented a preliminary overview of the proposed budget in the Tuesday evening, March 3 Town Council meeting. Although one Councilor called the job cuts “madness,” others asked if there were other ways to cut the tax rate, and Stearns listed a few. But with collective bargaining units refusing to bargain, the town must look for every possible way to save.
Stearns reviewed the history of the budget, including the Dec. 2, 2014 request from the Council to do a budget based on a $2.50 per $1,000 cut. When that proved unworkable, Stearns said he asked the Council to look at $2 per $1,000 and they gave him the directive to go ahead.
The $2 per $1,000 dropped the number of full-time positions to be reduced from 49 to 39, Stearns said, adding, “But this is a work in progress.”
Stearns noted that the task was challenging and involved finding a cost-effective way to deliver town services while reducing but not eliminating positions.
A $2 per $1,000 cut would result in the following changes:
• Fire Department, eliminating 20 full-time positions, savings of $1,868,000, which would reduce the minimum staffing for each shift from 16 to 12; reducing overtime by $300,000; and closing one fire station;
• Police, 10 full-time positions, three part-time positions, one full-time to part time, a savings of $1,447,000; reducing overtime, a savings of $500,000;
• Public Works, eliminating two full-time positions and several road projects, a savings of $1,400,000;
• Emergency Management, reducing the budget by $11,482;
• Administration, reducing the budget by $102,000, including changing one full-time position to part time;
• Health, reducing the part-time position from 16 to 12 hours, a savings of $16,000;
• Information Technology, eliminating one full-time position, a savings of $91,000;
• Human Services, reducing one full-time position to part time, a savings of $68,600;
• Assessing, reducing staff hours, a savings of $91,000;
• Finance, eliminating one full-time position, a savings of $119,000, and reducing the hours of part-time positions;
• Tax Collector, eliminating two full-time positions, a savings of $127,000;
• Derry Public Library, eliminating one full-time and four part-time positions, a savings of $200,000;
• Taylor Library, reducing staff hours, a savings of $30,000;
• Planning, one full-time position, $44,000; and
• Town Clerk, reducing the hours of two part-time workers, $30,000.
The total savings from these reductions would be $6 million, and would result in the elimination of 39 full- and seven part-time positions, Stearns said.
But there are other options, Stearns emphasized. The Council could vote to change the percentage of its Fund Balance policy. Currently, the policy mandates that the town retain 12.5 percent of its Unexpended Fund Balance, and last year Derry was able to retain $11 million. If they changed the percentage to 10 percent, they would still retain $8.6 million, but contribute $2,778,000 toward reducing the tax rate.
The Department of Revenue Administration recommends keeping the retained portion between 8 percent and 17 percent, Stearns said in answer to a question from Councilor Tom Cardon. Retaining $8.6 million is still “a pretty healthy balance,” Stearns said.
Other cost-savings could come from reassessing utility properties, reassessing fees or regionalization of services, Stearns noted.
Councilor David Fischer observed that changing the percentage to 10 percent would “cut in half the number of positions we were looking to eliminate.”
There are other miscellaneous savings devices, Stearns said in response to a question from Councilor Michael Fairbanks, but they were not brought forth with this proposal.
One of them probably won’t be “reduction in compensation” or pay cuts to preserve jobs, Stearns said in answer to another question. As previously reported in the Nutfield News, he sent a letter to the town’s unions asking them to meet with him to consider these, but as of the March 2 deadline, none of the unions had agreed to do so.
Councilor Phyllis Katsakiores urged her colleagues and Stearns to find another way. She asked Stearns if he had called the department heads in and personally discussed their needs with them.
Stearns said he had not personally discussed the needs with the department heads, but Chief Financial Officer Susan Hickey had sat down with them and discussed where savings and cuts could be made.
“This is your decision, not their decision,” Katsakiores said, to which Stearns responded that these were the savings that came from the department heads.
“I want them to come to us and say what this will mean to the town,” Katsakiores said. When Stearns said that had not been the directive of the Council, Katsakiores responded, “Then we left out the most important part.”
Stearns emphasized that the recommended cuts did come from the department heads, via Hickey, to him.
Katsakiores also asked what the cuts would mean to Auburn and Chester, towns Derry is contracted to serve. Stearns said that would no longer be possible with a reduced fire staff.
“How much money does that bring in?” Katsakiores asked of the contracted towns.
“In the neighborhood of $400,000,” Stearns said.
But Katsakiores was more concerned with Derry. “How can you take care of the needs of the citizens?” she asked Stearns and her fellow Councilors. “If we think we’ve got potholes now, when this goes into effect we’ll have sinkholes.”
Katsakiores concluded, “These cuts are too drastic, and I will not support them. It’s time we stop this madness.”
A formal presentation on the budget will be held in the Tuesday, March 24 meeting, followed by a public hearing April 21 and a second hearing and adoption May 5.