Four-board budget prep begins in Amherst

Staff Writer
Thursday, October 19, 2017

AMHERST — Rising health insurance costs and an anticipated flat level in state aid means a limited opportunity for Amherst to add new staff or enhance existing programs in next year’s municipal, school and library budgets.

Unlike a year ago, when Town Manager Paul Bockelman described conditions as allowing a “steady-as-she-goes” budget to maintain current services, he told representatives at a “four boards” meeting Oct. 12 that he anticipates more challenges in the coming months.

“This year I’m characterizing it as a ‘grit-our-teeth, we’re-going-to-get-through-it’ budget,” Bockelman said at the joint meeting of the Select Board, Finance Committee, School Committee and trustees of the Jones Library.

The four boards meeting serves as the informal kickoff of budget preparation, with the Select Board and Finance Committee to soon issue budgetary guidelines and directives.

Under the Town Government Act, Bockelman has to present his budget proposal to the Select Board on or before Jan. 16, while Superintendent of Schools Michael Morris and Library Director Sharon Sharry will unveil their budget plans for the regional and elementary schools and Jones Library system before their boards later this year, or in early 2018.

The budget preparation begins a week after a report from a consultant that the Amherst Fire Department should add at least two full-time firefighter/paramedics to handle a growing number of calls, with salaries and benefits anticipated for those positions at around $200,000.

Yet that amount is higher than a projected $138,347 gap in the fiscal year 2019 budget between projected revenues and projected expenses.

Preliminary calculations shows revenues growing by 2.6 percent, or $1.98 million, from $77.42 million in the current year to $79.4 million next year. But an increase of 2.7 percent, or $2.12 million, is needed, bringing the combined municipal, schools and library budget to $79.54 million.

Bockelman said there is no intention to seek a Proposition 2½ tax-cap override from voters or to use financial reserves to plug the gap.

Despite some pessimism, Bockelman and Interim Co-Finance Directors Sonia Aldrich and Claire McGinnis said that economic growth is showing a favorable trend. Reserves, the money held in the stabilization and free cash accounts, when measured as a percentage of the general fund budget are increasing. The town has $12.7 million in those accounts as of July 1, or about 16.5 percent of the total budget.

Over the past decade the municipal staff had dropped as low as 188 in fiscal year 2011, but has now rebounded to 202 employees. The fire department, though, only added one position over the last decade.

Bockelman said he wants to see spending on capital needs rise from 8.5 percent of the operating budget to 9 percent.

The biggest concern is health insurance. The town continues to wrestle with a critically low balance in its Amherst-Pelham Health Claims Trust Fund, the self-insured trust that has existed since 1986. The fund is paying out more than it is taking in from employee contributions and town payments. The fund dropped from $7.9 million in fiscal 2015 to $2.06 million as of Aug. 31.

In response, officials raised premiums.

Aldrich said that large claims during the last three years caused the fund balance to plummet as expenses outpaced revenues.

Bockelman said health insurance will remain a focus because of its potential impact on town finances. “Obviously the trend line doesn’t look good, it isn’t good,” Bockelman said.

As budget development begins, these challenges will be faced.

“It will be hard work to make hard decisions for all of our committees,” Bockelman said.

Scott Merzbach can be reached at smerzbach@gazettenet.com.