February 6, 2020
Dear Citizens of South Thomaston,
During the week of January 27 – February 1, the Selectboard and Budget Committee conducted a series of meetings to review the Town’s financial condition, the budget submittals by our department heads and vote on the budget for FY2020. What follows is a summary of FY2019 results and the challenging, but necessary budget that will appear on the Town Meeting Warrant.
Total Town expenditures for FY2019 were $1,368,944 versus the budget of $1,369,908 The final result included some significantly higher than planned expenditures. Chief among these was spending on the Ambulance Service. In 2019 the service received and acted upon 279 calls a 52% increase over 2018. The frequent breakdowns of the ambulance caused more chargeable assist calls to other services; finally, on site coverage has been expanded to 7days/week. On the positive side, billings of $89,214 were well above the forecast of $45,000 and failure to pay write-offs were less than $12,000. Finally, we made an initial payment for the new ambulance of $55,305; the balance of $144,559 will be paid upon delivery in April from Reserves authorized by Special Town Meeting on September 25, 2019.
In other departments, disposal volumes and fees in the Demo Debris facility resulted in minor spending overage; the larger fees will be in the 2020 budget. We also spent more than planned on computer/network service calls which are prompting a more detailed review of failure causes and the terms and value of our service contract.
As every taxpayer most certainly knows, the combination of Town spending, the County Assessment and a much larger that expected assessment from RSU13 resulted in an increase in the millage rate to $14 per thousand dollars of property evaluation. As you all will see for FY2020 this upward trend continues and, in fact, accelerates.
The Selectboard Budget Guidelines to our department heads were for wage and salary increases of up to 3%, to maintain our assets and service levels and to be prudent in new spending initiatives. While these guidelines were generally adhered to, the resulting operating budget of $1,584,843 is over 2019’s budget by $214,935 or 15.6%.
There are some significant and urgent funding requests in this budget:
The Island Road reconstruction project is funded with a $330,000 grant from Northern Border Regional Commission, a $10,000 grant from the Island Institute Shore-Up Maine, and $91,000 from a combination of Reserves and appropriation.
The Selectboard and the Transfer Station Board are requesting formal establishment of a Transfer Station Renovation Reserve using the funds – $153,479 – which we received when the Town withdrew from the Municipal Review Committee and began transferring Municipal Solid Waste and recycling to “Ecomaine” This action has no impact on the monies to be raised from appropriation.
The budget allocates $10,000 toward the resurfacing of the tennis and basketball courts, however we are also seeking a matching grant to fully fund this initiative.
Debt Service is increased by $35,129, the first of four “paybacks” of the funds used from reserves to purchase the new ambulance.
The Fire Truck Reserve will be funded with $46,000 from appropriation. The other transfers to reserves are minor and routine.
The Ambulance Service Budget is $216,969 up from last year’s budget of $185,827 but less than 2019 actuals of $231,778. This year there be a full year of seven day on site coverage; we expect call volumes to continue to rise but we should make fewer Advanced Life Support Requests from Rockland and certainly will have lower vehicle maintenance costs when the new ambulance is put in service in April.
The County Assessment for FY20 is $300,811 up 1.48% from last year; RSU13 has projected an assessment of $3,326,155 up 7.1% from last year. The RSU13 figure will be uncertain until its budget is voted on in June.
The unassigned fund balance (surplus) at year end was $590,681 much lower than last year when we used $150,000 to hold the “mil rate” to $14/1000. In 2019 we had an overachievement of revenues, but we did not generate the level of under budget spending as in the recent past. This inhibits our flexibility going forward.
Summary and Impact:
At Town Meeting, the Board will be asking the Town to fund the budget as presented with an appropriation of $570,875 up from last year’s $503,186. The balance of the total of $1,584,843 will come from revenues, application of reserves and use of surplus. At this time we are estimating that the 2020 “millage rate” will land at around $15.74/1000.
The financial and taxpayer impact of this budget is not what the Board would have liked. However, we have seen this coming for two years and tried in our meetings and other communications to warn that a significant number of urgent, high expenditure items were coming this year. And, so they have. The primary investments in this budget are overwhelmingly directed to health, safety and the preservation and upkeep of our assets. In the near term, and for the foreseeable future, “nice to have” investments are going to be harder to fund.
Walter Reitz, Chairman
Cheryl Waterman, Member
Jan Gaudio, Member