Towns try to ride out recession with flat 2010 budgets
By HENRY METZ
The biggest financial challenge facing area towns is figuring out how to continue providing the level of services residents have come to count on without raising taxes.
As selectmen, school boards and budget committees pour over their figures for 2010, they are finding the dismal performance of the regional and national economies over the past 18 months is taking its toll on budgetary decisions at the local level.
“The focus is always going to be on what people’s expectations are in terms of the level of services,” said Burton Reynolds, New Boston’s town administrator.
“We try to meet those expectations, but it’s a challenge to look and say, ‘What are we not going to do this year?’”
Challenges are also being faced by those in the private sector, as local businesses look for ways to attract customers even as their revenues are down.
“What we’re seeing is that it’s been tight for a lot of our businesses on Main Street,” said Robbie Grady, executive director of the Goffstown Main Street Program. “But I strongly believe that the businesses who survive this downturn are the ones who continually find ways to reach out to their customers. You can’t not advertise; you can’t not market yourselves. If anything, in this economy, you’ve got to reach out more.”
On the municipal side, service calls to the police department are up, as are welfare assistance calls, explained Reynolds, citing just two examples where residents’ needs intersect with a town’s ability to provide.
As the unemployment rate hits historic highs, the ability of towns to generate revenue is affected.
“Everywhere we look, revenues are down,” said Reynolds. “Motor vehicle registrations are down, recycling revenue is down. As towns, we’re very concerned, too, about the state and its ability to provide assistance to us.”
In the past, Reynolds said, towns have been able to count on state assistance for such things as welfare programs, contributions to the state retirement system for municipal employees and money for road improvements.
“In highway block (grant) money, for example, the state might say, ‘Sorry, we can’t give that money to the towns because we’re having difficulty ourselves,’” he said. “We’re finding that the state is waffling on or has turned over to the towns what they traditionally assisted with in the past.”
So what’s a town administrator to do?
In Goffstown, the plan is to keep spending at 2009 levels, explained Town Administrator Sue Desruisseaux, even though needs have outpaced those limits. In the area of welfare, needs are high and requests for assistance are up in this economy, said Desruisseaux. As of the end of November, the town had overspent its welfare budget by $8,000. When preparing for the 2010 budget back in August, she said, a request was made to increase the welfare budget by $7,000 for 2010.
“The 2010 budget is still being deliberated by the Budget Committee,” said Desruisseaux.
“At this time, the Budget Committee has cut $144,500 from the 2010 operating budget. At this moment in time, the Budget Committee’s 2010 budget is about $37,000 over the default budget.”
Administrators in area towns seem to agree that operating budgets are less flexible due to such things as contractual obligations entered into either before, or just as, the recession took hold.
New Boston’s operating budget last year was approximately $3.8 million. Reynolds said he anticipates it will be at about $4 million this year. Much of that budget, he said, is being driven by costs that are contractual in nature, such as a 16.4 percent increase in health insurance premiums for the town’s 24 full-time employees.
“If you’re going to absorb that, then what things are you going to cut,” asked Reynolds.
Even in good economic times, capital expenditures have historically been an area where towns have thought long and hard before committing to big-ticket items.
“We spend a lot of time on planning for our capital expenditures,” said Reynolds. “We’re very diligent about how we go about handling our long-term needs.” And capital expenditures are one area where area towns may take advantage of federal economic stimulus funds for assistance.
“Although this is very, very preliminary, we’re looking at possibly obtaining a grant for making energy improvements at the town hall,” said Reynolds. “We’ll have to see what it looks like. If it’s possible, we might combine the grant money with money from the capital reserve fund.”
The school budget in Bow has been affected as well.
“We are looking at trying to develop zero-impact level-funded budgets,” said Superintendent of Schools Dean Cascadden. “We need to trim all of our budget lines and are looking very closely at all staff positions to see where we can make savings.”
At this point in time, the Bow School District is looking at laying off seven teachers, which would increase class sizes, but save the district money.
In Goffstown, the economic downturn has also affected services at the public library. According to library director Dianne Hathaway, the board of trustees made the decision to reduce the 2010 budget by 17 staff hours, which will be reflected in a loss of four hours in the library’s schedule, effective Jan. 4. What that means for library patrons is that the library will be closing at 5 p.m. on Mondays and Thursdays, as well as reducing programming because remaining staff simply can’t absorb the additional workload.
“Unfortunately, some of these staff hours hurt our salaried staff members as they absorb some of the Saturday hours and tasks that must be completed regardless,” said Hathaway.
In the private sector, Main Street’s Grady believes that innovation will help area businesses weather the current economic storm.
“Our small business owners have to be tough and resilient, and fortunately we have some tough and resilient business owners,” she said. “A huge segment of the national population is looking at the green economy, sustainability, and buying things locally, and things that are created locally.”
It’s in this area where businesses in the Main Street district can really flourish, said Grady. “A lot our businesses have their own stories to tell,” she said. “I think consumers, in general, are going to be more open to supporting locally-generated goods and services. In the end, that will make a huge difference.”