Despite rising retirement and health costs and a drop in hotel/motel tax revenues, Danvers officials believe they can maintain existing services next fiscal year under a $100.6 million spending proposal recently approved by selectmen.
The fiscal 2014 plan, which now goes to the Finance Committee, would mark the first time the town’s annual budget exceeded $100 million. The spending plan does not include the $45 million Electric Division budget.
“It’s a fiscally conservative budget, a tight budget,’ said Town Manager Wayne P. Marquis. “But people in Danvers expect a certain level of services and we’ll be able to deliver on those expectations.”
The proposed budget overall is up 2 percent, or $2.15 million, over the current fiscal year, which ends June 30.
It includes $34.4 million for the schools, an increase of 3.19 percent over this year; $26.2 million for general government, up 1.64 percent; and $1.25 million for the library, up 2.6 percent. The overall budget also includes the water and sewer departments, and the costs for employee benefits and pensions.
Marquis said the town is continuing its return to budget stability after several difficult years, particularly in fiscal 2009 and 2010, when Danvers had to eliminate six general government positions, including two police officers and two firefighters, due to declining state aid and other revenues.
“We are happy those days are behind us,” Marquis said.
The proposed budget would maintain all existing jobs, and add a few. The School Department would add 5.5 teaching positions, and the town manager would have the option of adding a second part-time parking clerk.
Despite that small growth, Bill Clark, the selectmen chairman, called the plan “very, very tight.”
“We are very fortunate that we have a tax base that allows us not to have an override or a debt exclusion,” he said of voter-approved permanent and temporary property tax increases. “We’ve never had either one in Danvers, nor are we this year. It’s a balanced budget. But we still are not where we were in 2008 as far as state aid [is concerned] . . . and we are still down two firefighters and two police officers.”
The proposed budget, with recommendations from the Finance Committee, will go before the May 20 annual Town Meeting.
Marquis said the budget for retirement costs is up by $437,414, or 10.9 percent, as the town is trying to replenish its pension fund, the value of which dropped in the economic downturn of 2008-09. The infusion would put Danvers back on track in its long-term effort to meet its unfunded pension liability, he said.
Another budget pressure is health care costs, which are up 5.5 percent, or $490,000. The increase came despite cost-cutting changes made in the town employee health insurance program last year, and a new state law that requires eligible retirees to enroll in Medicare.
Marquis said he had hoped for a smaller increase, but he said the health care budget would probably have gone up more had it not been for last year’s changes.
Also putting pressure on the town’s budget is the anticipated $300,000 drop in hotel/motel revenues, to $1.32 million. “It’s disappointing,” Marquis said. “We are hoping this is a short-term situation, but only time will tell.”
A possible explanation for the revenue drop, Marquis said, is the greater number of homeless families placed by the state in Danvers motels last fall. Guests who remain for more than 90 days are not required to pay a lodging tax. That number has since fallen, but the town must make its revenue forecast based on data from the first half of the fiscal year.
The town will also have to do without $700,000 that its Electric Division had contributed in fiscal 2012 and 2013 in recognition of the energy-saving features included in the high school building project. With the project set for completion this summer, those payments come to an end, Marquis said.
On the plus side, the town anticipates an increase of about the same amount — $700,000 — in its state school aid, with general government aid to remain at current levels.
Danvers would stand to receive another $300,000 in state aid in the event Governor Deval Patrick’s $1.9 billion tax increase proposal takes effect, but Marquis said that is not included in the proposed budget.
Marquis said the town also is projecting a $38,388 drop in utility costs, much of it resulting from the conversion of the high school heating system from oil to natural gas.
The new positions in the school budget would meet needs identified in the district’s strategic plan, according to Superintendent Lisa Dana.
Among them are four special education positions — a basic skills teacher, a speech and language teacher, both part time at the elementary level; and a part-time social worker and full time intervention specialist, both at the high school.
Also proposed are a social studies teacher and a science teacher, both at the middle school; and an English language learner teacher at the middle and high school, all full time.
The School Department had to trim $55,000 from its draft budget to reach its final spending figure agreed upon with the town, but Dana said she is pleased with the final product.
“It’s always tight . . . but this is a solid place for us to be in meeting the needs of our students,” she said.