May 14, 2003

Mayor proposes $45.7 million budget

By KATE SPINNER

Staff writer

NEWBURYPORT -- Mayor Alan Lavender delivered his proposed $45,704,585 budget for the upcoming fiscal year to the City Council yesterday.

The proposed budget is approximately 4.3 percent higher than the total fiscal year 2003 budget passed by the City Council last June.

The 2003 budget, from which expenditures are currently being made, amounts to $43,831,545 including debt payments and departments that are funded through fees.

Next week the city council will begin reviewing all aspects of the budget to see where reductions can be made. The council is required by state law to pass the budget before June 30, which is the end of the 2003 fiscal year.

The City Council does not have authority to increase expenditures.

When passed by the council, the city budget will be funded primarily through local property tax assessments. The city estimates that state aid this year will amount to about $6.45 million, about $640,000 less than the state awarded last year.

That reduction in aid will result in cuts in spending for certain departments and may also result in higher taxes.

Water, Sewer and Harbormaster departments while not funded through the tax base, are funded through user fees. The proposed budget for fee supported departments represents an increase of $591,134 over last year's $5,530,193 fee-supported budget.

While proposed expenditures in the Water Department are lower for the upcoming fiscal year, both Harbormaster and Sewer Department fees are proposed to increase significantly.

The Harbormaster Department budget for 2003 amounted to $175,712. Proposed expenditure for 2004 amount to $215,758.

In the Sewer Department the approximately $2.6 million 2003 budget is proposed to increase to about $3.2 million in 2004.

Payments on debt for the High School and Library are also expected to increase from $1.4 million to $1.5 million.

The general operating budget that is proposed, outside of fee based departments and debt exclusion, amounts to about $38 million -- 3 percent, or about $1 million, higher than what was approved for the 2003 budget.

While city revenues from the state will be decreasing, mandated costs like municipal and employee insurance will increase.

The state has also eliminated charter school reimbursements and is proposing a recalculation of assessments for the Whittier Regional Vocational Technical High School. The new calculation, if passed by the legislature and the governor will result in a dramatic increase in the city's assessment cost. In fiscal year 2003, the city was assessed $173,675 for Whittier. This year the city is anticipating a $297,098 assessment.

Health insurance premiums for city employees will also increase by approximately 13.5 percent in the next fiscal year. Insurance for school and city employees will rise from a total of $3.7 million in fiscal year 2003 to $4.2 million in fiscal year 2004.

City retirement costs will increase in the upcoming fiscal year due to the early retirement of about 25 city employees this past fall. Retirement costs will increase from about $2 million in fiscal year 2003 to about $2.2 million in 2004.

Because some of the positions left vacant by retirees may not be filled in the 2004 fiscal year, the city will see some savings.

Education costs represent almost 50 percent of the city's proposed budget. The School Department is by far the most heavily funded department in the city.

For the next fiscal year, the proposed School Department budget amounts to approximately $18 million. The proposal is about $500,000 higher than what was approved last year for fiscal year 2003.

Other big budget departments are police, fire, public works, health and the library. Most of those departments will see reductions in the coming fiscal year.

The Police and Fire department budgets are proposed to decrease by between 2 and 3.5 percent, due to early retirement and cuts in operation expenses. The proposed budget for the Police Department is $2.97 million, compared to $3.03 million in 2003. The proposed 2004 budget for the Fire Department is $2.6 million, compared to $2.7 million for 2003.

The Public Works Department budget is proposed to decrease from about $1.4 million to about $1.3 million. The reductions result from the mayor's decision not to fill two full-time positions and cuts in other maintenance services.

The Health Department budget, proposed at $1.2 million will decrease by about $34,000, primarily due to reductions in solid waste and recycling costs.

The proposed library budget has been decreased by about $14,000 from last year, for a proposed total of approximately $1.07 million for fiscal year 2004.

Depending on the final state budget and how much will filter down locally, the city budget may change before the tax rate is set.

In the fall, the city usually comes up with a supplemental budget to fulfill funding needs not addressed in the budget that must be passed before the new fiscal year begins on July 1.

Over the next two months, the City Council will be holding a series of public hearings on the mayor's proposed budget. Taxpayers interested in shaping that budget should plan on attending those meetings which should begin next week.