Lenox Town Manager Proposing $27.7M Budget for FY16
 Town Manager Christopher Ketchen says the town has enough reserves and should be looking to invest more in long-term capital projects. |
Ketchen presented the preliminary budget to the Board of Selectmen on Wednesday night. He says the plan is for a 1.23 percent increase in total spending.
"My instructions that went out in the fall were for a level-service budget, noting there are inflationary pressures in maintaining services," he said.
The largest expenditure is the school system, which Ketchen estimates will have a budget of $11.7 million. It should be done at the end of the month, Ketchen said. General government is budgeted at $3.6 million and enterprise funds are expected at $3.9 million.
Most of the revenue will come from real estate taxes of about $12.5 million. Other revenue includes $2.9 million in state aid, $2.8 million in other local revenue, and $3.9 million in enterprise accounts.
"It is a very conservative local revenue assessment," Ketchen said.
The local revenue includes items such as meals and hotel taxes, which the Selectmen say are "at risk" each year. Ketchen estimates low and any excess at the end of the year rolls into reserves for capital purchases.
"We think of that free cash as being relatively designated toward capital," Chairman Channing Gibson said, adding that the excess revenues aren't being used for operations and is being spent wisely.
Ketchen said the town has been building reserves for a number of years and can now focus even more on capital repairs. He said an "appropriate" reserve amount is between 7 and 13 percent of a budget. The town will surpass the 13 percent this year and should plan more infrastructure investments, he said.
"The town is no longer in a defensive posture in respect of reserves," Ketchen said. "The town's reserve situation is strong."
The town is boasting some $3.6 million in reserves. It is also one of the only towns in Berkshire County putting money aside long term for "other postemployment benefit liabilities" (health benefits expected to be paid out over the lifetime of employees). The OPEB is now part of the town's budget.
"I'm comfortable with us capping our reserve capacity and moving forward to focus our efforts in other areas," Ketchen said.
The town has been saving up for a new fire truck, which the annual May town meeting will be asked to purchase.
Overall, Ketchen expects minimal impact on the average tax bill. But that depends on how revenues play out in the next few months.
The lack of a tax increase is what Selectman David Roche says is the reward residents get for "giving up the town" during the summer. Tourism has been increasing and finding parking has become tough during the summer, he said, but for any inconvenience, the town's finances are in better shape than other towns.
"We put a burden on the local residents," Roche said. "The local residents should be rewarded for their patience and understanding of letting the tourists come in."
The tourism dollars aren't just luck, Gibson said, but part of an effort to market the town. Lenox spends money each year to support events and to advertise. The result is that about 40 percent of all hotels and motel stays in the Berkshires are in Lenox.
"It is an important budget item for us to stand behind," he said.
While this year's budget calls for a minimal increase and reserves are looking strong, Ketchen said there are long-term challenges for which the town needs to prepare. The most tangible is that the reimbursement from the Massachusetts School Building Authority for construction on the middle and high school will end in fiscal 2018. That results in a revenue hole of $300,000.
Farther down the road, the waste-water treatment plan will need some significant capital repairs and upgrades, which needs to be carefully planned, Ketchen said.
Meanwhile, a number of the town's most knowledgeable staff will be up for retirement and Ketchen doesn't want to lose their institutional memory. The town is being proactive in succession strategies to pass on the knowledge that improves services, Ketchen said.
The Berkshire County population is dropping, which could pose threats to Lenox. Only 19 children were born to Lenox families in 2014 and, overall, the population is 17 percent less than what it was 30 years ago.
"The school population continues to decline," he said.
Ketchen is still waiting for Berkshire Health Group to finalize health insurance numbers, and will follow the state budget process, and work with the Community Preservation Committee and the School Committee on their budget requests.
"Our budget is not just a math problem, it is a way we prioritize services," he said.
Tags: fiscal 2016, municipal budget, municipal finances,
