Finance Director concerned about budget impact of downshifted pension costs
Police receive $25,826.25 in grants, draft K2 drug ordinance
July 14, 2011WOLFEBORO — During his monthly financial report at the July 6 Board of Selectmen meeting, Wolfeboro Finance Director Pete Chamberlin warned the board about the budget impact of pension costs being downshifted to town as a result of the recently-passed pension reform bill and budget.
HB 2 eliminated the state's share of employer contributions to the New Hampshire Retirement System for teachers, police, firefighters and other employees. In the past, state pension contributions had been reduced and deferred, but this bill permanently removed state pension support.
Chamberlin reported that the new rates, effective July 1, were significantly higher than what was budgeted for 2011 and approved by voters. For Group I employees (the group that includes teachers as well as general employees), the town contribution rate increased from 10.125 percent of salary to 11.09 percent, but for Group II employees the increase was much higher. For police, the rate increased from 15.625 percent to 25.57 percent and for fire department personnel the rate increased from 19.3 percent to 30.9 percent.
According to Chamberlin, the net half-year cost of these increases will be $23,948 additional for police and $18,277 more for fire department personnel. The 2011 impact was less than it would be because the town had received some credits. For 2012 Chamberlin is estimating the full-year impact at $124,000 additional.
Employees are also paying a larger share of pension costs as well, Selectmen Linda Murray pointed out.
Town Manager Dave Owen said the estimated additional compensation cost has to be made up. He said he has asked department heads to find areas to cut to cover the increased pension expense. One option is to defer hiring for open positions, keeping them unfilled longer. Both police and fire departments currently each have two open positions.
Increased pension costs will also have to be factored into the 2012 budget, which will have to carry the first full year at the higher rates. The Budget Committee plans to begin 2012 hearings soon.
According to Chamberlin's Monthly Expenditure and Revenue Reports through June, the General Fund showed an expended-to-date balance that was 44.46 percent of budget. The expended-to-date for the four Enterprise Funds at the halfway point were as follows: Water Fund, 48.28 percent; Electric Fund, 46.35 percent; Sewer Fund, 52.1 percent and Pop Whalen Fund, 41.52 percent.
If outstanding purchase orders are added to paid expenses, the expended-to-date total rises to 51.95 percent.
Murray said she was concerned about the 51.95 percent, given that the year-to-date figures include only 25 pay periods instead of 26. Owen said that the year-to-date figures do not include the capital transfers approved to cover winter cost overruns in the Public Works budget, but assure the board that he and department heads would keep a close eye on expenses against budget and institute a spending freeze if necessary.
Budget guidelines for 2012
Town Manager Owen proposed to the board setting guidelines for 2012 budgets that call for no increases from 2011 except where contracts, legal requirements and fuel costs dictate otherwise.
Department budgets are due to the Board of Selectmen by Aug. 31.
Murray said she would rather set the guideline at a one percent decrease from 2011, rather than call for flat budgets. Department heads should be asked to cut wherever possible to offset increases, such as fuel.
Selectman Dave Senecal cautioned against cutting too much. "You do need to provide services," he said.
Selectman Chair Sarah Silk pointed out that department heads can ask for exceptions to the guidelines if needed. She agreed with Murray that "everyone needs to make adjustments."
The board voted 4-0 to adopt the one percent decrease guideline.
Police grants, drug ordinance
Wolfeboro Police Lieutenant Dean Rondeau presented for the board's acceptance eight grants totaling $25,826.25. Most of the total – $21,247.50 – came to support four community policing programs: DWI/DUA patrol support of $5,335; pedestrian patrol support of $5,456.25 and speed enforcement patrol support of $5,456.25 (all three from the state Highway Safety Agency); plus $5,000 from the Attorney General's office to support enforcement of underage drinking laws.
The department was also awarded four smaller grants totaling $4,578.75: $1,485 to support Enhanced DWI Hunter patrols; $1,237.50 for Operation Safe Commute patrols; $156.25 for bicycle safety helmets; and a $1,700 radar grant.
Rondeau assured selectmen that the department will continue to seek grants to improve its effectiveness and support its operations.
The board approved accepting the grants 4-0.
Rondeau also presented selectmen with a draft ordinance, "Unlawful Sale and Possession of Synthetic Cannabinoid (Cannabimimetic) Compounds." The proposed rule prohibits the sale or possession of synthetic marijuana products, such as K2 and Spice, which are chemicals sprayed on leaves that mimic the effects of marijuana. At present not all of these compounds are categorized as illegal under federal law but, because they produce disorienting effects, are dangerous to users and their long-term effects are not known.
Rondeau pointed out that none of these products are prescribed by doctors.
The ordinance had been reviewed by Town Counsel and proposed changes incorporated.
The board agreed to schedule the required two public hearings on the ordinance.
The board approved a temporary event permit for the Wolfeboro Encampment Committee to hold a French and Indian War encampment on Brewster Field from Thursday, July 14 through Sunday morning, July 17. The encampment is co-sponsored by the Wolfeboro Historical Society and the Wolfeboro Parks & Recreation Department.
Selectmen appointed Roger Murray to the Route 28 Corridor Study Steering Committee, with Selectman Murray abstaining.
After some discussion, the board agreed to stay with the 2011 mileage reimbursement rate of 51 cents until the 2012 budget is considered.
See separate article for public comments and the Brewster Hall phasing discussion from this meeting.
The next meeting of the Wolfeboro Board of Selectmen will be on Wednesday, July 20, at 6:30 p.m. at the Wolfeboro Public Library Meeting Room.