2018-06-08 / Front Page

Final 2019 budget bound for voters

By Duke Harrington Staff Writer

Kennebunk selectmen have sailed through the final public hearing on their budget plan for the coming 2019 fiscal year, with minimal comment from town residents.

For everyone at the May 29 hearing, even audience regulars, detail of the $14.82 million spending plan was old hat. As Finance Director Joel Downs said in opening remarks to his presentation, “You’ve seen this over and over and over again.”

Assuming town and school budgets for the coming 2018- 2019 fiscal year that starts July 1 are both approved by voters at the polls June 12, property tax bills will go up 6.94 percent.

That will drive the mil rate from $16.55 per $1,000 of assessed property value, to $17.70. That means the median single-family home, assessed by the town at $300,000, could expect a tax bill hike of $345 — from $4,965 to $5,310.

The breakdown:

• 73.6 percent to Kennebunk’s share to run RSU 21 — coming in at $13.03 per $1,000 of assessed value, a 7.3 percent hike;

• 22.7 percent to municipal operations — expected to top $4.02, for an 8.4 increase;

• and 3.7 percent shipped to York County commissioners to cover their budget — representing 65 cents of the town tax bill, which is down 7.1 percent).

The calculations are a best estimate at this time. The final mil rate is generally set in mid-August, once the town knows the increase figured by the Maine State Revenue Service for taxable property in town (currently estimated at $10 million), as well as final numbers for state revenue sharing, homestead tax exemption reimbursements paid by the state, and allowances for the BETE (business equipment tax exemption).

Once these factors are known, the increase for the town portion of local tax bills will likely come in under the current 8.4 percent projection.

“I historically use smaller amounts for revenue sharing and the two reimbursements. I’m simply being conservative since the mil rate at this point is only an estimated projection,” Downs said in a May 31 email.

“Historically, my estimate for this (final) public hearing (on the budget) is greater than the actual rate calculated and set in August,” he said.

Downs also noted that the slip in Kennebunk’s share to run York County “is attributable to last year being the final year of funding the county’s conversion from being on a calendar year to a July 1 to June 30 fiscal year.”

“The county’s short year assessment was amortized over five years,” he said.

There are some additional outside considerations that remain in play, which could impact the town budget and final tax rate after the public weighs in June 12.

The biggest of those is the potential for reimbursement from the Federal Emergency Management Agency (FEMA) and/ or the Maine Emergency Management Agency (MEMA) for money spent by the town dealing with coastal storms on Oct. 28-29 and March 2-3.

According to Downs, immediate repairs to sea wall damage at the end of Boothby Road came in at $450,000.

“As to whether or not that is going to be reimbursed by FEMA, we’re going to try,” Downs said. “That’s the answer. We’re going to try. If they deny it, they deny it, but we are going to submit that.”

Downs said the total outlay for storm damage repair, which the town will look to FEMA for help in covering, rang in at roughly $800,000. That’s about one-third of what the town spends maintaining all roads in town in any given year.

“That’s this year only,” Selectman Christopher Cluff said. “We spend two-plus million dollars a year on roads every year, and we don’t have to touch the beaches in some years.”

Apart from sea wall repair costs, there were no budget questions raised at the May 29 final public hearing.

Barring an influx of emergency management dollars, the hit to taxpayers for the town’s $14.82 gross operating budget will be mitigated by $4.68 million in anticipated revenue — such as from excise taxes on vehicle registrations, and state revenue sharing derived from sales taxes. Other revenue sources include $1.2 million drawn from local TIF (tax increment financing) district reserves, $100,000 taken from the towns undesignated fund balance (i.e. its “surplus” — largely derived from money raised in previous years not spent and not earmarked to any particular purpose), and $4,000 from a restricted trust fund balance.

Combined, those other revenue sources will leave a net operating budget of $8.85 million to be covered by local property taxes.

A full list of significant changes from the current budget will be made available to voters at the polls. Early voting (a.k.a. In-person absentee voting) is open at town office, although Thursday, June 7, was the last day on which someone could ask to have an absentee ballot mailed to them.

The largest items in the new spending column include $265,000 in increased health insurance and payroll costs (such as social security and Medicare, plus workers compensation and unemployment insurance rates), $153,200 in new staffing (to bring on seven new employees and increase hours for three others), and a 1.5 percent across-the-board hike in wages for town employees. The budget also includes $50,000 in salary adjustments. Generally, that included the same 1.5 increase for salaried employees given to the hourly staff, although the raw dollars — such as the $1,432 increase for Downs, to $96,895 per year — are larger.

Among the new hires, the budget anticipates hiring one new police officer Oct. 1, and another to start April 1, 2019, while also boosting the animal control officer, to be shifted into the police chief’s chain of command, to a full-time job starting July 1. In addition two per diem EMS works will become full-timers, gaining employee benefits if not a pay raise, effective July 1. Two more current paramedic/firefighter per diems will join the fire department roster Jan. 1, 2019.

If the budget is approved by voters, the town also plans to hire an additional summer lifeguard for public beaches, and increase hours to full-time status for a recreation department programmer and a public works driver/laborer.

Among the new revenue sources (projected to be up 3.4 percent, overall) are $60,000 in expected new recreation department fees, including from new programs as the town takes over adult education from RSU 21 and $50,000 in new and increased ambulance billing. There also is a $52,500 shift taking place, as a 25 percent of the salaries paid to Town Manager Mike Pardue and Community Development Director Chris Osterrieder will be moved out of the general fund operating budget, to be covered instead by TIF revenues. The shift is made based on the number of hours each man averages working on economic development projects — an allowable use of TIF funding under state law.

Without this transfer, the $576,724 (6.97 percent) increase in the town’s $8.85 million net operating budget would come in at $629,214 (7.6 percent). Using Downs’ rule-of-thumb that every $100,000 increase in spending adds 5 cents to the mil rate, not making the switch to TIF funding would have added another $7.50 to the expected $345 median property tax hike.

Among the outside considerations, there also is the possibility, however remote, that voters on June 12 could reject the RSU 21 budget, which includes funding for two additional school resource officers. Those officers would be employees of the Kennebunk Police Department contracted to the two elementary schools in town. If they are hired, there will be no direct impact to the town budget for the coming 2018-2019 fiscal year, but they would be on the payroll thereafter.

The town does plan $770,100 in major purchases and capital improvement projects for the new fiscal year. The largest item on that list is $75,000 to bump up the reserve fund used by selectmen to pay for unanticipated capital projects that might pop up during the year. Other line items include:

• Covering this year’s $70,000 deficit in the pay-as-you-throw solid waste program, as sales of trash bags once again did not meet the cost to run the service;

• Buying two new computer storage area network systems, for $70,000;

• Buying new cameras for police cruisers and equipping offices with body cams, a $65,000 outlay;

• and buying and equipping a new police cruiser, at $42,000.

The capital funding, along with $100,000 taken to reduce debt service payments, will come from the town’s undesignated fund balance.

Debt service on past voter-approved borrowing will come to $995,443 — good for 7 cents of the coming 31 cent increase in the mill rate. Another $682,657 in debt service tied to economic development and any of three TIF districts in town will come from TIF fund reserves, which does not impact the tax rate.

Also not impacting this year’s tax bill, but queued up to come due in future years, will be $2.7 million in new borrowing voters will be asked to approve in three additional referendum questions on the June 12 ballot.

Question 3 asks to borrow $372,000 to buy two tractors to clear sidewalks and buy an associated debris vacuum trailer.

Question 4 seeks approval to issue $1.29 million in bonds to cover the $450,000 repair to the Middle Beach sea wall, as well as $288,700 to repair and maintain Sea Road between Summer Street and Heath Road. That project will not include sidewalks at this time. Also included in Question 4 are a variety of other road repair projects, including Cat Mousam Road ($209,100) Fairway Drive ($142,900), Parsons Street ($72,700), Portage Way ($49,200), Canterbury Circle ($39,500) and Sayward Street ($38,400).

Finally, Question 5 seeks the nod for $1.08 million in bonding, also for roadwork. The biggest project on that tally sheet will be $825,000 to rebuild Ross Road with the addition of 5-foot paved shoulders. Half of that cost is expected to be paid by the state. Other work work will take place on Fieldcrest Drive ($167,000), Storer Street ($165,000), Water Street ($128,900), Bourne Street ($96,200) and Friend Street ($28,300), as well as Summer Street, the latter project to include $80,000 in drainage work and sidewalk reconstruction in the area of the police department.

All debt service for borrowing contained in Question 5 is eligible for payment using TIF reserves, meaning future payments on that bond package will not impact property tax bills.

The full line-item budget proposal is available the town website at www.kennebunkmaine.us/budget.

Staff Writer Duke Harrington can be reached at news@kennebunkpost.com.

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