School Budget Information

The school budget can be confusing. In an attempt to minimize misinformation, here are some facts:

• Our Fiscal Year runs from July 1 through June 30. We are currently near the end of FY14. The budget we are considering is for FY 15, which will begin July 1, 2014 and will run through June 30, 2015.

• In FY 15, our property taxes will, once again, be increasing. Pending approval, the property tax levy will increase by $990,562 over FY14’s levy.

• The total requested FY15 general fund budget, including schools, is $53,863,035. Schools represent $28,148,496 of this amount, while the rest of city government represents the remaining $25,714,539.

• The school budget is not being cut. Pending approval by the city council, I have recommended, and the school committee has endorsed, an increase of $800,000 over last year’s budgeted amount to $28,148,496.

• In spite of this, we are still faced with a funding gap between forecasted school costs and the $800,000 budget increase. This gap is about $330,000. This is because the cost to run our school system will increase by about $1.13 million next year over this year.

• No one on the school committee has accepted the inevitability of the gap, and all are committed to reducing it. To that end, committee members are working hard on several fronts in order to close the $330,000 gap, including:

• Advocating for increased state funding to Amesbury’s schools. Over the last 15 years, annual Chapter 70 funding has decreased by about $1,000,000 while the annual cost to run our schools has increased by about $10,000,000.

• Asking school principals and administrators to aggressively pursue ways to reduce costs in order to work within the confines of the $800,000 increase in the $28.1 million budget (a reduction in costs of $330,000 would require a 1.2% reduction in school spending).

• Continuing to explore sources of additional funding to close the gap including increasing the city’s contribution.

• The school funding gap is not a new problem. We face such gaps almost every year, primarily driven by ever increasing state and federal mandated spending requirements. Last year’s gap was over $900,000.

I am not happy with the program reductions that school principals and administrators have recommended to close the $330,000 gap. Neither am I happy with the nearly $1,000,000 increase in property taxes that will result from the FY15 budget. However, we have two long standing problems – chronically underfunded schools, and extremely high property taxes - that are at cross purposes. In other words, fixing one makes the other worse.

As much as I would like to fix both of these problems in my first few months in office, if we are to balance the needs of our entire community, it can’t be done.

Therefore, my approach in the short term is one of shared responsibility. Taxes will go up, thereby increasing the burden on our already overtaxed citizens. However, our schools are being asked to share the burden. They will receive the bulk of the revenue from the increased taxes, and most of the amount they have requested, but they may fall short of the full amount needed to cover their increased costs.

I have consistently said that turning our city around will require a long term focus. My plan is and has been to increase revenue from new commercial and industrial sources thus reducing the tax burden on our homeowners. The revenue generated from these sources will play a substantial role in alleviating our annual dilemma of balancing the needs of our taxpayers and our schools.

I ask for the help and understanding of all of our citizens. Specifically I ask that everyone acknowledge and understand the validity of the points of view of those with whom they may disagree. Without such mutual understanding, we have no hope of resolving our long standing differences.

Ken

FY 2015 Budget

This week, the FY 2015 Operating Budget was filed with the City Council, and Finance Committee hearings also began. We posted the entire document on the City website. You can find it here: http://amesburyma.gov/files/filesystem/fy2015%20annual%20budget.pdf

Below, see the text of my letter to the community regarding my first budget, as well as the text of my FY 15 Budget Summary. If you have any questions, concerns, or input, please don't hesitate to contact me.

Have a great weekend!

Ken

P.S. I hope you will join us at 2 PM on Sunday, May 18, for the Dough Boy rededication ceremony at Amesbury Middle School. The Amesbury Veterans' Memorials Restoration Committee continues to work very hard to restore our monuments. I am grateful to see such dedicated volunteers in our community.

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Dear City Councilors and Residents:

 

Pursuant to Amesbury’s charter, I am pleased to submit the Fiscal Year 2015 operating budget.  The budget was prepared in consultation with the Chief Financial Officer and the heads of divisions and departments.

 

This FY15 budget represents my first since receiving the honor of being elected as your new mayor. As such, it represents my effort to move Amesbury toward solving its most pressing problems.  For many years we have faced two very large and very challenging financial problems in Amesbury: 

 

• Enormously high and ever increasing property taxes.
• Consistently underfunded schools 

 

These are deep problems with no easy solutions and neither problem can be solved by itself without negatively affecting the other.

 

For example, fully funding the school administration’s level services spending projection could only happen if we were to raise property taxes. Not only would such a move make our property tax situation worse, home values would be negatively affected and seniors, those on fixed incomes, and people struggling financially would suffer.

 

On the other hand, actually reducing property taxes would require unacceptable cuts in services, especially schools, but additionally in public safety, road maintenance, social services and economic development. Neither of these scenarios is acceptable. Therefore, my long term plan is as follows:

 

1. Decrease the rate of increase in property taxes while maintaining or improving municipal services and meeting previously contracted financial obligations.
2. Invest in education, with the majority of our increased tax dollars going to our schools. We must strive for excellent schools, but not to the extent that we dig ourselves deeper in the property tax hole.
3. Focus our efforts on initiatives that will result in expanding our commercial/industrial tax base so we can raise much needed revenue in the future without further burdening homeowners.

To this end, the FY15 budget focuses heavily on schools, with the majority of new spending going to education.  Moreover, even with substantial increases in personnel related contractual obligations, the proposed tax levy increase is at a rate is slightly less than last year’s increase. We are able to accomplish this in no small part because most of our municipal department heads have been able to rise to my challenge to find creative ways to reduce department costs while maintaining or improving services.

 

This budget is the first step in what will be a long term solution. It’s taken Amesbury many years to get into the position in which we find ourselves and it will take time to dig our way out.

This budget is an initial step in the right direction towards improving the quality of life for all our residents and relieving our future tax burden.

 

 

Sincerely,

 

Mayor Ken Gray

 

 

________________________________________________________

 

 

 

Budget Summary

Overview

The proposed FY15 general government operating budget is $53,863,035. Spending is proposed to increase $1,426,771 from the FY14 adjusted budget while revenues from sources other than the real estate tax levy are up by $436,209.

The result is an increase in the property tax levy of $990,562. While property taxes will increase with this budget, they will increase at a rate slightly less than that of last year.

Expenses

The single largest component of FY2015 spending increases is the cost of meeting obligations resulting from legacy contracts negotiated with our union teachers, police, firefighters and office workers. This is followed by increases in debt payments due to financing capital projects such as the DPW buildings and the Fire Station.

Specifically, of the $1,426,771 total increase in the requested budget, contractual salary related obligations account for approximately $800,000 and debt service increases make up an additional $311,240.

By department, of the $1,426,771 increase, $878,255 is for increases in education, $311,240 for increases in debt, $200,108.00 for increases in public safety, and $95,000 for increases in payments for veterans assistance. These departmental increases are offset by a reduction in expenses for the total of all other city departments of $57, 832.

Schools

On April 1, the School Committee voted unanimously to adopt the School Administration’s proposed budget that represented an $800,000 increase over the FY 14 appropriated amount. This amount is in line with my recommendation and is consistent with Amesbury’s historical school spending increases. In spite of this we are still facing the possibility of cuts in school services. This is because, like many other Massachusetts communities, we are faced with ever increasing unfunded spending that is mandated by the State. Although our Chapter 70 school reimbursement is up this year, we will receive more than $1 million less in 2015 than we did 15 years ago. Over that period of time state education aid to Amesbury has declined from 54% of district spending to 31%. This is a serious problem that shows no signs of abating and that cries for a permanent solution at the state level.

District school spending is budgeted at $28,148,496. This amount represents 52% of our general government expenses. In addition to district spending, the state assesses Amesbury an additional $3.2 million in education related costs, or an increase of $78,255 over FY14. This includes:

School Choice out            $456,000

Charter School                  $576,000

Retired teachers              $1,165,000

Essex Agricultural             $116,000

Whittier Vocational         $939.000

Including these assessments, total educational spending is $31,415,000 or about 58% of Amesbury’s total general government spending.

Revenue

Total revenue is projected to increase by $436,209. Of this, state aid is estimated to increase by $269,482 to $11,798,022. Revenue from our Ambulance service is up $80,000 while other miscellaneous revenue is up by $86,727, including an estimated increase in the meals tax of $50,000 to $175,000, and an estimated increase in the hotel tax of $13,000 to $95,000.

Enterprise Funds

Enterprise fund (water, sewer and Landry field) costs are projected to increase $115,993 to $6,730,008. This increase is primarily a result of borrowing costs related to the new water treatment facility.

Summary

Over 70% of our total municipal costs are personnel related, including salaries and benefits. FY15 is the third year and largest percentage increase of our three year contracts with the city’s union workers. As such these cost increases have, by far, the largest impact on the budget numbers. In addition, we are beginning to see the costs related to legacy capital improvement decisions.

In spite of these challenges, we have managed to hold tax increases to below those allowed by law. But these are short term reactions to long term problems. Going forward we must solve our school funding problems and revisit the way we manage our municipal expenses. I am confident that we can accomplish that and I look forward to the challenge.

 

 

 

 

2014 Amesbury Energy Initiative

At tonight’s City Council meeting, Deputy Director of Community and Economic Development Bill Scott and I will be formally unveiling Amesbury’s 2014 energy plan. More than 87% of the nearly $300,000 program will be financed through outside sources, including $228,775 in grant funding.

The plan makes use of a creative combination of multiple funding opportunities that will finance energy projects throughout Amesbury. These projects utilize new technology to improve our energy conservation efforts while also reducing costs. All of these projects are expected to be complete by the end of this calendar year.

Below are brief descriptions of each project:

Water Department Electric Vehicle and Charging Station:

Currently, Amesbury’s Water Department uses a van to read water meters throughout the City. The van gets very low gas mileage at 7.1 MPG. By December 2014, that van will be replaced by a 2014 Ford Focus EV. The electric vehicle does not operate on gasoline. This new EV will allow the City to reduce our energy related expenses.

Charging Station:

To complement the electric vehicle, the grant includes a dual connector charging station which will be located in the downtown parking garage. The station will not only serve the Water Department’s EV, but it will also provide public access to charging. We plan to use the recently announced wayfinding grant to place signs that will direct the public to the charging station.

Downtown Period Lighting Retrofit:

By November of this year, the City will convert 133 downtown period lights to LED technology. This project will save the City over $26,000 annually in energy, labor, and material costs.

Solar Compactors:

By November of this year, two existing public trash receptacles will be replaced by BigBelly solar powered compactors. These compactors come equipped with data logging technology which can be monitored from a smart phone. When the compactor is full, the DPW will automatically be notified. The compactors will allow the City to burn less fuel, and waste less time checking trash receptacles on a regular basis.

Titcomb Landfill Solar Project:

By December of 2014, the City will complete a feasibility study regarding a potential solar development on the South Hunt Road site formerly known as the Titcomb Landfill. The site represents an opportunity to convert a currently underutilized eyesore into a solar field that will serve Amesbury for decades.

Amesbury Middle School HVAC ASHRAE Level 2 Assessment:

The middle school’s energy use index (EUI) is higher than many comparable facilities in the region. The goal of this project is to plan the upgrading of the AMS HVAC system in order to reduce the building’s EUI. An HVAC upgrade could result in a utility cost reduction of more than 20%.

CES, AMS, and AHS Outdoor Lighting Retrofit:

The outdoor lighting at Cashman Elementary School, Amesbury Middle School, and Amesbury High School will be retrofitted with LED technology to reduce energy costs.

Door Seals in Schools and Municipal Buildings:

By the end of this calendar year, many door seals in the schools and in municipal buildings will be replaced or improved to minimize drafts. This improved insulation will result in energy savings and less fuel consumption.

In addition to these projects, the City will be adding a part time Energy Manager to provide necessary staff support for our energy plan. The position will be funded through grant money at 20 hours per week, and will serve an integral role in overseeing the implementation of these programs.

I want to thank the City Council for their support of our efforts to aggressively pursue these opportunities over the past few months. Councilors Joe McMilleon and Anne Ferguson are spearheading an effort to transition our Energy Task Force into its new role as a formal public body to be known as the Energy Committee. The Energy Committee will provide essential policy direction and transparency throughout the implementation of our energy initiatives.

Here is a link to the fully detailed 2014 Energy Program: http://www.amesburyma.gov/files/filesystem/Amesbury_Green_Communities_Energy_Projects.pdf

As always, if you have any questions, you are welcome to contact the Mayor’s Office at any time.

I look forward to seeing these projects develop!

Ken

 

School funding and the challenges facing Amesbury

On April 1^st, the Amesbury School Committee voted unanimously for an increase of $800,000.00 in the FY 2015 district budget to $28.1 million. To put this amount in perspective, it is slightly more than the average percentage increase in the school budget for the last five years, and almost $100,000 more than the absolute five year average increase. Overall, our FY15 budget proposal focuses heavily on education, with about 80% of city wide spending growth going to our schools.

However, as it currently stands, even with this substantial increase in funding, we face the possible reduction of teaching positions and course offerings.

The situation we find ourselves in is not new, and it is not unique.  Like many communities in Massachusetts, Amesbury has been painfully cutting school programs and raising fees for many years.  A major cause of these cuts is the gap between funding provided and mandates imposed by the state and federal governments.  For example, annual Chapter 70 funding to Amesbury will be at least $1,000,000 less in 2015 than it was in 2001, while the cost of funding our schools has risen by almost $10,000,000 during the same time period. The bottom line is that the taxpayers of Amesbury continue to be burdened with making up the ever increasing difference. To that end, I urge you to ask our legislators and the Governor to support increasing local school funding.

In the meantime, please be aware that we are by no means at the end of the budgeting process. District administrators and school committee members are working hard to identify alternative cost saving measures and additional revenue opportunities with the goal of preventing the looming cuts in programs or loss of teachers. Moreover, this work will not end with the upcoming City Council vote.

While we would like to spend more on schools, Amesbury has the 4^th highest property tax rate in the state; a fact which depresses our property values and necessitates keeping Amesbury’s overall spending increases to a minimum. To that end I’m happy to report that many of our municipal departments have risen to my challenge to find creative ways to reduce department costs while maintaining or improving services.

It’s taken Amesbury many years to accumulate the financial challenges that currently confront us and it will take some time to overcome them.

This is my first budget, and my short term goal is to keep spending increases to a minimum while still investing heavily in our schools. Concurrently, my goal is to focus on initiatives that will, in the longer term, result in the growth of our commercial/industrial tax base, thus reducing the future tax burden on homeowners, and providing new sources of revenue that will benefit all Amesbury residents.

Ken