Town Council Candidates Question 4: The Budget

Alex Roman
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Question 4: Verona has just passed its budget for 2019. If you could shift spending around in
this budget, which aspects would you give more funding to and which lines would you reduce to do so? Please don’t increase the town’s spending–or our taxes.

This is a challenging question to respond to as I just voted in favor of the budget. If I felt funds were not properly allocated, I would have requested changes and not voted in favor until they were made. The time for budget changes is during the course of the review process and before introduction, as only minor adjustments can be made after introduction. I have been reviewing Verona budgets line-by-line for numerous years, starting long before I was on the council. After I began my term, I pressed for changes in the municipal budget, and I feel that within the statutory guidelines many of these changes have been implemented. I’ve pushed for substantial reductions in overtime, for elimination of positions through attrition, efficiencies in back-office costs, reduction in our health care expense, and increases in shared services where possible. Most of these goals have been achieved to some degree and I see us as being on the right track.

Also, I have stated many times that we continue to operate at a budget deficit. Every year we draw down our capital account to partially fund current-year operations. This gap has been narrowed over the last four years, but is not yet at zero. As long as we continue to spend more than we take in, we should not be considering any expansion in the scope of our operations. Any area where we can save money needs to go towards eliminating this deficit. Discipline in expense control will get us to this point.

I’ve sparred with one of my colleagues quite a bit over pressure to establish “reserve funds” for various future capital projects; I argue that doing so is false accounting at this point because putting money from operating revenues into a capital reserve while drawing money out of the capital account to fund operating expenses is just moving money around in circles with no net effect. When we finally do reduce the deficit to zero, we can start going in the opposite direction and directing surplus revenue from operations into a general capital reserve to avoid bonding for future projects. Some of the most financially healthy communities in the state do this and avoid substantial interest costs. Our debt service in 2019 will be approximately $3.7 million or 15% of our total operating budget, with interest comprising $760,000 of that cost. While we still get attractive rates on debt due to our good credit rating, avoidance of interest payments can only help our financial condition.

So returning to the original question, there are areas of the budget I’d still like to see brought down, with the caveat that any funds released should go to deficit reduction and eventual buildup of capital balance to avoid bonding. Some of these are dependent on regulatory changes or establishment of shared services that I’ve suggested in a previous answer, some are expenses that will drop off in the future on their own.

Tax Assessment: I’ve suggested that this entire operation be handled at the county level. We incur approximately $203k expense for this function of government, almost entirely salary and wage. This requires regulatory change to accomplish, however.

Legal Services: We are incurring substantial expense for outside consultants and attorneys as we work to settle our affordable housing litigation. This expense should reduce once a settlement is reached. There will be some ongoing compliance costs and another round of affordable housing needs will recur in 2025, so we will only get temporary reprieve here. We will also have costs in 2020 related to the review of our Master Plan.

Municipal Court: A joint municipal court with other municipalities would allow us to save the costs of a court administrator and court security. Out of the $177k allocated for court, perhaps $50-75,000 could be saved.

Police Overtime: We brought the allocation down from $275k to $225k in anticipation of overtime savings related to migration to the Pitman Schedule. Barring major emergencies we will probably outdo this and see savings here.

Police Dispatch: Again, I would like to see this expense migrated to an interagency shared service. We spend $307k to operate our dispatch center and would have to contribute some portion of this to operate a regionalized center.

Debt Service: We will have a number of bonds mature in 2024 and principal payments will drop quite a bit. Depending on the final results of the financing of the affordable housing project on the Cameco property and the structure of PILOT and other agreements reached with developers, we may have an upcoming opportunity to lower long term debt service costs if we are cautious with our capital spending going forward. We still need to plan for the replacement of Firehouse #2 and the Rescue Squad buildings, so based on the timing of these projects we could at least hold our debt service relatively constant.

Water & Sewer Utility: We budgeted $160,000 for overtime in this utility, flat to 2018 budget and less than actuals in 2018. Our new labor contracts allow us more flexibility in scheduling to avoid weekend overtime for routine operations. This is one area where I feel we have been understaffed on labor and have seen the effects. We use part-time / summer help to catch up on general maintenance, which is very useful and could be expanded from any savings on overtime.

We have had a few requests for additional expenses that I feel compelled to address. While these aren’t happening in 2019, if we do hit a balanced budget in the near future I am open to discussing them again. We had a request to add a new non-certificated staff member to the library to assist with special programs and that did not make this year’s budget. It has also been suggested by some community leaders and another candidate that we provide additional social services to the public. I recognize the need to care for seniors without family support, those with mental health issues, and people in financial need, and would be open to exploring solutions to fill any gap in our social safety net, particularly if there are opportunities to partner with the school system or community organizations to make this happen.

Overall, I am satisfied with the general financial condition of the municipality and its operations. The budget process every year is a deep dive into our business where we hear directly from our department heads and question them both on their expenditures and the services they provide. While we’ve made numerous reductions in costs, we continue to provide a high level of service to the community. We’ve done everything from adding recycling pickup to increasing police staffing both in terms of headcount and officers per shift. We’ve completed the field complex, remodeled the library, replaced the police radio system, and paved many roads. We provide comprehensive recreational programs, senior services, and the most responsive public works department in the area. The five-year average increase in the municipal tax levy including 2019 has been 1.37% and our operating expense increase has averaged less than 0.9%. In short, what we are doing is working and we need to stay the course to meet our goals.