TOWN OF LISBON, NEW HAMPSHIRE
Incorporated 1763
OFFICE OF TOWN ADMINISTRATOR
46 School Street
Lisbon, New Hampshire 03585
TEL: (603) 838-6376
FAX: (603) 838-6790
Proposed FY 2016 Town Budget
Executive Summary
The Town Budget for FY 2016 has been crafted with the assistance of Department Heads and
contracted staff to address the guidance of the Selectmen as provided at the beginning of this process.
That guidance was threefold. First, to deliver a budget with a zero dollar increase over the previous year’s
budget. Second, to maintain service levels at present levels for the community. And third, if the first two
objectives were met, a 3% Cost of Living Adjustment (COLA) would be provided to all regular Town
employees. I am pleased to say that the draft budget that I am presenting meets all three of these criteria.
The draft that I am presenting to you not only meets the criteria as proscribed, but has sought to
cut duplication of funding through more accurate accounting, and trimming of expenses wherever they are
able to be reduced. The proposed budget is, however, not finalized as rates for many costly services and
revenue sources will not be released until later in the calendar year, and may be contingent on the state
approving funding in their budget for the next year. The result is that I have been forced to estimate some
costs that will not be set until the budget review period has begun, and may have an impact on the bottom
line for the Town. It is my hope that the reductions inherent in the current budget will survive any
changes, but it remains to be seen if that hope will be realized.
The total Town budget for FY 2016, including the Water and Wastewater Departments which are to
be funded solely through user fees, is proposed to be $2,409,550 (-8.54%, or $225,078 from FY 2015). The
Town Operating Budget, including Agency Requests from charities and Capital Improvements will consist
of $1,995,408 (-6.67%, or -$142,617 from FY 2015), with the Water and Wastewater Departments totaling
$414,142 (-16.61% or -$82,461 from FY 2015), again, to be funded solely through user fees and not part of
the tax commitment.
These figures include the addition of the Town Administrator position, budgeted at 40 hours a
week until August of 2016, and then falling to 32 hours a week afterward, in accordance with the
maximum allowable hours in the TA contract. This position, with benefits and taxes, accounts for the
largest increase in any department at $101,467, with the resulting Executive Department budget up 89%
year over year. Another Department seeing an increase is the Town Clerk’s due to there being four
elections in 2016 (up 7.44%, $4,785). It should be noted that the Town Clerk did not elect to accept the 3%
COLA offered to the Town’s employees. Other departments with increases include Property Revaluation
(+92% or $12,850) due to the addition of a cyclical town wide revaluation; County Dispatch is up $5,057, or
11.47% as the County’s rates have increased; the Library is up almost 2%, or $1,138, and Machinery and
Equipment is up $35,000 from $0 the previous year due to the Police Department’s request for a new
Police Cruiser, with $5,000 to come from their capital reserve account.
Other capital items include a Jaws of Life replacement for the Fire Dept. in the amount of $16,260,
all of which is coming out of their Capital Reserve Account; and $150,000 for the improvement of streets
which may include a reconstruction of main street’s manholes in anticipation of a state repaving project in
summer of 2016. The only department that I have not been able to finalize figures with is the Highway
Department, as there was some confusion in getting figures from the DPW director, resulting in estimates
only being entered for the account, however, these amounts will be finalized prior to the Board’s meeting
on Monday and I will be able to update them with these figures for my presentation. The Highway
Department currently stands at $352,569, a reduction of $58,000, or 14%.
It should be noted that the Department Heads did a fine job of striving to reduce their department
budgets and bring them in under the previous year’s estimates, and I wish to thank them all for their
efforts.
Other cost savings were achieved by identifying a double budgeting of the Highway Labor line item
in all department budgets, and incorporating the amounts broken out to Town line items in the Water and
Wastewater budgets, as these are funded through another revenue source (user fees), as opposed to
direct taxation. The correction of these items led to a savings of $57,030.
Additionally, some factors are not able to be accounted for as they are contingent on other sources
to provide this input. For example, I have asked HealthTrust, the Town’s health insurance provider, to
provide the Town with various options for continuing coverage at current levels, but with different
deductible amounts to allow the Town to entertain the possibility of lower overall premiums through selfinsured deductibles, and have also floated the idea of an employee buyout of $400/mo. to staff to drop
their Town insurance plans and be added to their spouse’s or find their own coverage. The results of these
inquiries have not yet been submitted, but as there is a deadline to begin the budget process, I thought it
best to simply use last year’s amounts as a placeholder of sorts and amend these items during the
budgetary process. Another example is with the Town’s Property and Liability and Workers Compensation
insurance carrier, PLT. Currently, PLT is not offering plans for 2016 as they are in a court battle to retain
their solvency and ability to issue new policies. I have therefore begun soliciting quotes from other
carriers, but again, these quotes were not turned in as of the date of this memo and I have therefore listed
the previous year’s amounts in the Insurance line items (which I believe to be quite high and should be
reduced when quotations do arrive.)
On the revenue side, I used a conservative approach in calculating individual line items, using the
previous 6 years’ history as a guide, and talking with the Department Heads about their insights into these
amounts. Unfortunately, there appears to be a collective lack of participation in previous years with
calculating this amount among the Department Heads as none of them had ever gone through this
procedure and did not have any idea of how to estimate these amounts. It seems that in previous budget
years, the revenues were estimated by the Finance Administrator or the then Town Administrator.
Consequently, these estimates are intentionally conservative and in some cases, educated guesses, as
looking into future revenue streams is always part science, part crystal ball.
That being said the Town’s revenues for FY 2016 are estimated at $752,581 (+$23,840 or 3.27%) for
the Town alone, and $417,900 for the Water and Wastewater Departments, for a Town wide total of
$1,170,481, (-$44,763, or -3.68%). However, this overall decrease is not reflected in the tax commitment
as the shift becomes a negative only with the Water and Wastewater Department operating revenues.
The bottom line is a decrease in the overall tax commitment over the previous year of $163,457,
or 11.54%. While it is not possible to estimate the tax rate with accuracy without the other components
that comprise it being accounted for (local school, state school and county), one can reasonably assume
that should these amounts remain constant, the Town’s portion of the tax rate should decrease by $1.58
to approx. $11.73. However, I must caution that as the current year’s tax rate has not been set, this
number is purely conjecture given the equation (Town Tax Commitment divided by Town Valuation x 1,000
= Tax Rate). Additionally, the Town’s overall valuation has fallen by approx. $2 Million to $106,831,648,
adding upward pressure to the tax rate.
Some discussion of the Town’s current surplus is warranted at this point. The current unassigned
fund balance is in excess of $510,000, or 26% of the total budget forecast for the Town for this coming
year. The New Hampshire Municipal Association recommends one of three funding levels for this
unassigned fund balance, or surplus. The first recommendation is a flat 7%-12% of total operating costs,
which at the higher percentage would be only $239,449. However, I do not believe that this would in any
way be a responsible fund balance for the Town of Lisbon.
The other two methods of figuring a healthy fund balance look at overall Town allocations of the
Town by month and prescribe either a sum of two months’ expenses, or the total of the highest month’s
expenditures. Taking into account the usual monthly totals of Town expenditures, these figures would be
$1,178,356 for the two highest months’ expenditures, or $605,986 for the single highest month’s
expenditure. Understandably, these amounts are a substantial figure, when compared to the Town’s total
annual budget of $2 Million, especially as they include funding that is not part of the Town’s operations
(School and County payments are included in these monthly amounts). However, I have included them as
they are still required allocations, and in the event of a funding shortfall, the Town would still be required
to borrow in order to meet these obligations. While I do not prescribe that one can ever fully insure
against all possible losses, the Select board will have to decide what level of surplus funding they are
comfortable with, and what level of taxation they are willing to accept, when presenting the overall
budget to the public at Town meeting.
Overall, I believe that the budget that I am presenting to the Select board is a good beginning for
the budgetary process. However, as I have not been with the Town long enough to understand all of the
services and delivery methods that we have in Lisbon, I have reason to believe that further efficiencies can
be found in future years. I and the Town’s staff will work diligently and honestly with the Select board and
the Advisory Budget Committee to produce a budget that will be fair and equitable for the residents of
Lisbon. If you have any questions or would like further information, rest assured that we will all strive to
provide answers and information to you in a timely fashion.
I therefore hand this proposed budget over to the Select board for you to do with it as you see fit.
As you will be held accountable for its contents, you must craft it into whatever form you will be willing to
take ownership of at Town Meeting. I will assist you in any way that I can during the budget process, as will
all staff, but in the end, this document, and the resources that it prescribes to serving the needs of the
Town, must become your responsibility, as you will be proscribing it to the voters and you will be held
accountable, along with Town staff, for its effects on the community, you must be satisfied with its final
form.
Respectfully Submitted,
Daniel J. Merhalski, MPA
Town Administrator