Budget season begins
As the annual budget season begins on the island, the Town Council met on March 10 with Town Finance Director Amy Land for an update on the town’s current and future debt, and to discuss capital needs, priorities, and expenditures for fiscal year 2022.
Town Manager Maryanne Crawford explained: “The council had requested a preliminary meeting for regarding current long-term debt and potential long-term debt, prior to our full-fl edged budget season.” The council has scheduled four budget work sessions and meetings to discuss the 2022 budget. The first budget work session was held on Wednesday, March 17.
Land said the town’s existing general obligation debt has an outstanding principal of $17,200,980, (referring to a graph prepared for the meeting labeled ‘Existing General Obligation Debt’, which can be found on the town’s ClerkBase, under Town Council Agendas, dated March 10, 2021).
“The town’s maturity picture is very favorable compared to other communities,” said Land. “93 percent of the town’s debt will be paid off in the next 10 years. That might feel scary but it’s a great position for a community to be in. You can see a big drop-off as we go from 2022, another step down from 2025, a major step in 2031, and final maturity in 2038. This is, again, what is outstanding today, but it gives you a visual picture.”
The next graph, “Existing and Authorized General Obligation Debt,” added $10 million authorized for broadband and road projects, to reach a total of $27,200,980.
“This is going to be a conservative view of what the town has outstanding and upcoming: the [projects] that are approved [and] projects that are underway. This a combination of the $8 million of broadband and the $2 million of roads projects,” said Land. “I would say the first chart is history, [and] this is present time looking to the future – the worst case. There will be some hope to not have to issue $8 million for broadband [and] secure some outside funding,” said Land.
First Warden André Boudreau asked Land to confirm the total aggregate debt service for the town, which presently stands at $31,804,666.
“The town is committed to $31 million in bonded debt?” asked Boudreau.
“That’s the total you have committed to. I haven’t issued it all, but that’s what you have committed to today,” said Land. The amount includes both principal and interest.
Capital improvement projects and process
While discussing the town’s capital improvement budget, Councilor Keith Stover asked how the projects were determined and addressed. Under the capital improvement ordinance, capital improvement projects can include the following: “the acquisition or lease of land; the construction of a new building or facility; major improvement, renovation, rehabilitation or extension of an existing building or facility; and the purchase of a major item or piece of equipment.”
“My question came from wanting to develop an understanding of how we establish what our priorities are,” said Stover.
Crawford stated that she and Land “rely on staff” for the information on the capital projects.
“That starts the dialogue,” said Crawford.
Land added: “This capital plan in front of you today is much more of a request driven document. It very much originates out of what the departments have identified as their needs. It doesn’t have the other side to it, the vision and policy of the council or the Planning Board. It doesn’t have that influence. That influence isn’t always direct.”
Crawford said that changes are being proposed for how the capital budget process works.
“It is a planning document and it is subject to change. This year, the lead on the capital budget process was taken by the town manager,” said Crawford. “It’s my understanding, previously you would submit [projects] to the Planning Board. We decided it’s been moved to the town manager. The town manager met with the fi nance director, with all the department heads, and from there Amy and I worked on a capital budget going forward,” said Crawford. She added there is “still language in the ordinance – even with the amended ordinance – that the capital budget will be referred to the Planning Board, and the Planning Board, in cooperation with the town manager, will review the final capital budget to make sure it’s in compliance with the town’s comprehensive plan.”
“The department heads will have the same opportunity that you had with the Planning Board. The opportunity to do that will be in front of the council instead of the Planning Board,” said Crawford.
Second Warden Sven Risom noticed that funding for a study of New Harbor was no longer in the budget. The New Harbor Vision Plan is “one of the most important studies that we have, given all the pressures between Champlin’s and the Boat Basin. We’ve got to figure this out. We know how bad it’s been in the last few years. I would hope we can get this back in the capital plan,” he said.
“In the next month we will be going through the budget process. We have different work sessions, and different work sessions looking at different budgets,” said Crawford. “I have some takeaways from this evening. I’m hearing Old Harbor and New Harbor Plan. We can update this and have another discussion,” said Crawford.