BY ETHAN FORMAN
---- — DANVERS — The town’s budget has inched over the $100 million mark.
The schools, town and library seek modest increases for fiscal year 2014 as officials grapple with increased health care and pension costs and uncertainty about state aid.
The increase for the schools is 3.1 percent, the municipal side is asking for a 2.2 percent more, and the library is requesting a 2.6 percent hike, Town Manager Wayne Marquis and Assistant Town Manager Diane Norris said Monday. (The budget figure does not take into account the $45 million for Electric Division operations, which are funded by its ratepayers.)
“It gets the job done,” Marquis said. “The services people expect in Danvers will get delivered with this budget.”
Marquis said the budget was “fiscally conservative,” containing no layoffs to full-time staff and no proposals for fee-for-service programs. In 2009, the town eliminated two police officer and two firefighter positions in a round of belt-tightening, and in the past several years, 10 positions have been cut from the general government through attrition.
This year, the budget absorbs $1.9 million in debt service for the Danvers High project. This number will go down in future years, Marquis and Norris said, as the town has passed its peak year debt payment for the nearly $71 million project this year.
While borrowing costs are slowly declining, the town is seeing a jump in employee health care premiums of 5.5 percent.
“It does not appear likely we will be able to reduce the increase,” Marquis said.
The town has budgeted nearly $10.9 million for employee benefits/insurance in fiscal 2014, up from $10.6 million in the present fiscal year.
Last year, the town switched its health care from Blue Cross Blue Shield to Tufts, and officials were hoping for a more modest increase this year. Some large claims in the initial months of the contract may have skewed the data that went into figuring rates, Norris said.
Every percentage point increase translates into a $90,000 increase in the cost for health care. This has been offset by nearly 100 retirees moving to Medicare.
The town is also facing a 10 percent, $437,000 jump in pension costs. Last year, the increase was a more modest $159,000. The jump is due to losses in pension investments from 2008 and 2009, which increased the amount the town has to sock away as it seeks to fully fund its pension liabilities by 2036.
While the town is counting on a $762,000 increase in Chapter 70 state education aid proposed by Gov. Deval Patrick, officials are not counting on $300,000 in additional aid related to an income tax increase and sales tax reduction, outlined by the governor to pay for transportation and education initiatives.
The town will see an estimated $600,000 in new growth due to construction, but the hotel/motel tax revenue forecast is down $300,000. Marquis said the town was unable to tell if the drop in room taxes was a result of state-sponsored homeless families living for extended stays in motel rooms — Danvers does not receive taxes for those guests staying in rooms for 30 days or more.
With the possible Smith School renovation project on the horizon, the town plans to draw $200,000 less from the high school/middle school stabilization fund than it did last year. Marquis also plans to add money to this fund with free cash. About half of the tax dollars from the redevelopment of the former Danvers State Hospital go toward this school building stabilization fund.
Marquis cautioned there will be a limited amount of money for warrant articles, with the single-biggest amount, $1.6 million, the assessment for North Shore Technical High.
Selectmen are expected to hold a final vote on the budget tomorrow before sending it to the Finance Committee.
Staff writer Ethan Forman can be reached at 978-338-2673, by email at firstname.lastname@example.org or on Twitter at @DanverSalemNews.