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Windham Town Manager's Page
TOWN MANAGER'S REPORT
November 21-27, 2008
Scheduling Notes.
The Joint Policy Committee will meet at 6:00 p.m. this coming Tuesday, November 25, 2008 in Conference Room 2.
The Council’s review of the annual audit with representatives from Runyon Kersteen Ouellette will be at 6:00 p.m. Tuesday, December 2, 2008.
Report.
Revenue Shortfall - Update.
As I said I would in my report last week, I briefed the Council on a developing revenue shortfall during open forum as last Tuesday night’s workshop. Earlier this month I sent a message to all department heads, deputy department heads, and senior staff ordering a curtailment of spending. Any purchase that can be deferred without halting the delivery of a particular program or service is to be deferred, capital purchases and use of ECB carryover funds has been suspended, and hiring of new vacancies on or after November 10 will remain unfilled. The reason for this action is the continuing weakness in the economy and the effect it is having on the town’s revenues especially, but not limited to, excise taxes, state revenue sharing, and interest income.
Through the first three months of the year excise taxes had weakened only slightly compared to last year. At the end of October they had declined sharply, to the point where receipts could be more than $300,000 less than estimated in the FY09 budget. November’s excise tax revenue is looking similarly weak. Excise taxes are the town’s largest source of revenue other than property taxes. The state of Maine sets the rates and the rules for collecting excise tax; the town has no control over the amount or timing of the revenue it collects, though we have a good understanding of the seasonal variations (at least under normal circumstances).
In addition to excise tax, we are also tracking state revenue sharing, interest income, and other revenue sources that are susceptible to the downturn in the broader economy. Though lesser in amount, weakness in these revenue sources contributes to the overall problem which, as I reported to the Council, is currently estimated at about $750,000. That figure is based on the approved budget, however. With the steps I have already taken we will be able to close the gap between revenues and expenditures for this year:
- Suspending the use of ECB carryover funds $ 246,000
- Deferring further capital equipment expenditures (other than
payments on existing lease-purchase agreements) 237,000
- Suspending road resurfacing work for the balance of the fiscal year 160,000
- Suspending the contribution to the Land and Buildings Capital
Improvement Fund 115,000
- Deferring other building projects (except public safety building
renovations) 10,000
Since my direction of November 10, we have had one full-time position at the library become vacant. This position will not be filled. We have also filled a full-time driver’s position in public works only for the season, not on an ongoing basis, to try to preserve winter maintenance operations at their current level but otherwise reduce personnel and benefit costs. The process to fill three vacant police officer’s positions continues because of the expense and difficulty in filling them and getting training slots at the academy. It is possible, however, that one or more of these vacant positions will remain unfilled simply because the selection process is so demanding. Along with general expense belt-tightening, these measures should be more than sufficient to address the size of the problem as we now see it.
Department heads, senior staff, and I are working to identify actions that can be taken to further reduce spending should the town’s revenue picture continue to deteriorate, to reduce reliance on a shrinking fund balance, and to prepare for fiscal 2010. As was discussed briefly at last week’s workshop these measures could very well include staff reductions, work schedule cutbacks, and reductions in operating hours, programs, and services as well as deferring capital and other expenses. I will brief the Council again during the manager’s report at Tuesday night’s meeting.
Public Works Fuel Tanks – Update.
Last week I reported that we had experienced problems with water leaking into the space between the double walls of the fuel storage tanks at public works. We have had the tanks tested, found the source of the problem, corrected it, and have resumed gasoline deliveries.
Please feel free to contact me if you have any questions.
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