By Kathryn G. Menu
The North Haven Village Board of Trustees may look at developing a long-term strategy for how to grapple with the rising cost of providing retirement and health care for its three village employees, but not until at least two staff members — with the village for over two decades — have already retired from civil service.
On Friday, March 8, some members of the village board broached the subject during a budget work session.
Currently, the proposed budget for 2013-2014 is $1,348,531, a $22,201 increase over the approved 2012-2013 fiscal year that ends May 31. According to a budget worksheet provided by village clerk Georgia Welch, an estimated $363,150 of appropriated fund balance is proposed to be use to offset the amount of money North Haven Village will ask voters to fund via property taxes.
The village will also collect $211,920 in projected revenues, although as Welch noted, North Haven has seen declines in revenue sources like license and permitting fees over the last year. According to the budget worksheet, while North Haven Village expected $233,589 in revenues other than property taxes in 2012-2013, it only anticipates to collect $214,695 by the close of the fiscal year.
However, the village also is estimated to spend less than it budgeted for in 2012-2013. That year’s approved budget was for $1,326,330 and according to Welch’s predictions, North Haven Village will likely spend just $1,097,349 by the end of May. The remaining money is funneled into the village’s fund balance.
While discussing the budget on Friday, trustee George Butts called the way the budget was increasing annually “out of control.”
“The benefits, the health insurance, everything is going up, up, up,” said Butts.
In the draft 2013-2014 budget, retirement benefits are estimated at $45,000, a $5,000 increase over the current fiscal year, which according to the worksheet may be $185 short of covering the actual retirement costs. Social Security benefits are estimated in the 2013-2014 budget at $19,000 — in line with the projected expense of those benefits in the 2012-2013 budget, which was $2,000 shy of covered the total projected cost.
Health insurance in 2012-2013 is estimated to cost the village $49,175, although just $47,500 was budgeted. In the draft 2013-2014 budget, the cost of health insurance is estimated at $62,000, primarily because one of the plans will expand into family coverage, according to Welch.
The increase, said Butts, is sizeable for a village the size of North Haven.
“We can’t afford to tax people out of living here,” he said.
Mayor Laura Nolan noted that North Haven Village has not increased the tax rate in six years, with projected spending often slightly above what is needed, although trustees roll that savings over into the next budget to keep increases at relative bay.
Trustee Jeff Sander questioned the size of the fund balance and what an appropriate amount would be for the Village of North Haven.
Welch said while the village’s fund balance was sizeable some years, unlike other municipalities North Haven Village does not have reserve accounts to allow the village to save for long term costs in building maintenance, improving the trail system, or public works, for example.
“But we haven’t done that,” she said. “We have allowed our fund balance to float there and use it against the budget and that is one of the reasons we have higher numbers in the budget.”
In terms of defraying the costs of benefits, Sander and Butts stressed they would not look to change the current model until some of its decades long staff members have retired. But they said in the long term they would like to look at what other municipalities — small in size — do to keep those costs down.
Nolan said she would be open to considering a plan five or 10 years down the road.