Larger Amherst budget increase to cover health insurance costs, town manager says

  • Proposed Fiscal Year 2019 budget book —Scott Merzbach

Staff Writer
Thursday, January 11, 2018

AMHERST — A bigger-than-usual increase in the town budget proposed by the town manager is meant to cover rising health insurance costs, while preserving existing services, without triggering a Proposition 2 ½ override vote.

Calling his fiscal year 2019 proposal both a “hard budget” and a “conservative budget,” Town Manager Paul Bockelman on Thursday afternoon unveiled the $23.84 million plan. The budget, which will be reviewed by Town Meeting before going into effect July 1, is $806,335 higher than the $23.04 million current year budget.

The budget will meet the needs of Amherst and strengthen the town’s financial position, while providing contracted raises and allowances for contracts not yet settled, Bockelman said.

“This budget maintains core services,” Bockelman said during his presentation to the Select Board and Finance Committee, which highlighted the support for the same 201 positions that exist, while setting the stage for adding two firefighter/paramedic positions suggested by a staffing study.

But the reason for the larger increase is the need to cover health insurance costs.

“In many ways, health insurance is the main driver of this budget,” Bockelman said.

The critically low balance in the Amherst-Pelham Health Claims Trust Fund, the self-insured trust that has existed since 1986, means appropriating more money for employee health coverage.

“We’re fortunate we can address the health care challenge,” Bockelman said.

Family plans are rising $200 a month and individual plans $100 a month, the third increase since last year. The town and schools covers 75 to 80 percent of these costs.

These rising costs are also having an impact on the current year budget, and Bockelman anticipates that Town Meeting may be asked to make a transfer from the free cash account to balance the budget.

Bockelman said Amherst is fortunate to have an increase in revenues, with new growth projections at $830,000, significantly more than the $600,000 this year. He attributes this to visible developments downtown, as well as the customary enhancements to homes.

“We put more money into new growth, primarily due to construction projects like One East Pleasant,” Bockelman said, referencing the mixed-use building under construction. “I’m comfortable we’ll meet that.”

The budget is still able to increase how much is going toward capital needs, from 8.5 percent to 9 percent, and what is dedicated to Other Post Employment Benefits, or OPEB, from $400,000 to $500,000.

Some potential concerns, though, include whether Hadley will continue to be served by Amherst’s ambulance service. The budget assumes this, but if Hadley goes with a private contractor, Amherst will be out $490,000 in ambulance fees — money made up of a fixed annual payment and insurance collected from patients.

The town may also lose a federal grant that has paid for a police officer. The department, Bockelman said, could cut back training or overtime to cover the $95,000.

“It would not require a layoff,” Bockelman said.

If enough money is available, Bockelman suggested two priority additions.

First, $134,465 would create the two firefighter/paramedic positions.

“If we’re going to add funds to the budget, it should be for public safety, firefighters in particular,” Bockelman said.

Second, $10,000 would be the first step increase the hourly rate of the lowest paid employees, who get around $12 per hour, as the town appreciates the push statewide to get to $15 per hour.

Bockelman said residents will see a number of projects get underway in the next budget year, including those being funded from both municipal and grant sources, such as the renewal of Groff Park with a splash pad, the renovation to the North Common in front of Town Hall and development of a dog park at a site to be determined.

“From the public’s point of view, there will be a lot of activity that will be going on,” Bockelman said.

The budget also includes a $4.47 million water fund, $4.53 million sewer fund, $487,270 solid waste fund and $1.16 million transportation fund. The transportation fund, which has more money following an adjustment in parking rates, will be used to rebuild the Main Street parking lot this summer.

Scott Merzbach can be reached at smerzbach@gazettenet.com.