LENOX — Residential property taxes would increase nearly 2.5 percent under the $27.3 million municipal budget proposed by Town Manager Christopher Ketchen for fiscal 2017.
During a recent presentation to the Selectboard, Ketchen pointed out that the projected operating budget would be 2.8 percent higher than the current spending total approved by annual town meeting voters last June.
The increase allows level services for residents and businesses "at a reasonable price and provides for a sustainable operation," he said.
According to current estimates, the owner of an average single-family home valued at $385,957 would see a tax bill of $4,808, an increase of $115 over the current year, Ketchen said.
He emphasized that he and schools Superintendent Timothy Lee are on the same page on the district's operating and capital budgets, "a rare thing, indeed," Ketchen said.
The town manager's budget fully funds Lee's recommended operating and capital budgets, Ketchen told the Selectboard members.
The operating budget for the school district totals $12.2 million, including benefits but excluding revenue from school choice and other sources. That's 45 percent of the total town budget.
Ketchen pointed out that his local revenue projections are "very conservative, and we've consistently beaten them in years gone by." In addition, he assumes state aid will be flat.
He described reserves such as "free cash" at $3.2 million and stabilization funds at $666,000 as "very strong."
A trust fund for municipal retiree benefits other than pensions (known as OPEB, Other Post-Retirement Benefits) stands at close to $1.9 million.
Among the strategic steps listed by Ketchen is an emphasis on Town Hall staff training and development, as well as more resources for partnering with the Lenox Chamber of Commerce.
"We're going to continue to aggressively pursue shared services" with Lee and Stockbridge, he said. As of Jan. 1, Lenox and Lee are sharing a single Building Department.
In addition, responding to public requests, the budget proposal includes an extension of lifeguard hours at the Town Beach this summer,
Ketchen cited "serious cost escalations" for the town, including a sharp increase in health insurance, retirement and other benefits— up by $304,000 (12.4 percent) for current employees and $265,000 (19.8 percent) for retirees, compared to the current year.
He also noted unsettled union contracts under negotiation that could impact the budget.
Looking ahead, Ketchen pointed to a currently projected 5.6 percent budget increase for the 2018 fiscal year.
"That's a number we certainly find unacceptable," he said, "and we'll be looking at a road map to eliminate as much of that as we can."
The anticipated gap is caused by a $350,000 annual loss of state reimbursements as the 20-year bonds that financed the middle and high school projects in the 1990s are paid off.
The state reimbursement has exceeded the interest payments for the bonds by that $350,000 amount, Ketchen said.
Raising taxes to close the gap "is not the strategy we're embarking upon, for obvious reasons," he said.
Potential solutions include controlling operating costs, a one-time use of reserves, and cost savings through shared services agreements, said Ketchen.
He also listed a "massive expansion" of capital investment programs, including a $4.2 million wastewater pump station replacement and a $5.5 million project to replace a 130-year-old water main along Richmond Mountain Road.
In addition, the town's 40-year-old wastewater treatment plant will need an upgrade with enhanced, state-required performance standards, a project described by Ketchen as "one of the largest capital improvement projects in dollar terms that the town has ever had to shoulder on its own."
A new public safety facility to replace the current police and fire stations is also on the distant horizon.
Capital improvements to the town-owned building housing the public library and the Lenox Children's Center in the former Center School will be needed through a master plan. Roof work is also anticipated for the town's two school buildings.
The budget proposal will be reviewed by the Selectboard, Finance Committee and Capital Improvement Committee. Adjustments will be made as needed before the budget is presented to annual town meeting voters on May 5.
Commenting on Ketchen's presentation, Selectboard Chairman Edward Lane called it "extremely thorough, professional and well put-together."
Several members called the long-term outlook "scary."
"We're positioned pretty well, we get it," Lane said. "We're not hiding our heads in the sand."
By the numbers . . .
Highlights of the projected Lenox town budget for the 2017 fiscal year that begins this July 1:
Proposed operating budget: $27.3 million
Increase from fiscal 2016: 2.8 percent
Estimated residential property tax increase: 2.45 percent
Median single-family home value: $302,800
Current median tax: $3,682
Estimated fiscal 2017 tax: $3,772
Average single family home value: $385,957
Average current single family home tax: $4,693
Estimated fiscal 2017 tax: $4,808