SALEM — Skyrocketing health insurance costs prompted selectmen to meet last night to try and slash $282,000 from a $37 million budget they already approved.
By the time it was over, the police and fire department budgets had each been cut by $35,000 and plans to spend $90,000 on computer system improvements were in limbo.
The special session was scheduled after the town learned late last week it would be hit with an 18-percent rise in health insurance costs after expecting an increase of only about 10 percent, according to Selectmen Chairman Patrick Hargreaves. He called the meeting Friday after consulting with Town Manager Keith Hickey.
Selectmen spent nearly two hours reviewing the proposed budget for 2013 after deciding the town portion of the tax rate would be $7.06 per $1,000 of property valuation.
The entire tax rate, including the county and school portions, is expected to be set this week. The total was not available last night.
Selectmen approved the budget at a meeting Sept. 24 that lasted almost five hours. The Budget Committee was close to finishing its review of the spending plan before presenting it to voters in March.
But selectmen adjourned last night before completing their review. They await further details on health insurance and the impact of proposed cuts. The discussion is to resume Monday.
Hickey said the town’s insurance broker assured him the 18-percent increase in health insurance costs proposed by Cigna may be reduced to 15 or 14 percent. Hickey said he wouldn’t know for sure until Thursday.
Since up-to-date health insurance costs were not available when the budget proposal was drafted, Hickey said he and the town’s finance and human resources directors researched regional trends. They concluded the rates would not rise more than 10 percent and that estimate was used when drafting the budget, he said.
Selectmen want officials from Neoscope, the town’s provider of computer services, to meet with the board Monday. To cut $282,000 from the budget, selectmen considered eliminating the $90,000 for a computer server room.
The board first voted 3-2 to cut $15,000 from the $90,000, with Selectmen James Keller and Michael Lyons opposed. But then Keller, convinced the remaining $75,000 would not be enough, proposed cutting the entire amount and delaying the project for at least a year.
“We can’t do it for $75,000,” he said. “It just won’t do it.”
Selectman Stephen Campbell said some of the necessary rewiring could be done, prompting Selectman Everett McBride Jr. to ask that Neoscope outline the town’s options.
“I would like to talk to them before we cut it out,” he said.
McBride, who is on vacation, communicated with his colleagues by speakerphone.
The board’s budget review began with Campbell presenting numerous proposed cuts to eliminate $282,000. The cuts come after selectmen failed last month to reach their goal of reducing the town portion of the tax rate from the $7.06 in 2012 to $6.99 in 2013. They settled on $7.00 — but just learned it would soar to at least $7.06.
“We have failed to meet the total that we set for ourselves,” Campbell said.
He blamed the town’s increasing budget costs on rising personnel expenses, saying cuts were needed in the overtime and replacement pay budgets in the police and fire departments to save money. Replacement pay is money paid to an employee who fills in for someone else.
“These two departments we really didn’t cut and they had significant increases in personal costs,” Campbell said.
Campbell originally proposed cutting $50,000 from the fire department budget, but it was rejected 4-1.
Campbell then asked to eliminate $25,000 from both the fire and police department budgets — cuts Campbell said would amount to less than 3 percent. The $25,000 cuts were approved, but then reluctantly increased to $35,000 by Hargreaves after the board was having difficulty reducing the budget further.
After significant debate, selectmen voted 3-2 to add $14,448 to the budget for a part-time assessing department employee that Hickey said was needed to make sure property assessments were accurate. Campbell and McBride were opposed.