AGENDA #2d

BUDGET WORKING PAPER

TO:                  W. Calvin Horton, Town Manager

FROM:            George Small, Engineering Director

SUBJECT:       Alternatives for Increasing Revenues and/or Decreasing Costs in the Engineering Department (in response to Budget Review Committee Report)

DATE:             April 27, 2005

The following information is provided in response to the April 11, 2005 report from the Citizens Budget Subcommittee (CBS) stating that “...each department can increase revenue by creating new and/or increasing existing fees and grants and/or by finding efficiencies to reduce expenses.  The CBS recommends base budget savings be found in each department with a combination of revenue enhancements and expense reductions.”

The CBS believes that the Engineering Department can generate revenue and/or cut costs in a manner that would result in a net positive effect on the tax rate of $45,000.

As you pointed out in your directive to Department Heads, the Engineering Department has been working with a constrained operating budget for the past several years.  As a small Department with a correspondingly modest annual operating budget, we are unable to suggest measures that would significantly reduce Department operating costs without eliminating existing personnel and associated services.  We believe that such drastic measures are unnecessary because we have identified alternative sources of revenue that would exceed the $45,000 CBS objective for the Engineering Department. 

We propose implementing new fees and increasing existing fees that we estimate would generate $65,000 annually in new Engineering Department revenue as follows:

            * Increase current charge for cemetery burial and cremation plots

            * Implement new fees for cemetery plot and monument staking services

            * Implement new fees for approval and inspection of lane and street closures

            * Implement a new fee for review of Traffic Impact Analysis exemption requests

            * Implement a re-inspection fee for driveway inspection permits

            * Increase current charges for sale of GIS data and products

            * Implement a new fee for processing address change requests

The attached table provides detailed data regarding existing and proposed Engineering Department fees and estimates of revenue from each source.

We also discussed the potential effect(s) of selling the Legion Road cemetery and adjacent property.  That property is quite valuable, and could result in a significant one-time source of revenue for the Town.  That one-time revenue would be partially offset by the loss of annual revenue from cemetery plot sales.  However, Town resources now used to maintain and administer the cemetery could be redirected, resulting in indirect savings in the Engineering and Public Works Departments.

I would be pleased to discuss this report with you at your convenience.