From gasoline, to groceries, to annual property tax hikes ,the cost of running a household is on the rise.
While some residents have had enough — witness the defeat of the 1 percent Community Preservation Act surcharge at the Andover ballot box — others seem resigned to the increases.
"Everything's expensive," said resident Lynn Schade, on her way into Market Basket in Shawsheen Plaza. "It's hard. It isn't just Andover. Andover's part of a much bigger world and national picture. We need to pay for what we enjoy."
This year's average Andover property tax bill is about $6,800. Without a Proposition 21/2 override and substantially higher taxes, programs could be eliminated and public employees let go, say officials.
"It seems to be one of those unsolvable problems," said Abbot Street resident Mary Joan Morris. "Every community is facing that. It's not just Andover. It's not that the local communities have done anything wrong."
Where does the money go? Andover's budget is more than $124 million. When factored together, the total cost of Andover employee salaries and health insurance is expected to cost $83.6 million this fiscal year, an increase of $14.4 million compared to the $69.2 million spent in fiscal year 2004.
Among the leading budget busters, according to Andover officials, is health insurance. The cost of insuring both active and retired town and school employees has risen $4.5 million, or 55 percent from fiscal year 2004 levels.
In addition to health insurance increases, total employee salary expenses for both the town and schools have jumped $9.9 million, a 16 percent increase over fiscal '04 levels.
The cost has climbed both to pay for raises and because of the addition of new employees. Andover has added the equivalent of more than 88 full-time positions since FY '04 — all but 1.5 of which were hired by the School Department.
Different type of raises
Public employees can receive different types of raises each year. There are annual salary increases covering cost-of-living adjustments. and workers can receive pay bumps each year for accruing work experience in town. These are known as step and longevity increases. Andover teachers advancing their degrees — such as those earning a masters degree — can also receive raises known as track increases (see related story, page 1).
"The basic salaries — including steps and tracks — and the health insurance, those particular budget numbers in the picture, those are the cost-drivers," said Finance Committee Chairwoman Joanne Marden. "Those are the big numbers in the equation."
Over the last several years, Marden said the town and schools have been able to cover cost increases each year because of revenue from new growth and by increasing the property tax levy by the 21/2 percent normally allowed under state law. But the new construction has slowed.
"If you have money coming in, you can afford it," said Marden. "It's when you don't have the money coming in..."
Next year Andover officials will raise the tax levy to its legal limit, but are budgeting for only $1 million in new growth associated with real estate development — or roughly half of what the town has collected during previous years.
"It's very difficult to be able to maintain that for the long-term when new growth slows down like it has now," said Selectmen Chairman Brian Major, referring to the cost increases associated with employee salaries and health insurance. "We can't be hiring the quantity of people that have been hired over the last five years. That's not sustainable."
New hires drive up salary costs
If the school department's current request is honored it will have added the equivalent of 103 new full-time employees over the past five years. In budget discussions, school officials have said the majority of these people are required under federal and state laws.
Town Manager Buzz Stapczynski said Andover's other municipal departments have minimized salary cost increases over the last five years by not hiring additional staff. Also some veteran employees have retired — including long-time public safety workers and both the former town health and planning directors.
"What's kept our numbers down is we haven't had an increase in employees," said Stapczynski. "We've had a number of senior people retire over the course of the last five years. ... There's been some turnover in staff."
But the addition of more school employees over the last five years isn't the only cause for increasing salary costs, according to School Committee member Deb Silberstein. She pointed to numerous salary enhancements within municipal contracts. Each year, Town Meeting approves money to the Accumulated Benefit Account to pay retiring town workers for items such as unused sick time.
"We do not have any of those benefits on the school contracts," said Silberstein, also a former Finance Committee member. "Some people get stipends, but we don't have accumulated benefit, we don't have sick-leave buy-back, we don't have vacation leave, we don't have overtime. These are big numbers on the municipal side and we don't have those."
Because officials work under significant restraints when it comes to balancing the annual operating budget with available revenues, Major said the salaries and benefits awarded to Andover employees must be considered a single package.
"There's a finite amount of money that's available each year," said Major. "You've got to balance the health care with the pay raises for employees."
Notes about the figures used:
Town employee salary figures used in this story include all forms of compensation except for off-duty detail payments, which are often paid for by private sources to public safety workers, according to Town Accountant Rodney Smith.
Expenditures from the town's Accumulated Employee Benefit Account were also included. This is money annually allocated at Town Meeting to pay for town employees' unused sick time upon retirement.
School Department employee salary figures used in this package include expenses like stipends, custodial overtime and payment to substitutes, according to department Business Manager Bernie Tuttle.
Salaries by the numbers
65 — Number of Andover employees who make more than $100,000
11 — Employees who make more than the town manager
7 — Fire Department members who make more than the fire chief
32 — Number of $90,000+ employees who make more than $20,000 in overtime
