The 2013-14 budget for the fiscal year beginning July 1 also shows revenues totaling $10.8 million — a 5 percent increase over last year's revenue — and a single-year revenue surplus of nearly $364,000.
The spending figure represents a slight increase over the $10.28 million budget for the current fiscal year.
Well over half of the town's spending will be for police services, which has been allocated $5.58 million. The town's parcel tax revenues account for 20 percent of that budget, according to the report.
Because the town has no sales tax revenue, which largely supports services in many other cities, it is dependent on parcel tax and property tax revenues. "Significant negative changes in either of these two revenue sources would have a significant effect on the town's ability to provide services to the community and would create an ongoing structural deficit," Mr. Rodericks wrote in the report.
The parcel tax will expire in June 2014, and the town is preparing to ask voters to renew the tax in November. Sixty percent of the tax revenue is designated for police services, and the remainder goes to public works projects.
In the new budget, three reserve funds total $4,069,641, including a $1.6 million contingency to cover emergencies and a $2.1 million "unassigned reserve."
The council and the town's Finance Committee have also been reviewing a five-year financial forecast, and have discussed strategies to pay down the town's long-term liabilities for employee pensions and post-employment health care costs. The five-year forecast suggests that the town, in addition to paying the budgeted amounts for the annual required contributions, also contribute to a side fund to whittle down the long-term debt.
Although the council approved the budget as presented last week, some tweaking is expected in the coming months. In future meetings, the council and staff will discuss options including increasing the town's code-enforcement budget, adding more funds to emergency-preparedness efforts, and allocating funds for the Town Center master plan.
In the coming months, the council is also expected to look at other revenue sources that would supplement parcel and property tax revenues.