The town of Milton is asking voters to consider a $7.8 million budget on Town Meeting Day.

The proposal represents a 5.3 percent total spending increase, town numbers show. The tax levy, or the $5.6 million to be raised by property taxes, is up 3.2 percent.

With a projected 1 percent grand list growth, if approved, the budget would cost the owner of a $250,000 home an extra $48 in taxes in fiscal year 2018, finance director Sarah Macy said. This would mean a less than two-cent increase on the tax rate, she said.

Town manager Donna Barlow Casey said staff took stock of the town’s needs after FY17’s “ground zero” budget that aimed for no tax increase.

“If last year was the ground zero budget, this is the first year of building a new budget and aligning that with the town’s desire to grow and to continue to provide excellent service to the community,” she said. “It’s a good foundation.”

Despite this, Barlow Casey said the town is under-resourced in nearly every department. Staff proposed $240,000 for additional personnel salary and benefits, a request the selectboard largely trimmed.

The situation worries Barlow Casey, particularly given the town’s shrinking fund balance.

Last year, Barlow Casey and town treasurer John Gifford discovered the town has been transferring about $340,000 from its unassigned fund balance to the general fund every year, quickly depleting the town’s reserves.

By Macy’s math, if the practice continues, the $970,000 unassigned fund balance will be gone by FY19. Raising the same amount of revenue would require a three-cent tax rate hike – since 1 cent raises about $110,000 – unless the town finds another income source, she said.

This doesn’t account for regular operating cost increases, upcoming negotiations with two bargaining units and more, Barlow Casey said.

“When you look at all of that, that’s a worrisome future vision,” she said.

“We’re already in a very tight, resource-challenged environment,” she continued. “We need to be talking about that.”

To start, the selectboard has considered a four-year rolling reappraisal and a possible tax increment financing project that staff will present at the board’s meeting Wednesday, after the Indy’s press deadline.

Another budget factor this year was paving. The board has generally budgeted $400,000 in this line item, which paves only about four miles of road. Ideally, the town would pave seven miles a year to keep up with wear and tear, Macy said.

This year, the board transferred an additional $200,000 to this line from the town’s sidewalk and highway reserve, draining that fund, which is populated with the halfpenny tax levy voters approved in 2012.

There’s also a .75-cent levy for fire and rescue and another halfpenny for recreation each year. The board will discuss keeping the highway fund when it sets the tax rate in August, Barlow Casey said.

She called the fix a temporary one to get Milton’s paving program back on track, keeping in mind the perception that local roads are deteriorating, one Barlow Casey doesn’t deny.

“We built a lot of roads without really looking at the engineering,” she said. “The cost to repair is not just paving; it’s reconstructing the roads.”

Barlow Casey added many towns are considering returning paved roads to dirt – a scenario the board posed to her and the other town manager finalist during public interviews in 2015.

Milton, however, is focusing on prioritizing which roads to pave. She said two selectboard members will meet with public works operations supervisor Dustin Keelty to discuss this again before Town Meeting.

Similarly, the board hasn’t identified which projects to fund with FY18’s capital budget.

The budget earmarks $325,000 for these big-ticket items – close to a $30,000 reduction from FY17 – but the projects that will use this money aren’t finalized, officials said. Capital items are also funded with impact fees, reserve fund dollars and grants.

Upcoming proposed projects include replacing large equipment like the loader and excavator and vehicles like police cruisers, constructing a road through the newly-acquired Village Cemetery, adding power to the recreation pavilion, creating a dog park and more, a town spreadsheet shows.

Barlow Casey said an upshot of Milton’s recent financial reviews is learning it has a wealth of grant projects for infrastructure in town. This includes the recent $850,000 sidewalk grant to fill in gaps along Route 7, which Barlow Casey called “a huge win.”

That project was part of the Milton 4D vision, which aims to improve streetscaping and walkability from the Milton Diner to the Clark Falls Dam.

On that theme, this year’s budget also increases the professional services line item to hire consultants for economic development initiatives like 4D and other “destination marketing” work, Barlow Casey said.

The budget also includes dollars for the planning office to digitize documents to provide a backup in case of a roof leak, she said.

Overall, Barlow Casey thinks the budget balances the town’s needs with the taxpayers’ ability to pay.

“It gives us the opportunity to maintain level of service for a small increase to the taxpayer,” she said. “It positions us structurally to grow in a planned way.”

Learn more about the town budget by attending Pre-Town Meeting at 6 p.m. on Monday, March 6 at the Milton High School auditorium.