Finance director warns budget increases driven by 3% COLA, extra pay period and major software replacement

Finance Director Troy Neff told the Milford Board of Selectmen and the Budget Advisory Committee on Nov. 15 that three items — a proposed 3% cost‑of‑living adjustment for employees, an extra pay period next year and a multiyear replacement of the town’s core accounting and HR software — are the largest near‑term drivers of the 2026 operating budget.

"About $785,007.85" Neff said when asked to state the dollar impact of a 3% COLA, calling it the single largest recurring personnel cost. He also called attention to an extra pay period driven by calendar timing and a statutory revaluation scheduled for 2026 that will cost roughly $192,500 in contract work.

Neff said the town is evaluating a replacement for its legacy Munis system with a modern suite that would include accounting, an HR module and a time‑clock solution. Implementation figures he discussed include a one‑time implementation package and a lower ongoing run cost in later years. He estimated that a 2002 warrant article for Munis would equate to a substantially higher present‑day price, and said the software work would be visible across several departmental budgets.

On employee benefits, Neff said health‑care costs rose unexpectedly in 2025. The town’s prior carrier, NHIT, went insolvent at the end of June 2025; the town moved to HealthTrust on July 1 and faced a roughly 14% premium increase plus assessments related to NHIT, which together added about $200,000 to 2025 costs. "We moved over to HealthTrust in July 1," Neff said, adding that the town plans a narrower menu of plans in 2026 and will fund a smaller share of deductibles on new HSA options.

Neff urged board members to weigh one‑time implementation costs against expected year‑over‑year savings and non‑quantified benefits such as improved internal controls and knowledge transfer. He said the goal is to reduce paper workflows and make auditing and routine functions faster and less error‑prone.

The board asked for follow‑up: members requested a line‑by‑line breakdown distinguishing how much of the benefits line is premiums versus deductible funding, and asked that software proposals show net year‑one and steady‑state effects on departmental budgets. Neff agreed to provide a more detailed cost breakout to the committee.

Next steps: staff will prepare detailed vendor comparisons and an itemized benefits breakdown for the committee so members can better evaluate trade‑offs before final budget decisions.