The Finance Committee made some adjustments at its March 4 meeting to try to ensure that the appropriate category of reserves benefits the optimum expenditures.
The proposal that will be presented in the 2021 annual town meeting warrant, scheduled to close March 8, calls for allocating $1.9 million from the stabilization fund to offset spending.
The offset, as approved by the committee, will be linked to the $3 million reserve fund, much of which is designed to cover the schools’ projected request for pandemic “recovery” and out-of-district special education placement expenses.
Initially, the stabilization money was targeted to offset fiscal 2022 capital expenses. But it was noted that authorization to spend from a stabilization fund requires a town meeting vote of at least a two-thirds majority.
Committee members felt that voters are more likely to endorse the school spending, and so moved to switch the destinations to protect capital spending, which now will require a simple majority to authorize.
“I don’t want to risk capital projects. There is much less risk if the stabilization fund is directed to education,” said member Steve Carluccio. He added that since this is for non-recurring expenses, drawing down the fund should not serve as a red flag to bond rating agencies.
The financial model also includes allocating more than $7 million in free cash, which has been certified at more than $11 million. Even with these offsets from reserves, the budget projects an increase of more than 4.5 percent from unused tax levy.
Town meeting has been scheduled for May 15, almost eight weeks later than the usual fourth Monday in March, because it will be held outdoors, to ensure safety from Covid-19 transmission.
So there is additional time to refine the budget with actual numbers or better estimates. For example, it appears that new federal legislation will be providing pandemic-related assistance to town government.
One proposed line item increase — $200,000 in additional water revenue – was proposed by Elizabeth McClung, who said the original number was too conservative. The change was approved 5-4.
The committee also revisited much of the discussions that took place a year ago before agreeing to endorse two major bonded projects: $5.4 million for police station expansion and $2.5 million for replacement of the library’s heating, ventilation, and air conditioning system
The reason some members expressed concern was that the cost of each project increased by about $1 million to incorporate equipment that will reduce emissions, so the town can adhere to its commitment to realize net-zero, which means achieving an overall balance between emissions produced and emissions taken out of the atmosphere.
Carluccio acknowledged that “we talked about this and approved it last year.” However, he added, “The world has changed dramatically.”
Taissir Alani, Facilities Director, said the net-zero outcome will be mandated under state law within the next 20 years. “We don’t know how they are going to enforce it,” added Town Manager Sarah Stanton.
Long-time committee member Thomas Busa suggested that the longer the town waits to convert, the more the technology will mature, perhaps resulting in a lower price. Alani replied that his recommendations are based on the net-zero energy policy approved by the Select Board.
Any chance of reconsideration ended when Elizabeth Hacala, who chairs the Library Board of Trustees, told the committee that “the system is living on borrowed time. We already had one catastrophic failure.” She added that, when the library is open, it is “a safe place when temperatures go to extremes.”
The committee also recommended approval of some $3 million in other bonded capital expenses. There were no negative votes.
The town manager delineated the other bonded projects: redesign of the North Road-Chelmsford Road intersection; designing a replacement bridge on Summer Street crossing the Shawsheen River; redesign of the intersection of North, The Great, and Concord Roads (Willson Park); and easement procurements in preparation for the extension of the Minuteman Bikeway. Some of these were postponed from a year ago, she said.
McClung expressed concern about the impact of higher taxes, citing the local unemployment rate. Stanton pointed out that many of the projects result from deliberations by volunteer boards and committees. Select Board Chair Ed Pierce said his panel always considers the impact of spending on taxpayers. He added that the effect of bonding is to spread payments over many years.
“I know we have about $300 million in depreciable assets and we have to make sure we do this on some regular basis,” Pierce said. If something like roadways are neglected, the ultimate repair will be exponentially more expensive, he said.
The committee will review the remaining warrant articles and make recommendations at upcoming meetings.
Mike Rosenberg can be reached at [email protected], or 781-983-1763