FinCom Wrestles with FY23 Budget Guidelines

December 14, 2021

The Finance Committee is expected to approve guidelines for the fiscal 2023 municipal and school budgets at its virtual meeting Thursday.

And at this point, there doesn’t appear to be a consensus.

In recent years the committee has limited town departments to a 2.5 percent spending increase, while the school budget guideline has been 3.5 percent. The numbers presented on the town meeting warrant are prepared by the Finance Committee.

Seven members of the committee attended last Thursday’s meeting, and when polled by Chair Steve Carluccio, they had some different ideas about the guidelines.

Based on an earlier overview provided by the superintendent of schools, member Thomas Busa preferred an education budget increase of 3 to 3.25 percent, “just to get something on paper, so we have something to look at next week.” His colleague Paul Mortensen said the plug-in number should be 3.5 percent “because I think that’s where we’ll wind up.” Members David Powell, Steve Steele, and Erica Liu were closer to 3 percent; Carluccio at 3.25. (Three committee members were absent at that point.)

Earlier, member Elizabeth McClung said she wanted to “express my concern on behalf of the taxpayer.” She suggested a computation of a 1.5 or 2 percent budget increase across the board. Powell said he feels that “this model should be close to showing we can afford 2.5 or 3.” That’s closer to the allowable increase under the state law known as Proposition 2 ½ plus new growth, he said.

Finance Director David Castellarin said he has prepared a working model with increases of 2.5 percent as placeholders. “We know things are going to change from the guideline to the final budget,” said Carluccio. “This is a living, breathing process.”

The committee discussed several other components of the proposed fiscal 2023 budget:

  • A majority favored a $1 million commitment to the town’s trust fund for eventual payment of other post-employment benefits (OPEB), mostly health insurance premiums for retired town employees. The town’s long-term liability is many millions; annual payments to the fund were suspended for the current year. Castellarin noted that the principal generated more than $1 million this year independent of an appropriation.
  • Carluccio said the state certification of fiscal 2022 free cash, which may be known before the end of December, will trigger decisions on OPEB as well as how to replenish the stabilization fund and the size of the reserve fund. Busa said he sees no need to wait; the committee should make its best estimates.
  • The estimate for the main capital article for next year will be $2.3 million. Carluccio noted that over the past six years, the annual total has ranged from $2.4 million to $2.6 million. Busa noted that before that, the capital article usually topped off at $1.5 million.
  • The committee agreed with Castellarin to increase the revenue line for state aid by 1.5 percent. Recent budgets have level-funded this line, which won’t be known for several months. The increase is “more realistic,” the finance director said.
  • Similarly, the finance director estimated a 2 percent increase in state assessments – “a more realistic scale, since these always go up.”
  • The utilities line will remain at $1,810,500, as recommended by Facilities Director Taissir Alani. Steele said he was “amazed” by the prospect, as fuel costs have been rising for weeks. Castellarin pointed out that the town has long-term agreements with energy providers on prices.
  • Castellarin made some estimates in categories of local receipts, based on five-year averages. These included a $150,000 increase in vehicle excise tax to a total of $2.1 million, and $950,000 for license and permit fees.
  • The placeholder for insurance and benefits will show an increase of more than $500,000. Castellarin estimated that health insurance premiums will rise 5 percent, adding, “This is a number we can fine-tune when the rates come out.” The line also includes retirement and unemployment insurance.
  • The finance director said bonded debt payments, including principal and interest, looks like it will total $10,630,459, an increase of $528,607.
  • The vocational education increase will include tuition for one student attending Minuteman Technical High School in Lexington. Bedford is part of the Shawsheen Technical High School district, but students can attend Minuteman if a particular program of study is not available at Shawsheen. A year at Minuteman is several thousand dollars more costly.

Mike Rosenberg can be reached at [email protected], or 781-983-1763

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