Bedford Finance Committee Chair Ben Thomas hopes that the spending increase guidelines for schools and town departments will be approved by his panel on Thursday – a couple of months ahead of the usual schedule.
“We used to do it later in the year when we had more information,” Thomas explained at a committee meeting last week. But important information was missing regardless, he said, so “last spring we talked about moving the guideline forward, because we know as much now as we will know in December.”
“Our goal tonight and next week is to take a look at the guideline,” he said, as well as at variables beyond the operating budget, “make it as reasonable as possible, knowing we can tweak it down the road, and get this out in a week or two, which was our goal last spring.”
It’s “an experiment – we will see how it goes,” he said, adding, “I think it is going to work out well.” Town departments, he noted, “take this seriously.”
At last week’s meeting, Thomas reviewed the process with four junior members of the committee. Tom Rowan and Abbie Seibert were appointed in August 2022 and have participated in one budget cycle. Mark Bailey and George Lee were appointed earlier this summer. The chair encouraged members to “ask as many questions as you can come up with.”
“We tell everyone how much they can expect will be their portion. They can build their budgets in compliance with that,” he said. “The guideline goes out in a memo: ‘This is what we think the increase is going to be. Try to balance what you have available and how much we want to expend.’” He added, “Anyone can make a case they need more money, and we can decide to give them more.
“There are no giant surprises here. We spend what we take in, which is generally 3.5 percent.”
Thomas also introduced the committee’s use of the financial model, a flexible document maintained by the Finance Department updating all of the financial variables – not only operating budgets but also capital expenditures; principal and interest; reserves such as free cash and the stabilization fund; local, state, and federal revenues; contributions to offset post-employment benefit liability.
“We use the model as a tool. The rest of the world gets the guideline memo,” Thomas told committee members. “This is the heart of the issue. If we wanted to give everyone a 3 percent increase, what would it cost, and can we afford this? You can tie this directly to the model, showing the amount of surplus or deficit.
“My view of budgeting is to make changes but make them slowly, so the town is fiscally solid 20 years from now,” Thomas said.
For the committee, “There are a number of pieces we need to figure out,” the chair continued. “This week and next week, let’s get to where we are comfortable, though it can change all the way up to Town Meeting.”
In answer to a question, he also addressed the town’s $8 million in unused tax levy, a cumulative amount under the provisions of the state law known as Proposition 2½. This also could be considered an emergency reserve. Indeed, the current fiscal year’s final accounting includes $200,000 beyond the annual levy limit, but the modest amount did not have a noticeable impact on taxpayers, Thomas said.
The chair said he hopes the early guideline decision will give the committee time to re-examine policies in areas such as the size of the reserve fund and use of free cash. Bailey said the discussion should also include the role of the unused tax levy.
Seibert pointed out the impact on local budgeting “when things happen in the world,” most recently the Covid-19 pandemic – when the budget was very conservative – but also including the recession of 2007 and 2008, “where different departments negotiated relative needs.”
“Our models never get us into trouble. It’s reality that trips us up,” and not always in a negative way, Thomas observed.
The committee spent some time with Finance Director David Castellarin reviewing preliminary projections, ranging from anticipated bonding to local receipts.
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