Bedford Finance Committee Grapples with Rising Budgets, Free Cash Depletion

February 7, 2024

The Bedford Finance Committee is scheduled to reconvene at 6:30 p.m. on Thursday to continue grappling with two fiscal 2025 challenges: escalating budgets and liberal use of free cash. 

Trying to dodge a significant property tax increase next year and structural problems in future years, the committee on Tuesday did not target specific areas. Member Karen Dunn said, “How can we arrive at a number that leaves us at a good healthy fiscal position?”

Last fall, the Finance Committee asked department heads in Town Hall and the superintendent of schools to limit fiscal 2025 spending increases to 3.5 percent. However, cumulative budgets submitted for schools and town departments each exceeded a 5.25 percent increase.

“Can we make a recommendation and have the departments back into it?” asked Dunn. “We’ve done it once already. It’s called the guideline memo,” said committee Chair Ben Thomas. 

The committee has invited school officials to join at its Feb. 15 meeting, hoping to find possible reductions.

Some members considered setting a ceiling; “this is the way I always remember it happening,” said Abbie Seibert, who served on the School Committee.

But Chair Ben Thomas said, “We’ve got to engage them in the discussion.”  

Member Philip Prince said, “It ends up becoming their explaining the rationale for every line item. And they have a rationale for every line item. It comes to a point of making choices.” 

Still, he noted, “We’ve heard places where we know there are opportunities to cut.”

Dunn said that she found the proposed school budget “opaque” because new accounting software changed formatting and categories and made year-to-year comparisons difficult. 

“Now we can’t interpret historical data,” she said. 

Seibert agreed, saying, “We are in a vacuum without it.”

The committee did not discuss the budgets of municipal departments. At a review session last month, the committee suggested that additional Police Department staff could be added if offset by reductions in street and road maintenance. Thomas said on Tuesday he was told there would not be an amended proposal.

The current financial model calls for allocating $9.5 million out of the reservoir of $16 million in free cash to balance the budget. This includes the capital article of more than $2 million, as well as road maintenance, and contributions to the stabilization fund and post-employment benefits. 

The School Committee is seeking $500,000 in free cash to seed a new stabilization fund to offset unbudgeted out-of-district special-education tuition.

Members of the Finance Committee expect to scrutinize the capital budget for items to cut or defer. 

Finance Committee members are vigilant about limiting free-cash to expenditures that supposedly do not repeat. But even with that policy, members are worried about depleting the balance that in recent years has reached unprecedented levels for reasons that may not repeat.

“There are two key questions: What percentage of free cash are we comfortable using, and what is the growth rate we are comfortable with [for property taxes]? Prince asked.

Member Tom Rowan pointed out that based on fiscal 2025 figures, a fiscal 2026 school salary increase of 4.2 percent would wipe out all other school spending increases within the guideline of 2.5 percent plus new growth. Thomas concurred, saying, “It’s a math problem.”

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