Advisory Committee Present: David Lindsay
November 3, 2009 Randy Dinjian
Bob Czekanski
Connie Benjamin
Terry Abdalian
Linda Day, Town Secretary
The Advisory Committee met at the Town Hall at 7:00 p.m.
Present: Board of Selectmen Kenneth Troup, Stan Wysocki and Curt Plante; School Committee members Richard Fly and Nancy Federspiel.
Mr. Lindsay provided everyone with a spreadsheet showing the primary reason for the current budget difficulty. Mr. Lindsay stated that the problem was not a reaction to the weak economy, but was instead the result of changes in the level of Free Cash replenishment from one year to the next. In October of 2008, Free Cash was replenished by $862K, whereas in October of 2009, it was replenished by only $144K.
Ms. Costello, Town Accountant, believes that the lower replenishment for the most recent period is the result of a decrease in departmental turn-backs of approximately $250,000, a decrease in excess revenue of approximately $100,000, an increase in unpaid property tax of approximately $250,000 and a net effect of deficits of approximately $92,000.
Mr. Lindsay provided a revised spreadsheet projecting New Growth for fiscal 2011 at $100,000, which is level with the fiscal 2010 estimate. Mr. Lindsay raised the FY 2011 projection in response to Mr. Plante’s observation that building activity in town was picking up.
In having the preliminary fiscal 201l budget spreadsheet prepared, Mr. Lindsay had asked Ms. Costello to assume that all expenditures were held level with FY 2010 except for step increases and contractual cost of living adjustments. He wanted revenues raised from property taxes to be at the maximum that 2-1/2 would allow, plus all the debt exclusions. He further requested Ms. Costello to modify from FY 2010 levels any revenue estimates that she thought might be different in fiscal 2011.
These assumptions produced a deficit of ($382,969). Certified Free Cash was $1,001,594, after subtracting the ($382,969) deficit, uncommitted Free Cash was $618,625. Assuming that a minimum of $500,000 of Free Cash was needed at the end of the process, there was $118,625 that could still be allocated. Increases in the library budget, health insurance and Worcester County Retirement were likely to consume all of this $118,625, plus an additional $41,375. Therefore, even with a zero increase for the Nashoba Regional School District assessment, $41,375 will need to be cut from the Town's budget. If the Schools were given the same increase as last year (3%), the increase would be approximately $350,000, and our budget shortfall would be nearly $400,000, which could only be achieved by reductions
in Town Government staffing and/or hours.
Mr. Lindsay would like to review the Town of Bolton’s preliminary budget situation at the Tri-Town meeting where representatives of the Nashoba Schools administration would be present.
Mr. Fly reported that 75% of the Nashoba Regional School District budget is personnel. The Schools are obligated to a 3% COLA increase in their contracts and 2% in step increases for many teachers and other employees, leading to a nearly 5% Schools' expenditure increase "at the get go" even if employment remains level. Their challenge will be to work that out. Supt. Wood is comfortable that he can manage this year's (FY 2010) budget and that no mid-year cuts will be required.
Mr. Troup reported that he had met with Supt. Wood and George King last week to review the preliminary budget with them. The school officials noted that even if they achieve what is their own objective of a zero increase in the Schools' budget, that does not necessarily mean that Bolton's assessment will be flat because of the complexity of the State formula for determining town assessments.
Mr. Fly stated that with recent legislation--related to a Nashoba reserve fund--having been signed, the Schools have an incremental $135,000 in each of the next three fiscal years to help offset revenue shortfalls.
Mr. Plante asked if there has been any consideration given to opening up discussions with the teachers regarding the union contract. Mr. Fly indicated that this is an option on the table and that whether an attempt is made to do this remains to be seen.
SOLUTIONS FOR UNANTICIPATED INTEREST PAYMENT
Mr. Lowe provided the Advisory Committee with three scenarios suggested by Treasurer Donna Madden and Accountant Julie Costello to cover the interest payment of $62,525 for the bonding of the Public Safety Center. These were:
- Requesting a transfer from the Advisory Reserve Fund in the amount of $62,525;
- Placing an article on the Annual Town Meeting warrant to appropriate the funds from free cash;
- Taking some of the principal pay-down slated for the June BAN for trucks, the new copy machine, etc., which would require an article at town meeting to move the money from the principal to the interest line item.
Committee members expressed dissatisfaction with the first two alternatives because both would have an adverse impact on the Town’s fragile Free Cash position. The third alternative was thought to have some promise, and further discussion regarding this approach would be scheduled with the Town's Treasurer and Accountant.
DISCUSSION OF THE RELATIONSHIP BETWEEN THE TREASURER, ACCOUNTANT AND THE ADVISORY COMMITTEE
It was the Advisory Committee’s opinion that an unbudgeted interest payment on the Public Safety Center bond would not have become a serious issue if there had been more interaction on the part of the Treasurer with the Advisory Committee regarding this matter. The Advisory Committee expressed their disappointment that the Finance group (Treasurer and Accountant) had not involved the Committee in discussions of recent financing activity as had been done in the past when the previous Town Administrator was overseeing the staff. Committee members expressed the hope that, with the involvement of the Selectmen and the Town Administrator, a collaboration could be re-established between the Advisory Committee and the Finance group.
Meeting adjourned at 10:00 p.m.
Meeting adjourned at 10:00 p.m.
| 
