541WVN #416: Residents: "Return surplus money"
- Sep 29, 2011Dear Wayland Voter,
Residents who say the town holds too much free cash want some of it returned to taxpayers. The Board of Selectmen acknowledged that the matter should be discussed but hasn't endorsed calls for a special Town Meeting where voters would decide what to do.
Wayland has the state's fifth-highest property tax rate projected for Fiscal 2012 and apparently the most free cash in proportion to budget -- 15 percent. The state Department of Revenue recommends 3-5 percent.
Resident Donna Bouchard told the selectmen at their Sept. 26 meeting that the town has created "a free cash generating machine" that hoards funds though over-budgeting.
In recent years, she said, Wayland budgeted millions of dollars beyond reasonably expected expenses. Bouchard said she became concerned when seven teaching positions were cut to meet stated budget strictures but that fiscal year ended with a $685,000 surplus plus revenues greater than budgeted.
An audit showed that the Fiscal 2010 budget closed with an excess of $3.2 million, she said. More than $2.5 million was turned back when Fiscal 2011 ended.
She and others speaking at public comment time favored asking voters at a special Town Meeting to approve lowering the tax rate, in effect returning part of the cash to taxpayers. Nobody specified an amount, though presumably it would be a fraction of the current surplus of about $10 million.
Time is short. To lower the tax rate in time to meet a state deadline, a special Town Meeting would have to be called next week for a date in November. if the selectmen decide against that, a petition by 200 registered voters could order such a meeting.
A Special Town Meeting could appropriate some free cash to reduce the FY 12 projected tax rate of $19.35 without changing the already approved budget or reducing services. To avoid a large tax jump in FY 13, the town probably would have to use more free cash. Residents have pointed to additional surplus funds in accounts other than free cash.
A recent consultant report on improving financial procedures recommended a special town meeting to consider surplus funds.
Former Selectman Linda Segal told the selectmen the giveback would make voters more receptive to the Board's plans for expensive future projects such as a Public Works garage and a municipal building, which will be discussed at an Oct. 19 "State of the Town" public forum. An informational public meeting on a DPW building is scheduled for 7 p.m. on Oct. 5.
"Some people are feeling taxed to death," Segal said.
Some selectmen said the cash level should be studied but were skeptical about the quick action that would be necessary to call a town meeting in time to change the tax rate. Town Administrator Fred Turkington said a reduced tax rate could create a problem in future years.
Selectmen in effect tried to discourage the idea by asserting that the Board's FY12 budget would not accommodate both a special town meeting and electronic voting, which previous Town Meeting voters enthusiastically approved and selectmen recently voted unanimously to support . The cost of electronic voting for two nights of town meeting is estimated at $25,000, less than one-fourth of one percent of the current free cash total.
At the suggestion of Chairman Tom Fay, Selectmen Steve Correia and John Bladon said they would meet with Bouchard before the Oct. 3 Board of Selectmen meeting.
Some selectmen recommended a "strategic" approach to reducing the tax rate and seeking the appropriate free cash level.
Excessive Taxation Or Fiscal Prudence?
"We've been guilty of conservative budgeting," said Selectman John Bladon,"but that's not imprudent." Selectman Joe Nolan recalled a time when free cash reached a dangerously low level. (This was $2.2 million in FY 2006. In succeeding years voters approved $6.2 million in operational overrides as well as debt exclusions for capital spending.)
Bladon said residents had voiced opposition to tax overrides, which were becoming biennial until the economy crashed in 2008.
Some supporters of a special Town Meeting say that hoarding cash is a way of avoiding override requests, effectively reducing voter control of the budget.
Meeting on the same evening, the Finance Committee discussed the use of free cash, but was not enthusiastic about applying it toward the FY 12 budget.
Some residents argue that the best way to increase the desirability of living in Wayland, is to start reducing the tax rate now. Many people regard a high tax rate as a deterrent.
The question of surplus funds is complicated by questions about a separate account, called the overlay, to reserve money for such things as tax abatements.
Resident Kim Cook questioned the handling of the overlay, subject of a guest column in the Sept. 8 Wayland Town Crier.
Cook asked, "What investigation has been done" about who has been setting overlay amounts and on what basis? A consultant first called attention to overlay totals much larger than the norm.
Cook suggested that overlay funds might be needed if the Town Center developer, Twenty Wayland LLC, succeeds in tax abatement appeals to the state, appeals made despite an agreement with the town to accept its current assessment.
Little is clear about the overlay except that the current elected assessors have never voted to set the amount, though they have sole power under the law to do so, and that the amount has been set in recent years by as yet unidentified elected officials and employees. Exactly by whom and under what authority isn't clear. Late Monday evening the selectmen approved a correction to their published column: they had written incorrectly that assessors had been setting the overlay.
Late in the Monday meeting, selectmen criticized some of the residents who had spoken during public comment.
Margo Melnicove had told the selectmen that returning money to taxpayers was "the ethical thing to do, the right thing to do, the fair thing to do."
"We want our money back," she said.
Selectman Joe Nolan said, "I'm sick of the tone and tenor" and the implication of "unethical" behavior. Selectman Sue Pope agreed, calling Melnicove's comment "terrible."
Chairman Tom Fay said he was "disturbed " at something Linda Segal had said.
Town Administrator Turkington referred to Kim Cook's comments as a "witch hunt."
Part of the evening's conversation revolved around a Sept. 23 guest column in the Town Crier by Wayland parent Tony Boschetto, a CPA and president of the Wayland Baseball and Softball Association. Boschetto asserted that over the years Wayland has overtaxed residents by $15-20 million. Selectmen said they didn't know where he got his figures. See:
For more background see WVN Newsletter #415, "Awash in cash":
-- Michael Short