WVN Newsletter #203: No override seen
- Dear Wayland Voter,
The Finance Committee's plan for the next fiscal year promises
to make ends meet without an override. Molly Upton has details.
Also in this newsletter: Will the state help local property
NO OVERRIDE -- THIS YEAR
Wayland's Finance Committee presented a "balanced operating
budget" of $53.1 million, thereby avoiding an override for fiscal
2008. Expenditures outside the operating budget, including
pension costs, state assessments and allowance for tax
abatements, bring the total to $56.6 million.
Expected revenues total $56.1 million, leaving a shortfall of
$500,000, which the committee intends to fund in equal parts
with ambulance revenues and additional sales of town land.
The tax increase should be within Proposition 2-l/2.
The FinCom directed departments to submit level funded
budgets other than increases for salary and utilities. Contract
negotiations are still under way.
Estimated operating expenses for FY 08 rise by $2 million or 3.6
percent, and revenue is estimated to rise by $2.3 million.
However, the operating budget is only 94 percent of total
On the revenue side, the committee is projecting income from
new growth of around $600,000, which in the past has been in
the $400,000 range. In FY 07, the town budgeted for $400,000
from land sales but will realize somewhat less. Only one
buildable parcel sold, and that brought a smaller than expected
sum. The other pieces were small parcels.
Last year Wayland's ad hoc budget committee looked at key
areas for savings, such as health care, adopting Medicare for
retirees, and controlling pension costs.
More than half the increase in FY 08 expenses is in
unclassified/benefits, which includes health care, representing
$1.22 million of the $2 million total. Pension costs are rising by
$175,000 and FinCom member Chris Riley said an article at the
April town meeting asks the town for permission to permanently
opt out of the Middlesex pension system and into the state
system. He said if the town had been in the state system since
1985, Wayland would have $6 million more in its retirement
On another item the ad hoc committee studied, Riley said the
town should start in FY 08 to realize savings from having retirees
covered by Medicare, with the town providing gap coverage. The
town should save $25,000 in FY08 and then $100,000 in FY 09,
with eventual annual savings $300,000 to $500,000, he said. He
also noted there is an article to rescind the vote taken last year to
adopt Medicare for retirees.
In FY 07, the town contributed $325,000 to free cash, and is
planning to contribute $200,000 in FY 08 and ensuing years. At
the end of FY 06, Chairman Cherry Karlson said, the cash
balance was just under $2.3 million, or 4.2 percent of the town's
total expenditures. For an AAA bond rating (which allows low
rates on debt service), the rating agencies generally prefer to
see 5-10 percent in free cash.
The town is also budgeting $500,000 on the expense side of the
ledger for tax abatements, which Karlson describes as a
standard budgeting amount. Last year Wayland had to pay
$441,000 to the owners of the Raytheon property for abatements,
which prompted the sale of town land to help cover this expense.
The Finance Committee approved three new positions: an
accountant in the finance office, a building facilities manager
who will .also handle strategic planning for buildings, and a
part-time person in the as.sessor's office. A vacant position in
the Department of Youth Services has been reclassified as
part-time. The building facilities manager will report jointly to the
school superintendent and the town administrator and will
oversee both school and town buildings.
The Finance Committee will discuss the request for a debt
exclusion ballot question with the selectmen on March 5.
The town incurs borrowing costs for exempt items and these will
be voted on as a debt exclusion on the April ballot and, if passed,
again at town meeting as part of the budget article. The exempt
category includes items that are substantial and are slated to
last for many years, such as building repairs, equipment and
vehicles costing $100,000 or more.
The other portion of the capital budget, nonexempt, also incurs
borrowing costs but the total usually replaces expiring debt, so
there is no increase in the tax rate. For FY 08, the nonexempt
portion is $1.145 million, and includes regularly occurring,
replaceable equipment and vehicles costing less than
$100,000, and a "number of items limited to capacity within the
existing debt service," according to the Finance Committee.
These items are voted on at Town Meeting as part of the budget
article, but do not require a ballot vote.
Calculations for non-exempt debt costs do not include the
$550,000 for beach improvements and a bath house, which the
Parks and Recreation Department says it will pay out of its
fee-based revolving fund account. This will make the project
tax-neutral to residents.
The figures also exclude $11.5 million for construction of a new
garage for the Highway and Park and Rec departments, which
will appear at Town Meeting as a separate article. Approval of the
garage would mean an additional increase in taxes, though not
until the next fiscal year's budget.
In the exempt category, $1.085 million is for repairs to schools,
principally new windows for Happy Hollow School.
Reading between the lines, Wayland in FY 09 might once again
need to revert to an override. For two years the town has counted
on sale of land for needed revenue. Last we heard, there wasn't
any more land being created.
WILL STATE PROVIDE LOCAL TAX RELIEF?
Gov. Deval Patrick promised during his campaign to ease the
burden of local property taxes by diversifying revenue sources.
His recent proposals point in that direction, but their fate in the
Legislature is uncertain.
Patrick's Municipal Partnership Act would eliminate tax
exemptions for telecommunications companies, a loophole that
is estimated to cost cities and towns $140 million annually.
His bill would allow communities to include town workers in the
state's health care plan, but only if local unions agree to it. If
employees would have to pay more, they'd have a motive to
Patrick also wants to force local pension plans into the state
system if they underperform the state's returns. Wayland already
plans to ask voters in the spring for permission to leave the
troubled Middlesex County plan.
One proposal would allow cities and towns to impose a 2
percent tax on restaurant meals.
Business and government leaders expressed skepticism about
House Speaker Sal DiMasi said that some of them would in
effect raise taxes, which he opposes, but told the Boston Globe
that changes in pension and health care are "good, creative
ways to cities and towns to save money."
Spokesmen for the Massachusetts High Technology Council
and the Greater Boston Chamber of Commerce responded with
alarm to reports that Patrick is looking for as many as 10
changes in business taxes. One change would allow
municipalities to raises business tax rates above current
maximums. This might have no immediate effect on Wayland,
where the tax rate for business and residential property is the
same. Wayland selectmen have speculated about the possibility
of ratcheting up business rates only if the town attracts a much
higher percentage of revenue from businesses.
Proposals for local tax relief are complicated by the state's
projected budget deficit of $1 billion or more. Patrick has
promised not to cut state aid to cities and towns.
-- Michael Short
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Michael Short, Editor