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WVN Newsletter #203: No override seen

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  • waylandvoters1
    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
    Message 1 of 1 , Feb 20, 2007
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      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
      taxpayers?


      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
      expenditures.

      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
      funds.

      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.

      CAPITAL BUDGET

      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
      reject it.

      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
      Patrick's initiatives.

      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
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