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WVN #473: FinCom digs for detail to shape FY14 budget

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  • waylandvoters1
    Dear Wayland Voter, The Finance Committee is digging into the complicated process of producing an annual budget for citizens to vote on next spring. The
    Message 1 of 1 , Dec 7, 2012
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      Dear Wayland Voter,

      The Finance Committee is digging into the complicated process of producing an annual budget for citizens to vote on next spring.

      The recommended budget for Fiscal 2014, which begins July 1, 2013, will appear in the Annual Town Meeting Warrant a few months from now.

      In some first steps, during its Nov. 26 meeting the FinCom heard a presentation from the assessors. Three new FinCom members began contributing to the process and learned about past practices. Drafts of capital requests for FY14 were discussed.

      No Tax Relief from Town Center This Year

      Assessing Director Ellen Brideau told the FinCom that she does not expect any increase in property tax revenues from the Town Center development until FY 15.

      Brideau noted that a supplemental agreement with the developers specified that they would pay property taxes based on the Fiscal 2006 value of the property and then-existing building -- $23.423 million -- until the property value exceeds that amount.

      See page 52 at
      http://www.wayland.ma.us/Pages/WaylandMA_Selectmen/2009STM.pdf

      As of Dec. 3, KGI Properties, the developer, had a property tax balance due of $83,064.11.

      Future plans call for a Beth Israel medical building, a health club, and about 40 condominiums. The original plans called for 88 condominiums. The new condos are expected to be constructed by the builder of the nearby Wayland Commons.

      Assessors Office Handles Many Tasks

      Susan Rufo, vice chair of the Board of Assessors, explained that in addition to establishing fair and accurate property valuations, the assessors are responsible for handling applications for deferrals, personal exemptions, community preservation exemptions, and abatement requests for real property, personal property, and motor vehicle excise taxes. The exemptions and abatements are paid out of the overlay account. Exemptions comprise about $300,000 annually.

      She noted the processes in the Assessors office have been improved in recent years so that fewer abatement requests are submitted and the annual amount of the overlay account has been declining.

      After the overlay account has been used to settle outstanding liabilities, including court cases such as the current ones involving utility poles, any excess for a particular year can be returned to the town's general fund.

      FinCom member Cherry Karlson asked the Board of Assessors to provide information on possible overlay turnbacks in January in time for the first FY14 budget draft in February.

      The town is starting the third year of a full list and measure process where all properties are re-evaluated. Brideau reported very good cooperation getting into homes. This has already resulted in a fairer and less contentious assessment evaluation. Brideau noted that fairness is to be emphasized; the total amount of assessed value has tracked market conditions (with a two-year delay---sales in 2012 are reflected in the FY14 assessment/tax rate calculations); fair assessments do not necessarily mean overall lower assessments.


      Tax Rate Vs. Tax Bills

      FinCom Chair Bill Steinberg then led some general discussion designed to help bring new members Carol Martin, Steven Lesser, and Nancy Funkhouser up to speed. These new members had already taken on assignments covering parts of the general budget and as communication liaisons with certain departments.

      Steinberg noted that voters seem to concentrate on the tax rate rather than the amount of the tax bill. Communities such as Weston with many very large residential properties have high average tax bills but much lower tax rates than Wayland.

      But buyers of houses usually look at both the tax bill and the mortgage bill to decide what they can afford. A higher tax rate and lower house value may be less desirable than a higher house value and lower tax rate. It makes no difference in the monthly payments but affects the resale value and ultimately the net worth of the homeowner. Resale values, as well as new growth, are key components in the valuation of the town's real estate, which along with the voted budget, determine the Wayland tax rate.

      Each tax year, the first two tax bills are based on an estimated tax rate. The last step to finalize the FY13 tax rate will be taken when the Board of Selectmen meets Monday, Dec. 10 to determine if the town continues a single tax rate, or imposes a slightly different rate on commercial property. This vote will then allow the filing of the FY13 tax recap with the state. The selectmen have consistently favored a single rate in recent years, arguing that businesses contribute a small percentage of total tax revenue.

      The calculations involved in the FY 13 tax recap sheet will be discussed at the Board of Selectmen's meeting. http://www.wayland.ma.us/Pages/WaylandMA_Assessor/FY13TaxRateRecap.pdf

      FinCom Seeks Detail on Capital Requests

      FinCom has already received capital requests from town departments. This led to a number of questions and complaints about incomplete information. In general, FinCom wanted more details and more explanation about specific requests. In particular, Capital Improvement Plan forms from the Department of Public Works were found to be incomplete and contained outdated or irrelevant information from the previous year. New FinCom member Lesser asked if anyone had considered outsourcing or privatising DPW functions. Lesser also wanted more information on the lifetime of trucks. He asked how often ambulances and dump trucks needed to be replaced.

      Fincom members noted that the DPW has obtained a lot of new equipment in recent years and now has an extensive collection of vehicles. When asked why there were more trucks than people to drive them, it was explained that the same person might use two different trucks for two different purposes, even in the same day.

      The major rationale for the formation of the DPW from several smaller departments in 2009, as given by the selectmen and town administrator, was to save money.

      DPW Garage

      FinCom members noted that it would be cheaper to buy an already existing garage in Framingham than to build a new DPW facility here. That was countered by arguments on efficiency and convenience.

      However, all agreed that the decades-old DPW garage is on its last legs and unlikely to last more than one or two more years without extensive repairs. It was felt that a new structure was necessary, although the location and size of the new construction might still be discussed. The construction of a new DPW facility would be in a separate Warrant Article and would not be part of the operating budget. It would also require a debt exclusion vote. The cost is currently estimated at $12.4 million.

      The FinCom was stymied by the lack of a facilities use study authorized last spring by Town Meeting. The study was intended to help determine the realistic use and lifespan of some existing buildings. But the study only went out for bid very recently. The lack of this information (about Town Building, Library and Fire Station II) was brought up several times regarding potential drainage improvements in the town building parking lot, the library and potential plans for a library/ Council on Aging facility.

      Frustration with the prioritizing of water main repairs came up. The determination of which water main should be fixed first has changed several times in the past. The water department is now an enterprise fund and not part of the operating budget.

      FinCom wanted more information about field maintenance requests -- what had already been done and what was planned for next year.

      There was a problem with approved repairs of the Middle School roof. Money allocated in the last Town Meeting was less than any of the bids to do it. It has been noted recently at a School Committee meeting that asbestos had been found in the roof, and dealing with it would incur unexpected costs.

      School and Department Budgets

      All departments, including the School Department, have been asked by FinCom to prepare three proposed budgets for FY14.

      1) "Maintenance of Effort" or "Level Services." This takes the current FY13 budget and adds the contracted steps and lanes and utility cost increases.

      2) "Level Funded." This pays for the steps and lanes and utility increases by reductions elsewhere in the budget. In this case the FY13 budget total becomes the proposed FY14 total.

      3) "Ten percent reduction." In this case, the proposed FY14 budget total is 90% of the FY13 budget.

      The school department and the library have made some progress in preparing these three proposed budgets.

      Next Steps

      The seven FinCom members, according to their assignments, will meet with town departments including the schools over the next few weeks to resolve questions. Most departments will be asked to revise the capital requests by providing more detail.

      The FinCom is posting budget documents on the town website:
      http://www.wayland.ma.us/Pages/WaylandMA_Finance/docs
      http://www.wayland.ma.us/Pages/WaylandMA_Finance/BudgetFY14

      The Capital Improvement Plan (CIP) forms for FY14 capital proposals were to be posted on the town website this week. The documents from recent years are archived here:
      http://www.wayland.ma.us/Pages/WaylandMA_Finance/plan

      -- Betty Salzberg

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