Results 1 to 15 of 27

Thread: Special Town Meeting: Budget Article

Hybrid View

Previous Post Previous Post   Next Post Next Post
  1. #1
    Join Date
    Dec 2006
    Posts
    12

    Default Special Town Meeting: Budget Article

    There are competing budget articles submitted for the upcoming Special Town Meeting, one by petitioners, the other by the Board of Selectmen. The text of the articles is available at this link, and included here below:


    PETITIONERS' ARTICLES FOR SPECIAL TOWN MEETING FILED WITH REQUEST FOR SPECIAL TOWN MEETING ON OCTOBER 7, 2011:

    We, the undersigned petitioners, respectfully request that the Board of Selectmen of the Town of Wayland call a Special Town Meeting within forty-five days after receipt of this petition and insert in the warrant therefor all subjects appearing in this petition.

    To determine, notwithstanding any prior action of this or any other town meeting, whether the Town will reconsider the sources of funding the Fiscal Year 2012 operating budget by reducing the portion of the budget to be raised by taxation and increasing the portion to be transferred from unreserved fund balance (i.e., free cash), leaving the total budget unchanged. This article calls only for reconsidering the funding of the operating budget (so as to achieve a reduction in the real estate tax rate) and not the budget itself.

    To determine whether the Town will vote to amend Chapter 19 of the Town Code by adding the following new section thereto: “At least seven days before any information pertaining to fixing any tax rate for any fiscal year is submitted to the Commissioner of Revenue for approval, the Board of Assessors shall conduct a public hearing to give interested citizens an opportunity to be heard concerning the proposed tax rate(s). At least seven days before the hearing, such information, together with the date, time, and place of the hearing, shall be posted on the Town’s website and in a conspicuous place in the Wayland Town Building.”

    ARTICLE VOTED FOR INSERTION BY BOARD OF SELECTMEN
    AMEND FY 2012 BUDGET FUNDING SOURCES

    To determine whether the Town will vote to amend its vote under Article 6 of the Warrant for the 2012 Annual Town Meeting relative to the Fiscal Year 2012 Omnibus Operating Budget by decreasing the amount to be raised by taxation by $1,000,000 and increasing the amount to be transferred from the unreserved fund balance of the General Fund by $1,000,000, without making any changes to the amounts appropriated under said Article 6.

    Authorized for submission by vote of Board of Selectmen, 4-0, on October 11, 2011.

    -------------------------------

    Below we have posted an article by the Finance Committee on the topic of the budget, and comments from the lead petitioner advocating for the Petitioners' article.

  2. #2
    Join Date
    Dec 2006
    Posts
    12

    Default

    Comments received from Lead Petitioner Tony Boschetto:


    There has certainly been a lot of attention on Special Town Meeting, Free Cash, Reserves, and most importantly tax rates.

    What does it all mean?

    Payment of your estimated tax bill for Fiscal Year 2012 (July 1, 2011- June 30, 2012) iss due next week. Compare it to the last bill you paid for Fiscal 2011.

    It represents a 7.5% increase.

    Now ask yourself, would you like to choose to pay the 2011 tax bill or the 2012 tax bill.

    Would you like to choose to pay the lower amount and still find a way to fund the entire town budget and support all the essential services?

    Would you like to choose to pay the lower amount and still maintain a healthy cash reserve to meet appropriate guidelines and be available for future emergency if necessary?

    Fortunately, thanks to a group of petitioners who requested a Special Town Meeting and drafted article 3, you have that choice.

    In order to make this choice, you must attend Town Meeting on November 17, support article 3 and vote to fund no less than $4M of the operating budget from free cash.

    This will roll-back your taxes to 2011, maintain adequate cash reserves and make no changes to the FY 12 budget.

    We have built up excessive reserves and now is the time to use them. It is fiscally responsible and will still enable us to meet our obligations in the future.

    We have forecasted various funding options to determine the possible future impact on FY 14 tax rates and determined that we can provide immediate relief and fully fund services without the need to increase future rates.

    Article 3 proposal applying $4M to fund the 2012 budget - forecasted rates
    FY11- $19.35; FY 12 - $18.98; FY 13 - $19.87; FY 14- $21.81

    Article 4 proposal applying $1M to fund the 2012 budget - forecasted rates
    FY11- $19.35; FY 12 - $20.01; FY 13 - $20.65; FY 14- $21.78

    The choice is yours.
    Last edited by Kim Reichelt; 10-28-2011 at 04:35 PM. Reason: correction to fix wrong year in post as initially submitted

  3. #3
    Join Date
    Dec 2006
    Posts
    12

    Default

    We received this article from the Finance Committee:

    Managing Wayland’s Finances
    By Wayland Finance Committee

    Much has been written about the questions residents have raised about our free cash balance and our finances. We would like to spend a few minutes to explain our strong position, how we got here and the Finance Committee’s plan to move forward.

    Over the years, Wayland has built a strong financial position through conservative budgeting and efficient operations. The Town’s financial prudence has been recognized by outside agencies, and we are consistently ranked as a top town in Massachusetts by bond rating agencies

    One significant measure of financial strength is free cash as a percent of the operating budget. Free cash means unrestricted funds generated from past years’ operations.

    Each year, Town Meeting approves an expense budget based on the projected needs and on an estimated revenue budget. Budget line items approved at town meeting have firm expenditure caps and departments may not move funds between line items. When Town departments spend less than their budgets during the year through good cost management and unexpected savings, the unspent amounts (or “turn backs”) grow our free cash balance. Given how municipal budgets must be structured, it is not unusual for overall budget turn backs to be in the 1-2% range.

    Similarly, when revenue receipts come in higher than estimated, the excess also adds to free cash. We make conservative revenue estimates, because it is difficult, especially in this economy, to predict auto sales and building starts, two of the more significant components of estimating revenues. Further, state aid is not finalized for weeks after Town meeting concludes.

    Wayland has other sources of cash reserves. For example, the Town has various defined reserve accounts, such as the overlay reserve account, water reserve account, and the school revolving accounts. These accounts, which reflect unused funds, each have an owner (board, committee, or department) responsible for budgeting, spending and monitoring the balances. When these account balances exceed their needs, the overseeing board may vote to change policies, reduce fees, enhance services or, if allowed, return the excess to free cash. These are not necessarily recurring sources of funds.

    A community's free cash level not only affects its bond rating, but also provides a financial cushion to guard against economic downturns or to meet unforeseen expenses. Experts recommend that a town like Wayland should aim for a free cash position of 5-10% of its operating budget.

    As recently as 2006, Wayland’s free cash levels dropped to dangerously low levels—about 2 percent—in part because we used large amounts of free cash to help pay for our operating budgets several years in a row to avoid raising taxes beyond the 2 1/2% allowed under Proposition 2 1/2. This was not a good long-term strategic plan.

    As the Finance Committee develops and refines its multi-year financial strategy, it takes many factors into consideration. In 2006, the four major components of the multiyear plan were: (1) grow commercial revenue (town center), (2) control costs through efficient operations and conservative budgeting, (3) modify healthcare programs, and (4) create a financial situation that avoids regular overrides. While implementing this strategy, the Finance Committee still had to propose operating overrides to the voters in FYs 2007 and 2009. The objectives of these overrides were to reduce the future need for overrides, raise free cash amounts to our target 5 – 10% level, smooth the rate of tax increases, and maintain the Town’s service levels.

    By 2011, we had attained our goal. Free cash has hovered around 5-10% of the total operating budget for the last four years, service levels have been maintained, and no operating overrides have been requested in the last four fiscal years. We have positioned the Town to withstand potential downturns in state aid and revenues resulting from the worst economic crisis in years.

    However, by the end of fiscal year 2011, our free cash balance rose to over $10 million, representing approximately 15% of the total operating budget. This occurred for a number of unexpected, but positive, reasons.

    First, local receipts came in higher than estimated (auto excise tax and new growth were significantly greater than projections).

    Second, our planned health care savings achieved through years of multi-pronged efforts were more successful than anticipated.

    Third, we received a better interest rate than anticipated on the high school construction bond and this was reflected in a bond premium that provided immediate revenue —in part because of the Town’s strong financial position.

    Fourth, investment income was higher than planned due to the high school borrowing’s interest earnings.

    All these are predominantly one-time occurrences. We cannot expect nor should we plan to repeat these savings in the future.

    In August, the Finance Committee began the process of developing a multiyear plan that is designed to incorporate changing financial conditions, including the opportunity to provide tax relief in this difficult economy. We understand adjustments must be made regularly. Accordingly, we have developed a go-forward strategy to address the current situation, while maintaining our solid financial position. Our strategy is as follows:
    • Maintain current service levels.
    • Continue to plan for no operating overrides through FY2015 or later.
    • Reduce free cash levels steadily until we meet our 5 -10% target.
    • Reduce the FY2012 tax rate to provide immediate tax relief. The Finance Committee is supportive of immediate tax relief in FY2012 that takes into account the impact on Town services and future tax increases.
    • Tighten future revenue estimates. We implemented tighter revenue budgets that will track actual revenues more closely, thereby reducing that source of free cash generation.
    • Minimize expense budget increases. Expense turn backs reflect good cost control by departments, and although it is difficult to estimate employee turnover, utility costs, and many other variables, we are implementing processes to more accurately forecast these amounts. For at least the seventh consecutive year, we have already given guidance to Town departments to continue flat or decreased non-personnel budgets or to provide a detailed and compelling case as to why an increase is needed.
    • Continue to use free cash to minimize increases in the tax rate beyond the amount allowed under Proposition 2½. For future years, we plan to avoid large swings in the tax rate in any particular year through measured and targeted use of free cash.
    • Closely monitor build-ups in reserve accounts and discourage boards from accumulating excesses. We expect to achieve this goal through improved and more frequent financial reporting as has already been planned as a result of The Abrahams Group review and the Operational Review Committee’s recommendations.
    These financial steps give the best long-term results, while taking into account the desire we all share for meaningful and immediate tax relief.

    This month, a group of citizens filed a petition calling for a Special Town Meeting to consider additional use of free cash to reduce taxes. Last week, petitioners calculated this request at $4 million. Conversely, other residents have voiced concerns that it might be more prudent to address the higher than desired level of free cash in a manner that protects our level of services while minimizing the need for operating overrides or large tax increases in future years.

    We can only use the free cash once. So, the larger the amount of free cash we use now, the greater the tax increase we face in the future to maintain services. The Finance Committee’s goal is to present the Town with a plan that responsibly provides tax relief now while preserving our services and minimizing future tax increases in FY2013 and 2014.

    The Finance Committee plans to provide a supplemental mailing that further analyzes the proposed articles from the petitioners and the Board of Selectmen. Working together, we can continue the responsible fiscal management that has served us well over the past years, provide level services, and reduce our high free cash position with some immediate tax relief.

    We look forward to seeing you at Special Town Meeting on Thursday, November 17th at 7:30pm, at the Wayland Middle School. Please plan to attend and show your support for our balanced approach to managing the Town’s finances.

    The members of Wayland’s Finance Committee are Cherry Karlson, Bill Steinberg, Paul Grasso, Tom Greenaway, David Gutschenritter, Sam Peper and Rich Stack.

  4. #4
    Join Date
    Dec 2006
    Posts
    12

    Default

    We received the following from the Board of Selectmen:

    Handling Free Cash in a Fiscally Responsible Way

    At Wayland’s Annual Town Meeting last spring, residents overwhelming supported the Finance Committee’s long held multi-year strategy to keep Wayland fiscally strong. A small group of residents reject this conservative, forward-looking budget strategy, and have petitioned to hold a Special Town Meeting to revisit the process.

    The strategy of preserving adequate cash reserves, investing in capital, maintaining adequate service levels, sheltering residents from overrides and avoiding large tax increases has worked well. Wayland boasts the highest Moody’s rating in Massachusetts. We now are in the enviable position of providing tax relief by drawing down our free cash balance.

    By comparison, some of our neighbors are in much worse straits. Wellesley is facing a $5 million operating override to maintain services. Sudbury’s repeated failed overrides and lack of cash has led to overcrowded high school classrooms. These are the types of scenarios Wayland voters sought to avoid when, in supermajority votes, they adopted the Finance Committee’s multi-year financial strategy this past spring.

    Since then, unexpected increases in revenue from auto excise taxes, building permits, and other sources, have resulted in $1.7 million more free cash today than at the end of FY11, four months ago. Ideally, this “problem” would be best addressed at our spring 2012 Annual Town Meeting, when the town budget is traditionally debated. However, petitioners want to address the free cash issue now in a Special Town Meeting, which will cost the town approximately $20,000.

    So, on November 17 Wayland will hold a Special Town Meeting to decide the magnitude of a tax relief package. Attendees will choose between two proposals: Article 3 from petitioners and Article 4 from the Selectmen.

    The petitioners argue that both proposals will lead to similar results by the end of fiscal year 2014. They say the only difference is one of timing of the tax relief give-back. This is simply not correct. Although the Selectmen and petitioners used the same spreadsheet model, the assumptions and parameters chosen are drastically different, and could lead to significant problems in the future.

    • Petitioners’ Article 3 gives the owner of the average house valued at $592,285 about $1,000 back this fiscal year. Article 4 gives the same taxpayer about $400 back.
    • Article 3 proposes using $9.2 million of free cash between now and the end of fiscal year 14. Article 4 proposes using $7.3 million. At the start of fiscal year 14, Article 3 projects that free cash will be about $5.6 million, while Article 4 projects $5.8 million.
    • Petitioners’ Article 3 estimates that local receipts will grow by 10% next year, and turn backs will be 3% going forward. (Turn backs are funds returned from operating budgets at the end of the fiscal year when expenses are lower than budgeted.) Over the years, our free cash balance grew because of three factors: conservative budgeting of revenues; unexpected revenues, such as grants, healthcare savings and insurance payments; and larger than expected expense turn backs. The Finance Committee has already implemented tighter budget projections, resulting in lower turn backs beginning immediately. Moreover, there are no known, one-time revenues in the future. Given the sluggish economy, Selectmen’s Article 4 estimates that local revenues will remain flat for next year and then grow by 2.5% afterwards. It also assumes that turn backs will be no more than 2%. In short, the petitioners paint a far too rosy picture.
    • Petitioners’ Article 3 assumes a total of $500,000 of cash will be used for capital improvements and none for pension prepayments. Selectmen’s Article 4 assumes $2.5 million in free cash will be used for capital projects and $1 million in pension prepayments. We believe this a prudent way to reduce free cash that allows residents to achieve lower than expected costs for these items in future budgets.
    • Petitioners’ Article 3 assumes that cash from restricted account reserves can be used to fund future budgets. The fact is these reserves have been set-aside for specific purposes and require Town Meeting votes to appropriate. For example, by law only the Board of Assessors can determine, and then release, overlay reserve account excesses, if any, to free cash.
    • Petitioners’ Article 3 assumes tax increases of about 5% and 10% in fiscal years 2013 and 2014 respectively. Wayland has never approved tax increases as high as the petitioners recommend. Selectmen’s Article 4 assumes about 3% and 6% for the same period.

    Ask yourself this: will you support a 10% tax increase in two years—the highest ever proposed in town history—to maintain town services, as the petitioners recommend?

    If it turns out that the Finance Committee projections are too conservative, the Board of Selectmen will propose additional tax relief in future years. On the other hand, if the petitioners are wrong, tax increases could be well over 10%, overrides will be needed almost immediately and/or services will be cut to the bone.

    One of the four lead petitioners argued to our Board last month, “Let’s have overrides! We want our overrides back.” The Board of Selectmen does not think annual overrides are good public policy or sound financial strategy.

    The choice is clear. The stakes are high and will have far-reaching effects. The course is yours to decide. Whatever your opinion, please come to Special Town Meeting on November 17. As always, Wayland’s future is in the hands of those who show up and vote.

    The Board of Selectmen

  5. #5
    Join Date
    Nov 2005
    Location
    Wayland MA
    Posts
    1,431

    Default

    The Wayland Voters Network frequently comments to the effect that Town boards are frequently/usually/always in agreement ... as if such agreement is inherently a bad thing.

    They do so once again in their latest newsletter, from which I've excerpted the following:

    Quote Originally Posted by WVN
    [T]he Board of Selectmen reaffirmed its endorsement of its Article 4 applying $1 million of free cash to the current (FY12) budget, even as FinCom members said the committee unanimously decided it was "comfortable" using $2.25 million of free cash to reduce taxes.

    ...

    The split between the two boards is relatively unusual.
    Sure, WVN doesn't come out and say that agreement is a bad thing, but those familiar with the tone of their newsletters and the positions they explicitly or implicitly take won't have trouble reading between the lines.

    Boards agreeing?! "Dogs and Cats living together"?! [grin*] How could that possibly be?! Why, it's as if they're discussing matters thoughtfully and coming to consensus rather than engaging in fits of yelling and name-calling.

    *My insertion of "Dogs and Cats living together" is a joke. The fact that I followed this quote with a question mark AND an exclamation mark is not an indication that I find such an occurrence to be unbelievable. In fact, an actual dog and an actual cat live together quite well at a certain Pleasant Street address.

  6. #6
    Join Date
    Mar 2008
    Posts
    448

    Default

    Quote Originally Posted by Jeff Dieffenbach View Post
    The Wayland Voters Network frequently comments to the effect that Town boards are frequently/usually/always in agreement ... as if such agreement is inherently a bad thing.
    Actually, it kind of is.
    There are several explanations for why a board would, more often than not, vote unanimously on a variety of things. Unfortunately, the most likely ones fall in the "inherently a bad thing" category.

    Here are a few possible explanations:
    1. Each of the 5 or 7 of them is like-minded and they just about always see things the same way and agree on things.
    2. The peer pressure from the others is a stronger force than their own inner will to do what they think is right, even if they are alone in their vote.
    3. They are colluding.

    Considering the frequency with which unanimous votes occur on these boards, Number 1 is unlikely. The odds are just against it. Even if they are friends, which some of them are, the odds of that much unanimity is just not plausible.

    The second two explanations are much more likely. Human beings that they are, peer pressure can be a strong force that many can't resist and some will actually suppress their better judgement and rationalize their way out of admitting to themselves that they had a different idea on a given topic that conflicted with their actual vote.
    And the 3rd explanation, sadly we KNOW goes on, as is clear from one of the BOS' Open Meeting Law violations that was caught on tape. ( ) I know we're supposed to believe them when they say that they take the Open Meeting Law VERY seriously and that this was simply a mistake. But one would have to have be incredibly naive to think that they don't STILL break this law, but just in more opaque ways - in the parking lot, on the phone, through email, etc.

    Actions speak louder than words. Regardless of the promises that come out of their mouths, their actions are a much more reliable source than those words. Here's another example from a few years ago - http://www.waylandtransparency.com/offensive_email.php . This honest, transparent look into the thinking of the SC Chair when he thought his only audience was his fellow board members says a lot more than his apology in the paper the following week. It is also infinitely more believable.

    So, yes, unanimous votes occurring regularly on a board can actually be more an indication of a problem than they are something to feel good about.
    John Flaherty

    Any views expressed are NOT mine alone.
    Wayland Transparency - Facts Without Spin
    http://www.waylandtransparency.com/

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •