Note: The Tri-Board consists of the Select Board, School Committee and Finance Committee which provide most of the financial guidance for our town.
Here are some of the key numbers that were shared for FY2010 and FY2011….
- There are continuing reductions in state aid for FY2010- not all of which have been identified but there is a high likelihood that the town will receive less state aid money than originally expected. All available free cash including that used at the April town meeting (total = $1.43 million) will be used at the upcoming Special Town Meeting on October 27 to help balance the current FY2010 budget. With an estimated additional 3.5% shortfall in state local aid, there is a projected $197,000 deficit for the FY2010 budget which will likely be balanced by use of the monies from the Operational Stabilization Fund. The actual FY2010 cut to local aid is unknown at this time.
- Longmeadow faces a projected $2.1 million deficit in FY2011. This projection includes an estimated additional 10% cut in state aid vs. FY2010 projection but does not include any COLA’s for teachers, firefighters, police and other town employees. There are currently 6 town employee unions actively engaged in the collective bargaining process with the town of Longmeadow, as well as the school unions negotiating with the School Committee. Contracts for these groups expired earlier this year. Earlier estimates by Paul Pastercyzk- Longmeadow Finance Director indicated that for every 1% increase in COLA there would be an additional $300,000 in annual costs.
- There is currently ~ $2.2 million in the Operational Stabilization Fund. This was originally targeted to be 5% of the annual budget and was created as a “rainy day” fund. Rating agencies look at this account in order to rate municipal bonds which determines interest rates. If the new high school project is passed next spring, it will likely be one of the factors determining the interest rate on our bonds.
- There is ~ $2.5 million in special accounts including Community Preservation Act and ambulance reserve funds. Many of these accounts have defined purposes and cannot be used for ordinary operating expenses. There was general agreement that all of these accounts need to be identified including possible uses. Some of the monies in these accounts are already being used to pay for indirect costs. There was a continuing discussion from earlier this year to use available CPA monies to refurbish the historic exterior of Center School.
The Tri-Board spent a large portion of the meeting trying to figure out how to meet the financial challenges for the FY2011 budget. The Select Board must provide budget instructions before December 1 to the Town Manager who is responsible for developing the Town Budget.
Here are some of the questions (+ follow-up discussion) that were asked during this portion of the meeting.
- What is the definition of a balanced budget?
- Will reserves be used and if so, how much?
- Does a FY11 budget include provisions for collective bargaining agreement costs? If not, is it a balanced budget?
- Is the budget based on level services? Or level $ budget?
- If town/ school services are to be cut, how should the priorities established?
After some discussion, there was some general agreement that prioritization of services should be set by the individual groups (Select Board- town services, School Committee, school related services). Roger Wojcik, member of the Finance Committee, suggested that town residents should be allowed to weigh in on the prioritization of town services. There was no proposal as to how that might happen.
- What should be the level of capital spending?
In order to help balance the FY10, targeted capital spending was reduced from a targeted $1 million (~ 2% of annual operating budget) to $681,000. The projected FY11 capital budget maintains the spending level at $681,000.
- How about the solid waste subsidy (~ $761K in FY10)? Should the town consider imposing a user fee for curbside trash removal? How about increasing water/ sewer fees?
A number of Tri-Board members voiced opposition to increasing trash/ water/ sewer user fees as an means to balance the budget because it is simply an additional tax on homeowners. In addition, it would shift the homeowner payment from a deductible tax to a non-deductible user fee.
- How much of the Operational Stabilization Fund should be used to balance the FY11 budget?
There was serious concern voiced by a number of Tri-Board members that the Town should be careful about “spending down” the Operational Stabilization Fund or “rainy day” fund since there are likely to be difficult years ahead in FY12 and FY13 as well. For this reason Finance Committee chairman, Mark Barowsky urged the group to consider developing a 3-4 year financial plan for the town.
Here are some additional highlights…
- Regionalization of local services is being considered for cost reduction opportunities.
- Other revenue sources are being developed through ongoing discussions with town departments led by Mark Gold, Select Board member. Some of the ideas being considered include: development of a fee based “dog park” for town residents, signage and advertising in ball parks, hiring of a code enforcement officer, use/sale/rental of town owned property in the Meadows.
Overall, this meeting was a good step forward.
Select Board chairmen Robert Barkett summed it up when he stated at the end of the meeting “there is an extraordinary challenge ahead”.
I just hope that our elected town leaders are up to this challenge.