The Finance Committee, culminating a summit meeting of municipal and school leaders, Thursday approved not only a spending guideline for fiscal year 2022 but also plans for allocations from reserves that will offset the increased expenditures.
The 3.5 percent guideline for the period beginning July 1, 2021, was endorsed by a vote of 7-0-1. It translates to about $2.1 million in additional expenses. The committee agreed to use the stabilization fund and free cash to cover that.
Finance Director Victor Garofalo pointed out that there will still be a modest tax increase because line items under the umbrella of fixed costs – such as debt principal and interest, insurance, water – are projected to grow by 3.2 percent.
Although unfolding with a backdrop of the continuing pandemic and resulting rampant uncertainty, Thursday’s meeting was at times almost celebratory in its affirmation of the consensus on the future financial path. There was frequent praise for the dedication and performance of town employees during the crisis.
One particular variable that was endorsed by many speakers was the plan to ensure a pay increase next fiscal year for town department heads and employees not covered by collective bargaining. There were no merit increases this year, in response to the pandemic.
Finance Committee Chair Ben Thomas defined the guideline as an overall envelope for budget planning. Specific line items will be addressed in the coming weeks. He also said the committee’s letter to town and school department heads expressed gratitude to employees and a promise of flexibility.
Appointed and elected officials took turns outlining anticipated needs and related factors. Town Manager Sarah Stanton initially mentioned that more than $800,000 in permitting revenue is expected from now through June 2022 related to the construction of the pharmaceutical company Ultragenyx on Middlesex Turnpike.
Stanton said she doesn’t anticipate state aid cuts beyond the 15 percent budgeted this year. “We are going to have some increased expenses,” she added, citing for example the town clerk’s office. The volume of mail-in voting necessitated additional help this year, she said, “and the workload continues to grow along with state election requirements.
Hundreds of thousands of federal emergency dollars have helped the town cover deficits for protective equipment and employee overtime during the pandemic, she said. The money allowed the public health nurse to work full time and for staffing of the food bank. “We are optimistic that come Jan. 1, there will be some stimulus.”
That would help accommodate the arrival of an anticipated Covid-19 vaccine, which engenders a lot of questions, focusing on staffing, equipment, and training. Heidi Porter, director of Health and Human Services, said her department, including volunteers, administered about 1,400 flu shots this year, a 58 percent increase. But that’s only 10 percent of the population.
She expects to need contracted services for vaccination administration, costs related to storage capacity, additional staff hours “With additional CARES funds, we can continue our testing program for town staff and maybe expand to community-wide.” Porter also noted that supplies for the food bank are stored in the Shawsheen Room at Town Center, which is near capacity. Demand has increased from 30 to 80 households, she said.
Stanton said the town should plan for Covid-19 spending through fiscal year 2022, in areas such as building modifications and public health practices. Porter pointed out that some residents may choose not to be vaccinated. “Continuing with protective measures will be required for a time after the vaccine [is available],” she said.
Stanton pointed out that in recent years, the schools’ 3.5 spending guideline has been greater than that for other town departments. She said the guideline should be uniform, adding, “I don’t take the approach of spending every last dollar just because I have it…. It’s worth noting that if I request additional funds it is because the request is coming from a place of need.”
Superintendent of Schools Philip Conrad also endorsed the guideline. He agreed that there is no end in sight for an end to the pandemic. “We have not heard anything about vaccine development for children.” Conrad also noted a decline in school revenues – from rentals, sports, and performing arts events.
“We are still wondering what our learning models will look like,” Conrad continued, with options ranging from full in-person to full remote. There may be more technology needs, and professional development will have to be restored. “There are educational initiatives we are working on and we are going to have to figure out how to do them in a new environment.”
Asked by committee member Paul Mortensen about financial steps taken by nearby towns, Stanton pointed out that “we were one of the first if not the only community” that deferred pay raises. “We made the tough choices last year.”
School Committee Chair Dan Brosgol acknowledged that adhering o the 3.5 percent guideline “is going to be really hard,” but “we’ll do the work. We will commit to fitting into the guidelines as well as possible.”
Finance Committee member Elizabeth McClung said, “We need to give some thought about our spending priorities over the next several years.” Stanton replied by noting that early next month the Select Board will be talking about the three major capital proposals, including the purchase of a site for a fire station, that were deferred from the 2020 town meeting warrant.
Planning Board Chair Jeff Cohen, Town Planner Tony Fields, Library Board Chair Elizabeth Hacala, and Library Director Richard Callaghan all were comfortable with the 3.5 percent guideline.
Ronald Cordes, chair of the Board of Assessors, pointed out that there are several outstanding challenges to the town’s tax assessment now in the state Appellate Tax Board, which is not reopening until January.
Finance Committee member Tom Busa calculated that using a 3.5 percent spending guideline, $2,170,647 is “the number we have to find.”
Committee members agreed that there should be efforts to keep taxes low and rely on reserves the town has. The decision was reached quickly to plan to allocate from the stabilization fund and free cash.
Some of the latter will include about $900,000 that in normal years would be channeled into a fund set aside for future payments of retired employees’ health insurance, known as other post-employment benefits (OPEB).
The committee also agreed to maintain the reserve fund at $2 million. This is about double the normal amount, but the rationale is to be prepared for unexpected emergency needs, which otherwise might require town meeting approval. Any unused funds would revert to free cash.
Mike Rosenberg can be reached at firstname.lastname@example.org, or 781-983-1763
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