One of the more consequential Bedford Finance Committee meetings in recent years is scheduled for next Thursday, Feb. 25 at 7 p.m. on Zoom.
The proposed operating budget for fiscal 2022 – including schools – is $106,787,787, an increase of more than $7.6 million, or almost 7.7 percent, over the current year. The recommendations of the Finance Committee on spending – and how to pay for it – will be the ones published in the warrant for a vote at town meeting.
“This is an unusual year. We are spending a lot of money,” said Chair Ben Thomas as the committee prepared for its final deliberations at its meeting last week. “There are lots of different ways to go after this.”
The School Committee has recommended a three-pronged funding package – a baseline budget, a supplemental so-called “recovery budget,” and a $450,000 reserve for out-of-district special education costs. Thomas suggested considering segregating the “up-to” $1,444,957 for recovery into a separate warrant article – a “pandemic reserve fund.” That way “voters would have a say.”
A big part of the discussion will focus on the use of reserves. Town Manager Sarah Stanton offered a scenario at the meeting for using $8.5 million of the town’s $11 million in certified free cash to cover capital expenses, road resurfacing, the Finance Committee reserve, and $1 million to “reduce the tax rate.”
Thomas said he feels it could be a mistake to allocate that much free cash. The possibility of a resulting “structural deficit scares the daylight out of me.”
Member Dave Powell has a different perspective. “I see free cash as over-taxation in prior years,” he said, and like any other special funds the assets shouldn’t be “squirreled away, as long as we continue to apply a conservative approach to budgeting. I am more concerned about how to avoid having it ‘baked in’ to future budgets.”
Stanton noted that vigilance should be applied to the “operational” use of free cash rather than the amount. If money used to balance the budget isn’t replenished the following year, then the taxpayers have to make up the difference just to maintain services.
She noted that bond rating agencies look favorably on towns that add to their stabilization funds and offset future post-employment benefit expenses. Bedford will be going two consecutive years without adding to these funds. Member Elizabeth McClung said the rating agencies should consider the extremities of a pandemic in budgeting. Thomas added that the stabilization fund is close to maximized under the committee’s financial guidelines.
The proposed fiscal 2022 municipal budget, detailed by Stanton at last week’s meeting, reflects a 5.1 percent increase over the current year’s adjusted budget.
Stanton detailed the drivers for the increase, including almost $400,000 to cover the cost of four additional firefighters approved by the 2020 town meeting, as well as residual contract obligations with other public employees.
She also cited a reserve for three as-yet unsettled police contracts; funding for management pay raises; $75,000 for Finance Department network monitoring software and conversion to quarterly water billing; a 20 percent increase in water purchase; and $19,600 to increase the hours of the Healthy Bedford coordinator in the Health and Human Services Department. Stanton said the office anticipates increased demand even after the pandemic recedes. Current demand is “unprecedented,” she said, with extra hours covered by federal aid.
The town manager also outlined projections for “non-discretionary” spending. Road resurfacing grows by 55 percent – a total of more than $1,980,000. Some work planned for this year was deferred, Stanton said, adding that the town also expects $644,000 in state funding for street maintenance.
Water purchase totals $2,732,130, shooting up 20 percent, based on 2020 usage patterns. Refuse and recycling, by contract, rises by 6 percent, or almost $100,000.
The pandemic has thrown some categories of local receipts into disarray or uncertainty, the town manager said. Estimates of hotel and restaurant tax revenue, as well as tax revenue from jet fuel purchases at Hanscom Field, are expected to be down about half. No change is planned for the categories of investment income and licenses, permits, and fines. The state has delayed the motor vehicle excise tax deadline to May, another uncertainty.
The budget projects school and general government aid will decline by 5 percent, even though state officials have indicated level funding. This approach “goes along with Bedford’s history of conservative budgeting,” Stanton said. For the current year, the budget reflects a 15 percent decline in local aid, although the funding turned out to be level.
Stanton noted that the annual $80,000 in support for Springs Brook Park is not in the fiscal 2022 budget. “I feel confident we are going to be able to open with the resources we have,” she said. If additional funding is needed there could be a request for a reserve fund transfer. Meanwhile, an ongoing audit of the recreation revolving fund will address larger issues. “We are confident that we will be able to identify expenses and revenues in a way that better defines the program.”
Other explanations of points raised by Finance Committee members were:
- Attorneys from both sides are negotiating to renew the MITRE Corp.’s annual payment to the town in lieu of taxes (PILOT). The contribution for fiscal 2022 is budgeted at more than $1 million. MITRE, a federally-funded research, and development center, was the town’s largest taxpayer until a court decision resulted in full exemption several years ago. But the PILOT has compensated for the lost revenue each year.
- Costs for outside repairs, such as heating, plumbing, and electrical, are on the rise across all departments.
- Additional telephone lines are needed. Current lines dedicated to Covid-19 information are financed by federal grants that will expire when the need does.
- The vocational education budget is projected to rise by $100,000 because more Bedford students are attending Shawsheen Valley Technical High School.
- Increased early and mail-in voting have added to the elections and registration budget.
Mike Rosenberg can be reached at firstname.lastname@example.org, or 781-983-1763