by Frank Schroth
At their meeting on January 21 the Board of Selectmen voted 2-1 on a tax override strategy for FY16 & FY17. The three pronged strategy calls for a) an override in FY16 to cover health care costs associated with an injured fire fighter b) using one time “free cash” to underwrite FY16 operations which will serve as a bridge to c) an operations override in 2017. Hurley opposed the motion saying “it’s not a strategy . . . it’s playing with fire.”
Tax overrides are voted on by the residents of the town. The decision to put an override request on the ballot lies with the Selectmen. Overrides are required periodically to address the shortfall in funds available to meet the town’s expenses. Proposition 2 1/2 has been a challenge to Commonwealth municipalities. It caps any property tax at 2 1/2%. However, towns have mandated costs that exceed 2 1/2% For example, electricity costs this year are expected to rise by more than 30%. This is a cost that will impact all departments. Separately, departments have unique mandated costs. The schools for example have costs for special needs students. A student assessed with special needs that cannot be met within the district can cost the system ~$100,000. The town does have other sources of revenue. These include state aid and automobile excise taxes. The total revenue (property taxes, state aid, excise taxes etc) rarely covers the amount needed to ensure level services.
The strategy the selectmen voted on will result in an override request for funding of health costs associated with fire personnel. This request will appear on the ballot in April and will look for approximately ~$500K a year. The issue here is attending to ongoing health care for an injured Milton firefighter. The costs had previously been covered through bonding but it has been decided that is not a viable way to finance the cost. The town has repeatedly issued bonds for this purpose. The override will eliminate that and create a fund earmarked for this purpose that will stay in effect for as long as necessary
The second aspect of the strategy calls for using “free cash” to fund operations for the coming year. The town has ~$2.9 million in free cash. Free cash is money left over when revenue exceeds the budget estimate. Some revenues are difficult to predict with accuracy such as automobile excise tax revenue. The split in the selectmen’s vote illustrates a difference of opinion on the use of free cash. One school of thought argues that free cash is one time money in that it cannot be guaranteed in future years and, therefore, should not be used to fund operations but applied to one time costs. The selectmen’s decision t apply a significant amount of this year’s free cash to fund operations contradicts this. The argument is that this is a bridge and will allow the town and its departments time to educate the public on the need for an override and therefore improve chances for its success. Member Hurley disagrees strongly with the notion of using free cash to fund ongoing operations because there is not guarantee. If the override fails then the cuts will be extremely severe. He would favor making cuts now to meet the budget or putting an override forward this year. Keohane questioned if town would have appetite to pass two overrides in one year: one for the health costs and one for town operations. Leroy Walker, Chair of the School Committee was present for the discussion. The School Committee had voted in favor of this strategy the previous week. Mr. Walker was concerned about the short time frame and that asking for an operational override when there was almost $3 mill in free cash was a “big ask” of the public. Hurley was not swayed. He said it was “fiscally irresponsible and I won’t be part of it.”
In other business the selectmen:
- Heard from Colleen Corona. Easton Selectmen, on Easton’s experience with a strong town administrator. There is an article on this year’s warrant that would strengthen the role of Milton’s town administrator. Ms. Corona was present at an invitation from Member Keohane to discuss the issue. She is in strong favor a strong administrator because:
- a community this large (27,000) with a budget of $100million needs a COO (Chief Operating Officer) and the administrator should fill that role with the selectmen acting as a board of directors setting policy and strategy
- the hiring process is improved. She felt selectmen should not be charged with hiring due to interference of political considerations. Having the town administrator manage the process makes it more professional and removes the politics from the process.
Corona concluded that “Everything may work now but you have to think about the future.”
Agreed to extend demolition date to February 6th though it was acknowledged that date can not be met. For one thing neither Carrick nor the town have demolition permit approval from the Conservation Commission. The next meeting of the Conservation Commission is after the 2/6 deadline. The board will revisit the deadline periodically as needed.
In the face of the Board of Selectmen’s request for another Override for FY 17 the need to expand the town’s commercial tax base becomes more imperative.
Those elected town officials in various committees who are dragging the town in the other direction – less commercial base – are one of the major factors in the decision of the Selectmen to make this request.
The Falconi and Hendries projects are just two examples of some town officials throwing as many roadblocks in the way of a commercial base expansion as they can. Sadly, those town officials are forcing residential homeowners to pick up the slack which would be more balanced if Milton had an acceptable commercial tax base.
For those of us, and there are many, who believe that Milton is a great place to live the over use of the Override process will only precipitate an increased exodus of those who would prefer to stay in the town.
The character of Milton will not be damaged by an appropriate increase in the commercial tax base but it will be irrevocably damaged by an over burdened residential tax base.
Those elected official who do not see the greater damage they are doing to the residential affordability factor should move off the stage. A new script needs to be written and played by a whole new set of actors. The old play has had its run.
The ” one school of thought” is one that is recommended by the Mass DOR and accessing free cash for non capital / one time uses is looked upon unfavorably by S&P .
I have a hard time trying to figure out this plan .
It appears to be a ” kick the can ” strategy and not a plan.
This need for additional monies should not come as a surprise to anyone, least of all the SC. School only related contractual increases for raises totaled approx. $ 1.4 million . Under Prop. 21/2 , the Town could only the tax levy by $1.7 million , so why are we surprised?
I am not saying that the School employees do not deserve or should receive the raises, I am just saying it should not surprise the SC.
If it were not for the existence of free cash, I wonder if the strategy would still be to postpone until next year for an override.
I agree with Mr. Hurley , that what was voted on was not a plan as it did not deal with or address what happens if the override does not pass .
I think DOR recommends that towns have free cash in the amount of 3-5% of the total budget. If so, Milton’s $2.9 million in free cash shows sound financial policy, not an excess of free cash. They also recommend that free cash be spent on one-time costs. If these are DOR recommendations, why would we go against them and spend free cash to make up for a fy16 operations budget deficit? I think we need to face budget deficits head on, this year.
I find it ironic that we are facing a 2.5 override which will make it harder to afford to live in Milton yet we are constantly worried about achieving a certain level of affordable housing.