Commentary by Frank Schroth

I never thought you’d ask. The reason an override is like an avocado is that whether discussing the need for the former or slicing into the latter –  you are likely either too early or too late.

There was little to no support for discussing the issue this past fall. The reponse was that it’s too early. We don’t know what we’ll have for “free cash”, department budgets aren’t in place, state aid hasn’t been established.

This despite the warrant committee stating last year that an override would likely be necessary this year.

We entered 2015 without any substantive discussion of an override. Budgets are now established and “free cash” is known. With that information in hand a group of town officials got together on two occasions and decided not to go for an override this year. There were at least two reasons for this. The public won’t support an override because we have $2.9 in free cash and it’s too late! There isn’t enough time to educate town meeting and the public on the need.

So the plan is to take the $2.9 in free cash and ride it, literally for what it is worth, as a bridge to a future override in 2016.

What is free cash (odd term that)?

Free cash is money left over from departments that did not spend down their entire budget, unanticipated revenue that came in higher than expected (e.g. excise taxes), and changes in rates paid etc. You can find a definition from the Massachusetts Municipal Association here.)

There are two Milton myths around free cash. One is that exceptionally high amounts (e.g. $2 million) are one time events and the other is that the money cannot be spent on operating expenses.

In 2013 the amount of free cash was $2.2 million. Officials said we wouldn’t see that high a number again. We did. In 2014 the amount was $2 million and this year it is $2.9 million. Whether these high recurring amounts are a reflection of sound financial management (see MMA definition) or a poor ability to cast financial projections is a separate question.

Some town officials have long maintained that free cash should not be used to fund ongoing operations (see MMA definition). But it is. It happened last year and will occur this year. One official, Selectman Hurley, strongly opposes this but he was outvoted 2-1 by his fellow selectmen. Hurley argues that free cash cannot be counted on year to year. In 2010 free cash was actually a negative number (-$388,072) and in 2011 and 2012 it was just over $500K.

The vote of the selectmen was based in large part on a recommendation of an ad hoc group of officials. The meeting was not public and it is not clear what process was followed. The Warrant Committee was asked to develop a series of budget scenarios and a decision made was to go with a scenario that uses the one time free cash to fund both operations and one time expenses as a bridge to 2016.

One would hope that the consequences of this decision on town departments was clear and done with open eyes and with communication back to department heads to avoid any misunderstandings. Ideally all impacts to every department should be understood by the selectmen who are the final say in whether or not to go for an override. Will all the positions approved by the Selectmen (e.g. police officers, van driver) still be funded? Further, are the risks of deferring an override for a year and the consequences of it failing preferable to the risks/rewards of going out this year?

By deferring a year the town may improve upon the chances of an override passing but our understanding is that the benefit will be diluted as a good portion of any override will need to be applied to cover the one time funds being covered by free cash this year.

Did the process that brought us here have sufficient rigor? Does anyone outside the Warrant Committee have a comprehensive, complete view of this budget and its impact across all town services? Or is the Warrant Committee being required to make Solomonic decisions yet again despite cautions voiced last year?

I am no expert in municipal finance. Maybe everything will work itself out. But don’t say it is too late, that there is not enough time. There was time and we chose not to use it.