Tri-Town Voices Budget Concerns… March 13, 2015

| March 16, 2015 | 70 Comments

by Ann Needle  W NashobaColor
At last Wednesday’s Tri-Town meeting in Bolton, Nashoba Regional officials fielded enough opposition to its proposed budget that the planned vote on it may be postponed.

Nashoba proposed a budget hike of more than 5% for the 2015/16 school year, which is notably higher than the hikes of the past few years. This triggered some strong protest from Stow, Bolton, and Lancaster officials, who voiced concern that, even with an improving economy, town residents will likely balk at the $53.1 million package. Even if voted in, town administrators insisted it would put a marked strain on municipal finances.

As planned, Nashoba Superintendent Michael Wood pledged to circulate an alternate budget with up to 2% to 3% in cuts from the current draft before the March 11 School Committee meeting. Though this will be the last official meeting where the budget could be voted on, Wood said it was possible to stretch that a bit and perhaps arrange another meeting after the SC and town officials have a chance to review the proposal.

Much of the Tri-Town discussion focused on a “white paper,” spearheaded by Assistant Superintendent George King, outlining the district’s reasoning behind the budget hike. The paper maintained that the district kept its budget increases low over the last few years in order to help its towns recover from the economic downturn.

King pointed to such examples of fiscal health among Nashoba towns as stability, and even growth, in their stabilization funds and free cash, a declining percentage of budgets being spent on the schools (in Bolton and Lancaster), and the fact that all three towns have not raised taxes as much as they could. (For the full paper, go to www.nrsd.net, select “FY16 Budget Presentation”, then “White Paper”)

 Administrators from each town offered their own set of objections.
Stow Selectman Don Hawkes asserted that, if Stow taxed up to its Proposition 2-1/2 levy limit, “Everyone in Stow’s tax bills would be $1,300 more than what they are.” He added that the town’s proposed budget, plus school-related debt, is running over $17 million, or 66% of its budget.
Bolton Town Administrator Don Lowe reported his town is carrying a $517,000 budget deficit. Resident and former Bolton Selectman David Lindsay estimated the town is currently taxing about $500,000 below its levy limit, “and we’re not wallowing in luxury, we’re in the top 2% of towns [with the highest tax rates in the state].”

Lancaster Selectman Jennifer Leone said if the town went to its current limit of  $24 per $1,000 in assessment, “we’re done,” given the legal limit is $25 per $1,000. With very little growth projected for Lancaster over the next few years, Leone maintained that the limit can only be touched in an emergency. Lancaster Town Administrator Ryan McNutt explained that, with more than 100 homes in town in arrears of taxes, not reaching levy limit “has been meaningful for us. More than 100 families could lose their homes if we reached that limit.”

George King had explained that the district was planning to follow its pattern of keeping its Excess & Deficiency (“free cash”) account at about $2 million, use half that as revenue in the budget, then replenish the following year. He maintained this was a sound practice, given this is the district’s only source of free cash.

But McNutt countered that the district could safely draw down about $1.5 million from the account, “And it would be an outlier type of thing [for an emergency] to happen in the middle of the year that would to wipe out your bank account.”

“If we spend $1.5 million, I can guarantee you a deficit next year,” King maintained. “The argument has been to make this district a little more solvent than it was. The way we manage it doesn’t hurt anyone.”

Wood noted that keeping E&D intact also helps prevent having to go back to the towns and ask for more money if unexpected expenses crop up.
“I would much rather you were running your budget, really, really tightly, and then you come back to us [for more]. That way, we know we’re getting what we pay for.”

OPEB Obligations
Town officials were more divided when it came to discussion of Nashoba’s decision not to put something from its 2015/16 budget toward its OPEB (other post-employment benefits). Don Hawkes reported that the district’s recent audit pinpoint this unfunded liability at $53 million, up from $42 million over the past few years. “How is that being responsible fiscally?” he asked.

Wood responded, “It’s a guide, not law. In better times, I think we will have a better perspective on funding it. I would rather [hire] three teachers than put it into OPEB.”

Ryan McNutt agreed this is a marked liability, but said, “Some of these numbers [municipal OPEB liabilities] are insurmountable. There’s no possibility that they will ever get to it.” Bolton Selectman Stan Wysocki remarked that OPEB funding may not yet be the law, but not setting aside this money could affect credit ratings.

The next Tri-Town Meeting is slated for Stow on April 1.

Category: NEWS

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