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Observations on proposed FY 2015 budget

February 10, 2014

At the Fall Annual Town Meeting last October, Town Hall pushed through seven new personnel hires, in the middle of the budget year, using what officials insisted over and over again was “recurring” revenue.

As it turns out, not only was a big chunk of that revenue not “recurring” after all, but the school department will now have a tougher time balancing its own budget this year because of it.

For those of us who stood up against that spending at Town Meeting, we can call that sweet justice. But all of us, as taxpayers, are left holding the bag, so how just is it really?

Town Administrator Michael Boynton didn’t even mention the fall Town Meeting, and how it might have made this year’s budget easier to balance, during his annual budget address last Monday. Nor did he mention the palpable irony in his praise for the recently-reactivated Insurance Advisory Committee, and their efforts to reduce the town’s health insurance costs – despite surprising and unnecessary hostility from his office (and Selectmen) on the issue of reactivating that very same committee last summer and early fall.

Those were two ironic takeaways that I got out of last week’s budget address.

Irony aside, the good news, in a nutshell: the reactivation of the IAC this past fall may actually yield some very positive results for taxpayers.

That’s after Assistant Town Administrator Jim Johnson said in September that he did “not see a need” for the IAC to meet, after more than three years of inactivity during some of the worst budget times this town has ever seen, and also stated, incorrectly, that he didn’t think the committee even had jurisdiction over health insurance in the first place.

In September, Boynton also publicly attacked two RTMs who asked him about his role on the Steering Committee of the town’s health care joint-purchasing-group West Suburban Health Group, and why the IAC had been inactive for so long. Boynton said the “line of questioning” was “personally offensive” and refused to be held accountable for health insurance issues despite his often bragged about seat on West Suburban’s governing board. All five Selectmen defended his stance.

But now with the controversy behind it, the IAC has been on a roll and met twice in late 2013 since getting back together. In December, it unanimously recommended that Selectmen seek consultants to examine whether the town might see savings from leaving its longtime arrangement with West Suburban, and moving to other health care options. Boynton said during his budget address last Monday that he supported that recommendation, and Selectmen voted last Tuesday to act on the IAC’s request.

The move toward health insurance savings comes because Boynton’s proposed FY 2015 budget – a $78.6 million monstrosity – will include an 8 percent increase in health insurance costs. The increase is due in large part to higher health benefit utilization, with more employees using the system and some employees going from individual to family plans, according to Boynton. Boynton said the total amount of the hike could change by the time the final budget is prepared before Town Meeting in May, but officials expect the hike to be large and inflexible all the same.

This year’s budget also includes a 10 percent hike ($470,000) in the town’s assessment from the Norfolk County Retirement Association.

The town will bring in about $78.6 million in revenue this year, up from $75.9 million in FY 2014. That includes $61.6 million from local property taxes and new growth, and about $10 million from state aid. The majority of the remaining revenue comes from local receipts, which is projected to be about $5.1 million in FY 2015.

About $2 million of that revenue will go directly to non-discretionary spending such as the town’s annual overlay appropriation and state and county charges. Boynton proposes more than $76.6 million in municipal and school spending in FY 2015, a 2.68 percent increase from the current fiscal year.

This small town of about 24,000 people is on pace to have a $100 million operating budget in less than a decade.

Boynton’s proposed budget includes no new positions or programs, and generally provides the same level of services that the town provides currently. Some funding was re-adjusted between departments to reflect changes in demand – the most significant of which is a 5 percent funding reduction in the Recreation Department. The Walpole Public Library’s budget will also be about $60,000 smaller, not because of any spending cuts, but rather because the library’s electricity costs have been moved to the Building Maintenance budget.

Even though no new positions will be added this year, Boynton said he wants to explore reinstating a Town Planner soon. The position has been vacant since 2012, when former Planner Don Johnson retired.

Of course, the only practical way to fund a new Town Planner would be to consolidate the duties with the Economic Development and Grants Officer position – a position that, since its creation in 2005, has netted no significant economic development gains to the town despite hundreds of thousands of dollars in salaries over nine years. Many other communities in the state do not employ Economic Development Officers as Walpole does – the duties of the position normally fall under the jurisdiction of the Planner’s office.

Meanwhile, Boynton said the school department budget will increase by a modest $564,747, 1.49 percent, this year – for a total of $38,378,360. That figure represents the town’s traditional 2/3 split of the budget to the school department.

Both Boynton and School Superintendent Lincoln Lynch said that the district is hurt by discouraging state aid figures which project just a $100,000 increase from FY 2014, from $9.9 million to about $10 million. Boynton said he expects that number to change, potentially in a positive direction, before the Spring Town Meeting.

Boynton said the school district’s appropriation will “present challenges,” and said their funding is “simply in need of a boost.”

“Increases in state aid combined with potential savings will likely bring some relief, but further adjustments will still be needed within the district,” Boynton said.

Just two years after the passage of a $3 million override that primarily benefited the schools, it seems that the school district is again running out of money. Where did all the override money go?

The answer is that both Boynton and Lynch rushed to spend a lot of it when we could not afford it. Both Boynton and Lynch insisted at the Fall Annual Town Meeting that unexpected increases in state aid and local receipts, discovered only after the start of the 2014 fiscal year, were expected to be “recurring” money, rather than one-time. That was the argument that Boynton, Selectmen, the Finance Committee, and the School Committee all used to push through more than $200,000 in new spending, hiring seven new employees, including five in the school department alone. One of those five positions was a newly-created Transition Coordinator at the high school.

Multiple RTMs stood up in the fall to call out town officials for their irresponsible decision to hire new staff in the middle of the fiscal year with newly-found revenue. Town officials kept insisting it was recurring money, but now, as it turns out, a lot of that revenue actually will not recur in the next fiscal year after all.

Maybe the school district would be in a better position now if they hadn’t rushed through so much spending with an unsustainable revenue stream and shaky state aid and local receipt numbers in the middle of the fiscal year.

In other news, Boynton also reported that the town has more than $3.9 million in funding available for specific building maintenance and other town building projects. That includes a $950,000 surplus from the construction of the new library, that can be used for any future building project, $200,000 from the sale of the old library, and $1.6 million in total saved prison mitigation pork from FY 2013 and FY 2014.

The Walpole Public Library also has a pot of $119,000 in state money reserved exclusively for its use, to be used for “green resources.” Boynton said that money can be used for new windows, roof repairs, or other similar projects at the new library, as the need arises over time. Watch how quickly that money will get spent down.

Boynton said that town voters could face an override for new town facilities at the South Street superfund site as early as this fall.

One Comment leave one →
  1. Tom Driscoll permalink
    February 10, 2014 4:54 PM

    Sam – Once again – great job and right to the point. I probably told you I have been surveying health plans to see what they expect in costs. The numbers gravitate around 7-8%. Ironically about half is Affordable Care Act fees imposed on employers. It would be great if we, like Saugus, could cut cost by one million but even that number is chump change compared to the 13.5+ million through over reserving by WSHG \ Tom

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