Dear Wrentham Neighbors,
The process of finalizing the Town of Wrentham operating budget for FY 2012 is nearing completion. The only thing left to do is for our voters to review and discuss the Finance Committee’s recommendations and take the vote at Town Meeting on Monday, 13 June. Town Meeting will be in the KP High School auditorium starting at 7:30. As chair of the FINCOM, I had hoped to get this final information article out a couple of days ago via our usual collaborative committee effort. But an out of town business requirement upset those plans. Even so, there are a couple of key information points to be made, and it’s a rainy Saturday afternoon, so those points will be made in the first person narrative.
The warrant for Monday night is relatively short. There are just eight articles to be moved. All of them will be moved by the Finance Committee. Six of the articles are fairly routine annual requirements such as setting the salaries of elected officials and renewing revolving accounts. The primary focus will be on Article 3 which is the budget that will go into effect on 1 July. The Finance Committee’s recommendations, to include the budget numbers to be voted on are in our draft report currently posted on Wrentham’s web site.
The basic numbers regarding our recommendations are in Figure 1 below.
A few key points regarding this budget:
- As shown in the figure, the change in the operating budget is 1.22% and is the smallest in the past 10 years (and possibly the smallest going back to the adoption of Prop 2 ½ in 1982). The primary reason that it has an increase at all is due to an 8.3% increase in insurance and benefits. Without that, the rest of the budget is 0.45% below this year’s current budget. (I know that most would say such a small increase is a good thing. But the reality is that the Town has to make cuts to operational services stay within this rate of growth.)
- The budget reflects the outcome of the debt exclusion vote. Despite numerous insinuations, the debt exclusion was not a shell game. In our previous article we described what would be cut if the exclusion did not pass. There are no changes to what we previously described. The specifics can be found in Table B-1 of our report and are highlighted in Figure 2 below. As shown in Figure 2, there are significant cuts required even with a 1.22% growth.
- To balance this budget, the Finance Committee is recommending using the entire remainder of our Free Cash, a total of $245,245. We are painfully aware that this is contrary to best practices. As we previously wrote, if the debt exclusion passed we were intending to carry this amount over to the next fiscal year in order to address important capital requirements. Alas, this will not be. But to not use it would mean that the cuts depicted in Figure 2 would be increased by another $245,245.
Based on the occurrences of the past two years, we are expecting that there will be amendments made on the floor of Town Meeting to our recommended budget. So I offer a couple of key points in that regard:
- Any amendment made to add funding to a specific budget line requires that the motion include the source of funding.
- As just mentioned, there will be no Free Cash available to use as a funding source towards an amendment.
- If Stabilization is to be proposed as a funding source, it requires a two thirds approval. I will not have the final numbers regarding Stabilization until Monday morning. My expectation is that it will be in the neighborhood of $100,000 above our threshold of 5%. I will personally strongly advocate against using any of this. As we will be going into a budget that will have significant challenges in execution, one that has no Free Cash being carried over, and one that will also have $350,000 less Free Cash than this current year (as that was contributed by a onetime sale of tax property), I believe it would be very short sighted and risky to add to our challenges by reducing Stabilization.
- The only other option is to take funding from one budget line in order to add to another. I am aware of at least one potential amendment that may propose this. The key caution here is that the state of this budget would require that any line that is reduced now would almost certainly need to be reimbursed at the November Special Town Meeting. The most likely source at that time would be Free Cash. Because we are using all of this year’s Free Cash and we will not have a bump up from the sale of tax property, once the books are closed on FY11 next year’s Free Cash will likely be in the neighborhood of $700,000 (or about $400,000 less than this year). For this current year we used $331,000 just for Snow and Ice. So using this option doesn’t necessarily solve anything. More importantly, it has the potential of making things worse.
One final note – during the run up to the debt exclusion vote the Finance Committee and the Board of Selectmen continuously stressed that the exclusion was not a singular, long term solution to our challenges. Rather, it was to be the first step to a long term strategy to meet our financial challenges. The outcome of the vote doesn’t change that. In fact, it makes it even more imperative that the Town quickly develops and implements such a strategy. I believe this strategy needs to provide a three pronged approach that addresses economic development and revenue planning, modernized business practices (shared services, consolidations, improved processes), and compensation policies that integrate fiscal realities with operational objectives.
Stay tuned. And even though the Bruins are playing Monday night, please come to Town Meeting.
Chair, Finance Committee