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Finance Committee Kicks Off

Last night the Finance Committee met for the first time this year. You can see a few photos from the meeting on Tabblo. The town has been working on the fiscal ’08 budget for months, but FinComm doesn’t really start until January.

Over the next few weeks the FinComm subcommittees will meet with the relevant departments and discuss the department budgets. The subcommittees will report to the full committee and the budgets will be voted. Similarly, any budgetary warrant articles have a hearing before the committee and are voted.

I plan on writing periodically about FinComm meetings. My goal is to give Arlington residents a bit more visibility into the budget process. If you’re not an Arlington resident, you might consider ignoring posts about FinComm. They may get a bit dry. But maybe I can make even budgeting sound fun! (It’s possible, right?)

There were no budgets to hear last night, but the Town Manager was there. He reviewed a series of topics, and a few others were discussed after he left.

  • Union negotiations – The library employee contract for FY07 was voted last year at Town Meeting. Since then, agreements have been reached with the 680 union and NAGE (now SEIU). The key points of the new deals are a 2.5% cost of living increase in ’07 and a 3% increase in ’08. There is an increase in medical visit co-payments that, when implemented, will trigger another .5% increase (the co-pay change will kick in when the town can implement a two-tiered co-pay system, which it can’t do yet because of other agreements and limitations within the insurance company agreements). And, starting in FY08, new employees within these unions will pay 25% of their insurance premium, higher than the 15% paid by the current union members. The library union is likely to go along with this as well. These agreements cover approximately 200 employees. The Town Manager is asking the School Superintendant to exercise the “re-open” clause and ask the teachers’ union to accept the 25% for new hires. Of course, these agreements have not yet been approved by Town Meeting, and there was not enough money set aside to cover them, though the sums involved don’t appear to be a large obstacle. There was no agreement with the fire or police unions. To me, this is exhibit 1A in the reason to fight coalition bargaining. If we were in coalition bargaining, we wouldn’t have made this progress. In coalition bargaining, we’d be stuck without any agreements until the fire and police union negotiations were completed.
  • The five-year-plan is looking more like a six-year-plan, which is a very good thing. The current predictions are that costs are controlled and the state has provided a bit more money than expected. This avoids a large deficit in the 6th year, although the 7th year (FY11) is predicted to have a large deficit. There were no significant changes since the summit.
  • Symmes will hopefully close in March. The lawsuit significantly altered the economics. Not only are there 30% fewer units, but the slump in the housing market has affected the price. It appears that may result in the units being rented until the housing market recovers. The rented units will pay significantly less in taxes. That leaves the town paying off the debt until 2013 or 2015. The town is not a skilled real estate developer, and now it looks like we will pay the price. For a while it looked like we would get lucky and get out almost-even, but the lawsuit dashed those hopes. We’re looking at more than a decade of property taxes that will go towards paying off the debt rather than paying for services or reducing the tax rate.
  • Evidently the lease with the state for the ice rink is “not executed” which was news to me.
  • FY08 budget notes
    • The use of unencumbered funds (“free cash”) is lower because FY07 “borrowed” they Symmes building permits from FY08.
    • Warrant articles are high becuase of $300k for the 10-year cycle on house inspection, $375k of Medicare Part D funds going to the healthcare liability fund, and $150k for an item that I forgot!
    • State funding levels are still unknown. Gov. Patrick has signaled that there isn’t much coming. There is concern about low lottery receipts.
    • There was discussion of the current state house debate about whether or not to let towns join the state health plan. It was noted that that would require accepting coalition bargaining.
    • Payroll may be moving from the school budget to the treasurer’s.
  • Pierce Field – Nothing new. Open question as to how much the industrial parties think the town should pay.
  • Minuteman Regional High – The school is looking for a new superintendant. The in-district enrollment declined from 504 to 456 students. Arlington’s enrollment dipped similarly, but not as much. The drop in enrollment hits their budget hard. Arlington’s assessment is anticipated to go up 10.9%, more than $300k. This was the worst news of the night. I guess I should be glad that the worst is only $300k, but $300k is still bad. Arlington is looking at sending 10% fewer students, but paying 11% more overall. After town meeting last year I said I was going to do more research about per-pupil costs at Minuteman, and that to-do item never made it to the top of the list. It just moved up several notches.
  • Park Ave Fire Station – Construction not going as quickly as planned, but still on-budget. Looking at fall occupancy.
  • Fire department overtime budget is “not great” but is “well documented” with several injuries causing budget issues.
  • Unemployment compensation was discussed and needs more research.
  • The Town Manager is talking about regionalization of some services with 12 towns.
  • Schools – Special Ed budget will likely use most of the fund created for cost overruns. As previously discussed, the budget is $700k short for ’08. At the same time as FinComm the school committee was having a hearing about fees. There was a question about curriculum tracks at the high school, and how many people were in each.
  • School renovations – The group is still working. One path getting a fair amount of discussion is to rebuilt Thompson in a few years with state aid, and renovate Stratton over several years on our own. It appears that Stratton is unlikely to qualify for state aid.
  • Fire station rebuilding – The group is contemplating four options:
    • Move the HQ to Summer St, and build a 2nd station on Broadway, and close existing stations.
    • Rebuild both where they are, which leaves Morningside response times as a problem. That might be mitigated by serving medical calls out of Winchester.
    • Rebuild HQ, move Highland to Summer St.
    • Rebuild HQ, have a joint station with Winchester.

The question of where to build on Summer St., or if Winchester would go along with the plans, are very much open. The group is in progress and has taken no votes.

The next meeting scheduled is Monday the 5th at 7:30PM to hear warrant articles. Keep an eye out, though; if we can’t schedule anyone to come, the meeting gets cancelled.


Pingback from Dan Dunn’s Podium » FinComm Reviews, Votes More Warrant Articles
Time: February 22, 2007, 1:29 am

[…] He also responded to a question about Symmes. In January FinComm had heard that Symmes housing might initially be rented rather than sold, and would therefore be assessed at a lower value. The assessor explained that legally he had three methods of making an assessment: market, income, or cost. Houses were done by the market assessment; there are plenty of home sales per year to use to extrapolate market value. Rental properties rarely change hands in Arlington so he has to do an income assessment, based on the rental property’s income. The income method leads to a lower valuation than market method. The cost method required engineering work and was not commonly done. […]

Pingback from Dan Dunn’s Podium » Finance Committee with HRC, Historic Districts, and Department Budgets
Time: March 25, 2007, 8:15 pm

[…] The committee then reviewed the current FY08 draft budget.  It is $650,000 worse than the draft that we reviewed on 1/30.  The biggest change is that anticipated net state aid is $400k less than forecast, and Minuteman came in $225k more than forecast.  Many other items changed up and down, but those are the largest.  This means that we can’t save money in the stabilization fund, and we have to find $150k to cut.  The 5-year plan is back to exactly that – it doesn’t stretch to 6 years. We approved budgets for relatively small amounts for other committees and commissions. […]

Pingback from Dan Dunn’s Podium » Finance Committee Organizational Meeting
Time: September 19, 2007, 11:32 pm

[…] I take this positive budget projection with a grain of salt. Last year we started the budget process thinking we had a big surplus. Then we learned of Minuteman’s increase and lower state aid, and the surplus shrank to $100,000. I have a theory that the same sort of cycle will appear this year. The good news comes in early, and the bad news rolls in later. […]