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Finance Committee Organizational Meeting

Attention non-Arlington readers: Please do not panic! No more FinComm posts until January. I have a few blog posts perking in the back of my head, ranging from the Senate race to the Superintendent to presidential date qualifications. Riveting stuff, I tell you. Oh, and Red Sox angst. Lots of Red Sox angst.

Tonight was the organizational meeting of the Finance Committee.

First up was the Manager (and Deputy Manager) who ran through the latest revision of the 5-year plan. The latest revision had more good news than bad. Some of the good news included more unencumbered funds (free cash) in unspent budget returns from last year than anticipated, and more new building than anticipated. Bad news included a lowering of projected state aid going forward. In the past, FY09 was projected to require use of the override stabilization fund – to spend down the cushion we’ve been creating since FY06. The current projection is that we can continue to save money in FY09, and maybe even make the 5-year plan into a 6-year plan. The 6th year, FY11, is currently projected to have a $1.7M deficit. The deficit grows to $6.2M in FY12 and $7.9M in FY13.

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.

The manager gave a non-report of sorts on Pierce field – there have been no developments in the negotiations between the industrial parties on the costs of capping Pierce field.

The manager reported no progress on regionalization, fire or otherwise.

Charlie Foskett reported that the Symmes property was sold, to applause from the board. He ran through the final terms of the deal. I don’t have exact notes, but the town received $6+ million in cash. If the medical property is developed, the town receives $1.5 million more. If the property is not developed, the town receives that portion of the property back, and $500,000. There was an additional payment to the town of $600,000 for some sort of compensation of anticipated lower property taxes in the early years of the project. That leaves the town owing approximately $6 million that needs to be bonded.

The bad news is that because of the current residential housing market, the property will be initially developed as a rental property. That means a much lower property tax stream to the town. The current calculation is that if the bonds are structured properly, this revenue stream is enough to pay down the $6 million without impacting the tax rate. This will take much longer than had been previously hoped. The lawsuit by the abutters cost the town millions – millions in interest, hundreds of thousands in permitting, and millions more in property tax that could have been reaped off a larger settlement.

In the long term, the town will get a 1.25% on each of the apartments as they are sold as condos in the long run, and 1.25% on each condo sale thereafter. Also, once the developer clears a 20% profit, the town gets 90% of the profits thereafter, up to $10 million.

Next up was the new Superintendent at Minuteman, Dr. Ed Bouquillon.  He politely asked what committee thought, and he got an earful.  People asked for more controlled increases in assessments.  There were several suggestions about areas he could consider including cutting the number of programs and carefully evaluating how much was being charged for non-core programs.  He talked about the work he was doing to increase in-district enrollment and revise certain business processes.  He said several things that I found encouraging.  He was up front about needing to cut costs, focus the school’s mission, and be more transparent in budgeting.  I hope that he comes through.

Al Tosti was re-elected chair, and the vice-chairs and secretary were similarly re-elected.  It was announced that Walter Fey and Dan O’Neill were resigning from the board.  We’re recruiting new members from precincts 6, 16, and 17.

The next meeting will be in January, unless a need arises in the interim.