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Notes provided by: Colleen Kirby Cho Budget and Revenue Task Force Presentation 7/21/2004 I wasn't able to make yesterday's budget subcommittee presentation by Charlie Foskett of the Fin Com but I was able to get a copy of the handout he used. Thus these are not even notes of the presentation but my understanding of what his outline says-so take all I write here with much caution. Much of what I am writing comes directly from Mr. Foskett's handout "Quality Municipal Service" July 21, 2004. I am very excited to see that he is proposing a way for the town to do longer term fiscal planning (4-5 years) than we have been doing in Arlington (sort of 2 year) in order to take a more rational approach to cover town/school goals and be prepared for alterations in fiscal resources that we are not in control of (changes in economy such as increase in health care costs, pullback of state funds, inflation, etc.) All I can say to this is Hurrah! Hurrah! Hurrah! I really want to see this happen. The goals are to provide quality school and town services (not sky is the limit services, but just enough) and to be equitable and predictable in our taxation of residents. What is just enough in terms of the quality of services Arlington provides is to be determined by our policy makers. The objectives are to make the budget process more transparent by doing long-term fiscal planning, having enough reserves to cover variations in revenue and expenses, defining and identifying structural deficits (i.e. those on-going expense items that are not being sufficiently covered by on-going revenues), and forecasting the tax capacity of the population. [This last point is especially important in light of the funding formula change proposed by the Senate as they included looking at the median income of a town's residents and not just looking at the property values as it works now]. Currently our budget system is based on "twoish" year planning, we have a haphazard reserve policy, there is broad community distrust of numbers from all sides for all reasons, there is no idea about what our tax burden really means to citizens other than "ad hoc", we have low reserves and a possible structural deficit (which if true means we wouldn't be able to hold services constant next year without an increase in revenues greater than 2.5% or eating up more reserve funds which may already be tapped out). He presented what we would need to do to develop a long term plan including specific projects that should be looked at, such as the fire stations, the Thompson and Stratton rebuilds, the effects of the School Building Assistance Program changes, pension fund performance, under funded retiree health insurance liability [a new mandate from the state], Special education mandates, the effect of the Hancock case, changes in state aid... What is the minimum and maximum fiscal goals to reach the level of quality service we really want (not the sky's the limit), what are the salary and wages we pay and why do we pay them; we don't have to be at the top of the pay scale in the area or state, what are our number of staff and other policies, what about insurance cost sharing, other... How can we best identify and address any structural deficit, how does it effect our goals for service, how long will it last, how can we get rid of it...how can we assess an equitable tax capacity on our residents based on data such as income distribution, age distribution, assessment distribution and the current tax burden...if we do need to resort to an exemption from the Prop 2.5 limit we need to show that there is a structural deficit and we need to make sure we only do this infrequently [as I understand it we've only done the exemption once since 1980s when Prop 2.5 was instituted]. And this would only be possible if the majority of taxpayers are convinced our need is justified, that it is affordable, that there are ways to aid those who are "taxed out" after 3 debt exclusions and the water and sewer rate increase. There appears to be a way to exempt certain directed stabilization accounts from Prop 2.5 which I am not clear on but as far as I can understand stabilization accounts with a directed purpose are exempt when you can get an exemption by a 2/3 vote in legislative body (not sure if this is TM or State legislature), and the regulation is IGR 04-201 and somehow this can augment and complement traditional 2.5 overrides. If anyone was at the meeting and would like to explain this section I'd be obliged. Mr. Foskett provided an example of how to stabilize an override over 7 years and he suggests uses for directed stabilization accounts could be School Building Assistance maintenance fund, Building, park and field maintenance, multi-year override vote to address a structural deficit, Special education variances, Fluctuations in State Aid. The new School Building Assistance program will have some positive and negative effects on the town, the existence of directed stabilization funds offer new tools for long range planning and financial management, it should take one year to implement a town-wide plan to identify structural deficits, additional building programs, tax capacity and variance analysis. We should be able to have results to show residents by Spring 2006. All I can say is thank you very much Mr. Foskett and the Fin Com. Is there anything we as residents, TM members, staff, elected officials can do to help this effort move forward? I look forward to the results of this analysis and am grateful that effort is being put into such rational planning. Is this a voluntary Fin Com effort or is the town administration helping out with this analysis? If I got anything wrong please let us know. SPOT
offers these notes as a service to the community. |
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