===PAGE 1=== Lunenburg Finance Committee Meeting Minutes Thursday, April 20, 2023 Location: In-person at Lunenburg Town Hall and broadcast on Zoom Present: Chairperson Evan Watters, Vice-Chairperson Chris Menard, Jay Simeone, Tom Balish, Tom Gray (Intermittently remote), Caesar Nuzzolo 1. Call to Order Mr. Watters called the meeting to order at 7p.m. and read a statement concerning the Open Meeting Law, and how all public meetings are legally being held remotely. This meeting was recorded and is viewable on YouTube at https://youtu.be/q91xlcBZgQ0 2. Pledge of Allegiance 3. Announcements: Mr. Menard informed the board of the passing of former Finance Committee member John Henshaw, and offered his condolences to the Henshaw family. 4. New Business: a. Public Hearing: Mr. Menard motioned to open the public hearing, Mr. Nuzzolo seconded. On vote, motion carried. Article 14 (Sewer Enterprise Fund) The Sewer Commission has met and updated the amount to account for the decrease in capital costs by $15,231.55, which covers an increase in Fitchburg sewer rates ($6,600), and an unbudgeted retiree cost of $8,631.53. Mr. Watters explained that $8,000 has been removed from the warrant article and retained earnings are now $419,718.07. Mr. Menard motioned to recommend approval, Mr. Nuzzolo seconded. On vote, motion carried unanimously. Annual Town Meeting: The committee agreed they do not anticipate a need for a last minute meeting before Annual Town Meeting on May 6. Mr. Nuzzolo motioned to close the public hearing. Mr. Balish seconded. On vote, motion carried unanimously. 5. Old Business a. Finance Committee Report: Mr. Watters read the latest draft of the report. (See Appendix A) Mr. Menard suggested including a final number regarding ARPA funds. Mr. Balish volunteered to edit the style and phraseology of the report. Committee members discussed the term under-levying, and whether it accurately describes the town’s situation. Mr. Nuzzolo suggested editing a bullet point regarding one public comment made at a prior meeting referring to the recent hike in waterfront property real estate taxes. Committee members agreed to edit that bullet point. Mr. Menard mentioned the Select Board’s investigation into the assessment process. Mr. Balish inquired whether the report should include the assessment/abatement issue before the investigation ends. Mr. Menard and Mr. Simeone discussed the assessment process, and the possibility of repeating the situation next year. Mr. Menard opined that the assessment issue is only a priority for 10 percent of the town. Committee members discussed which adjective to use regarding the situation, and agreed that though procedures have been followed, no one knows the outcome of the appellate process, and what that will reveal ===PAGE 2=== moving forward. Mr. Nuzzolo opined that the way the statements are currently written in the report are factual, and informative. Mr. Nuzzolo motioned to accept the FY24 Finance Committee Annual Town Meeting report as presented, allowing for syntax and grammatical updates up until Annual Town Meeting on May 6, 2023, Mr. Balish seconded. On vote, motion carried unanimously. 6. Minutes Mr. Nuzzolo motioned to accept the minutes of the March 22, 2023 and March 23, 2023 meetings. Mr. Menard seconded. On vote, motion carried. 3-0-1 (Mr. Balish abstained.) 7. Committee Reports: Mr. Menard recommended committee members watch the Select Board meeting regarding ARPA funds. 8. Public Comment: Mr. Watters informed the committee that the board clerk’s last day will be May 4, 2023. 9. Next Meetings May 18, 2023 10. Adjourn At 8:03 p.m. Mr. Menard motioned to adjourn, Mr. Simeone seconded. On vote, motion carried unanimously. Appendix A: ===PAGE 3=== Lunenburg continues to operate with solid fiscal policy, allowing for the weathering of unexpected storms. Under sound management and conservative practices in prior years, the Town stands poised to fund the needs of all departments and the residents within. The process of developing and presenting a budget to the Annual Town Meeting begins in the early fall with the Town Manager meeting with department heads to discuss expenses, wants, and needs. The Town Manager then presents the proposed budget to the Finance Committee in mid-February. Over the following 90 days, the Finance Committee meets with the various department heads to discuss their individual line-item budget requests. The Finance Committee then votes on the recommendation of the finalized omnibus budget provided by the Town Manager and reports to the Annual Town Meeting. As the Legislative body acting on the Town’s behalf, the Finance Committee recommends the approval of the budget as presented at the Annual Town Meeting. Historically, the Capital Plan has been funded though free cash, taxes revenues, and unspent capital appropriation from prior years. For FY24, the available free cash is substantially lower due to the need to fill the overlay account with enough funds to offset a worst-case scenario with resident tax abatements. Without the use of ARPA funds, the proposed Capital Plan would fund $1,039,010, a 52% decrease from FY23. With the inclusion of the ARPA funds, the proposed Capital Plan funds $2,025,010, a 6.4% decrease from FY23. This conservative approach allows the Town to fund critical items in the Capital Plan while reserving enough money to cover potential abatements. Understandably, a significant issue on most resident’s minds revolves around the current assessments and subsequent tax levy. While the personal positions, understanding, and potential outcomes of the taxpayers may widely vary, there are a fair number of certainties. 1. The increases felt by some taxpayers do not indicate a windfall of cash for the Town. Lunenburg is restricted by Proposition 2½ (Mass. Gen. L. c. 59, § 21C) and, as such, is unable to raise the overall levy of the Town by anymore that 2½% of the previous year’s levy limit plus any New Growth and Excludible Debt. The table below outlines the changes in taxes, showing the modest increase from year to year.   FY22 Final FY23 Final FY24 Budgeted FY22/FY23 % Change FY23/FY24 % Change Prior Year Levy Limit $ 26,049,570.00 $ 27,131,063.00 $ 28,043,722.60 4.15% 3.36% 2½% Increase $ 651,239.25 $ 678,276.58 $ 701,093.07 4.15% 3.36% Estimated New Growth $ 430,254.00 $ 234,383.77 $ 200,000.00 -45.52% -14.67% Debt Exclusion $ 2,828,812.36 $ 2,831,932.29 $ 2,477,704.00 0.11% -12.51% Taxes: Total $ 29,959,875.61 $ 30,875,655.64 $ 31,477,704.00 3.06% 1.95% 2. Many Town residents have filled abatements, disputing the assessments made of their homes. Should all abatements be granted, the Town would under-levy approximately $1,500,000. To best cover this potential outcome, the Town Manager has recommended the transfer of $1,500,000 from Free Cash to the Overlay Account. The Town residents would not be responsible for any abatements granted. 3. The abatement process and Overlay Account are the proper methods of both addressing the issue and reversing the financial burden placed on some of the Town residents. Noteworthy topics: • The end of FY23 will see a 14.6% reduction of our Debt Service and Excludible Debt, from $3,174,257.53 (FY23) to $2,712,069.90 (FY24). This decrease is the result of the retiring of excludible debt from the Public Safety Building and the Primary School as well as a completed MSBA reimbursement for the Primary School. As a result, debt capacity is made available for future projects. An analysis, run by Unibank, projected a variety of scenarios to guide the Town in debt capacity spending over the next 30 years. In total, the Town has $42,000,000 that will be useable while remaining under debt capacity limits. With this number in mind, the Select Board, Municipal Building Design Committee, and the Town will be better prepared to plan for the future. • Federal relief, during the COVID-19 pandemic, provided Lunenburg with $3,500,000 in ARPA funds and $1,900,000 in ESSER funds. ARPA funding is to be spent at the discretion of the Select Board. In an attempt to minimize the delivery time, the Select Board voted to spend $986,000 in ARPA funds to order three items from the Capital Plan; a replacement Rescue Ambulance ($506,000) for the Fire Department and two-6 wheel dump trucks ($240,000 each) for the DPW. The remaining $2,514,000 has yet to be allocated as the Select Board considers recommendations from various department heads and Town citizens. ESSER funds allowed the School Department to hire 13 new positions across the district. Social workers, guidance counselors, subject specialists, tutors, and technicians were all brought into the school to provide much needed support to the Town’s youth. The School ===PAGE 4=== Department will need to look for additional funding or other ways to maintain the new staff as the last of the ESSER funding is required to be spent by the end of September 2024. • Cherry Sheet offsets and other State monies have historically, on average, underwhelmed the Town. While FY23 did see a larger than expected increase (11.5%) in Chapter 70 (public school funding) funds, the outlook for FY24 is the likely mandatory minimum increase resulting in a 0.6% increase. In FY23, the Ch. 70 increase was more than enough to cover the 20.4% increase in the Monty Tech assessment. For FY24, the 0.6% increase will not be enough to offset the 12% increase in the Monty Tech Assessment. The Finance Committee met with our State Delegation and pushed for a reassessment of the formulas used to determine funding for small municipalities. The Finance Committee wishes to thank the Town Manager, Finance Director, Capital Planning Committee, and all the department heads that gave their time and effort to produce the budget presented at the Annual Town Meeting. We recommend the passage of the Town Manager’s omnibus budget and the funding of Lunenburg’s FY24. Respectfully, The Lunenburg Finance Committee: Evan Watters, Chair Christopher Menard, Vice-Chair Thomas Balish, Clerk Jay Simone Thomas Gray Caesar Nuzzolo