===PAGE 1=== Lunenburg Finance Committee Meeting Minutes Bilotta Meeting Room Lunenburg Town Hall Febr u ary 2 1 , 2024 Members Present: Chair Evan Watters, Vice Chair Chris Menard, Clerk Tiffaney Tavares, Board Member Tom Gray, Board Member Dave Passios, Board Member Jean Russell, Board Member Jay Simeone 1. Call to Order The meeting opened at 7:00 PM. 2. Pledge of Al legiance 3. Announcements There were no committee announcements . 4. Comment s Committee comment Dave Passios had a brief conversation about the prior night ’s meeting with the state delegates. This is the 3 rd year Dave Passios has sat through the states meeting and they have all been very similar. The programs and benefits are for towns other than Lunenburg. Public comment S able Kaufman , 27 O ak Avenue , prior to this meeting had sent an email to the committee. In this email she offered that it seems incongruous for the members of the Committee to describe the feasibility to budget increases for the town departments requesting 10% budget increases compared to what an equal increase would mean for the school ’s districts multi- million-dollar budget. Sable Kaufman b elieves we should be talking about percentage values rather than dollar amounts . Is a merit of a department ’s budget increase judged by its dollar sum over its relative percent increase if costs have risen so precipitously for all business operations ? Why would we so easily assume responsibility for one service sustaining increase over another ? Based on the meeting with the state delegation s it seemed that they are ready to help . The S chool C ommittee shared their concerns about per pupil spending, transportation monopolies among other things. Sable Kaufman appreciated that Evan Watters and Chris Menard advocated for the town. ===PAGE 2=== Laura Br zozoski , 21 Francis Avenue , is not happy with the town manager ’s proposed budget. It is not shared equally among the town ’s departments. The s chool is getting 2.94% which is more than the typical 2.5% and knows they are bound by proposition 2 ½ without an override. Other departments are being given a significantly larger budget than the schools. The schools are planning on cutting the IT contracted hours in half to save money. The town side is more than doubling the hours for their IT administrative assistant. Laura Brzozoski d oesn ’t agree with the town proposing to hire a town grant writer at this time . This position is a non-essential experimental position that ’s not a priority while the school is making drastic cuts. The E sser money was spent to meet a lot of mental health and behavioral issues needs but it is now gone and is still needed . There are 17 other school districts aside from charter schools and online only schools that spend less money per student than we do. Peter Beardmore , 282 P leasant Street, believes the town manager ’s budget is toned deaf and off ensive. After receiving the 2.94% increase in the town ’s budget there are 17 positions that need to be cut including teachers, guidance counseling , 1 secretary, reading specialist, special ed, custodians , maintenance worker, and title 1 coordinator . In order to not cut those additional 17 positions there would needs to be a 10% increase. This is a leadership problem . Tiffaney Tavares responded and stated this is heavy material to look over and impacts a lot of us. She believes that the grant writer position could open many avenues of income for the town. Currently there is only a certain dollar amount that the town has available to work with. Tiffaney Tavares thanked everyone who came out to voice their opinions. Evan Watters shares his deep concern about the cuts at the schools but there is still a town to run. The process is transparent, and everyone is encourage d to remain involved. 5. Town Manager Report There was no report from the Town Manager. 6. Finance Director Report A Finance Director was hired, Ezequiel Ayala , but has only been with the town for 2 weeks and doesn ’t have any reports yet. 7. Old Business a. Town Grant Writer Letter ===PAGE 3=== Tiffaney Tavares and Dave Passios are working on a letter for a grant writer, and they plan on presenting it at tomorrow night ’s meeting. Dave Passios doesn ’t anticipate that this grant writer will not be added to the town payroll and anticipates this position will pay for itself multiple times over . At the state reg meeting there was a discussion about legislation and allowing administrative costs to be included in the grants. b. FY 25 Budget Update/Discussion This topic will be skipped since the preliminary budget will be presented later in the meeting. c. Overlay Account Balance and General Update The overlay account has roughly $ 562,000 dollars . The re is no indication that the Board of Assessors doesn ’t have any funds that will be deemed as a surplus that could be returned. There is a spreadsheet provided to the B oard of Assessors that provides a history of all overlay abatement amounts and balances. The re is a suggested amount that should be kept in the overlap account provided by the DOR. At the present time, we are within that amount. 8. New Business a. Town Manager ’s Preliminary Budget Tonight is the start of the weekly budget presentations. The annual town meeting warrant will close on March 18 th . The finance committee will hold their public hearing on March 28 th to vote on the recommendation of the budget including C apital Pl an and other articles on the town meeting warrant that have financial impact. The a nnual town meeting will be on May 4 th and on that da y, voters will decide on the final outcome of the budget and other decisions on the town warrant. The i ndividual department presentations start on February 2 2 nd . These presentations include an in-depth review of their programs, services, and needs. The g oal for preliminary budget recommendation is to present a balanced budget that funds the operating budget using recurring revenues. Th e preliminary budget does not accomplish or meet the needs of the town or school department due to the loss of state aid and the loss of E sser funding . The Esser funds have supplemented the school budget for the last few years. It does address incremental changes in person ne l that address staffing shortages ===PAGE 4=== and community needs to ensure that the town is able to sustain these changes in the long term. There are 4 main revenues sources to address the target budget. This includes property taxes, state aid, local receipts, and other available funds. Property tax includes adding 2.5% to the prior year ’s levy , there is an estimated $ 400,000 for new growth and debt exclusion amounts. Local receipts include a $ 50,000 increase over previous F Y ’s estimated for motor vehicle excise tax, but level funded all other local receipt categories. Other available funds are cash and unexpected capital for the FY 25 Capital Plan, Sewer and Public Access Indirect costs, and artificial turf revenue for debt payment. Projected Revenues for FY 2025 - Property T ax- $32,587,335 - State Aid- $ 10,682,086 - Local Receipts- $3,266,491 - Other Available Funds - $2,431,884 o Totaling $48, 967,795 Expenditures are a r eflection of the cost of providing a level of service to residents of all ages in our community. Expenditures are divided into the following categories: - Departments - Non- appropriated costs: cherry sheet offset charges, allowance for abatements, tax title, retirement assessment. - Sewer Enterprise F und - Enterprise F und - Solid Waste Disposal Enterprise Fund - Cable Access Enterprise Fund - Other warrant articles with a financial impact include transfers into stabilization counts, OPEB trust fund and capital plan. PRELIMINARY BUDGET OUTLINE - General Govt: Funds an increase in hours for IT Administrative Assistant, includes adding a part time position in Assessors Department to assist with data collection, and includes $50K for grant writing contracted services . Overall increase of $197K . ===PAGE 5=== - Police : Includes funding for an Operations Lieutenant for ½ year as part of 10-year staffing plan; other contractual expenses. Decrease in Lock-Up Expenses. Overall increase of $129K . - Fire : Funds an increase in costs for EMS supplies and equipment line due to increased call volume, an increase in IT software specific to Fire. Overall increase of $36K . - Radio Watch : The assessment for Nashoba Dispatch decreased by $12K and the salary reserve line for desk coverage after the day shift was cut to fund the 2nd Lieutenant position, which will be available to come to the front desk during the second shift. Overall decrease of $55K. - Other Protection: Eliminates non-reoccurring expense of kennel behind PSB and change in personnel resulted in a reduction in salary costs. Overall decrease of $10K . - Facilities : Funds an increase in hours for the Recreation Director, an increase in landscaping costs, and adds a new line item for repairs and maintenance not covered by the incoming revenue for the TCP Building in the amount of $30,000. Overall increase of $50K . - DPW : Includes level service increases General Highway account for drainage related costs, stormwater projects and purchase of services and tree removal expense line; additional $50K for Pavement Management; a slight increase in the seasonal cemetery salaries line. Overall increase o f $99K. - COA : Funds an increase in hours for the Meal Site Manager. Overall increase of $35K . - Library : Increase in hours for Teen Librarian, $4K increase in programming line, increases the Library Materials line to meet the min.16% towards Library Materials that maintains certification. Includes certain IT requests in IT budget. Overall increase of $33K in library budget. - Worcester Reg. Retirement: 10.94% increase or $209K more than the previous FY. - Unclassified : Includes final rate increase for active employees of 5.7% and 6% rate increase for retirees. The other insurances are estimated at 5% and the Reserve and Salary Reserve Accounts are funded at $100K. The overall increase is $71K. to expiring debt, our overall debt is decreasing by $576K . ===PAGE 6=== - Lunenburg Public Schools : Recommendation includes increasing LPS budget by $673K (2.94%). This d oes not meet any of the budget scenarios provided by the Superintendent . The l oss of Esser funding has a large effect. - Mont achusett Tech High School : Recommendation includes a 3.75% increase of $44K. - Solid Waste/Recycling Program : Includes estimate of $17K increase. Funding currently available: - C ertified free cash- $ 1,870,612 - Current stabilization fund balance $ 2,862,006 - Current special purpose stabilization fund balance $ 2,211,683 - Current other post-employment benefits (OPEB) Fund balance $ 1,310,058 - Moody ’s Bond Rating – Aa3 - Standard and Poor (S&P) Bond rating AA+ - Unfunded Pension Liability - The Town increased its funded ratio for pension obligations from 43.4% in 2014 to 45.3% in 2018. Currently, the Town is scheduled to fully fund its pension liability in 2036 per State requirements. Free cash Free cash is defined as the close out of unexpected appropriations at the end of a fiscal year. There are multiple f actors that come into play . Free cash can come from e xcess receipts revenue , actuals versus estimated, taking in more money for tax titles, penalties, and interest. A cardinal rule of the budget is that free cash should not be used to fund operating expenses. Questions from the Committee Tiffaney Tavares asks about the increasing budget for Monty Tech and how that ’s related to the town. Heather Lemieux states that students from Lunenburg are part of the regional technical school. It ’s an assessment amount based on the students enrolled from Lunenburg. Th eir school committee votes on the assessment amounts for each town and the town can approve or not approve. Tiffaney Tavares questions who is responsible for that reconciliation where free cash ends up . Heather Lemieux states the responsibility is on the town accountant and then the DOR reviews and certifies. Tom Gray asks Heather Lemieux due to the reduction in income if she has thought about a hiring freeze for the year. Heather Lemieux believes that could be a possibility for FY 25 . Dave Passios asks if there was any unused capital and if any of that money was a complete project that was dropped off from previous years . Heather Lemieux confirms the public safety carport project was a complete project. It was put out to bid twice and both received bids far exceeded the appropriation. ===PAGE 7=== Evan Watters inquiries about the Chapter 70 formula. It seems like the state expects the town to pay more in taxes to cover it ourselves based on our assessment values, based on our income evaluation . Tom G ray thinks this may be happening in other towns and that the 2 ½ percent hasn ’t changed in over 40 years . We can and should fight with the state, but we probably won ’t get a lot of extra money . Chris Menard shares that the estimated inflations rate from 2011 and 2025 was 2.47%. Chapter 70 funding increased by 5% per year over those 15 years . This was a running average and not linear. Evan Watters asks how the Town Manager foresees th e effect o f insurance rates continuing to climb abov e the rate of 2 ½ percent what ab ility will there be to service the town and maintain town employees ’ salaries . Heather Lemieux had a recent meeting with the insurance rep resentative and broker, and we were the only community that saw a single digit out of every community they represent. It ’s going to be a continuing trend for a period . The health insurance stabilization account will be depleted with the FY 25 preliminary budget . Chris Menard requests the 10-year trends for health insurance increases. Evan Watters asks if a balanced budget is being presented this year. Heather Lemieux states that this is a continuing discussion. What the Town Manager is present ing tonight is a balanced budget, but it doesn ’t meet all the needs of the town, especially the schools. Evan Watters requested a level serviced budget for the town side. Heather Lemieux states the target budget was all contractual increases with existing staff, existing programs. b. Town Manager ’s 5 Year Financial Report This agenda topic was skipped due to the financial director starting just 2 weeks ago. 9. Minutes There is a m otion to approve the minutes from February 8 th as amended by Tiffaney Tavares , seconded by Dave Passios. Roll call vote. The motion passed with votes from Dave Passios, Tom Gray, Jay Simeone, Tiffaney Tavares . Evan Watters, Chris Menard, Jean Russell abstained. 10. Committee Reports Chris Menard attended a joint meeting with O pen S pace, P arks, and the S elect B oard regarding public access to the lake. There was no action taken during this meeting. 11. Topics for Future Meetings Discussion will continue relative to the g rant writing letter . 12. Upcoming Meetings ===PAGE 8=== a. Feb 22 nd – Land Use, Council on Aging , & Library Land use presentation was canceled b. Feb 29 th – Information Technology & Police c. March 7 th – DPW & Facilities d. Mar 14 th – Fire & Lunenburg Schools e. Mar 20 th – Monty Tech & Administration, Unclassified, & Debt Services f. Mar 21 st – Public Access Committee, Sewer, & Other Monied Articles – Lunenburg Public School Update 13. Important Dates a. Jan 9 th – Mar 18 th – Town Meeting Warrant Open b. Mar 28 th – FinCom Public Hearing c. April 2 nd – FinCom Report for Warrant d. May 4 th – Annual Town Meeting e. May 18 th – Annual Town Election 14. Public Comment Carol Archambault – 662 P age S treet- is in opp osition to the preliminary budget. The budget deficit on the school side is not all due to the E sser funding drying up. The Esser funds in FY 24 funded 8 full time teachin g support positions and 4 paraprofessionals . Currently the school has eliminated 6 of those positions, kept 2 social worker positions while cutting 2 budget funded guidance counsel ors and moved the payment for 4 paraprofessionals to the Title One Grant. Due to inflationary costs, health insurance , and some contractual agreements we find ourselves in the position of cutti ng 11.7 additional teachers, an assistant principal, an instructional coach, 4 part-time custodians, 2 maintenance people, 3 part time secretaries , and a full-time secretary as of February 7 th . Carol Archambault is having a d ifficult time wrapping her head around the town side adding and or increasing hours to positions while the school is disassembling 5 years of work that was beginning to show an increased achievement for students. This budget sho w s disregard for the school community. There must be another way, and something else that needs to be done. Committee comment Dave P assios believes there needs to be a conservation about correcting the problem of agenda posting . There is a p roblem with the submission or delivery of agendas. Dave Passios t hinks that the town employees need to be back to a 5-day work week . Evan Watters shared his frustration with the process of deliberation with the state delegates. As a town he believes we should present them with a unified legislative priority list . Everything is run through the executive and ===PAGE 9=== is ineffective. Additionally, he think s the school committee should have the ability to sit down with the delegates. After budget season, Ev an Watters plans to have a meeting with the delegates . There needs to be enough time for discussions and interactions , and cross communication. Evan Watters felt the meeting was rushed and should be run differently. Dave P assios suggests add ing a few meeting dates to the calendar in case of inclement weather, so meetings aren ’t missed. Evan Watters will speak with the Clerk about the possibility of Monday meetings. Evan Watters will request the committee to submit questions for the department heads in advance to prepare. 15. Adjourn There was a m otion to adjourn by Tiffaney Tavares , seconded by Dave Passios. Roll call vote. The meeting closed at 9:34 PM .