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Date: 2/16/2023
EAST LONGMEADOW – The East Longmeadow Town Council and School Committee met in a joint session on Feb. 7 to begin discussing the budget. Town Council President Ralph Page described the meeting as the “kickoff to the whole budget cycle.” Town Manager Mary McNally began with a recap of the town’s finances.
“The town is in very good financial condition,” McNally said, adding that home values increased 12 percent over last year, translating to about $750,000 in new growth, and the tax rate is down $1.90. The town’s bond rating is AA, considered high quality by Standard & Poor’s. On the downside, McNally said, utility rates have “skyrocketed” over the winter, putting the town’s expenses “out of balance.”
Municipal Director of Finance Kim Collins gave a rundown of the town’s reserves. She related that the town’s Free Cash account, containing unspent money from prior years, sits at $6.8 million with $4.1 million available. There is nearly $3.5 million in the Stabalization Account, which essentially acts as a municipal savings account. The Community Preservation Act fund has $1.5 million and the other-post-employment-benefits (OPEB) trust, which includes funds such as retiree health insurance, has a balance of almost $10 million.
McNally has requested all departments submit a level-funded budget, but she noted utility costs and contractually obligated cost of living adjustments, as well as salary and benefits for 13 positions that were added last year, will increase the budget. The increase is “a little bit of a hiccup. It’s not a cliff, but the payday’s here,” McNally said, referring to statements from School Committee Chair Gregory Thompson warning of a fiscal cliff.
Thompson asked about funding capital expenses from the operational budget and reminded McNally that the school department’s capital expenses were estimated to cost $7 million. “I’m aware of that number,” she assured him.
McNally said she was torn on whether the $1 million typically included in the operational budget for capital expenses would be added back into the calculations after its absence last year. The town has spent a large sum on capital expenses in the past few years on projects that remain uncompleted, she said, musing to herself, “Maybe you should take a year off.” On the other hand, she acknowledged not planning for projects “is a mistake.”
McNally then told him that the money for capital expenses would go back into the budget and had only been omitted last year because the town had one-time funding from the federal American Rescue Plan Act (ARPA). She said the town’s allotment of ARPA “went fast,” but was a help to the town.
Thompson asked about the Finance Oversight Committee’s role in the budget process. Page said the body can recommend cuts to the budget but cannot increase it. Thompson asked if the committee would be given a threshold down to which it must cut the budget. McNally explained that without the state’s budget and a projection of state aid and other revenues, the town can only estimate its operational expenses.
Thompson contended that the town’s budget would see a 4 percent increase over last year. “I’m telling you, the town’s going to be at 4 percent. If you put that $1 million back for capital [expenses], with those 13 positions, we’ll be at 4 percent [with] level services,” he insisted.
New positions
Thompson said the district had identified two additional “needed” positions that the School Committee was considering adding to its budget. McNally and Page assured the committee that if an explanation of the need for the positions is given, the Financial Oversight Committee likely would not cut them from the budget.
Thompson then expressed a concern that the additional personnel, and therefore increased budget and taxes, might jeopardize the town’s willingness to vote for the high school project in November.
Page explained that the high school project is separate from the operational budget, and instead, is funded through a debt exclusion. “We still have to operate the town. You still need money. You still need increases,” Page said, assuring that he wants to “do whatever we can” to make sure the high school project is a success.
Thompson continued to argue the point, “I don’t want to put that taste in the taxpayers’ mouth,” of asking them to pay a higher tax bill and fund the school. “You know how taxpayers are,” they “complain” about the tax bill, he said. He said the budget had to be “tight.”
McNally pushed back, “We’re always trying to maintain a fiscally prudent and tight budget.” She said there were 13 positions added last year because in the two years prior there were “zilch.” She also pointed out that at least five of those positions are in the Fire Department and are paid from the Ambulance Revolving Fund, rather than the operational budget.
McNally went on to say that the town has gone without services in favor of the budget. She specifically noted that the town would like to have a consultant examine cost saving measures, but said, “We don’t have the capacity to do it in house and we don’t have the money to hire it out.”
The largest increases to the budget come from third parties, such insurances, McNally said. However, she pointed out one bit of good news: the Scantic Valley Regional Health Trust, the municipal health insurance provider, plans to raise its rates by 2 percent this year instead of the expected 7 percent.
Councilor Kathleen Hill asked why the committee was proposing new positions is it was worried about leaving voters with a “bad taste.”
School Committee member Elizabeth Marsian-Boucher explained a social-emotional learning (SEL) teacher is needed. “We have students that just cannot function in a regular classroom,” and an SEL teacher can provide “a safe place” for them to go until they are able to regulate themselves.
Superintendent Gordon Smith said such a position will keep students from having to be educated out of district and save money in that way.
Hill assured them that the Finance Oversight Committee would not want to cut that position. She asked rhetorically, “Who can argue against the dilemma that every school district has to wrangle right now?” She said there is “wiggle room” in the budget and referred to the lower health insurance cost.