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Date: 9/14/2023
BELCHERTOWN — Members from the Select Board, Finance and School committees, Town Administrator Steve Williams and Jill Rossi met on Aug. 16 to discuss the upcoming fiscal year 2025 budget.
Select Board Chair Ed Boscher said, “The state has a brand-new template to help with forecasting and this is the first time we are using it and there is still a lot of work to be done.”
Rossi has worked with the new template that includes free cash, general funds, potential projects, budget transfers, the tax levy, state aid and local receipts to help forecast the budget.
Boscher added that he wants to work with the joint committee on making a free cash policy after how it was used last year.
“One of the things that this group in total needs to think about is the free cash policy for the upcoming budget season. It’s much easier to think about that now as opposed to right before May. If we all work collaboratively together we can work on a policy for this year and years after,” Boscher said.
The FY24 budget included a total of approximately $1.5 million of free cash — funds that were approved in the prior year operating budget that were not expended.
Excess funds are required to be certified by the state and then are available for use in the next year for operating or capital expenses or retain in reserves like stabilization.
Of the approximately $1.5 million, $1.3 million was used to balance the FY24 operating budget with the remaining $200,000 going to the town’s stabilization fund.
Boscher said, “We got lucky last year with the amount of free cash that we had. We have to prepare, and we have to use data to prepare in case we aren’t as lucky.”
The Stabilization Fund total is approximately $1.7 million.
According to the Finance Committee Chair Lauire Shea, a healthy stabilization/reserve fund should have between 3 to 5% of the town’s total operating expenses.
On an approximately $54.5 million annual budget, the Stabilization Fund should be between $1.6 million and $2.7 million.
Shea said, “The town will need to prioritize revenues and other sources, including free cash, to focus on maintaining the Stabilization Fund.”
There was no exact policy discussed but Shea mentioned how a free cash policy could look.
She said, “We are going to determine that automatically X percent is going to be used for ‘A’ and X percent is going to be used for ‘B’ and X percent is going to used for ‘C.’ Of the expense savings, the free cash from not having the expenditures that we thought we were going to have, how do we want to use that.”
The committee agreed that they should create a set of guidelines to determine as a group what the best practice is to hold everyone’s department accountable and be proactive.
Shea added, “I can speak for most of the Finance Committee by saying we are desirous in making a policy on the free cash and how it will be distributed against the budget because we were all in agreement that last year was a pretty significant amount. There was a big, big deficient and without that we would have been looking at much deeper cuts than we did.”
Superintendent of Schools Brian Cameron said that he would like to see the town generate more revenue so that he and the schools don’t have to keep making cuts.
He added, “Is the expectation that we are going to have to make cuts every year or are we going to look at other ways to get revenue in the town to get more services that we’ve cut in the past to bring back in. I can tell you for 18 years, I have cut positions for 18 years.”
Although budget cuts are the main concern when it comes to constructing a new budget, Boscher said that the buildings in Belchertown are also important.
He said, “The other hard part to this whole equation is there is not a meaningful capital plan. I was just talking to one of the DPW folks as we just had to close 51 State St. because is hasn’t been upkept. I asked what are the next two roofs to go and its [Town Hall] and the Finnerty House. It’s the first time I’ve heard it. There’s no plan to address that stuff.”
Boscher added, “It’s people and it’s also things that we need. There is a lot here.”
Williams and Rossi were assigned the task of making a budget calendar to make sure the group stays on schedule and make sure the budget is constructed in plenty of time before Town Meeting.
The joint committee also agreed that they would like to meet quarterly if not more often.