Update : it was a packed and passionate house and a we’ll run debate. The vote was a close one. At the end, I’m glad to report that fiscal responsibility prevailed and the article was voted down. Phew! We heard from the town accountant that this might have made the high school three million dollars more expensive. Yikes!!!
Tomorrow is a big day in the town of Stoneham. We’ll gather in Town Hall, as we have for nearly 300 years in various buildings, and make decisions about our community. First, a few facts and links:
- All voting citizens of Stoneham are welcome. Non-citizens may attend, but need to sit up on the stage, since most votes are voice/hand votes. The meeting is at 7 pm on Monday May 7th 2018 at Town Hall in Stoneham (tomorrow!)
- If you’re wondering what we’ll be talking about, here are all the articles
- Supplemental materials can currently be found on the Town News Page
- If childcare is a problem, the fantastic Stoneham Rec Department is offering childcare during the meeting so all parents can attend!
The biggest question on the docket for our joint decision is whether to use our rainy day funds to temporarily cut our trash fee – Article 22. Here’s the text:
We’re likely to talk about this for an hour or two (these are not short meetings) and it’s almost certainly going to be one of the first things we talk about. I estimate we’ll probably vote on it between 8:30 and 9 pm. This is a complicated issue, so I wanted to provide my view (shared by every board in Stoneham) that we should VOTE NO ON 22.
Here are my key objections:
1) Using reserves to pay for recurring expenses may negatively affect our bond rating – which may make it more expensive or impossible to build a new high school.
2) Not having a rainy day fund may lead to nasty consequences for the town if there are any unexpected costs, or drops in revenue.
3) The downsides seem long term and serious. The upsides seem temporary and small. I’m afraid this will overall increase the financial burden on Stoneham residents, when effects on our bond rating are considered.
4) I’m unclear on who has provided the funding for the serious mailing and phone banking campaign in favor of this article. Does someone have something to gain? What and who?
Here are some more notes on those high level thoughts
1) Paying for recurring expenses with savings
State guidelines advise that the town should have 3% to 5% of our operating budget in Free cash each year. That is a target between $1.98m to $3.3m in free cash each year. If we were to approve this article, we would have only $328k. (See the analysis here.)
There are some real and serious consequences to this kind of budgetary move. Our neighbors over in Lynn just learned this the hard way. This proposal effectively makes the mistake that Lynn is trying to recover from, and may lead to statements like this “The negative outlooks reflects our expectation that the city will continue to be challenged to effectively match recurring revenues with recurring expenditures”. With this proposal we’re paying for recurring expenditures NOT with revenues but with savings.
2) Not having enough savings set aside for even a mild shower, never mind a rainy day
Selectman Colarusso’s previous actions have already dropped our safety net for any issues with water in sewer from 2.24 million dollars in 2014 to as low as
$23,955.72 on April 9th – a 10th of the recommended amount (and not nearly enough to pay to fix a water main break).
Currently our housing market is strong, and our tax revenues are strong along with it. The regional economy is doing well. I know many people’s well being has not risen with those macro trends, but there is every reason to believe that at some point in the future there may be a correction in the housing market, or a challenges in the larger economy. When that day comes, our town will have already frittered away our flexibility and savings. That may mean we would have to make immediate cuts in safety, education or critical services if at any point our revenues falter at all, or if there’s any unexpected costs. As any homeowner has experienced, if you don’t have a little extra set aside to fix a roof or a small leak, it can lead to much larger and more expensive long term consequences. The same is true for towns.
3) We want to build a new high school
There is a lot of serious discussion about building a new high school in town. Our existing building is profoundly challenged to meet the needs of our students and ensure that kids coming out of our town are well educated and ready for the world. We will need to borrow the money for such a major expenditure (especially if we spend all our savings). The cost of borrowing may go up if we are considered a poor credit risk (like Lynn). If we end up paying a higher interest rate because of our fiscal irresponsibility, the overall cost to the residents of the town of Stoneham may very well be far more than gets returned in trash fees, temporarily. It’s like going on “holiday” using a credit card with a 22% interest rate.
4) This just doesn’t make sense. So why did so many people get letters and phone calls supporting it?
I do not understand why so much money was sunk into campaigning for an article that I think will hurt this town. It makes no sense. If you want to help residents pay their bills, that money would seem much more useful in creating a fund to assist residents & help directly. I’m especially confused since Selectman Colarusso’s last campaign to cut water fees led to such a painful and negative outcome with our Water and Sewer board. That entire experience seemed really negative for the people of Stoneham, with unexpectedly huge bills taking people who plan carefully by surprise. I have not heard any discussion about why the outcome would be different this time.
Every single board in town (Finance Committee, School Committee & the other four selectmen) have taken votes recommending against this article. Across the 22 members on those resident board and committees, only one voted in favor of this article: Selectman Colarusso. Given that lack of widespread local support, I find it hard to believe that Stonehamites are making political donations to support a campaign to spend our reserves. If they are, let me recommend that a fund to help folks pay for their bills would be way more effective in supporting their neighbors.
So please, come tomorrow to Town Hall. Ask your questions. Read the materials. And come vote!!
In trying to be ready for this, I made a Freedom of Information act request for data on both the Trash Fund and Water and Sewer fund. There wasn’t as much information as I hoped, and it is a bit hard to understand, but here’s what was provided to me.
You can see all the documents I’ve been using in this Google Drive folder.
The Town Accountant Dave Castellarin doesn’t have balances for the water & sewer enterprise funds. From what the Budget Analyst said to me it’s like taking a snapshot of a point in time and it wouldn’t be giving you a true balance. The Town Accountant told me that it’s something he calculates at the end of the year. I did ask them if they could write something up to explain it to you and hopefully they will get that done.
The first two attachments are the worksheets that the Town Accountant had shown the Board of Selectmen at their March 6th meeting. He also used them at the meeting the Water & Sewer Review Board held when they recommended the increase. He doesn’t have anything with projected balances for the water and sewer enterprise funds and it sounded like he wasn’t comfortable creating that. The Budget Analyst Al Rego emailed the trash balance to me this morning:
As of today, April 30th, the current balance of the trash fund is $144,861.86.
He also forwarded a spreadsheet which he said showed the impact of Article 22 to the free cash. Not sure if that was the type of impact you were looking for but it’s attached as copy of book 1.
I asked the Selectmen, Finance Board and School Committee if any presentations were done for them and the answer from all three boards was no. I have attached minutes that the School Committee gave me because they discussed it at their meeting in early April.
I will point out to you because I’m not sure if it’s been mentioned publicly that Town Meeting does not have the authority to grant a “Trash Fee Holiday”. This article would possibly pay 1.1 million for trash from free cash but it would not do away with the trash fee. The trash fee is by the vote of the Board of Selectmen. They are the only ones who can put it in place, take it away or change the amount raised.
Hopefully what I have sent will be helpful. If you have questions on what you are looking at you can try reaching out to the Town Accountant Dave Castellarin at email@example.com or Budget Analyst Al Rego firstname.lastname@example.org . The telephone number for accounting is 781.279.2690.
Let me know if you need anything else.