BOS - May 4, 2005 Joint Workshop w/School & Finance Comm

Moderator: Suzanne Kane

BOS - May 4, 2005 Joint Workshop w/School & Finance Comm

Postby Suzanne Kane » Wed Feb 22, 2006 11:56 am

Board of Selectmen
Joint Workshop w/School and Finance Committees
May 4, 2005
Approved February 21, 2006

1. Call to Order:

Madame Chairman Shirley Mosczynski called the meeting to order at 4:07 pm. In attendance: Paula Brouillette, Edward Therrien, Rich Preston, Executive Administrator Michael Guzinski, and Administrative Assistant Suzanne Kane.

Other staff and citizens: Finance Committee Chair Pamela Holmes, Finance Committee members; William Krauss, Jerome Kocur, and Todd Bari, School Superintendent Connie Verge, School Committee Chair Shirley Downs, and School Committee member Leslie Breault, Acting High School Principal Brett Kustigian, Technology Director John Ducharme, Town Accountant Rich Mathieu, Board of Assessor Jack Blatchford, Marie Beane, John Sharpe, Betsy Choate, Kathryn Quinn, Melissa Molvar, Kathleen Ells, Michele Sharpe, Margaret Burgess, and other citizens.

Finance Committee Chair Pamela Holmes called the Finance Committee to order. There was not a quorum for the School Committee.

Shirley Mosczynski thanked everyone for coming. She stated the format of the meeting is to keep order, and to be recognized by the Chair when speaking so people will speak one at a time and not over each other so everyone can be understood. She stated the reason for the meeting which was posted on Monday by all Boards is because they have been hearing statements being made at other Board meetings, and letters and emails that are being sent around the Town regarding the Budget. She has spoken to the School Committee Chair, Finance Committee Chair, Michael Guzinski and Town Accountant Rich Mathieu. She has been attending the Finance Committee meetings through the budget process and things have come out that she feels everyone should have the opportunity to know. She felt the need to discuss the budget issue before going to Town Meeting – she felt she would be remised as Chairman of the Board of Selectmen if Town Meeting happened without keeping everyone on track with information. She asked Michael Guzinski and Rich Mathieu to prepare and give them information so they are all operating with the same information. It is not an emergency meeting – it’s a general informational meeting. Michael Guzinski pointed out there is a pie-chart which shows available revenues and expenditures for FY06 – as they go through the meeting it’s a good reference. At their meeting April 26th, the Board of Selectmen recommended a balanced budget to the Finance Committee. At the Finance Committees last meeting, the Finance Committee approved a balanced budget. He went over bullet points and gave background information then asked the Town Accountant to go over the revenue changes and where they come from. All of the Town reoccurring revenues have been applied to the operating budget. In addition they have to apply $907,000 of Free Cash to the operating budget. They have no guarantee from year to year how much, if any, they will be getting for Free Cash. The remainder of Free Cash, $285,000, will be applied to Capital Projects. For several years the Capital Committee has not put that forward to the voters for approval. Under the recommended budget the Net School spending is projected to be $11,220,339 which included the Schedule 19. The minimum Net School spending for FY06 is $10,712,889. The current budget, if presented to the Town, is over Net School spending by $507,450. He reiterated that all recurring revenue has been applied to the budget in addition to $907,000 of Free Cash. The only other sources of funds which could possibly be available is the Stabilization Account; but there are several drawbacks to even looking at that it is not a recurring source of revenue. It will add to the structural deficit – they are already at $907,000. It would almost certainly result in a drop of their bond rating – which is currently at a AA rate. Any use of the Stabilization Fund for operational budgets is looked down upon by the Bond people. It would also deprive the Town of funds for future Capital projects, and most importantly it would necessitate an override for future years which if it were to fail would result in financial catastrophe for the Town. At that point they would be facing mass layoffs which would cost the Town hundreds of thousands of dollars depending on how many people they would have to layoff because of unemployment costs. Since FY02 the State Aid has been drying up – there has been less and less money coming in from the State. The Town has tried to fund the School the best as possible and to the best of their ability. He asked Rich Mathieu to go over the revenues – where the revenues come from. Rich Mathieu started with available levy capacity which shows up on the pie chart as levy capacity before over-rides ($7,254,294) minus committed amounts ($214,902). They are taxing the residents of Douglas under Prop 2 ½ to the maximum including all available new growth figures. The minus committed amounts shown on the pie chart are amounts of money they have to put away for allowance for abatements and exemptions as well as deficits the Town has. Right now the Town has an estimated $140,000 for snow and ice removal from this past winter. Under the levy capacity they are appropriating and estimating all available revenues. The next largest source of money is the Net State Aid Cherry Sheet numbers which total about $7,000,000. That is all money that Douglas has no control over which comes directly from the State House, the Governors Budget, the House of Representatives Budget, and the Senate Budget that will at some time get combined into one document and a final number will be known to Douglas. They are using the estimates as available today, to the best of their knowledge. The next largest source of revenue available to Douglas is estimated local receipts. For FY06 they are estimating $1,152,000 – an increase of approximately 10% over last year. Again trying to maximize and stretch out every available revenue for the Town. The next largest source of funds that go directly toward the operating budget is Free Cash – nonrecurring revenue that causes a structural deficit in the budget. They have been fortunate the past couple of years while the State has had a fiscal downturn to be able to continue funding the operating budget without any significant layoffs. They don’t know if those numbers will be able to continue or not. They do have money coming into the General Fund budget from the Ambulance Fund which pays for the Ambulance Department. The other number on the pie chart, debt exclusions, are projects already voted by the taxpayers of Douglas to exclude from Prop 2 ½ such as the High School, the Police Station, etc.; which account for $2,300,000. In summary all the numbers have been maximized and stretched to the best of his knowledge and the best availability of the Town. They wish there were more revenues for everyone but at this time there are not. He wishes the Stated would live up to their commitment and mandate under Massachusetts General Law to Cities and Towns to fund education; however they have no control over that other than writing the local Representative and State Senator. Rich Preston asked the School Committee what their latest number is and what percentage increase it would be over last year. Shirley Downs stated they have been working on their budget. At their last meeting they settled on $11,086,536. Rich Mathieu asked if the School Committee has voted to have that as the Schools request of the Town – the Board of Selectmen have already put together the documents for Town Meeting and want to reflect the Department request appropriately. Shirley Downs stated that is what they decided at their last meeting and concurred with that number going into the flyer. Rich Preston stated he understands their arguments for the increased budget. His concern is that they had proposed a 2.54% increase. Michael Guzinski interjected that it’s a 3.78% increase with Valley Tech as a reduction. Rich Preston continued – on the low end do they know if they were to maintain the status quo and be able to service all of their contractual salary increases; what percentage they would need. His concern was that the number might be too low and they would have to talk about lay offs and losing staff. What would that status quo number be in meeting those contractual obligations? Connie Verge stated they would definitely lose staff because it would tear the budget down to rock bottom. There are pieces of Special Education that are mandated. They need staff for Special Education and staff is required to be consistent with the Class Size Policy. The expense portion of the budget has been taken down to bear bones, survival kinds of things. They would have to look at staffing. There is a 3% negotiating increase. Without counting horizontal and vertical steps its $275,000. She tried to explain how the horizontal and vertical steps work. There are people who could be making an increase of around $5,000 depending on the steps. Rich Preston stated he understands that every year increases go up due to contractual obligations, expenses of running the School, etc. – that’s why he wants to know what the bottom line number is so they won’t be undercut. He asked again if there was a percentage she could give him knowing her number includes added staffing. Connie Verge stated there is about $700,000 for staffing. She went on to say they presently have class sizes of up to 28 students. They did not increase staff and enrollment keeps going up. Shirley Mosczynski asked how many Choice In students they presently have. Connie Verge stated that off the top of her head she can not think of the number but at this time Choice In has been put on hold. The only grades they will accept students for Choice In is grads that have low class size. The significant increase is not Choice In its kids moving into town. They have put Choice In on hold until they see how many kids will be in the class rooms. The only children they are allowing to stay here are children who have moved out of Douglas but have been in the school since April. Shirley Mosczynski asked about the High School grades. Acting School Principal Brett Kustigian stated there is a waiting list. Marie Beane of 133 Chestnut Street stated she wants to make the Town aware that there are over 300 house permits out there to be built in town. If the Town is not careful about how they plan and support the schools they will not be able to educate the children that are moving into town. Shirley Mosczynski stated she believes the 300 permits for houses will not be built all in one year – asking Ms. Beane if she has looked into that. Marie Beane stated she has not looked into that but on her street right now there are two houses ready to be moved into. Shirley Mosczynski repeated – it is not all going to happen in one year. John Sharpe of 10 Pine Street stated there are people that are buying homes and people that are moving out that could be new families as well. It’s kind of misleading to just say there are 300 families – that’s over several years. There are other sources that could equal the 300. Betsy Choate of 7 Belvoir Avenue asked if there is a time limit on building permits – she thinks it’s a year once they have been issues. Shirley Mosczynski stated she believes it’s a time frame to start the house and again, they are not all going to happen at once. She asked Michael Guzinski and Rich Mathieu if they had any further comments on money stating they also need to focus on the fact that the amount of money the Town puts into insurance and administration. Michael Guzinski went over the breakdown of Schedule 19. The State not only counts the money for general appropriation for schools but also other expenses the Town pays which are direct costs associated with the schools. Such costs are health insurance, life insurance, which will be $1,354,000 this year for the schools. Unemployment insurance will be $15,000. Other various insurances totaling $45,000. Choice out tuition total $369,000. Various Municipal administration costs total $120,000. Medicare will be $125,000. Worcester County Retirement will be $113,000. A total of $2,156,819. Those costs are applied to Net School Spending. It’s different from the $9,600,000 because of the appropriation. Shirley Mosczynski confirming what he was saying – this is above and beyond the School budget. Michael Guzinski stated yes – these are monies that are spent by the Town towards School costs but are not under the direct control of the School Committee but they are costs associated with the Schools. Connie Verge concerning Schedule 19, stated there is no written agreement between the School Committee and the Board of Selectmen – that has not been resolved yet. She asked with the Munis System coming in and so much work being put onto the School – will those administrative costs decrease. Michael Guzinski stated it’s a possibility. Once Munis is on board they will have to look at how it affects the structure and those figures will have to be evaluated and possibly adjusted down the road. He agrees it is important before they get to this point next year to have a written agreement between the Town and School as to what percentages and how those costs are allocated. Rich Mathieu stated he feels they should have a written agreement for FY06, whether it happens before Town Meeting is not important. They have already received some savings on Schedule 19 for the School in regards to the Munis System because that has allowed his Assistant to work down at the Water/Sewer Department one additional day. That savings is reflected in the Schedule 19. Shirley Mosczynski asked Rich Mathieu to explain the deficit in snow removal. Rich Mathieu explained the way the tax recap process works – the process that looks at all town meeting votes, what is available for revenues under MGL, and any deficits. This was not an easy winter – the Town is anticipating some FEMA reimbursements for some of the snow storms but there is still a $140,000 deficit that has to be taken off the top of available revenues for FY06. That is the only deficit they are anticipating for the tax recap sheet but there is also the land settlement that has not been finalized. That could go on the tax recap sheet as well. Shirley Mosczynski added that the House of Representatives are pushing for more funding but it’s in the Senate and what she is hearing is it’s not going to be much more. Rich Mathieu stated that the State continues to divert lottery funds – they say the lottery is to help support City’s and Towns but they use it for their own purpose. That’s an area people should be outraged at. The Town of Douglas has suffered drastic cuts in State Aid since FY03. They have been fortunate to fund the budget, including increases through the use of Free Cash, but it’s a structural deficit of $907,000 (5% of the budget) – that’s not going away and they don’t know how much longer they can continue to do it. Shirley Mosczynski asked Michael Guzinski or Rich Mathieu to elaborate regarding Free Cash. When they say Free Cash residents think its literally free cash – a bonus. Michael Guzinski explained that Free Cash is not free nor is it actually cash. At the end of the year the Town Accountant looks at the prior year revenues and expenditures. Free Cash is revenues above and beyond what was expected and expenditures that came in below what was expected. Those totals come out to Free Cash which is certified by the State – they allow the Town to expend it after it’s certified – a date usually in the fall. Sometimes the Town uses that money in the fall to correct items in the budget or for Capital items. They don’t know from year to year what those funds will be. Departments are given money to use and they have the legal authority to use all of the money. What will happen as things get tighter and tighter, year after year there will be less Free Cash. They are also at a point where they are being forced to increase their revenue estimates which have been stretched as far as they feel safe to stretch them. Also the expenses are getting tighter and tighter so the departments will be turning less and less back. By the nature of the fiscal restraints they will have less and less Free Cash. The reason they had more than anticipated is because they ended up carrying some Free Cash – he doesn’t expect that this year. He thinks they will be very lucky to get Free Cash of $900,000 next year. Rich Mathieu stated that in addition to the revenue and expense side of things what the State does is looks at the balance sheet as a whole. In addition to those amounts they also look to see if the Town has any fund deficits. And unless they can justify that the deficit has been cleared up by the end of August; they will hold those moneys against the Town. As a result, they may have $900,000 but if they have a fund deficit some place of $500,000 Free Cash will be reduced by that deficit. One note about Free Cash and the local receipts – the biggest source of revenues is through motor vehicle excise taxes. One of the issues about motor vehicle excise taxes – after September 11th for a year or two, the economy experienced a big slow down. As a result there were a lot of auto financing deals available – there was a big uplift of the sales of automobiles. When people have a new vehicle for the first two years the tax revenue is realized at their highest. As the vehicles get older and older, the amount the Town collects decreases and so will the surplus revenues. They have increased the local estimated receipts by 10% to $1,150,000; the highest Douglas has ever estimated it at. Finance Committee Chair Pamela Holmes asked if Rich Mathieu could go over the Free Cash situation and miss information as to the amount of Free Cash that is available. Rich Mathieu stated as of July 1, 2004 the Free Cash certified to Douglas was $1,358,000. At the Fall Town Meeting they appropriated $165,000 of that Free Cash leaving an un-appropriated amount of $1,193,000. They are planning on utilizing $970,000 of that Free Cash to fund the FY06 operational budget and $285,000 to fund some Capital items that they have not been able to fund since FY03 because of the fiscal constraints that have been placed on the Town due to lack of State revenues. Shirley Mosczynski added that Capital items go through a Capital Committee. Departments submit their requests with a really good reason why they need the capital items. It’s reviewed by the Capital Committee. Paula Brouillette, as past member of the Capital Committee, explained how the Capital Committee works. The process is to go over what they consider one time purchases and prioritize them. There are always different requests from different departments, for example vehicles for Highway, Highway equipment, land purchases, anything over $10,000 and could be up to $500,000. They have not funded the capital items the past few years due to the financial situation. This is the first year they have tried to look at catching up on some of the requests. One of the request is the Post Office Roof – the roof is being damaged by ice dams. Some of the others are maintenance items. Shirley Mosczynski stated that another item is a Ladder Truck for the Fire Department – it’s going to take 7 years to pay it off but it’s a need. The current Ladder Truck has not passed inspection. Rich Preston stated he wants to be very clear at what they are looking at – the difference in the two budgets. Their recommended budget is a 3.78% increase; the recommended Municipal budget is $9,062,520 and the recommended School budget is $11,086,536. They are looking at a $2,000,000 gap – he would like some comment on how they are going to close the gap. Finance Committee member Todd Bari asked if the transportation number was figured into this and was told it was. Shirley Mosczynski stated that there is then a $1,500,000 gap. Michael Guzinski concurred. Connie Verge stated the School Committee has pledged to raise funds to offset the budget. The real operating budget needs to let them operate in the fashion they are operating in currently. The level of quality they are currently operating at is $12,443,643. The School Committee asked her to see what she could come up with and ear mark funds to go to the Town for less money. What she came up with and what they hope to contribute to the 12.4 million figure is $1,357,407. They are really further apart – it takes a lot more money to operate the school system. Their per student expenditure average is significantly lower than the State average. If they take away what the School Department has raised in revenues they would be about $2,400 per child below State average. It was her understanding in preparing to open of the new High School that they would be looking at an operating budget. When they were meeting with Department Heads over a period of time and the Town Administrator they had a gentleman’s agreement that if there was anyway they could hold out from preventing an over ride to be able to operate the High School and hire the staff they really needed – try to hold off for a year or so to look at a total Town wide override. But it hasn’t happened. They are about at the max for what they can do for themselves. They will try to continue to raise revenues – they use Choice, grants, day care, circuit breakers, etc. She stated over the years the Towns budget has gone up significantly and the Schools percentage has gone down significantly. She went over why she feels that way. She stated she has done every trick she can think of and they will continue to do their best to take the burden off the tax payers. Rich Preston stated it is the responsibility of the Selectmen to bring forward a sound budget. The parent’s responsibility is to make sure their children have an adequate education so they can move on, and the Schools responsibility is to provide the best education they can provide. He only wished they had these conversations earlier so they could try to rectify some of the problems. He appreciates where the School is coming from and hopes they appreciate where the Town is coming from. But know they are at the end of the scheduling, Town Meeting is upon them and they need to rectify this as best they can. Kathryn Quinn from 11 Old Farm Road asked if layoffs occur, what will the burden be on the Town – where will the money come from, again out of the School budget. Michael Guzinski stated there is an unemployment line item – there is only $20,000 in that line item. If there were massive layoffs they would have to have a Special Town Meeting to fund that. They would have to fund it whether its from the Reserve Fund or if it’s more than the Reserve Fund could handle it would have to be from a Special Town Meeting to transfer money from where ever they could – it would be considered an emergency, they have to pay per statue. As far as the costs he believes they are responsible for 6 months or about 50%. Rich Mathieu stated it works out to be about 50% for every dollar they layoff they end up paying 50¢. Those monies do come from the General Fund budget but the do count against School spending on the Schedule 19. It does not come directly from the School budget that is appropriated but does count against net school spending. Connie Verge stated the rule of thumb is for every teacher they layoff they layoff another half teacher. Shirley Mosczynski stated they have been fortunate they haven’t had to layoff teachers. She asked how many teachers were hired in the past year. Connie Verge stated she doesn’t know – not that many. What they have done with all the teaching positions is as a new position is required they will look at the entire system to see if there is something no longer required – they don’t just add to the staff. Example; if they hire 11 people they also cut three position or chang positions – they reallocate the resources. Shirley Mosczynski asked for the numbers of new hires as well as how many part time people and other people that have been added to the staff in the past year. The reason she is asking is they are faced with a situation where the Highway Department for the past three years has had an open position – they did not fill the position because of the funding situation. They have held on Capital expenditures and they can’t keep doing that because things start to deteriorate. Such as the Post Office roof, the Highway Department needs a new truck, and the sidewalk plow broke this year. They can’t keep doing this. Fortunately the School hasn’t had to layoff, but they also have also added personnel. The Town side has not laid-off personnel – they have held the line, but they have not added personnel where needed. They have had a request for three new Policemen – they added one last year and hope to add one this year. They are trying to balance the budget through this year and they are not looking for layoffs – they are trying to work it out. She stated that one of the things being heard on the street is that if they do not do certain things they will not get money from the State – that is not true and this is why they are having this meeting to get the right information out there. Pamela Holmes stated School Committee member Leslie Breault at one of the School Committee meetings asked Connie Verge whether or not the number of Pre-School students is skewing the per-pupil expenditure number. Leslie Breault stated no. Pamela Holmes stated her concern with the per-pupil expenditure number the Department of Education (DOE) counts different things when you are talking about Net School Spending or Per-Pupil – they count different accounts. It is so complex that she would like to have someone from DOE come out and explain it. On the other hand she can not understand that the number of pupils counted is significant – those pupils are shown on the DOE’s website. Douglas shows about 142 pre-school students. Sutton for example shows 6. If Douglas is different from Sutton by 136 pre-school students she thinks that number is really skewing the per-pupil cost. In fact Douglas is reporting more pre-school students than Uxbridge, Millbury, Grafton, Northbridge, etc. And for the size of the community there has to be a reason for that. The other thought she has along those same lines – she it told that the majority of pre-school is a paid program. Her concern is why then are they reporting this number through the State when they are talking about their tax dollars that go to the mandated school program. They seem to be mixing apples and oranges. She would love to have someone from DOE come out and explain it – she is afraid that number is being misrepresented. Leslie Breault stated the reason she had asked that question was she noticed that number was big also. She couldn’t figure it out from the website because the pupil numbers on there are the current year but the number figured for funding is last years – so she couldn’t just go and divide the numbers. Shirley Mosczynski asked her if is she was pursuing finding out that information. Leslie Breault stated she had asked Connie Verge. Shirley Downs stated she believes they do count those students – on the end of year report all those monies that do come in for tuition have to be reported. Pamela Holmes asked if they would let her know where those finances are reported. Connie Verge stated enrollment keeps going up – they have no control of how many children come in. Right now space is not an issue. If they can’t control kids coming in they can’t control the revenues going out. Melissa Molvar of 90 West Street stated she is not sure if the Town or other communities are reporting the special needs children as special needs children – they do not pay tuition. Shirley Mosczynski suggested they check with the other communities to see how they do it. Connie Verge stated John Ducharme does the reporting. Technology Director John Ducharme stated he does the reporting. They are counted but not counted as far as the amount of money paid to the Town. He has dealt with Roger Hatch of DOE. They did make a mistake last year – that was corrected. He will get a formal note from Roger Hatch. Pamela Holmes asked John Ducharme if he was talking about net school spending and foundation enrollment she is talking about the number of per pupil cost. The number that is generated to figure per pupil expenditure costs. John Ducharme stated he does not know how number comes out but there are 142 pre-school students. He is not sure how they balance between students and students with special needs. Pamela Holmes stated it is her understanding that there are 27 SPED students counted under foundation enrollment. John Ducharme stated he assumes they don’t count them – they are not paying tuition. Shirley Mosczynski stated they need to clarify this – it could change the per-pupil expenditure. Finance Committee member William Krauss asked if the Town has numbers from ’03, ’04, and ’05 for total number of students. Connie Verge stated they do not have those numbers. William Krauss stated the School is asking them to appropriate money and teachers because they have increased enrollment but they don’t know what the increased enrollment is. Shirley Mosczynski asked Connie Verge to get those numbers. Kathleen Ells of 61 Pond Street had a question regarding the revenues of the Town – the population has been increasing and there are more taxes coming into the Town. She would like to know going into FY06 if they are anticipating the increase revenue that the new homes are going to bring along – if they have to account for the expenses of the children they should also anticipate the income of the revenues they will receive from the tax base. Rich Mathieu stated the tax rate is formulated by the Assessors Department. The number is certified by the Commonwealth. Unfortunately there is some delay because as soon as someone moves into Town the children are allowed to enroll into school. The new growth number may not come on for another 6 months or so. The Commonwealth has recently modified its approach to the re-evaluation of the overall Town to catch up with value of the Town. They do have an estimate of $263,000 in terms of new growth that the State will certify as being able to raise on the tax sheet. The way the system works is the State puts into place Proposition 2 ½ in 1983 and from that point forward has certified how much new growth can be counted on the recap sheet each year. Kathleen Ells stated that based on that information for FY06, when they look at the revenue that will come into the Town, are they looking at the revenue for the new homes coming into Town or are the numbers on the pie chart based on FY05 numbers. Rich Mathieu stated the numbers on the pie chart are FY06 numbers – again utilizing $263,000 of new growth. That’s above the numbers as they existed for the end of FY05. They catch up to them as quickly as possible within the State guidelines. Michael Guzinski wanted to clarify her question – it’s estimated new growth, it’s numbers that are figured into the revenues based on estimates of new taxable property coming onto the rolls in the next tax year. Board of Assessor Chair Jack Blatchford stated what he thinks Kathleen Ells is asking is with the new houses coming in, when are they showing that income, is that income being shown in the projections on the pie charts. Pamela Holmes stated she thinks what Kathleen Ells is asking has to do with the entire Towns Levy capacity the total taxable amount. Everyone in Town pays to the Levy capacity on their property taxes (owned property). Because of Prop 2 ½ it can only go up 2 ½ % a year. If 300 houses come into Douglas it will still only go up 2 ½ % a year. What would happen is if those 300 houses come into Douglas and bumped up the Estimated Local Receipts the tax rate would go down for everyone. So the actual total only goes up 2 ½ %. The Town is constrained at a level of only 2 ½% of the total levy. Kathleen Ells stated the way she looks at it is that if they have 300 houses that come in and they pay $5,000 extra in taxes then that money should go somewhere. She feels what Pamela Holmes is saying is no, the money is only going to the State and the Town is only getting 2 1/2 %. Jack Blatchford explained that what happens is they are able to fund “X” number of dollars. During the year they do evaluations of houses. If the value of houses goes up significantly however the tax amount goes down. The overall tax dollar for this year went down from last year. What Kathleen Ells is saying is if 100 new homes come into town this year, they can only increase the Levy for income by “X” number of dollars based on last years numbers. So if they had 100 new homes at $5,000 it won’t bring in $500,000. They have to bring down the tax rate. The tax rate currently is 11.05%. So if 100 new homes come in at $5,000 the tax rate will go down to around $9. The levy can only go up a certain amount based on new growth and new projections. Kathleen Ells asked if the tax dollar goes down and the Town is incurring more expenses then why they aren’t increasing the tax amount to where it should be. Jack Blatchford again stated they can only raise taxes a certain amount each year – no matter what. Shirley Mosczynski stated that on top of that every so many years the Board of Assessors does a re-evaluation of property. Jack Blatchford stated that in the last several years they have had a good amount of Free Cash and every year the Board of Selectmen have asked the Boards/Committees to level fund. Revenues have gone up as much as possible each year. He understands that there are Capital improvements this year but why would they make the assumption that they are not going to have enough Free Cash come September/October. Michael Guzinski stated they will have Free Cash – it’s a matter of how much. He does not expect, based on how much they are stretching their revenue estimates and how tight the expense budgets are getting, that these numbers are going to be sustainable in the long term. He feels that number will be much less than it is now. They will have Free Cash – he just can’t say what the number is. Jack Blatchford stated he thinks the $1,100,000 they had last year is a stretch. But like Rich Mathieu stated the Board of Assessors, instead of going every January to do a new growth, are going to go out as soon as a new house is put up. They will no longer get a free ride for a year like they used to. Shirley Mosczynski stated that they won’t know that until fall. Jack Blatchford concurred – he thinks it’s a calculation they should keep in mind based on new State legislation. William Krauss stated that on the same side of the coin – they are projecting increases of students based on that – it’s kind of a wash. They don’t have any definitive things on houses, which they can’t do by law and they can’t just say that every household is going to have 1.3 children come in. Rich Mathieu asked Jack Blatchford if the Assessors are using the maximum growth that they can, to which he answered yes. So in the Fall if they have a different certified number from the State then those numbers will be available for future appropriations, but it would be bad budgeting practice to anticipate those at this point to which Jack Blatchford concurred. Shirley Mosczynski added that under Free Cash they are using some that was held over from last year. Pamela Holmes stated she feels that Rich Mathieu was just talking about new growth. For point of clarification the new growth number has been stable for about 10 years. $240,000 to $260,000. Kathleen Ells stated her feeling is if they cut the teacher salaries they are cutting programs. Shirley Mosczynski stopped her – they are not talking teacher’s salaries, they have no control over that. Kathleen Ells stated if they cut the expenses there is no capacity to add more students to the mix because the classes are full. They are not adding people and expenses as a luxury, they are asking for this because it is a necessity. William Krauss stated they are not cutting aid; they are increasing at a lower rate than what is being requested. They don’t know what the total number of students that are increasing each year. Michele Sharpe of 10 Pine Street and Assistant Principal at the Intermediate School, speaking about enrollment, she can not give a full figure of enrollment but she can speak on the 4th graders for next year. At this time they have 4 – 4th grade teachers. In one class they have 29 students. She can empathize with the Towns needs. If there is a fire at her home she certainly wants the fire truck to come to her home. But yet, it’s not that they have the luxury to add extra staff, they are just trying to get by with what they have. For the next year for them to be able to hold to the 28 to 29 students per class they need to hire 2 to 3 more 4th grade teachers. They have one counselor for all 505 students in the whole school. As she knows they are a little more than $2,000,000 apart. She wishes the dialoged had been more open to them so they could find that gap. What she is asking of the Board of Selectmen is to find that gap. Shirley Mosczynski stated she understands her position – she worked on the School Committee for 9 years. But they all have to give and they all have to work at it. They still have to work at this because some of the things that could happen at Town Meeting could be very detrimental to the Town. They need to discuss some of the situations that could happen. They need to try to come out of it this year and maybe work towards a better understanding next year. She again reiterated the reason for this meeting – all the misinformation, rumors, the emails, the losing of Chapter 70 funding; No it is not going to happen. It’s unfortunate that it’s out there and that is why she asked everyone here. Michael Guzinski stated they have looked at the budget quite a bit over the last 4 months and feel they have turned over every rock looking at what’s available within their levy limits. They have concerns about using the Stabilization Fund. Their options are very limited. Rich Mathieu stated he wished they had additional revenues to apply to the budget. They are constrained by the Commonwealth of Massachusetts – who has not been kind to either the Town or the Schools in any district. They are facing another year of cut State revenues. William Krauss asked if anyone has figured out what $1.5 million will do to the tax bill. Rich Mathieu stated 1.5 million is approximately the difference of the Schools request and the Towns recommendation at this point. There are other factors to take into consideration such as the cost of health insurance for 16 new positions which would be approximately $170,000 above where they are currently. Looking at those two numbers (1.6 million) they are looking at approximately $2/1,000 on FY05 tax rate. Taking it to approximately $13.05/1,000. The total bill impact would be approximately $530.00 on an average family home valued at $268,000. William Krauss asked what the $530.00 would increase the tax bill to. Paula Brouillette stated around $2,900. William Krauss stated that is around a 20% increase in taxes. If anyone has read the paper in the past year they will have noticed that foreclosures have gone up, in the Valley and particularly in Douglas. They are mistaken if they don’t think the level of a tax increase will not affect the number of foreclosures and property values and hence future revenues. Betsy Choate questioned the Library Article going before Town Meeting, when the publication went out it stated the taxes for that would go up $89 per year. Michael Guzinski explained that the Library project (approximately a $3.5 million project) is a bond, spread out over 20 years. The amount per year is not $3.5 million but approximately $275,000 – that’s why is it’s a much less impact on the tax bill. Shirley Mosczynski added that once a project like that is paid, it comes off the tax bill where a Prop 2 ½ override is on there for ever. Kathleen Ells asked Rich Mathieu why he calculates the numbers based on FY05 revenue. What would be the tax increase based on anticipated FY06 revenue – isn’t the revenues going up? Rich Mathieu stated he chooses to use FY05 numbers because they are concrete known numbers rather than projections. However if they want to use FY06 projections the numbers are approximately $1.6 on the tax rate but the dollar value remains the same. It would be $1.50 instead of $2.00 – but the net impact on a person’s pocket book would be the same because the assessment goes up. Marie Bean questioned why Free Cash can’t be put toward the School budget to help balance it. She also knows there is a lot of School Building money that could go towards the budget. Michael Guzinski stated they are applying $907,000 of Free Cash to the operational budget which includes the School. $285,000 of Free Cash is being applied to Capital projects. As far as the remaining money from the authorization of the School project – the only legal use of those funds is towards items association with the School project. They can not be used legally for operational purpose – that’s right out of the State Law, there is no gray area there. Shirley Mosczynski asked Rich Mathieu what is left in that fund. Rich Mathieu stated he met with the CMS Project Manager Marc Zawatasky; there is approximately $112,000 left in that fund at this time pending further reconciliations. Marie Bean stated she feels that is an incorrect amount claiming Leslie Breault said it was about $300,000. Leslie Breault answered no. Pamela Holmes stated this is why she was on board for this meeting – they can not sit in the same room with the Town Accountant, who is hired by the Town and question the figures he presents. Shirley Mosczynski stressed that Rich Mathieu met with the CMS Project Manager Marc Zawatasky and his figure is $112,000 with more reconciliation to happen, it could be less. Marie Bean asked if there was any way it could be voted to use that money to which Rich Mathieu and Shirley Mosczynski answered no. Margaret Burgess who does not live in town but works at the Elementary School, stated she is upset that people are questioning Connie Verge as to how much the School needs to run. She wanted to know what happens at Town Meeting – is it true the Town votes on this amount and what would happen if the School Committee brings a different amount. Shirley Mosczynski thought this was a good question, that is where they are headed but first she stated that it is important that they ask question, from an educator or who ever. They are not challenging, they are asking questions because they need to know. They are responsible for what happens. They all need to work at this. Betsy Choate commended Shirley Mosczynski for having the open meeting – it’s nice to see dialog flowing. They are all on the same page that there isn’t enough revenue to go around. They need to think of how the Town can generate more revenues other than taxes. Some communities have municipal golf courses. Shirley Mosczynski stated the Board has been, especially Paula Brouillette, working with the 4 Town Group to bring industry into the area. A couple of them, herself, Michael Guzinski, Economic Development Committee Chair Hal Davis and Master Plan Implementation Committee Chair Paul Peterson went to Webster to open up a dialog for another industrial area. They are working at it and they have to be diligent. If they get industrial development in it’s doesn’t mean they can spend money on what they want – every other expense goes up. Rich Mathieu stressed that these are not his numbers. They are the numbers coming from the Project Manager for the School Building project. It’s not Joes Smith sitting on Main Street that he is sitting with to come up with a number. It’s the person the School has hired to be in charge of the building project. Brett Kustigian stated they are in a new era of education. They are accountable to EQA (Educational Quality and Accountability), they are accountable to NEASC (New England Association of Schools and Colleges), and they are accountable to DOE (Department of Education). Their MCAS scores are very important. They have parents constantly asking why aren’t the MCAS scores going up. They are held accountable to many different standards. There are lessons to be learned by looking at the newspaper and some of the Towns who are having problem. While School Choice is good; it pins one town against the other. He feels that if the High School does not get what they need for next year they could be in some trouble – they are in an accreditation year. He would hate to see people pull their kids out and go to another town. He feels things are going very well at the High School. As for being over staffed – one of the things the EQA audit did prove is that small rural districts are understaffed. They work very hard. He understands that Police, Fire, and Highway need things too but next year is a critical year at the High School. Shirley Mosczynski stated that similar communities are facing similar problems. Some of them have had conversations with their State Representatives. Communities can not keep doing this. She stated they need to work on where they are going in regards to Town Meeting. It is not a good thing to go into Town Meeting with an unbalanced budget. She asked for suggestions. Pamela Holmes stated the School is looking for additional money that the Town can not afford. The only way to get that additional money is through an override. The problem is the timing – where they are at. She had the opportunity to go to Sutton a few years ago to see how other communities plan for an override. They had a series of meetings starting last July to culminate with the vote at Town Meeting this May. She is hoping they can hold the line for this year and start meeting in July and move forward to put something together that is comprehensive. They don’t have time now to put together a plan – it would not be fair to the tax payers of Douglas to put something together in a slip-shot way when they are talking about increasing the size that they are talking about. Rich Preston asked if they go to Town Meeting and the School Committee presents the budget they are presenting now and Town Meeting passes an unbalanced budget then what? Pamela Holmes stated the Finance Committee did not have their Public Hearing yet. The expenditure budget is $1.5 million – if they are talking about an override she hopes they consider the whole town and it’s needs and not just the School – so it would be more than that. There is nowhere from the expenditure budget to move money. Michael Guzinski stated what would happen if they had an unbalanced budget at Town Meeting is they would be forced to have a Special Town Meeting somewhere in the Summer or early Fall before they could set the Tax Rate. The Assessors would not be allowed to set a tax rate and the Tax Collector would not be allowed to send out tax bills until they had a balanced budget with a certified tax rate by the Department of Revenue. They would have to put out notes of anticipation of tax revenues – it would be an over chaotic situations. Shirley Mosczynski reiterated that any use of the Stabilization Account would have a bad affect on their status as far as borrowing for any project. Rich Mathieu added they could pass a budget contingent on a Prop 2 ½ override vote but with so little time they can not truly put together what is needed for that 2 ½ override vote – they only have one shot at it and it would be a disservice to the community not to include all of the Town departments and include the structural deficit they have built up over the years as well as the School. Shirley Downs asked if they would consider putting off the financial portion of the Town Meeting to a later date so they can get the 2 ½ override done. Rich Mathieu stated there is so much deliberation with each department. He never wants to say never but he thinks she is talking about a Herculean task to do it and do it correctly. They only get one shot at this. Pamela Holmes reiterated that Sutton started in July last year – it can’t be compressed into a month. Connie Verge stated that after doing some quick calculations; if the $1.5 was cut in the budget they are looking at lying off 54 teachers. Using the rule of thumb they figure 1.5 teachers for every teacher laid off – that would be 36.2 teachers, unemployment, take away the 16 new positions, they were looking at they still may not make it. She is sorry she did not force an override. Shirley Mosczynski stated she can’t force an override, it’s up to her Board and the Board of Selectmen and what she was hearing was her Board did not want an override. Paula Brouillette commended everyone in the room – these are not easy discussions to have. There has been a lot of misinformation out there and that is one reason they wanted to have this meeting. So as a community they can make sure they are making the right decisions. She asked Connie Verge if what she was saying is; if the budget goes through as it is with a $300,000 increase, they are going to have to lay off 36 people. She would like to understand the math that would indicate that. Connie Verge stated that if she takes $40,000 as an average salary and divide it by $1.5 million. Paula Brouillette interrupted Connie Verge and clarified that she is not talking about the $1.5 million. She is talking about the difference between last year’s budget and this year’s budget. There is a $330,000 increase based on the Administrators recommendation. If this budget were to pass it is $330,000 higher than last year’s budget. So she would like to understand the math if that were to pass how she would end up lying off 36 teachers. Connie Verge stated they are asking for $1.5 million. What they are operating on is higher than the FY05 budget. Right now the variance between what they need to operate on and what the Town is recommending to spend is $1.5 million. Paula Brouillette stated this is the frustration she has – they do not get a document that they can all look at and she can not follow Connie Verge’s numbers. She is converse in numbers but to hear numbers like that is disturbing to her because they can not all look at the same numbers and agree on the basic facts. When they can’t even agree on numbers that are stated in a document and then they get verbal numbers – it’s really hard to follow. Connie Verge stated that the FY05 appropriation at Town Meeting was $79,199 including the amount of money the School Department generated – that is the operating budget. Pamela Holmes asked how much money the School generates. Connie Verge stated $1.3 million for FY06. Pamela Holmes asked how much in FY05 to which Connie Verge stated she will have to go back and look at her numbers. Pamela Holmes asked Rich Mathieu if he had the numbers. Rich Mathieu stated that at the FY05 Town Meeting $9.3 million was appropriated. Based on school documents, the school contributed $1.3 million to that budget for a total of approximately $10.6 million. So if the recommended budget would go through at $9.6 million and the school has $1.4 million in available revenues to help sustain their budget; the budget would increase to $11 million – an increase of about $400,000. Paula Brouillette stated that she knows that in the past sometimes there has been disagreements and people feel they shouldn’t be questioning things. She feels these are elected officials who should be respectfully considering revenues and expenditures to make sure they are making the best decision not only for the children of Douglas but also the tax payers of Douglas. She feels asking questions and getting agreement between education and the Town side on the numbers is critical. She asked Connie Verge if those numbers agree with hers. Connie Verge stated that she doesn’t have her numbers in front of her. Paula Brouillette stated that the request from the School Committee last year (FY05) to the Town was $9,321,260; which included $588,123 for transportation. The recommended FY06 budget is $9,630,643; transportation went down a little bit and the operating and personnel went up by $330,000. The total increase is $309,383 – the Town appropriation from FY05 to FY06. Connie Verge stated that is $1 million less than what they were operating on. Paula Brouillette stated the Town appropriation is going up $300,000. They are applying more money from their other revenues (Choice In, etc.) and there is $300,000 more – her question is how does that equate to laying 36 people off? Connie Verge stated the difference is not in what the Town is giving them; the difference is in what they need and what the Town is recommending giving them. They are operating on $10.7 million now. Paula Brouillette asked for confirmation $10.7 million in FY05 is what they needed to run the school to which Connie Verge concurred. She stated that $1.3 million is what they are applying from other revenue sources, not from revenue sources from the Town. $10.7 million (what they needed to operate in FY05) minus $1.3 million (revenues they are applying) is $9.4 million (the appropriation from the Town). Next year the recommendation is to increase that number by about $300,000. They say they have at lease $1.3 million to apply so her question still stands. She doesn’t want to scare people, in her mind she can not get the numbers to add up. Connie Verge stated they are immediately eating up over $300,000 in salaries. They have additional mandates and a policy that dictates class size which they are violating now. There is no place to go except staff. Paula Brouillette stated she respectfully asks this; Connie Verge just identified the $300,000 increase that is being recommended is going to salaries. What she is having difficulties with is if this budget is passed how they get to laying off 54 people (using Connie Verges number). She is very frustrated – they all want to support education and the numbers do not seem to support that. Connie Verge stated they are asking for $11 million from the Town. The Town is offering $300,000 more than last year, not more than what they are operating on. Currently they are operating on $1 million more than what was appropriated by the Town. Currently they have “X” number of staff members, there are 16 new positions in the $11 million operating budget. If they took those 16 new positions and got rid of them they would still have to remove 38 staff members. $11 million wouldn’t cover their budget with out them putting money in – it wouldn’t cover the increases. They have $400,000 increase in salaries alone; they are above what they currently have. The entire $300,000 increase is eaten by the salary increases. Finance Committee member Todd Bari stated he is as confused by the numbers as Paula Brouillette is. They can’t incur the possibility of lying off people they haven’t hired. There can’t be incremental costs associated with not hiring 16 people. He thinks the questions they are all struggling with is – assuming they keep the same staffing levels it sounds as if those incremental costs associated with the same staffing is $400,000. What the struggle is – take the same staffing with incremental staffing increases and given what is budgeted, how is there a need to layoff 38 people. Rich Mathieu as a follow up – even if they fund the Schools budget at $11,086,000 as requested; they are still kicking in approximately $1.4 million. That points out the complexity of doing an override the correct way. Someone earlier in the meeting pointed out that School Choice money was not ever meant to fund the operation of the School budget. Other than the grants from the Commonwealth and the Federal government the School receives – any of the funds currently being utilized were ever meant to offset the operational costs. That is why if they do decide to consider an override question they need to do it appropriately for everyone – so the School isn’t using funds that weren’t designed for those purposes and they can build up the reserves that where once in the Choice monies. William Kraus asked Connie Verge about the 16 new staff members – she had mentioned $40,000 per teacher. Is that number for the new people as well. Connie Verge stated yes, they would not be hiring any administrative personnel. William Kraus stated that would be $640,000. She had stated that with the raises coming from the 3% and the steps (vertically and horizontally); the difference between what the Town is recommending over last year ($300,000) and the salaries alone are $400,000. That totals $760,000; if they hire 16 new teachers. Now they are $760,000 off the $1.5 increase he asked what some of the other major increases in operating the school are, other than salaries, that would make up that difference. Connie Verge states she understands what he is saying, she doesn’t calculate it the same way. There are other expenses – she is not prepared at this time to discuss them. William Kraus stated it sounds like something really huge. Shirley Mosczynski stated she thinks they need to close, some people need to leave. It has been very informative but there are still some unanswered questions. She asked the answers be given to Michael Guzinski. She asked Shirley Downs if her Committee could take another look at their budget – keeping in mind some of the questions that have been asked here today. Paula Brouillette stated the last time they met Connie Verge had stated she had a Capital Plan that she would forward to the Board of Selectmen – they have not received it yet. Connie Verge stated she was told that it was sent to Capital Chair Mitch Cohen. Paula Brouillette stated they don’t have a copy – they would like to have a copy. That is another important piece she looks forward to having discussions with the Superintendent and School Committee on maintaining the two school buildings they currently have that they don’t have any Capital Plan for major repairs that probably are coming up simply because they are 20 and 25 year old building. Shirley Mosczynski thanked everyone for coming.

• Funding for Yacino Article: Michael Guzinski stated they will be borrowing for the Yacino Article. From a bond rating standpoint – it’s the best way to go so they don’t take all the money out of Stabilization. Paula Brouillette made a motion to authorize debt borrowing for the Yacino settlement of $767,000. Edward Therrien seconded the motion. All – aye.

2. Adjournment:
Edward Therrien made a motion to adjourn at 6:24 pm. Paula Brouillette seconded the motion. All – aye.

Respectfully submitted;

Suzanne Kane
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Suzanne Kane
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