Town Manager To School Committee: Fire Station Will Not Jeopardize Your Funding
Town Manager Mark Haddad met with School Committee to allay fears over available funding in fiscal year 2014 which runs from July 2013 to June 2014. The budget cycle for fiscal 2014 is currently underway and culminates with a recommended operating budget to voters at Annual Town Meting in May. The meeting was held during a regular school committee meeting Jan. 9 and was prompted by editorial comments in the Jan. 4 Groton Herald which suggested alternative funding mechanisms for the proposed new fire station to maintain flexibility in available funds for the 2014 and future budgets.
School Committee is considering an increase in their operating budget for FY14 after a couple years of flat budgets. The increase may include a significant investment in technology. School Committee wanted to discuss funding issues raised in the editorial and invited Haddad to their meeting to talk in more detail about the 2014 operating budget.
Haddad told School Committee that his goal was to try to fund the new fire station without raising the town's tax levy beyond limits allowed by Proposition 2 1/2. Under Proposition 2 1/2, the town is allowed to increase its tax levy by 2.5 percent plus an amount for new growth. Haddad estimated that in FY14, the town's tax levy will increase approximately $800,000 or 3.3 percent over FY13.
Haddad noted that in managing the town's tax levy, he tries to maintain approximately $500,000 in unappropriated funds in the town's tax levy. He indicated that this allows flexibility in taxing capacity in case some departments or the schools have special circumstances that require additional funds. He also indicated that this cushion prevents the town's tax levy from wide swings and makes for a more stable tax rate. Haddad noted that in FY13 some receipts have gone up and the town may finish 2013 $557,000 under the levy limit. He acknowledged that this situation was due in part to the School District's effort to keep their budget down in 2013.
Haddad said in preparing the fiscal 2014 operating budget, he has planned for expenditures to cover debt service for the new fire station within the levy limit and given most departments a 2.5 percent budget increase and Groton-Dunstable Regional School District a 2.5 percent increase in their assessment to the town. With those proposed expenditures, Haddad noted that the 2014 budget will include approximately $500,000 in unexpended tax capacity. He also told School Committee that his budget makes provision for a decrease in state aid and that his revenue estimates were on the conservative side.
Haddad stated, "At no time did we take all available revenue for the fire station...We're comfortable with our projections...If we do need additional funds for technology, we have $500,000 in tax capacity." Haddad also told School Committee, "Groton will work with you to find those dollars."
He added, "I assure you that building the fire station will not be done on the backs of school children." Haddad said if it became necessary to do a debt exclusion (a temporary increase in the tax levy and tax rate) down the road it was something that could be considered for the whatever remaining debt existed on the fire station project.
]School Committee member John Giger said the school district deliberately worked to be good citizens of the town and deferred things to allow the town and taxpayers to get beyond the difficult economic situation of the past couple years. School Committee member Jon Sjoberg said by funding the fire station within the levy limit, it will increase the likeihood of affecting the town's ability to fund other things. Haddad responded that he is very careful about managing the town's expenditures. "Why raise taxes now if it's not necessary," he said.
Selectmen Chair Peter Cunningham said there is extra tax capacity to work with and the town will also be retiring some debt adding more flexibility to available revenue. "There is capacity there to work with," he said. School Committee member Jim Frey said the financing question is a bit confusing but felt better after the explanation given by Haddad.
Finance Committee member and former State Representative Bob Hargraves said the work by Haddad in preparing the 2014 budget and keeping expenditures within the levy limit was good. However, he said consideration should be given to financing the fire station through a debt exclusion to maintain some flexibility in the town's tax capacity. He related the story of when the town purchased the country club and repaid debt service within the levy limit. The economy went into a recession and the town had very little funding for departments which resulted in some layoffs. Cunningham responded that back then the town did not have anyone to manage the town's tax levy and noted, "We have that now."
School Committee members thanked Haddad and Selectmen members for attending the meeting and discussing the financing issue.