2005-11-04-SPTM-AC-rpt - Laserfiche WebLink

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APPROPRIATION COMMIT fEE REPORT-NOVEMBER 2005 The Town will receive $8,561,958 in State aid for FY 2006 which is $502,797 above the $8,059,161 received for FY 2005. The FY 2005 amount had been projected for FY 2006 for purposes of building the budget last spring. The major components of the increase are an increase of$310K in Chapter 70 aid for the schools and an increase of about$180K in State lottery aid. New growth has been determined by the Town Assessor and Board of Assessors to be at least$1,605,000 which exceeds by$500,000 the conservatively estimated value of$1,105,000 used to build the budget last spring. In a change from past years,the final number will not be determined until closer to the time when the tax rate is set. Nevertheless, the Assessors consider the $1,605,000 to be a solid lower limit that is sufficiently credible to be used in this Special Town Meeting. Between new growth and State aid, the increase since last spring in the estimate of recurring revenue that will be used for the budget for FY 2006 is therefore just over $1M. There has been no adjustment to the estimate of local receipts for FY 2006 even though actual receipts for FY 2005 came in higher than the estimate for FY 2006. Any windfall realized at the close of FY 2006 will flow to free cash. This fall the Town received a rebate from NSTAR for the investment the Town made in a geothermal heating-and-cooling system as part of the construction of the new Harrington School. It is our understanding that this rebate was expected and budgeted when the project was approved. Town Meeting will need to appropriate these funds so that they can be applied to the school project; this will most likely be done at the 2006 Annual Town Meeting. The new Fiske School will also have a geothermal heating- and-cooling capability and a similar rebate is expected to be received when that building is completed. That rebate will be handled similarly to the Harrington School rebate. On the negative side, a deficit of$646,688 remains from FY 2005 snow removal, and bargaining with municipal employee unions is in progress. It is likely that the latter will lead to contract settlements with wage increases. While there are some funds in the FY 2006 budget for wage increases, we cannot predict the outcomes of the negotiations and especially their cumulative impact on the municipal budget. here are newly identified expenses associated with the schools for both FY 2005 and FY 2006. These are discussed below in context with Articles 4, 5,and 6. Table 2: Changes to the FY 2006 Budget(not including changes in free cash) Revenue: Net amount of State aid above 2005 Annual TM projection $502,797 Amount of new growth above 2005 Annual TM projection $500,000 Expenses: FY 2005 snow-removal deficit $646,688 Art.4: Prior year's bills(Schools) $528,177 Art.5: Net supplementary appropriation (Schools) $790,396 The FY 2005 snow-removal deficit of$646,688 will be offset by the increase in new growth ($500K) and a portion of the increase in state aid ($146,688) without any action by Town Meeting. The balance of the State aid increase ($356,109) is thus available for appropriation at this Special Town Meeting. Other monies available for appropriation include free cash and stabilization funds (although there is no plan to appropriate the latter). Page 3 of 11