2009-03-25-AC-rpt2 - Laserfiche WebLink

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APPROPRIATION COMMITTEE REPORT TO 2009 ATM —MARCH 2009 FY2011 and bevond Continuation of the street reconstruction and resurfacing program at the FY2009 level will not meet the Town's long -term needs (and possibly even the short -term needs) for street and sidewalk maintenance and new sidewalk construction. Rather, the Town will need to approve a debt exclusion or override in order to keep up. Last year the DPW floated a preliminary figure of $15M to cover eight years of street maintenance work. Unfortunately, any plan to put approval of a debt exclusion to the voters has been put off because of the recession. That there will be substantial demands for capital investments in future fiscal years is amply demonstrated by the list of requests for FY2010 that were deferred and the lists of possible projects for FYs 2011 -2014 that may be found on page XI -19 of the Brown Book. In the mean time the Town Manager is identifying capital projects that can be delayed so as to reduce the growth of debt service over the next few years. Clearly it will be important to carefully review the upcoming capital requests and to assign sensible priorities to each. Projections of expenses and revenues in the fiscal years following FY2010 are presented in the Appendix. They indicate that maintenance of the current level of services could cost some millions more than the revenues that will be available. We have not quantified the uncertainties in the growth of each of the major components of expenses and revenues. Indeed, the experiences of the past few years which all took place in less economically turbulent times showed that it is difficult to predict the size of a budget gap more than a year in advance with a precision of better than $1M or even $2M. In the current financial environment the uncertainty in the FY2011 projection is even greater. In our report to the 2008 Annual Town Meeting we wrote " ... future budgets can only be balanced through (1) passing operating overrides; (2) finding significant new sources of revenue, and/or (3) finding ways to deliver services at lower cost." Today the prospects for passing overrides look rather dim for at least a couple of years. Thus the Town will have no choice but to manage expenditures and to find new sources of revenue. The issues surrounding employee health insurance immediately come to mind when the topic of management of expenditures is raised. There are certainly prospects for slowing the growth of health insurance costs, but these largely depend on the outcome of negotiations between the Town and employee collective bargaining units. The possibility of collecting property tax on telephone equipment and the possibility of increases in the meals and hotel/motel taxes were noted above. Federal economic stimulus funding could be received and spent over FYs 2010 and 2011; however, such funds are unlikely to be converted to long -term revenue sources. Other than these possibilities, an expanded commercial tax base may well be the primary route to revenue growth over the next five to ten years; this should be kept in mind during discussion of the zoning articles. We hope that the projections in the Appendix and this discussion will promote a multi -year view as each of the financial articles is acted upon at this Town Meeting. Page 10 of 59