Good evening and welcome to the Wednesday,

February 12th meeting of the Select Board.

I'm calling this meeting to order at 6 0 4.

Let's, for those of you who are in the room

and are able, could we stand

and say the Pledge of Allegiance

and observe a moment of silence for those

who are serving our town, Commonwealth and Nation

Pledge Allegiance.

Allegiance

Of the United States of America to stand

Under Liberty.

Liberty.

All

thank you.

At this time, we will open the floor to public speak.

Any individual may raise an issue

that is not included on tonight's agenda,

and it will be taken under advisement by the board.

There'll be no opportunity for debate

during this portion of the meeting.

Due to the requirements of open meeting law, this section

of the agenda is limited to 10 minutes

and any individual addressing the board is limited to three.

While the select board endeavors to ensure

that all interested persons have the opportunity

to address the select board due to time constraints

that may not be possible.

In cases where there's intense public interest in a

particular topic, the board may schedule a future meeting

to allow for further public input.

Is there anyone in the room who would like

to address the board during public speak?

Mr. Joseph, could you come to the podium?

Thank you, Madam Chair.

Paul Joseph, economic Development Chair.

But I'm only speaking the capacity

as a private citizen tonight.

Just wanted to, first of all, thank the board

for its continuing efforts to scrutinize our numbers,

understand where we stand financially

and what's best for this community.

In that vein, the board itself, as well

as other elected bodies in this community voted

some unanimously, including the select board

to endorse the idea of a charter commission.

One of the things I've observed throughout all

of the debates on the topic

that you've got on your agenda tonight has been a

fundamental distrust or dissatisfaction

or suspicion of how government operates.

One of the things we have failed to do

as a community is give the opportunity to the voters

to elect a freely

and objective body, to study our form of government,

its impact on how we operate,

and basically put a recommendation

before the voters as to potential ways

to change our form of government.

There is is a group that was established a couple

of years ago trying to promote the idea

of creating a charter commission.

It does not obligate the town to anything

but an objective process.

This body has sort of suspended its work,

but it is continuing and behind the scenes

and it will continue hopefully until spring of 2026.

The goal is to put something on the ballot

that would allow the community to elect an objective

independently operating body that's basically legislated

by the state called the Charter Commission to study our form

of government and make recommendation to the voters

to then ratify.

The reason I bring this up,

and again with great thanks to this administration, I,

I've not been able to attend a lot of meetings live,

but I've been trying to keep my eyes on the process so far

for the override, which I won't get into details.

I've noticed a lot of questions being asked

and suspicions being raised on social media

and I cannot thank the town administrator,

the department heads and the people

that have pulled budgets together

and answering questions yourselves included

as elected officials in answering things

that frankly have been addressed in

previous meetings in other ways.

One of the things we fail to get at as citizens is

how we can understand this stuff before it becomes a crisis.

And I feel like we're all in a very hypersensitive mode

right now with the override discussions Form

of government is one way

that we can look at having a more regular beat

and regular visibility into what's going on.

So I encourage people to think about this.

There is a website called natick charter.org.

It is somewhat dormant and dated at the moment,

but if you're interested in this topic,

it will surface again after the town election.

And I encourage people that are curious about it to look at

that website and feel free to reach out

to me personally if you have questions atPaul@onenatick.com.

Thank you.

Thank you, Mr. Joseph. Is there anyone else in the room

who wishes to address the board during public speak?

Is there anyone on Zoom who would like to address the board?

Seeing none, we will move on to our discussion

and decision in order to guide tonight's discussion

and debate, I've formulated a list of suggestions, topics,

questions that people have posed

and given the list to the board so that we could kind

of focus on them one by one, the merits, the pros, the cons

in, in guiding our discussion.

What I'd like to know, is there anyone in the room

who would like to ask a question?

We're gonna set aside a small amount of time for questions.

Mr. Scott, is there anyone online

who would like to ask a question?

Do you see anyone, Jamie? No. Okay.

So then Mr. Scott, you're welcome to approach the podium.

Just introduce yourself

and I'd like to limit the time

to five minutes please.

Roger Scott. 40 Water Street.

And this actually sort of connects to

what Mr. Joseph just said.

We this confusion as to what goes on in the town and,

and my question is addressed to some

of the spending situations that we missed out on

various financial opportunities such as,

You know, everybody knows about the Auburn Street sale,

the a hundred dollars for the 2 million,

but I also would like to discuss what happened.

Why, why did we use the $1.7 million

that we got from the drug settlement?

And, and, and we didn't use that as a,

an offset in this dangerous position, which we have

with our budget expenses.

That, that was like a windfall one time windfall.

And as far as, I never heard any

information regarding the 50 Pleasant Street settlement.

So I don't know what we paid out on that situation.

I I had heard rumors it was

500,000 plus a million dollars in insurance.

So you know, these things that sort of bypass us

and we're trying to make a decision yet we don't really get

to, to hear any of those details,

which I think should be considered

whenever you're approaching, requesting an override on top

of six

and a what we had a passage of A CPA not that long ago,

which I felt was in violation of prop two and a half.

But that is my concern there.

And also the fact that we had all that COID money

and we didn't seem

to factor in when the Covid money disappeared,

that all the added expenses we did to build up to spending

that money, which we were required to spend,

did not get considered on what,

what happens after that's gone.

So I just feel,

and my question is why don't we disclose more information

to the public so they're aware of these, these

VA various situations

that could affect their pocket books at home.

You know, we got people who are on limited income,

fixed income, you know, they're in residence of the town

for 50 years and all of a sudden they have a budget crisis

because of taxation.

So I would hope you all would consider

that in the way you set up this prop two

and a half override.

Thank you very much. Thank

You Mr. Scott.

Let's take those one by one, Mr. Erickson.

Sure. So I believe the, the funding

that Mr. Scott noted

as drug funding was the opioid settlement funding that is

actually a series of federal lawsuits

or cases that are leading to a number of payments

to the town over the course.

Well, it depends on the actual settlement,

but over the course of basically the next five to 10 years.

So it's not all at once.

We get maybe, again, depending on the settlement,

anywhere from 10 to $50,000 a year.

And that actually fluctuates over the years.

So right now we have, I believe a balance of a,

of maybe three or $400,000 in an account.

We're actually obligated on an quarterly basis

to report back

to the courts on our expenditure of those funds.

And they must be used for the purposes of

basically outreach and prevention

or even direct payments in some cases, to folks impacted

by the opioid crisis.

So those are very, very heavily regulated

and restricted where we actually are required now

by the state to hold them in a separate account

and they can only be used for those purposes.

So we're currently planning,

and this has been presented to the board earlier this year,

we're currently planning to utilize those

to support our Natick 180 program, including a staff person

as well as some other supports

that they have program supports

and the like, you know, we're part

of some regional consortiums

and also just trying to get the word out about the funding

and just program supports for that.

We have about a 10 year plan for the use of those funds

to try to just make sure they last as long as possible.

I wanna add one thing to that.

The discussion of the opioid dis monies has been a regular

occurrence as we've had updates from the federal government

on use and requirements reporting requirements.

So that is something that the select board has

been covering in public meetings.

Do you wanna take Pleasant Street?

Well, 50 Pleasant Street was a settlement between the town

and the plaintiffs.

Plaintiffs and the folks. Yep.

And really we're, we're bound by that settlement to

as to what we can say publicly.

So I'd wanna check with our legal counsel

before we start really talking publicly about

what we can and cannot say about that.

Okay. Were there any

other, did you remember

He was asking about AR funds?

ARPA funds? ARPA funds?

Yep. So ARPA funds, those did as noted arpa,

American Rxi Plan Act funding.

Well, there was a number of federal stimulus dollars

that came through to the town in the schools.

Schools had what I believe was called SR funding.

And by

and large those funds are, are, have been spent

on the, and I can't speak to the SR funding, Matt is here

to provide a high level overview

of SR funding expenditures for the schools.

But on the townside we largely utilize those

for revenue replacement,

which has basically offset our lost revenue from local

receipts 'cause that's where we were most heavily impacted,

but basically revenue replacement.

So it did not lead to increase

expenditures when it came to operational expenses per se.

It was really an offset for revenue loss for the townside.

I believe it was 6.5 to $7 million of our 10 million

that we received for that purpose.

Then we use another million five, I believe,

for water project for PFAS related water sewer projects

we're, we are still using some in our police department

to do some social, not social work,

but we work with a, it's called Advocates Outta Framingham,

to provide some additional supports

to the police officers when they're in the field when it

comes to working with

and supporting mental health related responses

and some other funding.

I think we had the board was able

to appropriate some funding to support a phase,

a most current phase of A CRT project, for example,

but really small projects beyond that.

But the bulk of it was really for the revenue replacement

and then the water sewer projects and,

and some to the schools as well.

But it was all sort of mostly in

that revenue replacement side.

Just really high level.

I dunno if Matt wants to try to do the SR funding

'cause that was another bulk

of funding from the federal government.

Yeah, so we got three SR grants.

The first one was used in FY 21 all for supplies

for technology and like air cleaners

and things like that to reopen schools.

And then the other two, close to $2 million

were used up in 22

and 23 with a little bit of money carried over

and spent the first month or two.

I was here in summer of 24 to,

to close out that July August to close out the,

the Esser funds grant.

And that's sort of reflected

with the school's budget request where we've reduced,

you know, $2 million between last year

and this year from what?

From FY 25 and FY 26, the reductions from level service.

So we've tried to offset that.

We, we added several positions

and we've basically traded them off.

A lot of it was used for summer school

and partial payments stipends for extra work for folks.

Thank you. So I'd like

to suggest that we start with a discussion

amongst the board members on the suggestion

that has been made that the town adopt means tested

senior tax exemptions.

Some towns have done that

and we've conferred a number of us individually

with our tax assessor.

So I'll open it to the board for comments,

question, discussion, debate.

I wanted to start with one thing,

a gentleman was in the room last night

who is also here tonight,

who made a very impassioned statement about the situation

that he finds himself in.

And I don't think he's alone.

And I just wanted to show appreciation for that

because I felt like it was extremely vulnerable

and it's some of the things that we had been hearing.

And I, and I, you know, in the time

that I have been in Natick, not nearly as long

as this gentleman, I have heard of, you know,

sometimes the struggles with the intergenerational becoming

of Natick, you know, people who have been here for years

and want to retire here

and now don't feel like they're able to.

And maybe say people who have a demographic more like me

who are coming in

and perhaps we are a part of, you know, the change

of natick, not because we don't love it any less, but

because of where the market is.

And it's interesting because I feel like I finally got it

when he spoke last night.

And, and I'm thankful

and empathetic to what the gentleman was saying.

And separately, it's interesting that I, I

empathize with him from my own situation

because part of the reason why my family moved to Natick was

because it was what we could afford.

And if we tried to move here again in our current

home, we couldn't afford it.

And so on the one level, I get what he's saying.

And on the, and on the other level, I,

I feel very similarly myself as a, as a resident of Natick.

So I just appreciate what he shared

with us from the senior perspective.

And, and I, I take that

as we are making this discussion very

seriously and how we move forward.

Thank you, Ms. Pope. Ms. Slager?

Yeah. Just a question. Did you receive any information

from the assessor about a potential cost for this program?

Yes, I did.

So there was a, there was a, there, a senior tax

taxation committee formed several years ago.

And they were unable to make a recommendation for

or against a, a number of proposals that had come before it.

They were unable bec for various reasons.

And I spoke with the,

the Sudbury tax assessor because they have this program

and I also spoke with our assessor.

So the first, the first item that comes up is an issue

of equity, which means that we're transferring part

of the tax levy from one group of people

to another without taking into account perhaps a 40-year-old

who lost their job or had a catastrophic illness,

lost a year of work and is unable to pay taxes.

That 40-year-old

or family person with children may be in the home,

cannot avail himself of the 2% deferral program

that we have in town.

And other means

tested tax protection.

So there was an, an issue of e equity,

the law set up so that it's only funded

by the residential class, meaning it's only a benefit

to the residential class.

But we could or would,

we could split the tax rate to, to offset.

So for example, when we run numbers

and say is this will affect

and we don't know how many people it will affect

because we don't have access to the income tax statements

of our seniors

or who we don't have a, a good sense of

how many people would be eligible.

But if we, if we were able to do that, we could

or would just split the tax rate

and shift that burden onto the commercial class.

That's a possibility. Sudbury does not do that.

A means tested and tax work off pro means test tested

tax exemption has similar

qualifications to the deferral program.

The the difference is in the deferral program,

our town doesn't look at assets.

So you could have someone with five

or $10 million in assets in a home in Florida,

but have income that's $40,000 a year

and qualify for a means test exemption.

Now, in order, when Arlington had their override

and they made a commitment to endorse this program,

they imp they included an as asset test.

So that's much more staff intensive, at least

for the first year staff intensive

process whereby federal tax returns, bank accounts,

investment accounts need to be looked at, et cetera.

So the first year would probably require,

when I spoke to our assessor,

Mr. Henderson having bringing in a temp for a period

of time just to make sure

that they had the staff coverage to set it up.

It's not impossible, it's just, it's just a factor

to take into consideration.

The biggest downside according to Sudbury

and our Sudbury assessor and our assessor

or potential downside is

that we're replacing state dollars with local dollars.

Let me explain what I mean by that.

If you qualify for the state senior tax circuit breaker,

you get a credit against the taxes that you pay if it's over

a certain percentage of your income, I think I'm saying

that right, or is it flat number

Is 2,500?

Well that's the rebate,

but in any event you're entitled to that.

Now we would be using the same criteria

and in year one, if a person had a house,

a home assessed at $750,000,

they would be paying real estate taxes of $8,970

then water and sewer.

So their total is $9,770 for water and sewer

and real estate taxes

in year two.

So they, they would be able to get a credit a,

a circuit breaker, stack a circuit breaker tax credit

of $2,730 the next year.

They wouldn't qualify if, if they applied the next year

for the senior tax exemption here,

they're not gonna qualify for the state.

So by putting this program into place here,

what we're doing is taking our local dollars out

of the tax levy, shifting it onto another class of residents

and not using the state funds that have been set up.

So I don't know if I've explained that very clearly.

I'm happy to take a question if that was

from the board, Mr. Scott? Yes.

Just had a couple things to add.

I think you got it mostly right.

I think what we have to look at is, I forget when the

study committee was,

but it is probably on the order

of about eight years ago, somewhere around there.

They started pre pandemic

and they wrapped up just after the pandemic.

I believe they, okay. So I believe they dissolved in

2021 ish.

Okay. But they started I think in

20 18, 20 19 to do some of their work. Okay.

Alright, thank you. So in my view,

a lot has happened in terms of accelerating the

home values in Natick.

And I think it is independent of the override.

We need to look at what things we can do

with the a means tested program, see who it affects.

When the, when we spoke to Mr. Henderson the last time,

this was three years ago,

he said that between 200

and 600 homeowners could be eligible for the

exemption according to the study.

But they didn't have firm fair numbers.

We already touched on the fairness piece of

that, in my opinion.

I think we do need to look at it again

and I, I, I think there are enough people in this community

that are, that are aging.

I've had several neighbors who've had to move out

of town even though they sold their property

and made money, it wasn't enough for them

to buy something in Natick and stay in Natick.

So what I want to to see is a sort of drill down

and maybe it's a another study committee

or maybe it's just something that goes

through the assessor's office.

I don't know the answer, but I think we need

to take a good hard look at this independent

of the override situation.

Mr. Sidney?

Thank you Madam Chair.

I think this circles back to something I think that we ought

to be really clear about.

I would like to see the board make a commitment

after our override vote.

Should we have one to study these things?

Just make the commitment to look at all

of these other options.

This would certainly be one of them.

One thing to look at that we could make a, you know,

after we get through, you know,

whatever debate we're gonna have about, you know,

all the things around the override itself,

there are things we could bring up that, you know, we could,

we could look into sort of, you know, after the heat of this

and this would be, this would certainly be

qualify as one of those.

But I think it does require the commitment from the board

to actually do that study.

I think, I think if I remember correctly,

we've talked about doing that,

but I don't remember if it's on an agenda or not.

So part, part

of the select board discussions have talked about

in the context of an override, what kind

of commitments can we make to the town.

We will be bringing up that

and working on that in the next couple of weeks.

It's not what's super time sensitive is the vote.

So the vote has to happen tomorrow as to whether to

put the override on the ballot and in what form.

So various ideas have come up from the community about

things we could commit to do as a matter of trust

between the board and town administration and the voters.

And that will be part of ongoing agenda items. Ms. Slager?

So since Mr. Evans said the last time I think we've talked

to the assessor about it was three years ago,

I think there have been some things that have changed

including potentially some law changes

that happened last fall.

If I recall correctly, I had a conversation

with Mr. Henderson about that,

who had been thinking about potentially

bringing something either to SPRINGTOWN meeting

or fall town meeting about these changes.

And I think that that's all part of one thing

that I think we ought to work with the assessor's office

to understand if there are any new programs that we want

to adopt or that the select board feels we adopt.

It's up to town meeting of course.

And, and I think that's a good idea.

I think it's, it's part of a bigger hole

and I think we need to look at the, at the whole picture.

So I just to be clear, I spoke

with Mr. Henderson this week.

I spoke, met with him on Monday and Tuesday.

The research that Bruce is referencing is,

is different from my conversation

and I spoke with the Sudbury tax assessor,

or it corresponded I believe on Tuesday of this week.

Any other comments? And,

and he is bringing a Warren article to change the

work credit limit.

So the state raised the limit

by which seniors can work off part of their tax from,

I think it's now 800 to 2000, up to 2000

or 1800 just in case minimum wage CH changes from 15 to $16.

So we have to adopt that

and he is prepared

to bring a warrant article for Springtown meeting. Oh

Yeah, I think that's one of several things.

So that may be the only one

that he felt was worth bringing forward,

But I think so maybe that's something we look at.

Yeah. Okay.

Okay. Other members of the board on this topic?

Just angry.

We've communicated

to the tax assessor's office

and to our communications director that the of the

programs that we do have in place for tax relief for seniors

is not easily found.

It's not easily easy to digest.

And I know that they are working on that to make

that into a single one stop shop.

And also, I'll reiterate,

we've said this in several meetings.

I have The, one

of the previous collectors in the downstairs on the first

floor had told me that there are seniors who come in

who have talked about their taxes.

So she had a stack, she's since left to go

to another top down job,

but she had a stack of my cards so

that somebody could call me or text me

and I could put them in touch with

our assessor.

And Eric has been very good.

He will meet with a senior, he will meet

with anybody about their tax bill and sit

and talk about what availability relief there is by

and tell them what documents he needs.

And I know of three people who've met

with him who've been extraordinarily pleased

with the outcome of those conversations.

So he is available, he's very busy,

but he always makes time.

It's a private consultation in a conference room, you know,

'cause you're sharing, you know,

your personal financial information.

So I do wanna reiterate that to the public that, that,

because sometimes even reading the materials that,

that are on the page, you don't fully comprehend.

I I didn't, there were, there were, there were some, yeah,

there were some, there were some funds that were available,

but I, I just couldn't, you know, even with

graduate degrees, couldn't work my way through it.

So we, we were aware of that and we're working on that.

Mr. Bruce,

I'm getting used to that.

Just wanted to, to comment.

The last time that I asked this question of Angela

and Eric, they hinted that they should,

they hoped to have something done by end of February,

early March.

So I'm hoping ahead of, you know, the, the

sooner rather than later.

They, they acknowledged, we showed them actually a one stop,

one page document from Arlington,

which just laid out everything and then had links to it.

That would, that made it much simpler

for people to understand.

And, and I want, I wanna explain this, just, it's not just

tax related things, it's service related things.

How, how you get different services,

Natick service council, et cetera.

So I think this'll be of great value to the community.

Mr. Scott alluded to the, you know, being able

to find out the information you need that, that's helpful.

We also now have a digital welcome kit in town.

So when somebody's has moved to Natick, they can find out,

you know, what the trash pickup schedule is

and all these FAQ type things.

So it's, we're headed in the right direction.

I think we'd like to be there yesterday,

but let's, let's get there as soon as we can.

Okay,

the next item,

let's talk about the stabilization accounts.

So we have three suggestions, three topics. Yes.

Any

Comments right now?

We're not gonna take comments Mr. Scott. Not a

Comment question.

Please approach the podium and

Just address something.

It should be addressed back.

So last night I went to the meeting, all right

and I think we all said it was 80%

of the budget is school related, if I'm not mistaken.

And that without the override they were gonna get a 6.2

something increase

and if we pass the override,

they're again like a 9.7% increase in the budgets.

So I'm looking at that situation talking about an injustice

and distribution to the community where you're saying too,

well this is 80% of the budget and you have three children

and you have a senior who's been through the process

and paid for the kids along the way

and paid for many kids along the way, not their own.

And it gets to a point where the person at the other side of

that doesn't have a job anymore

and needs to be considered on a fixed thing,

not a borrowing situation or a claim against their home.

You know, it's just the distribution doesn't seem just where

you're not getting the same services

as the other person paying at the same based

on the price of their house.

The tax is determined by the price of the property.

Mr. Scott, what's the question?

The question is, I think you need to deal with, with the

distribution of the taxes between certain segments

of the populace without attaching their house to it.

Okay, thank you. Could someone address the questions,

the figures that were just presented?

Because I don't think they're correct.

Sure. So on the budget front, the budget percentage or,

or the budget amount increases

and percentage increases,

no override versus override reference

for the school department appear to be accurate.

They're in the six plus percent range

for when there's no override dialogued

and obviously this is pending vote and it's determined,

but, but with an override, the intent would be

to be in the closer to 9.6% range.

I believe the other point was 80%

of the town's budget is school related.

I think that was, we were throwing a lot

of percentages around last night.

I think what we said was 80% is staff staffing costs

and that's true school town,

typically overall budget related, inclusive of the portions

of shared expenses that

'cause just the school budget is about 90, well, 90 60,

well it depends on the override.

92 to 96 to 95 million out

of a roughly $200 million budget.

But then the shared services is about 60

to 70% also school related.

'cause that's healthcare costs

and other costs that also go into supporting school

buildings and other school school programs.

So it's, it's about 65 to 70%

and that, that does fluctuate a little bit depending on the,

the, the staffing models, who's got insurances

where we have certain investments when it comes

to capital programs

because, you know, the useful life of a certain product

or a school or a town building might have different

impacts on a different year.

Thank you

Matt.

Matt?

So in answering some questions for the,

the portal, the, the health insurance cost breakdown

for the town, the total was 12,621,000.

The school's portion was 7,099,000.

So we're about 56.2% of the health insurance.

And where 51% of the debt, the total debt payments

as 14.2 million and the schools were 7,237,000.

The, the debt, the debt card share cost share can be found

in the town budget book pages 2 0 3 2 0 4

and the health insurance breakout can be

found on page one 90.

So we're a bit bit closer to, to 50

to 55%, not 60 70% of the,

the shared expenses in town.

I didn't break out the, the, the littler things

but we're, we're not 70%.

A lot of the school staff have sort of,

they can't afford the health insurance, the part-time staff

to have a family plan.

So they, they opt into mass health where they can.

Thank you Mr. Gil. So the next series of topics

I'd like us to address are the stabilization funds.

And I'm just gonna lump them all together.

One is either choosing to not fund

or underfund the, the proposal

for the general stabilization fund

and the operational STA stabilization fund

and the capital stable stabilization fund and

or so not funding or underfunding those three.

And then alternatively pulling from stabilization accounts

to minimize the size of the override.

So I'd like to turn this over to the board for discussion

and debate Ms.

Wolfer.

So I think it's important to note

that our no override scenario, we are short of our targets

for our general stabilization

and operational stabilization funds.

We've been that way since the pandemic.

We certainly haven't brought it up to the levels

that we had pre pandemic.

I know there's been questions about

the usage of these funds.

We have our financial management principles

that the select board has adopted.

Are they cast in concrete?

No town meeting.

Can with a two thirds vote take money out

of these stabilization funds?

Would we recommend it? Is it financially prudent?

I wouldn't but that said, there's been I think a lot

of dialogue that we've heard from residents about

with this override with the $8 million override,

it feels like we are raising money to park it,

to put it into stabilization.

Now, whether or not that's prudent

or not, it's a perception issue that we're asking the voters

for money that's just gonna sit there at times when it is

very difficult for many people.

And this is a big ask,

an $8 million override.

There's only been 10 in the state since 2000

that have been $8 million or more.

So this is definitely an outlier.

So I think some of the options

and some of the options that I think we've asked

a ton administration to consider as potentially

lowering the amount of the override to

and not funding the stabilization funds to the degree

that we were.

So with the override we had projected putting

additional money into the operational

and general stabilization funds.

Maybe we don't do that. We've also been putting quite a lot

of money into the capital stabilization fund.

Now those are, you know, those are things

that we wanna be able to support

but maybe we don't need to put in quite the same amount.

So it's something that I've done a couple

of scenarios on

and then when it comes time tomorrow when we actually are

going to be proposing the override

and for those that don't know,

we're not gonna be voting on whether

or not to put the override on the ballot

and what that question would be tonight.

That is gonna happen tomorrow,

Right?

We, this is a night for us to, to debate.

We, we have not had an opportunity to debate in public

to discuss all of these things among ourselves.

We've been reading the emails,

we've been talking to residents.

Tonight is a night for us to debate and go home, think

and sleep and tomorrow come in with motions

and votes tomorrow at six o'clock.

So I am,

to my mind, I think for this year I would be comfortable

with not putting money into stabilization funds

and then re-looking at that next year

and seeing what, seeing what happens and what that means.

And there's other factors that go into this

that I think we're gonna be talking about

later in this meeting.

But do you wanna give the caution

that we are not at our targets?

I know there's also been some other proposals that we use,

other, other stabilization funds.

Oh we have other stabilization

stabilization funds other than

operational general and capital.

That is not something I support at all.

We're not gonna rate our savings this year.

These other stabilization funds are there

for a reason. So for

Point of clarification, we can't test the opep, right?

There's a number of stabilizations that are,

are more heavily restricted.

Opep is one of them. There's also an FAR Bon stabilization,

which is in theory only for open space purchases, right?

There's an INI and INI is an acronym,

but it's really related to sewer water infrastructure work

I put up on the screen what's in the budget book.

This is literally from the budget book.

It's page 35 of 315

and it shows the no override scenario.

A current balance is no override scenario.

Override scenario. So of the general

and operational stabilization, just just

for public knowledge with no override,

there would be no proposed increase

or any, any contributions

with an override 538,100 88,000

for general and operational respectively.

So non-capital stabilization account increase proposed

contributions, 720,000, roughly

710,000 roughly capital is the 1.7 million in in capital.

And then there's an additional proposed use

of free cash for capital.

Capital is, has got more flexibility to it.

It tends to, it doesn't have, for example, the general

and operational stabilization have very specific guidelines

and I would argue somewhat requirements, I know

that's not the term used, but in the financial management

principles from the select board as noted by Ms.

Slager, operational stabilization, interestingly

that was also voted by town meeting.

Yep. Those so, so those are, I would,

they're probably maybe a little bit more set in stone,

whereas capital is just really for capital projects.

And we do regularly use capital both in the spring

and fall town meeting, but we need to

put budget in there if we need to use it in the fall.

Yeah, I just wanna point out there is an error on the

start which Mr. Townsend is aware of and we'll be fixing.

Yep. And that is in the override scenario, the OBE trust

contributions, you'll see that it's the same

as general stabilization.

That amount should be $295,560.

Oh fair. Good to catch. Yes. Yeah. Yeah. Good catch.

Fortunately that's not one that we're talking about here

because it's a very

Restricted fund.

No, but just so in case people are Yep.

Taking copies of this, that there, there is

A small that would be fixed in the updated budget book.

Yep. Yep. So it really depends

By my calculations, and this could be Ron

and that with the current budget, the no overrides scenario

for general and operational stabilization we're about 90%

of our minimum targets. Roughly.

Roughly. Roughly. Yeah.

Roughly. So

Sorry, not the best.

That's without the override you said?

Yes. That's the new no override scenario. That's

The no override scenario.

Right. So it, it, it, the a reason we did work

to reach targets but it, it keeps going up each year

because it's based on a factor of our overall budget.

That's why in one year you might meet it,

but then in the next year if you don't contribute to it,

you don't meet it anymore.

And so no, no contribution means we're

not gonna meet that target anymore.

Right. It's a percentage of revenue. Exactly.

And hopefully our revenues keep going up.

So, you know, I've looked at this, I've,

I've looked at different scenarios about this

and you know, not happy that we're not at our minimums

but I personally, I would potentially support

an alternative where we did not fund

the general and operational.

I do think we do need to put more

into the capital stabilization.

I'm not, I would not propose $400,000

that would really leave a lot on the table.

And I'm hoping we could get more information at some point

from administration about what cuts in that might mean.

But that's, I I do think that's very important.

Ms. Wilger, could you, I just have a question.

You're saying that the no override scenario proposes a

$400,000 cap stabilization

and you would be in favor of that being higher?

Higher, yes. Keeping higher

but not necessarily the 1.7 million.

Correct. Got it.

So I'd like to, before we, I want Mr. Erickson to address

the implication

and impact of not funding

that and Sure.

Sorry the mix has to be on. Sure.

And one thing that's missing from this,

'cause this is specific to stabilization,

is there is still the intent to try

to fund capital just not through the cap stabilization.

And if you'll bear with me, I'm gonna stop share,

but pull up another table to show

If it's helpful for the board while Mr.

Erickson's pulling that up.

Just so we know, a historical spend from capital

stabilization for capital projects in fiscal year 2018,

it was 2.1 million from STA

In 2019 it was 4.3 million

in fiscal year 2020 it was 4 million.

In fiscal year 21 it was 385,000.

That was our, one of our covid years.

In fiscal year 22 it was 2.5 million.

In fiscal year 23 it was 1 million.

In fiscal year 2024 was 781,000.

And in fiscal year 25 it was 475,000.

Thank you John. So it has fluctuated.

So it has the balance in that account

and we, it definitely got hit hard during the pandemic due

to just the demands of the pandemic and,

and still trying to ensure

that we kept up with our capital program.

'cause one of the, as we've talked a lot in this,

in this realm

and in this community, if, if one's not able to keep up

with the capital program, it leads

to typically more cost down the road due

to deferred maintenance due to just a lot of other

challenges that come from not investing in the capital.

Putting that aside, what I,

what I put up on the board now is

the free cash spending plan with the proposed, well

with the, with the concept of an $8 million override

obviously all pending

and this includes what was on the previous slide

of the investments into the various stabilization accounts.

That's what you see here highlighted.

And you can see it goes from a $6.5 million use

of free cash with no override preliminary budget

to a $2.5 million use of free cash with an override

because we can utilize free cash a little bit more

strategically with an override

and not have it really be reliant to support our operations.

And in this case, this is where you see $400,000

in cap stabilization

with no override versus 1.7 capital

improvements is what I was talking about.

So with no override two 50, that's not much,

that's not even a trash truck to 1.4 million.

So there is an intent to continue to invest in capital,

but I I'm, I'm understanding what I'm hearing from the board

that that ensuring our capital program

between these two funding sources is still a

critical desire of the board.

Yes,

Mr. Sidney,

Thank you Madam Chair.

I I want to, a little bit of, this is a little repetitive,

but one of the things, one of the reasons to

that our financial principles say we want minimum levels in

these various stabilization funds is

because it actually contributes

to keeping our bond rating high,

which reduces the cost of our debt.

So we want to be really careful not to underfund them

to a degree where it's going to cost us more money

in debt service because the,

the rating agencies look at

that sort of thing pretty carefully.

The other thing, and, and Mr. Erickson said this,

but I want to like really hammer it home the reasons that,

that the stabilization funds were created

with specific reasons town meeting voted.

The operational stabilization fund is to be used in times

of economic downturn.

And there, there's a very specific definition in the

creation of that stabilization fund

and what an economic downturn means,

and I don't remember what it is,

but it's like a specific percentage drop

in significantly. I have that

Period significantly defined as being more than 5%

of the total of the respective revenue category.

Yeah. Right. So while town meeting has the right

to draw money out because of the rules, it really

in some ways not appropriate for the administration

to suggest using it unless we've met those criteria.

Now that doesn't mean we have to put money in,

which is a another question.

And the other thing I wanna say, just sort

of at a higher level, typically

with the capital stabilization money's put in in the spring,

sometimes some is taken out in the spring,

but a lot is generally taken out in the fall for the,

so we're, we're, we park it in the spring

and we take it out in the fall.

And so that fund goes up and down.

And specifically again, town meeting said this is

for funding capital

and keeping capital, allowing capital spending to be

kept relatively stable.

Of course if there's no money in there, we can't use it.

So if, if I may go onto that other topic.

One of the things I was

Gonna say just wait, wait on that

one 'cause I wanna, I wanna

Well it's, it's sort of go ahead jars in.

Yeah, go ahead. We can, we can I I just wanna mention it.

Yeah, we can talk about it later. Okay.

One of the suggestions I heard,

and one of my calls was

that we create a new stabilization fund for

override avoidance.

So it would be

significantly less restrictive than any of the existing

stabilization funds in terms of the rules of its use.

And the purpose would be to put money in when we have it

to avoid an override in future years

because it wouldn't be restricted to those, you know,

like operational stabilization to those drops in revenue

or capital stabilization wouldn't be restricted to capital.

It would be much easier to, to, for the administration

to decide to use it.

And we can talk about it in more depth later,

but I wanted to bring the, bring the topic up

as something we could consider as a way to

park money differently that

to avoid the next override to the extent we could.

Mr. Evans.

Thank you Madam Chair.

I tend to agree with Ms. Slager.

There's, there's kind of a time

and a place for contributing to the override.

If I just looked at those three areas, if we cut back,

I'm sorry, operational stabilization fund,

I wrote it down, but where opera,

everything but capital stabilization,

forgetting the other one.

I'm losing my mind. General General, thank you.

If we make those two zero

and get the capital stabilization fund down to 1.4 million

in an override scenario that

that takes 926,000 out of the budget,

so nearly a million dollars

and if we take maybe a little more out

of capital improvements,

that's a million dollars right there.

So I think we're asking a lot of our residents

in this timeframe

and to the extent that we can reduce that number,

I don't think Ms.

Walser said earlier about 10 communities have eight

or $10 million overrides in the last year or so.

I'd like to be one of the ones that, that discussed it

and said, you know, hey we, there are things we can do that

maybe are a little out of our, our comfort zone,

but let's go through the, through it this year.

I firmly believe that we're gonna have new growth

numbers that will help next year.

I look around just in my neighborhood, all the developments

that are going up, we have a lot

of activity in town, the building permits are going up

for both from new houses as well as renovations.

So I want to see that reflected in

that will be reflected in a future year budget.

So I I'd like to be as conservative as we can.

Yes, we're on the low end. I, I can see that.

But I think it's a good calculated risks not to

over or not to

or I'll just say it's a good calculated risk. That's all.

Ms. Pope,

I just wanted to hear from Mr. Erickson,

what are, what's the risk

or what's the impact of us not funding those funds?

The operational and the capital?

So the operational and general stabilization.

Yes, you, yeah, they run, they roll.

I've been doing this a long, it takes a while for,

to roll off the tongue like that.

A lot of what was talked tonight, you know,

not meeting our minimum targets will have an impact on our

potential credit rating.

Although if we can very soon, maybe in the fall

or next fiscal year, keep up

with our minimum targets, that would be a benefit.

There's obviously we're going into an economic time

that we're not sure of what's gonna happen

these next few years.

Really any time there's a,

and we are hearing even at the state level

that there's some potential challenges with revenue,

we might actually need to tap these.

And if we're not even at our minimum targets

and we have to utilize those in the next 1, 2, 3, 4, 5

years, then we're even below our minimum targets.

So the, the more healthy we can keep our reserves,

the more healthy we're able, the, the better off we are to

really address those economic downturns like

we saw during the pandemic.

And if you look at where we are today, you know,

we have a change in federal administration, we have

a state revenue picture that's a little less healthy.

We have a potential bird flu challenge

that's happening nationally.

There's a lot going on that makes me cautious when it comes

to using and, and,

and not even i,

I prefer exceeding our targets, lemme put it that way.

I know John has a couple of points. Thank

You.

Yeah, I just throw a follow up on that point.

So during Covid we used $10.7 million

our stabilization funds.

So if we did not have those funds available

and we had fairly robust stabilization

because at the time this town

would've been in some serious trouble.

So I'm just cautioning that, you know, it might be a,

a risk, it is a, it is definitely a risk there

as Mr. Erickson just said with regards to

what we're looking forward to down the road.

And the other thing just to comment on Mr.

Sidney's comment with regards to our bond rating, it is sort

of a dual sort of factor here.

First of all, you know, if we didn't put it in

for an extended period of time

and maybe we miss a particular year

or so, probably not that big of an effect,

but if we do get downgraded to like a double A,

then all your savings is pretty much gone just in

increased interest costs.

Now I'm not gonna say this is a good thing,

but we're not, we're not intending to go out

for any major borrowings for a while.

And we do have some down the

road memorial course is a big one.

And if we're going out for a 50 $60 million

debt, debt issue, then

that could have serious ramifications on first

of all the debt exclusion they're gonna ask

the resident to take up.

But like I said, in the near future

we are relying primarily on bond on bans instead of bonds.

So our likelihood of actually having a, a rating, you know,

assessment done on us is probably fairly low.

So that we would've time to sort

of make up those payments as we go on down the road.

With with, sorry, just with that said, well two things.

One context as, as John mentioned, we heavily used

the stabilization counts

during the pandemic 10.5 million roughly.

We currently only have about

7.9 million in there.

So if we had another economic downturn of that scale,

it'd be a very different, we

wouldn't be able to sustain it basically.

And two, without an override of some type,

our ability to cover capital, preferably with cash,

but even with borrowing means

that we're probably gonna put more into borrowing,

which means we're, it, it's even gonna hit make a

credit rating even more critical for us to keep.

So, so it, you know, has that domino impact cascades,

cascades cascading impact is a better way to put it.

Yeah,

I, I have a question because this has been asked of me

by other members of the public that they say that there,

there's nothing in our credit reports

and that the bond councils don't care about our financial

management principles when it comes

to our stabilization funds.

And I'd like to give you an opportunity to address that.

Sure. So I mean by

and large, I mean credit rating

agencies are working nationally.

So what they do look at is, is how much money we have in

available, basically not allocated

for particular purposes.

And whether you call it a general

or operational stabilization account, those,

they're looking at those balances.

They might not call it an op, a stabilization account,

but some communities just keep it in free cash for example.

They'll just keep high balances in free cash.

The effect though, from the credit rating agency in our,

my experience anyway, and John you can sort of add to this,

is that they're looking to those balances

and every time I've talked to a credit rating agency

and I've done it two or three times now,

just in the last three, four years,

when we mention the financial management principles,

they might not mention them but they see that we're, that

that the town has strong principles

that we adhere to that, that we have strong governance,

that we have strong financial,

just strength and trends.

Those are all important factors.

It might not necessarily exactly reference into a bond

report, but they absolutely ask those

questions. John, do you,

Yeah, so the bond reports

and you can see them, we have 'em on the website when you

read through those, they do credit natick

as having very strong financial management in place

and that includes, you know, town meeting,

putting money into stabilization funds,

you're having the financial management principles.

Those are all part of the, first of all,

we give those materials to them

'cause they ask for them, then we

have the conversation with them.

So it is definitely part of their assessment of Natick

and that's one of my concerns that, you know, if we,

because for years we've been very good at putting money in

stabilization and all of a sudden we're gonna stop doing it.

We might spend it on something that's not intended for

and that would be very looked, looked on

by the credit agencies as not being a positive sign.

So I can't really see how there's any way

that we would get past the credit agency, you know,

if we're not doing what we're supposed to do with regards

to our stabilization funds.

Mr. Evans, thank you Madam Chair.

Just, I'm started thinking on the fly here,

so bear with me.

Is there a middle ground

that says we put a nominal amount into some of these things

much like we have done with Opep

and just say this is a calculated risk

but it affirms our financial management principles

by putting in some amount.

It doesn't have to be huge,

but it just has to be a positive number

and it has to fill in that column

and the spreadsheet, right.

And then in future years bolster that I,

I I can, I can see

taking some of the, the budget that's allocated currently

to the capital stabilization fund

and putting it into the operational stabilization fund

to account for the potential risk of,

of the economic situation going south.

What we need to do for the taxpayers is to try

to get this number down right And there, there are a number

of mechanisms that have been discussed to try to do that.

So I think being able to, to work with those numbers

and put a nominal amount

or a nominal nominal amount in the general

stabilization fund takes some of the money that we allocated

to the capital stabilization fund to move it over

to the operational stabilization fund.

We can save, I'll, I'll just make a number up, five,

$500,000 maybe.

Right? And we can, we can, you know,

chip away at this number, right?

I don't think, you know,

there's not gonna be any magic solution that says, ah,

here's the $2 million that we can take out.

Right? But I'd like to see us chip away

by a nu there are a number of things

that we're discussing now

and we'll discuss soon that can chip away at that number.

So I'd just like to see us chip away.

Ms. Wilger,

I don't know if we're gonna get into any

debate here or,

but, you know, I think that's, you know, a,

a good suggestion Bruce,

but I think I would rather see where we are in the fall

because a lot of times we do fund stabilization funds.

If, if we can get free cash

and see where we are there, rather than do that

because of the optics of funding these, like I said,

I think a lot of people think

that all we're doing is taking it from their pocket and,

and putting it into a town savings account.

So you know, I, I think we need to leave that door open

to potentially fund it.

And I would, I would support

that in the fall with free cash.

If I may, just for reference,

the last several years we've been use, not exclusively,

but we've been using a lot of the new growth

that gets certified to put into stabilization accounts,

and that's typically done in the fall.

So I'd like to make a few observations.

I don't disagree with anything that's been said here.

My, my mind isn't, I'm not in a place

where I've made up my mind,

but I do want the public to know

that our financial management principles

define the operational stabilization fund for the purposes

of sustain using the operational one

for sustained economic downturn.

And then they define that by being

a sustained economic downturn defined as more than 5%

of the total for the respective revenue category.

I highlighted the wrong part. So basically we need these

to carry us through a three year period

of an economic downturn, which they define, given

I have real cons, concerns about

the loss of state aid, about the loss

of federal funds.

Right now we have a $2 million,

roughly $1.8 million fema.

We're waiting for a FEMA reimbursement for Covid

that's sitting out here off our books.

And if DOR decides that that's not gonna get funded,

that $2 million liability hits us, that's another

potential problem.

So I think

we need to think really hard tonight about,

we keep talking about calculated risk.

I'd like somebody to talk to me about

what calculations are going into their decision, that that,

that this is a calculated risk.

Are we, what are we calculating? What are we weighing?

What elements of 6 million, six

and a half million, 7 million moving from

this fund to that fund?

If it's going to be a calculated risk, I wanna know

what calculations are going into that to win me,

to win me over to that argument. Yes, Mr. Evans,

I can get some of it.

And Mr. Erickson alluded to part of it,

which is new growth.

Right? We can, I see the new growth

numbers being higher than our, our normal number

this year, just based on what I'm seeing in terms

of the building permit permits taken out in terms

of the buildings that are going up and,

and will be available getting their

certificate of occupancies.

I think that will help.

I take your point about the FEMA reimbursement.

I also take your point about the risk of state and fed and

or federal funding that might be withdrawn.

But having said that, I also think that

we owe it to try to, to find a way

to cut some of this.

You know, I'm not saying, you know, you've convinced me

that it's not an order of magnitude cut.

It's, it's, what is the right word?

It's snipping and cutting here and there.

I don't, I don't see massive cuts

as being appropriate.

I see nipping and tucking,

and that was a phrase I was looking for,

Mr.

One minute Mr. Erickson, could you put on the screen,

page 48, the general fund forecast

Of the budget book

From

the budget book? Yep. All, yeah.

Gimme just a couple seconds.

48 you said?

Yes, it's the general fund forecast.

Yep.

And those of you who have your bibles with you,

he's open to verse

Number,

The book of general fund forecast.

So this is, this is page of, of the budget book.

So, so anybody watching from home can pull this up online,

or if you have your, if budget in front of you,

you can pull, pull it up on that page. Can

You scroll down to the bottom for me?

So people in our community have pointed out,

it looks like we might need

An override.

And what we've assured them is

we're counting on the new growth figures,

our conservative accounting principles, and, and to

Carry us through here and here and here

We're trying to get to 2030 when our oped

liabilities will take about pension.

Pension, I'm sorry. Yes.

We'll drop about 12 to $13 million off our liabilities.

So we're trying to make this work. And if we're counting

On new growth to plug in, this is

with an $8 million override. If

We, if we're counting on new growth to plug in

Here,

What are we doing?

We can't count on it in two places.

So Mr. Erickson, could you bring up the slide that I I'd

or the information I'd asked you to prepare

with a $6 million override?

Sure. Related to this table, you mean? Yes,

Please.

Yep.

I'm gonna stop share real quick a

sec so I can make sure I get it.

And then while you're looking for that,

I think it's really important

to clarify this is a forecast, not a budget.

Indeed. And

We've, and we've heard that from,

and Mr. Townsend has drilled that into everyone

and there's a lot, there's conservative assumptions in here.

Absolutely there are, but I'm,

I just don't want us talking about,

we're gonna count on new growth

and taking 2 million out of the,

and we're also gonna count on it to patch up

what the forecast might be.

I think we're, I really do believe we're gonna see a far

more a, a far higher amount in new growth

and in our excise

because we've got,

I I don't know if anybody saw the Boston Globe today,

beautiful writeup on bossy pickleball, food critic,

just entertainment complex.

I'm counting on that place to bring in a

lot of local option taxes.

We do have a lot of building going on

once those occupancies.

So I, yes, I absolutely believe in that.

But if we combine, 'cause this is multifactorial.

If we combine an economic downturn with perhaps

a sustained rate of inflation, given the impact

of tariffs on our economy

or the withdrawal of federal funds for things

that people are counting on

or state funds that they normally get.

If we combine all of these things and we take $2 million out

and we count on new growth, there's a,

there's a lot of factors here.

I'm, I'm not

disagreeing that we need to get the number down.

I absolutely agree.

But I wanna make sure that when we're tossing

around words like calculated risk

and new growth, that we're thinking about

it really holistically.

So

Could you talk about this

Chart?

Sure. Just, just briefly. What I did is I took

that prior table, right from the budget book and,

and I added a bottom line based on

what was asked from the chair to look at what 6 million

would look like.

Meaning basically reduction of

that revenue in FY 26 of 2 million.

It's not an exact figure. I literally just took $2 million

off of that bottom line.

What actually is not factored in are a couple other things

like the two point a half percent that would be in addition.

So it's actually more than than that.

The negative is actually gonna be greater than the 3.096.

It's, it's gonna be a factor

of maybe a couple hundred thousand dollars a

year compounded over the years.

This is a really, really just simple,

threw it together really quickly,

but it just shows order of magnitude.

It was really more about order of magnitude.

John's cringing because it's, I know there's a lot

of things doing in here and it's not the way to do this,

but I was just trying to show order of magnitude.

Best case scenario. Yes. Yeah.

It's sort of more of a best case

scenario from that perspective.

It's likely to be even more impactful

not having the additional 2 million or what have you.

I I just was trying to show just again, order magnitude here

and, and this, the first column B is FY 27.

So this is assuming we get through FY 26.

And that's also assuming some other factors that

that an $8 million override was considering.

So it's probably gonna be greater than,

than just putting additional 2 million towards it,

Ms.

Hope. But as noted, it's a forecast.

So there are conservative budget principles up top as well

for, for purposes of dialogue. Yep.

In this discussion, we, this particular discussion,

we are talking about addition, like looking

for more ways to cut.

And I just don't want to lose the premise

that the, the budget proposing the override

has cuts, it's got cuts to the town,

it's got cuts to the school.

So I, I just don't wanna lose that. That's great.

There are present cuts there, like very serious ones

without the override.

And then even with the override, we are just kind of like

keeping ourselves afloat.

So I, I just wanted to throw that out there

as we are talking about deeper cuts, which I'm

happy that we are looking at.

I don't wanna lose sight of the fact that these,

these forecasts are with cuts on both sides.

Lemme just pull up on that point, which is,

and I, and I take that point.

That's a great point. What I think we're discussing are a

little bit slightly different.

It, it's more, you know, we, we, for the operating budgets,

we're in solid agreement that these cuts are as far

as we can go both on the school side and the town side.

What we'd like to see is the override get passed.

But where I think I have an issue maybe is,

and it's not with all of the

stabilization funds, but it's some

of the stabilization fund.

And again, I'd like to see p snipping, you know, just, it,

it doesn't have to be draconian, it just has

to be piecemeal.

Maybe it's not the right word,

but it has to add up to a significant amount and, and,

and thank Mr. Erickson for doing the the $6 million figure.

Because that points out that if we go too hard,

we're gonna, we're cutting off our nose despite our face.

Right? So I just don't want to go too far down the road

unless there are other revenue sources, which is,

is a conversation for soon.

I, Mr. Erickson. Sorry. Yeah.

Do you know off the top of your head?

And I, I just, just occurred to me,

so if you're not prepared, that's that's fine.

Has the, has math labs MathWorks pulled all

of its building permits for the new campus?

I don't believe they pulled all of them.

They usually do it in phases based on their project,

but they both, I believe they pulled the bulk of them.

They will by the end of this fiscal year,

I believe pull most if not all of them.

But that's permit revenue, not new growth.

I know the new growth won't hit until

after it's completed and occupied.

And that's even, I know there's a lot of new development

that was referenced here in Natick Center.

Those have to be like occupancy permits

by six 30 of the fiscal year.

June 30th, not six 30 at night, but June 30th.

So many of them might not be completed by that time

to hit our new growth for this upcoming fall.

And all likelihood is probably gonna be FY 27. Okay.

Before some of these in downtown.

So we are still keeping a conservative estimate in new

growth because it, it, I I actually expect that some

of them are rolled depending on the fiscal year.

We're not gonna see it all in one fiscal year.

We'll see it gradually over the next several fiscal years.

And the MathWorks project is a multi,

it's probably a 24 month construction schedule minimum.

And that, that will have a net benefit. Absolutely.

It's just without knowing when it's going to to be finished

and how new growth is calculated by the, by the fiscal year,

it's hard for us to really not take a conservative approach.

We, we can't overestimate that. Yeah.

Yeah. That makes sense.

Ms. Wolfer,

So you asked about, you know, our rationale

and our thinking on this and for me,

and you know, it's obviously the elephant in the room

is what if it doesn't pass?

I mean, we've all had conversations with people

that this is a real hardship for many in our community

and I think it's up to the board

to make that calculation of, based on the conversations

that you all have had about

what might be a likely number for people to support.

I think the town and and schools have done an excellent job

at the forums that we've had about

understanding the ramifications.

If we don't have an override, certainly not, you know,

it's not convincing people that can't afford it.

So I would, this is why I would really like to see us

go down in the number but not affect the budget numbers.

Talk about those stabilization funds.

If, if, you know, if we can add them

and, you know, we might have a little conversation later on

that might have some ways of, of adding to that.

I think that has the least impact

and, you know, hopefully will help get this passed.

I think that's an excellent point. That is a great point.

Yeah, I agree with that. I think

that's an excellent point to that end.

I, I would like, just on the school side, I can tell you

that Dr.

Bash has been abundantly clear that if the override fails on

March 25th, on 26th, 41 pink notices are going out

because she cannot wait till town meeting.

It's not ethical for her to wait till town meeting to hope

that town meeting takes money outta stabilization

to shore up the school budget.

She needs to let those people

know that they have to find a job.

So on the town side, Mr. Erickson, I'd like you to speak to,

I was putting, I was putting this towards the end

to talk about the, the impact of no override,

but you've raised it

and I think we should just go right into it. Yeah,

Absolutely.

of this is outlined in detail in the budget book.

I'm actually gonna pull up a couple pages from the budget

book to show some of the impacts.

And, and I'll start with, with also the position impacts.

And this is on page, oh, what page is this?

I, I apologize, I don't have the page written down,

but it's on, it's on, it's in the opening pages,

probably page 20 or 26, so or so on the budget book.

And this, this is the seven positions,

the very real positions that are, that will be cut, some

of them are 0.5 partially

because we still need to fill some roles.

So, and a good example, sorry, 28. 28, page 28.

And it was in the twenties, 28 of the budget book.

So, but some of them are, are full positions.

So for example, the town clerk, assistant town clerk,

it's 0.5 because we still need to do some of that work.

So we need to keep some budget in there.

But that will go towards supporting

part-time employees for example.

But interestingly, we are, we will not be doing pink slips

because we are actually in a hiring freeze

and we have a lot of these positions already vacant.

So already feeling the impacts

of not having these positions.

We actually have more than these positions vacant right now.

I'm gonna be asking the select board later this week just

to be aware that we're gonna be posting some positions

that are not on this list

but are other critical positions that the town needs.

But the point is that, that these are very real impacts,

fire public works facilities.

So those are gonna be custodians

that junior night managers in one of our school buildings

and, and finance and budget.

And so these are extremely, extremely, very real positions

that that would be really cut from our budget.

In addition, and this is also from the budget book.

And Bruce, you can find the right

page and let me know which one it is.

This is the full list of all the cuts.

It includes the schools, both permanent and additional cuts.

So this is where you see the

1.4 million permanent in the schools.

And then the 2.7 page 30. Yes, thank you.

But there's, and I'm not gonna read through all of this.

This is broken down by department

and then you can look to the department pages

of the budget book to see the very, what that equates to.

But these are the additional cuts that make up

that roughly $4 million.

It's 3.9 million, but we're, we're rounding

to $4 million worth of cuts on our operations.

And these do conclude some pretty critical items.

You know, facilities management, additional cuts,

these are inclusive of the positions.

So these are not, in addition to, these are inclusive.

So when you see, for example, fire having a $257,000 cut

that's inclusive of those positions.

Public works similarly,

but there's also other ones that are really just about

services we took to Bruce's point, sort of the,

the measured scalpel slash cut approach.

So it's not all in one department,

but these will have ripple effects.

The other reality of these cuts

more the permanent cuts from the town side.

And it, and I'm not, I don't have the page up,

but if you look at the free cash turnbacks by department,

those will largely be non-existent for several years

because a lot of these permanent cuts

and non-permanent cuts will then impact

what the term backs are that lead to free cash.

And that's about one to $1.5 million, which means

not this upcoming free cash season

because it's this fiscal year,

but net again FY 27 is when you're gonna feel those

impacts on our free cash number.

So if you think this past year we had a $7.8 million number,

just reduce that by 1.5

and that's sort of a, a new,

on average we get about six to seven.

So that's, that's a very real impact to there as well.

So before we go any further, I have been forgetting

to acknowledge Mr. Joseph who is asked to make a comment

probably long after we on a topic, long after we've moved

and I, a apologies,

That's have to do with over.

No, no worries Madam Chair. Thank you.

I get that a lot at home.

I'm actually Paul Joseph,

I am actually speaking in the capacity as the chair

of the economic development committee.

Not on behalf of the committee

because we've not had an explicit discussion about this,

but from my experience, I'm currently chair of, of

as about four months.

And I chaired the committee from 2009 till 2015.

I've also most recently served

as the interim executive director

of the Natick Center Cultural District, which

honestly gave me a lot of deeper perspective on

what you consider calculated risk variables.

And I think this is a very important consideration.

You touched on it Madam Chair.

We have a lot of new growth,

five major projects in Natick center

of 200 plus housing units.

At least a dozen retail places, which would be lovely

to have all restaurants

with liquor licenses generating local options, taxes.

What I've learned and what I've learned firsthand from

conversations and what I've observed, we are at high risk

for occupancy of our Natick Center properties.

While everybody wants to hang their hats on,

look at this great growth

and you're not gonna believe how great natick's

gonna be in 2026.

What I've been hearing, and I can paraphrase a couple

of these conversations, is that many

of the retail spaces have not been preemptively fit

out for restaurants.

And in fact, the property developers are waiting on

restaurants to come in and put up the capital

to make those finishing investments.

That puts us at a competitive disadvantage

to communities like Marlboro and Hudson.

I'll use them as examples

'cause I do use them as a beacon for economic development

that do have ready properties and economic incentives

because they've got incorporated economic development.

We are struggling to invest with this override

to maintain status quo.

Natick has fallen behind in economic development

and growth opportunities in the last 10 years to communities

that have proactively invested in it.

That being said, my concern,

and I'm gonna use real numbers now,

the average rent per square foot in Natick Center are best

as we could calculate in working with the CED Community

and Economic Development office here as well as privately

with the NA center Associates,

on average is about 2320 $4 a square foot in Natick Center

right now, some of the new properties

that are coming online are asking $48 per square foot.

Okay? Which sounds expensive.

It's two times what the average is in Natick,

but it's actually still about two thirds of

what Wellesley's charging right now.

So we're still a value in terms of dollars per square foot.

However, the pushback these potential occupants are giving

is the expectations of the property owners are too high.

Cost of capital is still too high.

And by the way, interest rates today were

signaled to not going down.

They might go up, right?

Supply chain costs are gonna be a big factor

for these companies, right?

So we've, we've got a lot

of uncertainty and volatility ahead.

So when we think about calculated risk,

you future receipts are not guaranteed.

And in fact, I would argue they're at higher risk than

we'd like to express.

So I just really, really caution this board

to heavily rely on that.

In addition to them normally taking a few years,

it might be another protracted,

my big fear is we're gonna have one foot in old Natick

and one foot in future natick.

And we might be at risk of stagnating for a couple of years

between those two realities.

While this uncertainty plays out, the best thing you can do

to manage uncertainty and volatility is save

and have that money available.

And I respect and I appreciate the voter's concerns about

you're just basically taking my savings

and putting it in the town coffers.

The cost of not having that money available

could be catastrophically high in terms of long term

cap recapture of, of future opportunities.

So I just, again, I can't express it enough.

I sent to this board

and to the school committee, just an email just now about

ways I, I see the biggest concern when I talk to people

and I've heard from people about the override is trust.

You know, you're just gonna come back

and do this again in a couple of years.

This, this has to, we, it's too expensive.

We can't afford this on an ongoing basis.

And I know you're invested in a process to establish

that trust maybe moving forward.

Communities like Hingham have done it in

writing to the voters.

They've passed an override of almost $8 million with a a,

a fiscal management plan that they committed to.

So it can be done, but I think it's really important,

and I know this board is sincere,

I know the administrations are sincere about establishing

that trust with the community,

but please be careful with economic development

and the expectation that we've got a a a fact cow here.

It's not necessarily as big as you think.

The other big factor for Natick Center, the lack

of a parking garage, okay?

And that's not free either.

And that's been sitting around

for about 15 years that we need to address.

So we've got some major capital needs that are going to have

to be invested in to generate that incremental revenue.

So I just wanted to kind of speak to

that while you were talking about

calculated risk. Thank you.

Thank you Mr. Joseph. So in the last week I spoke

to the developers of the property going in at the corner

of Union and East Central, east Central.

There's relatively certain

that the residences will be occupied

probably by the middle of summer.

They're not getting many inquiries with regard

to the commercial property, which affects its assessment,

which is which as, which impacts the taxes that it pays.

So part of that is the rent part of it is none of them

are going to be outfitted for restaurants that, that,

that would compete with Moore Tavern,

which they own right next door.

So I've also spoken relatively recently

to the Stone Stonegate group, which has two pro projects,

one on Summer Street and one the St.

Pat's project. They too are pretty confident

that the residences will be occupied

if we don't figure out the parking situation

for the businesses on the first floor,

which there is a committee working on

and very diligently, if we don't figure that out, it's going

to dissuade businesses,

which affects the property assessed value,

which affects the taxes they pay in.

So where we, where we may see

an increase in new growth, not may, where, where I'm, I'm I,

I'm confident we'll see is in all of the tear downs

and the $2 million, $3 million houses that are being built,

which has its own set of consequences

and implications, including shifting the,

the allocation of assets from 83% residential to 17%

commercial maybe residential goes up to 85%

and our commercial goes down a little bit

that affects whether or not we consider a split tax rate.

So I, I hear what you're saying, Mr. Joseph.

I have been following up on these developments.

I've, you know, with the developers to figure out

what are we looking at and when,

oh, and the property, property on Summer Street.

I, I thought that that was gonna be ready to come online

for the commercial space this, this summer.

But that, that may not be the case.

In any event, these are all considerations

and any other board members

with regard to overrate over,

what are we talking stabilization accounts? Yes.

Just a quick thing.

And I just wanted to reinforce what something

that Mr. Erickson said about the impacts of this

and when they will occur, even if those things all happen,

and maybe I wasn't getting this across earlier,

but it, it's an FY 27 impact

at the earliest, right?

So we've gotta look at FY 26 almost in isolation

and say, can we get through this year

and then anticipate new growth to help us

with FY 27 and beyond?

'cause otherwise, I don't think we're being realistic.

Thank you, Ms. Alger. I

Just wanna add that I agree with Mr. Evans.

I think that there's so much potential

for volatility in the next couple years that it, it,

you know, we, I don't think we can

predict, and I don't think we should,

We should still forecast.

No, no, I am not saying that we shouldn't forecast,

but I I think that it makes sense potentially to reassess

after a year and where we're at.

Absolutely.

Not just, you know,

Even quarterly, I mean,

looking at quarterly, right? What we're,

You know, I, I've heard a talk about, you know,

making some promise that you, if we,

if we get this over right, we're not gonna do

another one for four years. That's something

I think that's unwise.

I think that's something I would be very unwilling

to do given, you know, the, the current economic potential

for economic climate change

That aside, this board's composition changes in March on

March 25th and will likely change the year

after that and the year after that.

And this board should not handcuff,

handcuff a future board's decision.

It has been done in the past,

and in my mind there was catastrophic consequences, a loss

of when a former select board decided

to make a special act

and enshrine a hundred seat minimum for restaurants

that hand, that handicapped future boards from their right

under mass general law to write alcohol policy.

And it took us 19 months to reverse that.

In the meantime, Wellesley opened up 12 to 15 restaurants

because they, they didn't have that to deal with.

And we're playing catch up.

Now, in a previous meeting, someone responded with who cares

how many restaurants we have,

who cares about the liquor licenses when we generate local

option taxes that people voluntarily pay,

people voluntarily go out to eat and they spend $50

or a hundred dollars on a meal, that's money.

We don't have to look to the real estate levy for Levy for.

So that's why I care about making sure our alcohol policy

is, is we worked really hard to rewrite that alcohol policy

and now Arlington is looking to it as a, as a model.

So those are positive things that this board has been doing

to make sure that the business community wants to stay here

and wants to come here and open, you know,

businesses, open restaurants.

I don't see any, we get local option taxes from hotels.

I don't see any, any new hotels are gonna go up.

There's, there's no land.

In fact, one was torn down, I guess Travel Lodge was,

travel Lodge was torn down for,

for Abby AB for Abbey Lab. So

Travel lodge.

Yeah. And we've also, the market is relatively

saturated at the moment with hotels.

Yes. Especially post pandemic.

Other comments on, yes,

I want to just put my

stake in on, on the volatility issue.

I'm extraordinarily concerned

about economic futures.

To me that's a reason not to.

Certainly, it's a reason not to use any

stabilization funds at this point

because it, it's my opinion

and my belief that we're gonna need them in the future

because I think the economy is not gonna stay where it is.

That concern

impacts state revenues.

We're already hearing that there are potential

problems with state revenues.

If the state decides to do nine C cuts, then some

of our state aid goes away and we can't control that. Mr.

Sydney, could you define what not for people at home

and for lay people what nine, nine C cuts are.

So a nine C cut is when the state says we don't have the

revenue to pay your state aid

and so we're gonna cut your state aid.

And they just do it. And so even though it was budgeted

that they were gonna give us, say,

and I don't know what the number is this year,

I can't remember, but let's say they're

gonna give us $12 million.

If the state doesn't get the revenue,

they might give us $9 million instead.

And they te tend to do that mid-year

before we actually receive the money

that we have planned on.

That's a problem. I'm also concerned with

the federal administration.

Theoretically FEMA owes us a couple

of million dollars from covid.

They could decide not to give it to us.

They've certainly been delaying it long enough

and if they decide not to give it to us, that's,

we're gonna have to make that up somewhere.

There are other, you know, other federal grants that,

you know, we either get cut

or wouldn't get that could affect, could, could cause us

to have to spend money on things like transportation

projects that have started based on receiving those funds

that we then don't get.

We have to, we have to be very, very conservative in funding

and using our stabilization

accounts in case those things happen.

So I could

support delaying funding stabilization from spring

to fall, but I can't support not funding it.

Okay. To be clear, for the public at home,

nothing in our budget book is,

is at risk for federal.

We're not relying on any fe federal funding in our budget

book in the budget or in the, in the forecasts.

But grants that may go away that at least on the town side,

I can't speak for the school side grants

that may go away.

That we, we, we tend to look for grants to augment

programs and services

And capital.

And capital, yes. So if we have two vehicles

that have reached the end of their lot natural life

and we're looking at ev purchasing

for which we would get grants of $15,000 per vehicle,

that's money we're gonna have to come up

with when the vehicles are out of service.

So for those who are worried that

federal funding going away is gonna mess up whatever we come

up with, with the override

or the budget, that's not necessarily the case,

but there could be an impact.

Yeah, that's a fair point.

So we've talked about re

reducing the amount of money in the budget

that will go into general

and operating stabilization accounts.

What I'd like to talk about is,

or have the board reflect on, and I think Mr.

Sidney just alluded to this, is taking money out

of stabilization accounts to plug this,

to lower the plug the budget

to lower the override the amount of the override.

Because that has been a suggestion from the

public, Ms. Slager,

I think I've already commented on that.

I'm not in favor of that.

Ditto.

What you said. I'm not

Distinguishing between,

Yeah, so what we've been talking about is

reducing the amount of the override by, by looking at the,

the planned amount of money

that we're gonna put into our stabilization accounts.

General operating op E Okay,

now I'm gonna flip that a suggestion has been made

by the public to maybe not only do that,

but take money out of stabilization to lower it even lower.

So right now we're counting on if

with an $8 million override, we would be putting in

right here with an override,

we would be putting in $505 million,

$500,000 roughly,

or $540,000 in general stabilization,

188 in operational

and then in capital stabilization, 1.7 million.

So the flip side of that question

or suggestion is you're talking about 8 million.

Maybe you can not fund as much in these

and take out what we have in the balances

to get it down to say 4 million. Yeah.

Yes. No, I understand.

I thought, I thought that's what I heard,

but I wasn't, I wanted to be sure.

I agree with Ms. Bollock.

I think, you know, based on

what we just heard in the last 15 minutes, half hour,

it's risk, risk, risk volatility.

These are words that, that make me personally nervous

and make anyone who does a budget nervous.

And I think doing that just to,

you know, one of the things that we've heard from

residents is, well, if you do an override now, what's to,

to stop you from doing an override a couple years down the

road when you, when you need more money?

To my mind, it's a false economy. Right?

Taking that money out of the stabilization fund

and saying, Hey, we only did 4 million, right?

And then we can pat ourselves on the back

and say, Hey, we only did 4 million

and then two years from now, exactly,

we're gonna be right back in the same situation.

And saying, well how how'd that happen? You know?

And then we have to go back and face the voters

and say, Hey, we were stupid.

We, we didn't foresee that this was risky and,

and we, we have to pay the consequences.

I think there's a middle ground

and that's what I'm trying to get to both tonight and,

and tomorrow that manages risks appropriately,

but doesn't go overboard in doing that.

We know our assumptions are conservative and,

and rightly so, but I think there's a middle ground

and I think that, that, again chip it away.

Thank you Mr. Evans. Mr. Sidney.

Yeah, I'm just gonna, I, I thought I said said it,

but I want to just reiterate,

I do not support in any way taking money

outta stabilization.

I think we're gonna need it in the next few years.

I would like to see more going in

to support our financial management principles.

I can see an argument for letting them fall a little bit

relative to the where we're supposed to be.

Not take money out, but, you know, not quite be as,

as well supported.

But I think that taking money outta stabilization,

you know, that, that those are rainy day funds.

I'm not, I think,

and I think we've got rainy days coming, so

Ditto,

Ditto.

I love the succinctness. Thank you.

I'm I'm in the same place.

And since we're speaking about risk, most

of our conversation tonight has been rightly

so on the impact of this to the residents.

But we also wanna think about our business owners too.

The single most, as, as somebody who owned a small business,

the single most worrisome aspect

of running a business is managing risk.

The beta between and,

and not knowing, not having a

not being assured of a certain sense

of constancy when you're planning

and forecasting out your business.

So I do wanna acknowledge that the override is going

to be impacting businesses

to a lesser extent than residences,

but it still will have an impact.

But why don't we take a five minute break

and come back on in about five minutes,

get her stretch our legs and Oh really?

I'm gonna go ahead and call the meeting back to order.

And

How's your coffee? Thank you for taking your seats

and stopping side conversations.

Deeply appreciated. Where'd we leave off?

Let's talk the about the free cash. Do that

Now.

Yep. I worked on putting together just some scenarios based

on the conversation and just

to show some concepts of, let me just share my screen

so I can talk through it.

Make sure I pull up the right one.

I can share this after the meeting

with folks just to, to take a look.

It's a pretty simple spreadsheet.

I basically recreated the free cash spending plan.

What you see on the left in column A are just the different

types of expenditures.

The first row or the second row is

the free cash certified amount.

That's at 7.8 million.

I put in the existing balances of the

stabilization accounts just for reference that I didn't,

I don't have 'em tied out anywhere

because it kind of depends on the approach taken.

And then I have a no override, which this is,

these are the numbers directly in the budget book,

a $8 million override, which is also directly from the book.

And that's the one that was presented.

And then based on tonight's conversation, I put a seven,

a 6.5 or a six.

Obviously if you do a 6.8, it's slightly different

or understood.

Yeah, but I just wanna show those for reference.

And, and based on what I heard, the idea is to, to minimize

or, or reduce to zero.

The, the,

basically the investments in the stabilization,

the general operational stabilization accounts.

That's why these are zeroed out

for all three additional scenarios

above the 8 million scenario.

I also brought back down the reserve.

So part of the financial management principles

for those watching from home includes a desire

to keep what's called free cash reserve,

which is basically unappropriated free cash at a minimum

of 1%, but never less than a half a percent.

So that's what those two numbers are.

Basically the 890 is roughly the one number

and the 430 is roughly the other number.

Very, very rough. But bringing that back down

to a no override scenario amount.

So 4 3 8 0 33,

keeping the capital projects at 1.45 million, which is

what was proposed with an $8 million override across all

of the fields, bringing back the EP trust down

to the no override amount of two 250,000.

And then putting really as much

of the balance into the cap stabilization,

we can certainly flex, move from cap stable to

capital projects.

But in the long run, all of them balance out

to the 7.838 million across the board.

And then you can see that also then relies on more heavy use

depending on the override amount of free cash for purposes

of operational.

So that's why 6.5 million is using the,

oh no override scenario 2.5 in the

8000003.5 in the 7 million,

four in the 6.5, 4.5 in the six.

It's almost a direct correlation.

So given that a sound financial,

These numbers in the bottom are just for me to,

I I needed those just to play with. So you people

Just ignore them.

Yeah, they're, they're, they're just helping

with formulas in, in the rest of the spreadsheet.

So given that a solid financial principle is not using one

time funds to plug budgets,

how does, how do

these, IM, I'm sorry.

How do the 7 million, six and a half million

and $6 million override use of those funds,

how does that impact future years?

Well a lot of our assumptions that were built

that I showed previously assumed a

$2.5 million use of free cash.

So if we're relying now on 3.5 million

or 4 million or 4.5 million, that now becomes sort of,

we have to factor that into some

of our assumptions moving forward for

Forecasting

Purposes, for forecasting purposes.

And with the uncertainty,

not likely this upcoming year,

but maybe the FY 27 fiscal year, it could very well be

that our free cash numbers might not even reach a four,

4.5 million

or a 5 million, which means we even

have less to play with here.

So if, for example,

let's say we use the $6 million override number

and we are reliant on 4.5 million for operational

and we only get 4.5 million for operational, that means all

of those other items, opep trusts, cap sta operational

capital projects will basically have zero.

Okay.

Or if we get 5 million,

then we only have $500,000 to put towards those items.

Now that's very, very basic.

And again, this will be part of the record.

We'll get the, I can share this with the board and,

and make a PDF and put it on the, on the public website.

That'd be great. I'd appreciate that Ms. Slager.

Thanks. I have something very similar

but with one difference.

Can you just talk to the reserve amount,

which I know is made up of overlay

and free cash reserve about

Debts?

Just free cash reserve.

What?

This reserve is just free cash reserve.

So that's different from the budget book.

The budget book has free cash reserve

and overlay, you know of

Yeah, it does in the, in the book.

So,

Correct.

It's slightly different from the budget book.

And so the intent here would be not

to put funding into the reserve.

I I was trying to do this on the fly,

so I apologize if I missed

The line.

Oh, okay. So like he literally just

did this during our five minute break

While you were talking in,

Alright, so, so

where does overlay come in here?

So the, it doesn't,

So corlay is not, this is just free cash, it's a 7.8,

Right?

This is, this is the equivalent to the,

the free cash spending plan on page 2 39, right?

Or is this something different?

So your overlay John, sorry, your mic, sorry.

So your overlay is in your other available months?

No, but if you're looking on page 2 39,

There was $270,000 in the most in the, in the budget book

for overlay and Correct.

I did miss that in putting this together.

So there's some slight difference there.

I can certainly add the overlay here if that's necessary.

But I was trying to come up with a quick snapshot.

Basically if I put two 70 in in re in reserve,

we can just insert it.

I'm, I'm just trying to tie it to what's in Yep.

In the book and understand what it is that you did. Okay.

That aside, what is

the rationale between, you know, rather than adding

to the free cash reserve, putting it into

the cap stabilization fund, don't you have more flexibility

of keeping it in in the free cash reserve?

'cause couldn't we always just use that

to fund any capital projects?

I'm just wondering, you know, aren't we losing a little

flexibility by making the trade off there?

Yes and no. I I I think it's signals that we intend

to use these for capital projects

rather than free cash reserve could be used for anything.

So if the message is that we want to invest in capital,

I would argue put in the cap stabilization accountant

because it then is, is a bit more of a yep, we intend

to invest in capital with these funds.

You are correct, there's more flexibility in keeping in

reserve or un or un unappropriated.

But that's, from what I heard, the intent was to

make sure that we invest in capital.

And so this was the,

the thinking when I put this together five minutes ago.

Okay. So with that, I mean that leaves us

with very little free cash reserves.

I mean it's only 168,000.

It's in the same as, you know, overrides scenario.

And I just wanted to ask, is that sufficient?

I mean, none of this is sufficient. No.

If you're asking me if that's

sufficient, the answer is no. No.

In general, what have our levels been over time

For at ti?

Yeah, typically we've met at least a seven

to $900,000 range, which is in that, that target range of

of the, sorry, go ahead John.

This is basically going back to covid days.

This is where we were, in fact I think we went down

to zero a couple times during Covid.

So that's what's disturb. It's disturbing about this.

I absolutely agree that this is,

doesn't make me comfortable whatsoever,

but that's sort of how we get there with regards to the,

the moving into the cap stabilization funds, you know,

if we have projects ready to go and,

'cause we do have the line for capital

projects, we could put it in there.

But the question is whether if we need to have

to build up the cap stabilization fund for it later

because, you know, 27

or something might be even looking worse than it does

26, then it's, it's there.

So

Yes,

Mrs Yeah.

So I'm, I'm thinking about the free cash reserve isn't one

of the reasons that we keep it unappropriated is in case

revenues don't come in so that we can,

can keep our books balanced.

I'm j I'm just asking, you know, why do we,

why do we keep it unappropriated?

Why don't we put it in one stabilization fund

or another, you know, what's the,

what's the rationale there?

So yeah,

You, you are correct that if we did need that

to balance out our books,

that would be probably the last place we'd hit.

But it would be one of them. Yes.

But pretty much, and you're correct in the fact that,

you know, one of the concerns I have is that with the cuts

that we're doing in this budget, our free cash numbers is

gonna go down 'cause the turnbacks aren't gonna be awful,

won't be as good.

But oftentimes in order to balance the books, you know,

the comptroller will use the turnbacks to sort

of balance out the accounts.

So if we don't have those turnbacks,

which I'm concerned about, yes.

That would be the, the amount that would be important to us

to balance out our books.

Yeah.

Yeah.

I'm just trying to get information out to the public. Yeah,

Appreciate that.

Yeah. So here has the overlay.

Thank you

John.

Can I, and hopefully I state this right,

but that's also our starting point.

Your overlay number is your starting point

for free cash the following year.

'cause you're distributing the rest of those funds.

So then your starting point

for the next year when your free cash number is 70,

the free cash reserve starting point.

So that's, that's, that's what you would start with

before any additional ins and outs.

You mean the free cash reserve amount? Correct.

Yeah, the overlay is is, sorry, that's

appropriation to the, that's what I meant. Yes. Yes.

That's your starter amount. Yes, correct.

Yep.

Any other comments or questions from the board on the free

cash of this scenario?

Just

Yes,

Just thanks for Mr.

Erickson's Spreadsheeting on the fly there.

'cause that that's, it was helpful to see the

impact of the various scenarios

and I think it'll help the discussion

If we can move on to the next topic.

A suggestion has been made in several places,

either by email question

or discussion in meetings to have

a two year override of $4 million each.

And I'd like to point out that if

that were an option, the board would wish

to do those would be two separate questions on the ballot.

So it can't be one question,

so voters could choose one

and we're back again another year.

But I wanted to speak to what the implications

or the impact of that would be on town in schools were we

to choose to do for assuming, let's say

bo both scenarios.

One is that the voters say, yeah,

we'll support 4 million over two years,

so we get our 8 million over two years.

And the scenario where we have voters

that just pick a 4 million.

Matt, why don't you start?

So, so for the, the schools, we,

we don't have the same flexibility that the town does in,

in staffing, right?

They each school year, the kids basically come the end

of August, early September, and then they run through June

and we like to have our staffing ready

before the, the kids are there.

So if, if the allocation of that 4 million, like our,

our school shortfall's about 2.8 million in, in year one.

So if we're allocating that where

we would still have to reduce staff, I think that needs

to be clear to the voters, right?

If, if we're not reducing staff

and that's how the town wants to proceed, I guess the,

the school doesn't necessarily have a a, a strong opinion on

that if the town is confident in, in proceeding that way.

I I I do see where there's sort of opportunities that

to sort of reevaluate at fall town

meeting in at other times.

Like it's, it's not always easy to,

to plan the budget out 18 months in advance to

where you're gonna end on June 30.

So I get that part of it,

but I I, there's also two school committee members here if,

if, if you're willing

to hear from them if they want to opine.

Do either of you wish to speak to, to that scenario? No.

Okay. Well, you know where to find them now. Yes.

We do know where to find them, Mr. Erickson.

Absolutely. And we did provide this concept

for the board's consideration

and to, to Matt's point, the uncertainty

and also the potential impact from a school year perspective

where the town has a bit more flexibility to weather

a fiscal year to the next is definitely very real.

And that, that's one of the, one

of several reasons why when, when this is discussed

through the, through the, the dialogue was largely

met with less positive reaction.

The other reality is that when you're doing a multi-year,

you, they're technically separate questions on the ballot.

So given just the uncertainty of an override to begin with,

having that level of additional uncertainty is a challenge

from a fiscal planning and

and perspective.

You know, as much as our forecast go f five years, we can,

we still are year to year, but even if we don't have

that next year, it's even more challenging.

So, so that multi-year approach just was viewed that way

and, and, and it, it's, it, it's just very,

very much a real challenge when we're trying to

figure out how best to plan accordingly.

Not just with the schools, but also

with our own town departments and with capital

and with capital planning because it's such a diverse and

and dynamic exercise.

Not having that level of certainty one year

to the next is very much, is very much

concerning from that perspective.

John, did you have any other comments

from the finance perspective?

No, I think you covered it. Okay.

And, and John, from your perspective,

Just from a staffing perspective.

You know, I, I think one

of the things sometimes in the conversation

that doesn't get looked at as the quality of staff

that we have, there's a lot of communities that are looking

for the quality of staff that we have.

So if there's uncertainty with our employees

and they know that they might not have funding the next

year, if they know

that their workload is gonna significantly increase beyond

what it is right now, there's a real reality

of us losing some of our quality staff

and they're really the engine

that keep everything going in this community.

So that would keep me up at night.

Mr. Evans.

Thank you Madam Chair.

Just for grins this afternoon

I looked at the tax levy.

I, I went to the calculator and,

and it said tax levy for FY 25 is roughly

145 million.

If there's an $8 million in FY 26,

the total tax levy goes to 1 53, 4 89, 5 59

and FY 27, if you go 1.025 times that,

it's 1 57 3 million.

If you divided it into four

and four the first year,

you'd have 149,480,959

and FY 27 it would be

1 57 2 17, 983.

So the difference is roughly a hundred thousand dollars.

So in my view, the risks of,

of things not getting passed, of the,

I'll call 'em the soft costs, you know, to,

to Mr.

Marshall's point that the morale people leaving positions,

we run a pretty lean staffing operation in both the

town and the school side.

If, if, if they sense that, hey,

we might not have a job this year

or this next year coming up

because of funding,

they're gonna start entertaining other opportunities,

they'd be foolish not to.

Right. And I don't want to see that happen.

Ms. Yeah,

Ditto.

But I also wanted to, to bring up another point on this and,

and it's Because it

would be two questions.

You know, we, we, you can assume they both would pass

or you could assume that one does and the other one doesn't.

And, and so my concern is like, let's let's say the,

the we're optimistic

and say the $4 million for this year passes,

but maybe the one for next year doesn't, we're

gonna be going, probably going back to the voters at

that point and you know, that is another,

well we already turned it down and you're coming back again.

I mean, there's that perception that, you know,

you're gonna beat us with a stick until you say yes.

And then if it's the other way, if it's,

let's say the $4 million for FY 26 doesn't pass,

but the one for the later year does that causes all kinds

of problems because you know, we have to do all of the cuts

that we've been talking about

and then where does that leave us for, for next year?

It could be that we would need more or maybe not,

but it's, I think it just is a little awkward

and the, you know, how we address the voters and,

and what we make as, as our commitment in terms of,

you know, what we're gonna do with these override votes.

I think it's, it's just a little hazy

because of the different scenarios.

Yes.

I think it's important that we be upfront about

what we need in total now.

And there's, we haven't seen a budget that has demonstrated

that a four this year

and a four in the following year would be beneficial

to either side of the town and with all of the dis

and the misinformation about this that is circulating,

I can't even imagine having to come back

around in the following year and having to quell that again

and, and people saying, you just asked for money,

you're gonna, you're asking me for money again,

despite the fact that it's half of

what we were talking about, I just think

we would create an, you know, an unnecessary uproar

versus just asking for what we, we have demonstrated

at this point is needed.

Thank you, Ms. Pope. Mr. Sidney.

Yeah. Yeah. So ditto, ditto.

The other thing is that concerns me about a split vote like

that is we have very dedicated volunteers in town

doing all sorts of different things

and we would be

more than doubling the work we'd be asking

our volunteers to do.

These are unpaid people who love this town

and volunteer for it.

It overly complicates the situation.

It overly complicates both administration's jobs.

It overly complicates our volunteer

people's jobs and,