Cohasset Advisors vote against bundling anticipated funds with FY 13 budget

Cohasset advisors are taking a long, hard look at Article 1 on the Nov. 23rd Special Town Meeting Warrant. The other 6 articles were unanimously approved after brief discussion. Four selectmen attended the meeting.

A motion by advisor Tanya Bodell at the conclusion of the discussion showed that advisors are unanimous in supporting Article 1 if the first bullet were eliminated.  The first bullet calls for STM to raise and transfer $$600,000 in ANTICIPATED surplus funds to the Capital Stabilization Fund. Article 1 may be reconsidered at the advisor’s Nov. 21st meeting.

Article 1 is the article that petitioners used to call for a Special Town Meeting when the majority of the board of selectmen determined that a special was not necessary this year.

Paul Schubert, chairman of the Cohasset School committee, is the spokesman for Article 1 petitioners. .

Other bullets transfer $500,000 from free cash to the Stabilization fund; transfer $20,000 from free cash to fund the Facilities Stabilization (OPEB) liability trust Fund; and to transfer $100,000 from free cash to the DW Public Roads Repair Expense Account.

Early on in the discussion Advisor Bob Benson wondered why some of this money could not be applied towards lowering taxes; Advisor George Chamillard questioned the integrity of the transfer numbers. Schubert said he wouldn’t recommend changing them.

(Editor’s note: The MMA supplies a definition of free cash on its website.  It states,” Under sound financial policies, a community would strive to generate free cash in an amount equal to 3 percent to 5 percent of its annual budget. As a non-recurring revenue source, a prudent use of free cash would be to fund one-time expenditures, a capital purpose, or to replenish other reserves,” according to the DOR.)

Advisor Nan Roth said she didn’t understand the need for a special, as the money had to be allocated out by town meeting or special town meeting. Schubert said the money had to be allocated before it could be invested. He said only transfers going to OPEB and/or the public roads repair fund would be available immediately.

According to Advisory Chair Peter Pescatore, over the past 8 years the town has averaged 8 percent in interest rates. Last year the Town got 14 percent, but this was thought to be atypical, Pescatore said.

Pescatore said he did not want to bundle FY14 ANTICIPATED surplus funds in the FY 13 budget. He added that Article 1 transfers would put $1.2 million money into the Capital Stabilization fund. He said he was disappointed that a citizens’ petition ordered this event, as it circumvented any opportunity for discussion.

While the article could be amended on special town meeting floor, advisors can only vote a citizens petition up or down. It cannot suggest amendments. That can only happen on town meeting floor, Pescatore pointed out.

Roth said she was concerned about some of the language in the warrant, i.e., under the Policy Statement, items 6, it says all new revenue shall be allocated after fixed costs in the following manner: 61% shall be allocated to the schools and 39% shall be allocated to town services.

Chamillard said he would feel a whole lot better if the $600,000 were left out of the article. “But I feel we should move on.”

Mike  Milanoski, acting town manager,  urged advisors to review the recap sheet before voting on the article. Advisor leaders said they felt the recap sheet would not change anybody’s mind.

During discussion of this article, advisors noted the increase in fees, the fact that FY 14 money added to the FY13 budget increases the levy base going forward, giving the Town a bigger levy limit. That increase should decrease the likelihood a 2-½ override, but the town is locked into a 2 ½ override every year, according to Milanoski. 

Pescatore has been warning the Town since last summer that the town may be overtaxing its citizens. People can write off taxes, but they can’t write off fees. Several advisors suggested that the Town needed to have a tax forum discussion in the near future.

Chamillard agreed that the Town seemed to be on a slippery slope when it came to pre-spending money it had not yet received.

Other articles on the warrant will be published later this week.

© Copyright 2013 Tanna K, All rights Reserved. Written For: Tinytown Unleashed