Town wonders where to spend $1mimllion plus
Published on August 15th, 2001
STONEHAM, MA - A spreadsheet charting five years of free cash spending predicts where the town may spend the money this year.
Free cash is money remaining from the operations of the previous fiscal year, such as unspent amounts in budget line items or receipts in excess of estimates.
The Finance Board created the chart to assist new Town Administrator David Berry and Selectmen as they prepare town budget articles for the October Town Meeting.
“These aren’t recommendations,” Finance Board Chairman Richard Gregorio said. He said former Town Administrator Jeff Nutting would refer to past figures each year while preparing the annual budget articles. Gregorio said the free cash estimates for fiscal 2001 will help bring Berry up to speed and present some “guidelines,” for fiscal 2002.
The 2001 figures are estimates because the state won’t certify the total free cash figure until the end of September at the earliest. Everything leftover doesn’t count; for example, unpaid tax receipts count against the total, but the Finance Board members have a good idea because they know the history.
“It’s way too early to get into these details,” Selectmen Chairman Tony Kennedy said. He said the Board won’t make any moves until more of the official numbers are in.
Funding pension liability
In the past five years the largest expenditures of free cash have been $350,000 in 1996 (27 percent of total free cash) for school capital and $325,000 in 1999 (20 percent) for the Town Common. The $600,000 suggested by the Finance Board toward unfunded pension liability is 32 percent of free cash from fiscal 2001.
Mass General Laws Chapter 32 requires Stoneham to erase its unfunded pension liability by 2028. To stay on schedule with the plan approved by Town Meeting in 1991, the town may need $600,000 more than anticipated in fiscal 2003.
But Selectmen want to take one fiscal year at a time.
“I talked to Richard (Gregorio), and we agree this isn’t necessary this year,” Kennedy said.
On Aug. 28 the pension fund sub-committee of Selectmen Finance Board members and Retirement Board members will meet to discuss issuing pension obligation bonds. The first step is to draft an article for the October Town Meeting asking citizens to approve a request for special legislation from the State Legislature to give Stoneham the option to issue a bond. The State has to approve, and the town must approve the debt before a bond can be issued.
Kennedy hopes the town will get another $569,000 from the state under a supplemental budget championed by State Treasurer (and gubernatorial candidate) Shannon O’Brien. Stoneham and the other communities who invest their pension funds with the state were promised annual payments toward unfunded liability, but this money, about $13.4 million, has never come.
The rest of the free cash
For other Stoneham departments, suggested free cash expenditures are as follows: $100,000 for school capital, $150,000 for sidewalks, $100,000 for drainage, $200,000 for the stabilization account, $25,000 for DPW equipment, $35,000 for police cruisers, $40,000 for fire equipment, $80,000 for police sick leave buyback, $161,000 for school budget adjustments, $60,000 for school vacation pay liability, $125,000 for school technology, and $190,000 for school books.
These numbers may all change, especially if there’s an extra $600,000 in the mix.
Some departments are anxiously anticipating this money. When the School Department settled on a $20 million fiscal 2002 budget after slashing more than a million from the first draft, Committee members said they would be back for their $161,000 for staffing.
The chips will fall over the next two months.
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