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Try: Select Board School Committee Real Estate Town Meeting Budget

October 26, 2026 – Finance Committee – Video & Transcript

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October 26, 2026 - Finance Committee

 
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Pursuant to Chapter 2 of the Acts of 2025, this meeting will be conducted in person and via remote access in accordance with applicable law. If this meeting has only remote access, no in-person attendance by members or the public of the public will be permitted. If this meeting has remote access, one may watch or participate remotely with the meeting link that can be found at wayland.ma.us. When required by law or allowed by the chair, persons wishing to provide public comment or otherwise participate in the meeting may do so at the meeting location. Public comment should be limited to two minutes per person. We have an agenda tonight, folks. We will quickly just going to go ahead and walk through our agenda. If there's any public comment, we will have a moment to listen to that public comment and any response as needed. We also hopefully will have a quick vote to approve the minutes of October 19th. We can also honestly push that to the end since we have. Brian. And is Michael McCall in the room? I'm sorry, I didn't see him. Not yet. Not yet. Okay. So then hopefully we have a couple minutes to approve the minutes. And then roughly 7.10. I see Brian Keveny was able to join us. Thank you. I know you were out on vacation last week, so we appreciate you finding the time to meet with us. And I think Michael McCall said he would also be available. Really, it's an open discussion. Bill, I think you had said, and I think others had agreed that even though we don't at this point anticipate really any net new information, good to facilitate a conversation and just understanding of where things currently are, looking at fiscal year, 2020 operating budget, but also... Your rear tax increase and essentially maybe our thoughts as they stand at this moment on Prop 2 and 1 half override. Any related topics we want to discuss, but really I think it's an open discussion between the group and Brian and Michael. And then if time allows at the back half of this meeting, I would like to discuss the standard warrant articles. And really, if anyone has had an opportunity to review those, if not, or if people have reviewed them and they look good, my next step there is to send them off to select board for some feedback as well. And then we can wrap up by discussing upcoming meeting dates and times. All right. Thank you, folks. So with that in mind, do we have anyone from the public? Iris, can you just note who's online and who's in person? Yes, absolutely. Thank you. Online, I see Rob Quimby and myself, Iris Hawksa. And can someone in the room actually say who's in the room? Bill Hass and Brian O'Krilley. Thank you. Wasn't sure if there was anyone else. Okay. Okay. Thank you. And there's nobody in the room for public comment. Anybody online? Nobody online. Yeah, online's just Waycam. All right. Great. Then we will move to approve the minutes of October 19th. Brian, I think you sent those out to everyone. I did. It looked fine to me. I did not have any feedback. I also have no feedback. Okay. I have two minor nits, just so we can do them as revised. On page three in the first paragraph, I want to delete the apostrophe S after capital improvement planning. And under review of the draft of the annual town meeting schedule, the very last line, I want to remove the apostrophe S after it's been found. I move we accept the minutes as adjusted from Brian's comments. Second motion. All right, let's take a roll call vote. So, Brian. Yes. Bill. Yes. Rob. Yes. And myself, Iris, I'm also a yes. Thank you. Motion passes. Thank you. Town manager has joined us in the room. Hi, Michael. Thank you for joining us. Hi, Iris. How are you? I'm good. My apologies. I couldn't be there tonight in person. I feel like I'm talking to the Wizard of Oz behind the curtain. Here, I can come on. I can come on camera. Oh, there you go. There I am. But thank you for joining us. I think the group really, as we know that a tremendous amount of work... Sorry, we know that a tremendous amount of work has been done on the budget to date. And so certainly we want to thank you all for the collaboration with getting that together. And we know that a lot has changed from when many of the conversations begun over the summer and through the early parts of the fall. I think with all of that in mind, there was some discourse on our end of just wanting to continue to have open conversations and an understanding of how you all are. Perceiving the budget process this year, the budget itself, really maybe looking more holistically at not just thinking about this year, but of course looking to get your thoughts there, but also as we look more broadly at trying to think about an override that's coming down the pipeline as well. And that's my stance on really the conversation that we're looking to have. Again, just back and forth of how things are going. Bill, Brian. Looking to you all as well to provide and maybe kick us off with any thoughts or topics as well. I mean, I guess for me, I would just start by trying to understand, like, what is the overall process for when you start? In other words, for example, you could give all of your department managers a target and say, here's your individual target. Or do you wait for them to send something in and then you add them all up and revise it? You know, what's the whole process of you getting information from your department managers? Assembling a budget, making trade-offs, you know, how does all that work? So a couple things. First of all, thank you for having us. I guess what I would start by saying is, you know, Brian and I this year, like last year, started out with a budget working group shortly after town meeting right about the end of the fiscal year to look at this. You're doing long-range forecasting with conservative estimates. We're never trying to say the sky is falling, but when you start that far out with a lot of numbers that won't shape up, sometimes it can look a little bit more dire than it may at this time of the year because we've had a better part of four or five months now to look at some of these numbers and get... Some additional indicators, you know, we put in some conservative estimates for our health care, for our new growth. Some of these numbers we'll be getting, soon we'll be getting better numbers, but we don't get our state aid, we don't get our health care until the end of January for state aid, and then February for the other numbers. But we're already starting to see other numbers that drive our budget, such as energy. As we all know, energy's been changing. I've been able to start getting memorandums of agreement with several labor unions, trying to keep the numbers in fairly conservative. The schools settled with their teachers, but they also made some changes. But what's been driving a lot of the increase that we're seeing is our unclassified. So that's debt service, health care, retirements, OPEB. So early on in, Brian tries to put together essentially, I'll call it a pro forma budget, correct? Where you base it off of Some trends, some input, and we've started this working group looking at ways that we could try and either get better information or make some changes. On the town side, last year I sent out an email saying that there would be no new hires unless people spoke with me, and both the school and the town side have been not filling certain positions in order to save... Money, we've tried doing some consolidation where we can. We've changed some roles within Town Hall. We've changed some processes on how we handle purchase orders to try and make it a little bit more efficient and also economical. We're using less paper, so that frees up staff time. So we're trying to make changes that we can on our respective sides, but 50% of our budget goes through. Class unclassified these days. So as those changes hit on that side, it's harder for us to make changes because a lot of those are non-discretionary. We've been meeting almost on a monthly basis throughout the summer. We're going to have another meeting this week. We also meet regularly, Brian and I meet with Dr. Fleishman and Kirsteen Patterson, Brian's counterpart upstairs, just to make sure we're all on the same page as we go forward. As I said, we've been getting a little bit better numbers on a couple of things. Middlesex Retirement gave us a lower assessment than we thought. We're getting some slightly... Better news from our assessor. So we see some numbers shifting. So the budget gap that we started out with has come down considerably. And then having discussions that you may have seen with the select board at different times, that number is getting down to the point where at one point it was around $500,000 or so right at the last look, did you say? And I don't want to speak for the board, but you're starting to get the sense of people, you know, we should better keep our powder dry for a one or three-year override, maybe another fiscal year if we can tighten our belts one more time. So we're at that point where we're trying to see if we can get through. And we've come up with a couple of different models that we've been talking with the school. We can put together a projection with a certain level of tax increase. One, well, it's higher than what you've traditionally had, but if we want to avoid an override and continue with the same level of services, that would be one number. There can be another number where the tax rate is not as high, but then we're looking at some... Cuts. I won't say drastic cuts, but there would be cuts on both sides. I'll give you that for a general starter, and I'll let you start. What's the interaction you have with department heads? In other words, if the IT director or the fire chief or somebody puts something that they would like, and you're saying, well, I don't know if we can afford that. I mean, is there a back and forth? How does that work? That will typically happen about this time of year, and about another week or so, once we're in the month of November, we'll set out our budget letter, and Brian usually fills out some templates for the operating budget for the nest. Fiscal Year, and everybody's supposed to go in, fill that in, and then we meet department head by department. That doesn't mean we're talking on a regular basis with these folks. And, you know, we have, when you talked about the fire chief, there was a staffing study done last year. We're supposed to be getting together with our working group. We didn't meet over the summer, but we plan to meet shortly. You know, and how do we address... Issues identified there when we're running up against revenue concerns. But we will have those individual department head meetings we do every year. We do that in probably late November, early December so that we can put together a preliminary budget in December. But there will still be those large... numbers that drive the budget that won't come in until the end of January, which is our Chapter 70, our unrestricted general government aid, and then the health care numbers come in about the first week of February. We will have a meeting with West Suburban Health Group probably end of November, early December, where we should get an updated meeting on trends and claims, which would... Give us some indication of where that February number would go, which might help us, you know, give us some direction, but a lot of this information that you're asking about really won't. The dialogue with the department heads as well as the information sharing with these other external groups won't be happening until the end of November, beginning of December, and into January and February. Do you find you typically have to push back on department heads? Hey, you guys are asking for a lot. We really can't afford this. Is that... We have, and that's been, you know... Something that's gone on back and forth, especially in overtime budgets. Brian will tell you in the last couple of years, in order to make the numbers work, we had to go back to our larger departments that rely on overtime, which tends to be our public safety unions and DBW. And then last year, as you know, we got hit with more inclement weather than we intended, and that didn't help us out. But that's usually where we go. As I said, we've tried to be conservative with our collective bargaining this year to be mindful of what's going on for the next three years. But that's kind of how we've taken it. I mean, we look... To consolidate and share what we can, we're aggressive with our grant applications, and you may have seen either in our newsletter or on the website, we just got a $495,000 grant that Abby Charest, our town engineer, applied for, which is going to help us look at capacity with our wastewater over here. We're working to get the... Middlesex Regional Emergency Communication, our Regional Dispatch Center off the ground. We have a meeting tomorrow with State 911 to get additional monies to help that get up and running. And the thought there is the state will be helping to offset the salaries as we transition. Once it comes up and running, we should be getting additional monies to help pay for that transition, which could create capacity in the budget or breathing room, if you will. They're all in the works, and we're constantly looking for that, those resources. You can try it anytime you want. Most of the trade-offs are staffing, or they're not buying equipment or something. It's usually, hey, can we, you know, like a hiring freeze or something. Is it staff-related that you really focus on? Well, in the operating budgets, it's a lot more staff-related, and there may be some goods and services that people use. The capital budget's separate. And it's no secret, if you saw the Capital Improvement Planning Committee's draft, we had to make some changes in IT. There was a lot of unspent capital in recent years from IT, and we have changed. And our new IT director has come in and realized that because we didn't expend that capital, a lot of our hardware has fallen behind and is end of life. And if you watch the news, we've had some... Some cities and towns get hit with cyberattacks recently that crippled them. Everett was one, Springfield was one. So... He's been going out and really going through with a fine-toothed comb. We've even talked to Wacom trying to make sure there's no entry points into our network and making sure that everything gets updated. But one of the things we'll have to do is we're going to have to migrate off of the older software we had to an updated version of Microsoft 365, and there's going to be increased costs with some of those. We need to do these things to ensure that we're protecting ourselves, but there's a cost to the upgrades. So that's in part of your upbringing. Part of the reason that maybe my questions are off base, because I think a few years ago, they used to have the department chairs come in and talk to us, and I guess that was felt not to be very productive. It sounds like it probably wouldn't be productive. I mean, you sort of have those meetings, and you sort of synthesize it and give it to us. So it's probably... You would agree that we don't really need to meet with the department then? I mean, I think if you have specific questions, you want to have some of the means. Some of the smaller departments may not be as appealing, but you might find that some of the larger ones, if you want to ask what they're doing. I think the police is finally fully staffed. You know, we're trying to get all of our fire fully staffed. You know, it's always a challenge as soon as you get a full complement of people somebody leaves or, you know. But we do pretty good keeping the services that we do. It's just that challenge when you know there's a lot of things that are beyond our control. One thing that we deal a lot with now that wasn't an issue two or three years ago is we see more public records requests, and that takes up staff time. There's lots of little things that we're required to do, and there's no funding. The state just tells us to do it. It occupies staff time. I don't mean to monopolize the question so everybody else can feel free to jump in, but sort of switch. One of the things we've talked a lot about is getting ahead and focusing even now on the FY29 budget because we focus so much on the current budget. Then we end up getting caught behind into, well, do we go to a prop two and a half? Oh, there isn't enough time to get the word out. So I think we really want to try to get ahead of the curve and focus on FY29. How do we do that? In other words, we can't say stop doing anything on FY28. Let's start the FY29 now. What's a way that we can get ahead of the next year? Well, I'll let Brian speak in a minute, but Brian... He constantly has a budget model that's looking at a couple of years, and he's been watching this, and the very reason you said about whether we would be needing an override or a multi-year override, and he's trying to be projecting where the shortfalls may land. So I don't know if you want to comment about what you've been doing for the outer years. I know you've been tracking 29 and 30. Well, I've always used a budget model going back to, like, 2014. Fincrum used it between, like, 2014 and 2018, and then they really didn't do any forecasting whatsoever, which, you know, you have to know what your next year's budget is going to be, the impact on the out years. You've got to be looking out five years, not just one year, five years. So it's good to see that you guys are going back into looking at a five-year lookout. To get to 29, you know, we just have assumptions in the budget right now in the forecast and the gives, you know, depending on how you look at it, some kind of bad numbers. 28 is sort of like a different problem that we didn't really have before. You can get to it in a minute if you want. Somehow it's trying to get the 29 budget as polished as the 28 budget is. In a way, it's impossible. But how do we get closer now? Because in my two years here, it's always seemed like we have... It looks like there's going to be a big shortfall, and then we work on it, and the shortfall goes away. And then that's happened kind of two years in a row, or potentially two years in a row. And it's like, can we get ahead to know really what's going to happen in FY29? Well, again, as Brian said, you're making assumptions. Right. We look at, say, Middlesex retirement, there had been a pattern of increases. They would give us, what, a 6 in one year and a 9% increase in another year. And then this year, they gave us a lower one. So now we're anticipating potentially a higher one next year to offset what they did. So, you know, you build some of these numbers in and things break our way, which is great. But then I probably, like the rest of you, I get a little leery. You're giving me a lower assessment this year? What are you going to do in 29? So, again, we look at friends, what's going on, like with the GIC and Maya with their health care. We've been fortunate in West Suburban that our numbers have been, our claims have come in lower, and we've been able to get year-over-year increases that are much lower than the GIC and the Maya. Maya is the Massachusetts Interlocal Insurance Agency. The NMA, they're partnered with the NMA. A lot of cities and towns go to them. The GIC is the states where you get your health insurance. And we've just done better in our small joint purchasing agreement. But that's not to say we could have a bad year. But some of these numbers, as we said, the trend was looking at a 12% or 14% increase. And then we got like a 10%. In one year, we got a single digit. So it's, I would rather. conservative when we start. And again, we're starting like nine months ahead of time trying to put together a budget. So it's based on assumptions. And now we're looking at trying to do 29 and 30. So it's not an exact science, but we rely on past numbers and try and anticipate the trends. I guess the hard part seems to be we need to make a decision on whether we go out for a prop two and a half. Before we have all the information we need to make that decision. Well, I mean, that's why we had this budget working group. It started the year before we did it because we were very sure where we were going to be. Born out of that last year's was... A couple of the thoughts were we went out and we converted some of the levy debt to excluded debt, and then we went out and did some bond anticipation notes at a different rate to save some money. So that helped avoid us having an override last year. This year, we've just been watching it, and we had been overly conservative in a few areas, and those numbers, as I said, broke our way. Doesn't mean we don't have a gap. It's just the gap is not as significant before and it might be one that we can live with, you know, and make some changes to get through without an override. As I said, What I take away when we have conversations with the select board is that I'm not sure that the appetite is there yet to go forward with an override. If we know we're going to have much worse years in 29, 30, 31, that if we can tighten our belts and get through this year, put our energies into one or more year override next year. You know, Brian, that would serve your point is how do we get ahead of this and then look a little bit further ahead. So I don't know. I mean, I'm not hearing a lot of changes, you know, that we could do. Well, I have mentioned in the past, the MMA has a white paper up on their website called The Perfect Storm that explains the same scenario we're going through, that a lot of municipalities are having these problems where the limitations of Prop 2.5 and the increasing health care costs, retirement costs, those are driving budgets up, and you're seeing more and more communities going for overrides. Some pass, some don't. I mean, it's whatever works in each community. But as I've said when I talk at Town Meeting when I've introduced the budget, I think we've been trying to be good stewards of the town's money. We've tried to find savings where we can. We've tried to look at alternative ideas. We've tried to be modest with our salary increases. We try not to... I don't think we've really added to the headcount since I've been here on the town side. If anything, we've tried to reduce it where possible. And through efficiencies, we're going to more online permitting. As I said, we're trying to find ways to go paperless and save the clerical time. And we do have some turnover. We have some employees that are starting to retire, and then you have the opportunity maybe to bring some people in at the lower end of the pay scale. So the schools saw that this year. They had a lot of retirements. They were able to bring some people in at the lower end of the pay scale, and that helped them come through with their budget numbers. I think maybe also to the point about getting ahead. It seems like a significant percentage of getting ahead is kind of what we already have in the model, right? We already do have a model that looks out X years. We're baking some assumptions into about kind of what we expect. I guess there's a question of, you know, is there more beyond that that it is realistically useful to do? Is what's in the model for the next, you know, three to five fiscals kind of the best picture we're really, you know, the 90% accurate picture that we're likely to get at this point? Or is there more we could be doing in terms of projecting what we expect to have happen? At least, you know, your labor contracts, you're pretty much, the school's settled, I think, with all of their employees that I've heard. The teachers' union is settled. I think they've dealt with the custodians and non-unions. So if you get your labor contract settled for the next three years, at least you know what your labor polar is. And you can also figure out what the steps and lane increases are. So I mean, that's a big piece of the budget. You have the budget's payroll. So not even including unclassified with the Medicaid tax and the health insurance. So to kind of like... Figure out where 29 and 30 would be. It starts with nailing down or, you know, settling your contracts, at least you know where they are. With debt, that could be a little bit more predictable. You've got a capital budget. You can either not do some of the capital and not issue the debt. I'm not sure what you can do with health insurance. It's really been, I would say, a rollercoaster. I think two years ago, we had a 3% increase. And then we went last year to a 10. So that kind of like is not consistent. So to answer your question, it's really, I've always said that the town budget stops and stops with the teacher contract. Yeah. Okay. And the same is true of Middlesex. They've been all over the place one year. Yeah. Three, they gave us a sixth and we expected a 69 this year and got an over one. I guess what I'm trying to avoid, and maybe the world is uncertain and you really can't avoid it, is making a commitment, say, for a two-and-a-half override in 29 or 30, and then as it gets closer and closer, saying, you know, oh, never mind, I guess we don't need it. That would be kind of embarrassing to set up the vote and to say Finance Committee approves this, Select Board approves it, and then we sort of find things broke our way, and I guess we don't need it. I mean, maybe that's not a big deal, but that's, to me, would seem to be a little bit, you know, tough. Correct me, I'm wrong. I'm not suggesting that we do this. You don't need a deficit to necessarily pursue a Prop 2.5 override. You can strategically decide that you want to go out and ask for an override. Early, you know, when you don't need the full amount, is kind of one thought. And when I look at some other communities, and I'm sure they run into the same issue, they all have to look out one, two, three plus years. And I think in our case, but for the million dollar increase in local receipts. And then the second thing is, And again, they're in the same boat, but West Suburban, to the extent you could bring pressure for earlier analytics and earlier discussions with that group. And then the third thing, Brian, if all the contracts are settled or close to being settled, the question is who actually goes through all the... The bodies and assigns payroll, and you can get actual payroll. I understand people may come and go, right? But, you know, simply adding a percentage is what we do in the model right now, because we're using your model, isn't as precise as if the schools just did. Some unsurprisingly, the result came out year-over-year increased less than their COLA in their contract. Which had to do with not filling certain positions and filling retirees with, you know, white staff. But, you know, trying to get some of that actual detail work done to gain better comfort in what we're doing for assumptions, I think, would be helpful. And that requires, you know, people committing to do things off-cycle. You know, I assume there's no reason somebody couldn't Map out all the salary information for the next two years, anyway. Only one more year after. We'll be in the third year of the contract in Fiscal 28, or 29? 27, 28, and 29. Yeah. So anyway, the question is, who bears the burden of that work? So, for the most part, it's me. So you have the forecast model that I gave you guys. So I have that. And then I actually own a whole separate model. And I actually... Bring in all the employees in every single department, put in their pay, project out there, if they're eligible for a staff with the estimated total increase. So I have that work and document already done. Then I wait for the department heads to enter their budgets, which Michael will be setting up the guideline shortly. So they'll enter their budgets, then we'll meet with them. And I'll compare my number to their number and say, this is what I came up with. How'd you come up with that number? So I do do that with every department, with every employee. And we calculate, you know, at least one or three years out all the time. So that's always been the practice. And then when you finally get your budget, when we finally prepare the budget, it's built off actual census. School does the same thing. We actually run the payroll reports. And use their current pay and calculate if they're due or stepped. And then we use the COLA. So we actually pin it right down. And then I compare that to my forecast, how close I came. So I've always done that. So what we have now, to Bill's question on at least fiscal 29, right now we're just using year-over-year percentage increase of fiscal 27, and then it just compounds itself. I think you, in fiscal 28, you went back and began to insert, obviously inserted the school calculation for the three years for their payroll. Just their number. I don't have the detail behind the number. Yeah, just their total number. But I'm assuming they went through the drill you just said to come up with those numbers. And I don't know that you've done that on the town side, although you did insert. more hard-coded numbers for fiscal 28, which I presume comes from some of your other calculations, but then for fiscal 29, it's just whatever percentage we're including. So I guess the question is, if you have those for fiscal 29, at some point, would that be something that you could kind of, not people, but... More refined numbers. I mean, we can do that by department. The school could do it by location, high school, middle school. They could do that. I wouldn't say it's time consuming, but we already have it really set for 28. And we're very close from meeting. I mean, that's what, almost the end of October. We'll be meeting with the department as first part of December when they submit their budget. To come up with that kind of analysis, isn't that difficult to do because we already have the database built? Yeah, I think what we talked about and I think Karl brought it to the working group as a recommendation was, you know, if I look last year when I was on the working group, we kind of finished more or less what we were doing early fall and then the budget process took over after we... We made recommendations for the financial engineering that you mentioned, and that got accepted by the board. But the working group kind of stepped aside and didn't reconvene in whatever current form it is until, you know, May. And I think our view is the same effort that's being put in that has just been put in by that working group for the last three or four months. We think... That, you know, a working group of some sort or a committee appointed by the SEC board and possibly the Finance Committee doing its own ongoing analysis really needs to start now if, in fact, your general sense is that it's unlikely that we're going to be able to do away with the $2 million or $2.5 million or $2.9 million that's in the model at the moment for the shortfall on fiscal 29. And kind of work it from now until next June so that you could be in a position by next June to determine whether you want to go on the fall ballot, which is, you know, this year you couldn't do that because, you know, you weren't far enough along. Well, as it turned out, you know, you could. I mean, I think people at some point. I think you both have said it in different ways. We may never have perfect data to make a decision. And there was even some discussion about how, I think it's Marblehead did it. They basically put a position paper or an MOA, if you want to call it, to the community about how they would utilize the money if they didn't. It's a very simplified explanation, but I often explain to... People who don't understand how overrides work, it's like when you have a credit card and you've reached your limit and you need to spend more, you can ask for a rate increase. You might get a $5,000 rate increase. You might not need it. So then, to your point, Brian, you need to demonstrate and commit to the community. If you went out and got the override, it turns out you may not have needed it at all for 2029. How are you going to use that excess capacity in the coming years? So you could start the plan. And as you said, maybe that number shrinks. But now you have a commitment saying, look, if it shrinks, we're going to spend X. But we will not spend more than Y this year or Z this year. And, you know, maybe. Your working group is not just a budget. Maybe it is actually an override group. A lot of communities have an override committee that they're looking at to decide when and where we go for an override. If you look around, we've got... As you said, local receipts came in in our favor. We have this project here at Terrain, a lot of permit fees, there's licensing fees, we're trying to bring in some additional liquor licenses, but I don't see a lot of big, big projects coming. up on the horizon that are probably going to move the needle for increased tax revenue or increased permitting. We get a fair amount each year, but we don't have any major projects like Alta Expo or anything that are going to bump it up. Not at the moment. Yeah, I guess in a way there's two kinds of errors. You can go for an override when you end up not really needing it, or you can not go for an override and find out which you had. Well, that's the anxiety that people like Brian and I have sometimes because, you know, a part of me was wondering, should I just ask them to consider it just in case? But, you know, the numbers keep getting a little bit better and you don't want to look like, you know, you don't know what you're talking about. To your point, you don't want to be here in December and something break that wrong way. And now you say, wow, either I'm making a million dollars in cuts or a wow, I should have gone. My sense is politically a two and a half override is a bigger deal, you know, because it goes to a vote. It probably gets a lot more publicity. You know, it's something that's sort of hard. It's a hard decision. And I think... There's a lot of things that play into it. Perception, you know, we have these days we're over $100 million. And if the deficit you have is less than a million dollars, that's less than 1%. I'm talking to some of my peers and seeing what happens in other towns. When that number falls below the 1 million, there's kind of a... I don't want to say emotional, but a psychological breakpoint where people are like, you can't find, you know, a half a million dollars in a $115 million budget and get us through. You know, people might be reluctant to vote for it just for those reasons. So that's when we say maybe we should see what we can do, wait a year and make sure, you know, we definitely need it. But this has happened two years in a row now, essentially, you know. There are probably people out there going, you did it two times. Maybe you can pull it off one more time. It's really the numbers. And that's right. I mean, I'm not sure I'm a believer of that, but I want to at least be prepared to defend, you know, the right that that could come up. Trust me, I think we hear these questions all the time that, you know, can't you do it or should you be, you know. By the way, just as a little bit of an aside, you mentioned you do guidelines to your department. Is that something that we could see? Yeah, we can share. Every time a manager does this, I mean, I've been... One of the towns I worked in, we had the plenary budget on a similar timeline as this, as Wayland. Another town I worked in, they didn't do their budget until the beginning of March, until after they got a lot of these other numbers they're stating. The fiscal 20 budget, let me jump in and explain this, is different than what we've sort of dealt with in the past. So, you know, we're still not going to have an overlay, given the fact that a lot of things have broken our way. Take a look at the fiscal 27 tax that we're going to put on the tax-free cap. It's $94.9 million. The max levy for 28 is probably going to be $100.5 million. So if you add up all the increases in state aid, what we see as the transfers, the total town budget can go up $6.2 million and be right at the levy. The problem with the 6.2 is that 3 million of that is already going to unclassified. So between the town and the school, you're basically left with another $3 million. So then when you do those allocations, assuming we did a budget that brought the levy to 100.3, which is the 100.5 less 200 as a cushion, you'd be producing a tax increase of almost 5.7%. Historically, over the 10-year period, the compound growth rate on the tax rate has been 4.5. So the most recent tax rate that we're doing at the end of this month, actually November, is going to be less than 4. So we're going to go from something less than 4 into 28 with something on the high side of 5, which the town is not typically seeing. So the problem we're facing is not so much. You know, we get new growth. You know, I get $650. It could be $700, $700. That just increases your living capacity. It doesn't change the year over your tax. So based on, say, a 5% tax increase. So if we produce the budget with a 5% tax increase, then the total town budget would go up 4.7%. Town and the school budget will go up 2.65 and the town will go up 3. If I allocate that difference, the difference between the 6.2 and the 3 million, both the town and the school are working on very trim year-over-year increases. Take the school, for example. Based on a 5% tax increase, they would have to produce a budget that's 2.65. Given that all their employees, most of them, are going to get a 3 to 4% call on. What's the math on that? You know what I mean? So the only, there's no clear way out of a fiscal 28 budget. It tends to say we don't need an override because in my opinion, we don't. But then it complicates it to what kind of a tax, what kind of budget do we bring to town meeting that represents what kind of a tax increase? If the Towns used to sink four and a half, maybe they'd be okay with five. Would five and a half do? To me, the conversation really starts shifting to what kind of a tax increase are we projecting for 28? And then once we nail that down, then you can jump forward to 29 and 30. It's very complicated. What do you think is a sellable, I guess to either one of you, what do you think is a sellable tax increase for next year? I mean, two, three years ago, we had a big spend increase. We had like 7%, and I don't know if the numbers are in front of me. But again, the average is 4.5 over a 10-year period. In fact, it's still 4.5 over a 5-year period. So, um, should we try to get it to four and a half or is that like, well, I actually got the four, so if you did a four and a half percent budget, four and a half percent budget. The school budget goes up a little over 2%. The town budget goes up a little over 2%. That would mean significant cuts, particularly on the school side. You'd probably have to cut the school a million dollars based upon what they were looking for. I know you've got the number, right? Their budget for 28 is about $60 million. So they'd be looking at themselves about a million dollar cut. We'd be looking at like $200,000 to $300,000. So there's no clear. We've talked about this the last two meetings. Using your model, which we're keeping pace with, and we look at our own iterations. Based on the last iteration that you ran that we matched up with in our last version, the year-over-year tax increase is around 6.2, and it would take a million dollars of less expense or increased revenues. And, you know, we understand likely could be more state aid, so that would cut in our favor. Health could be down a little bit, maybe. But there's still likely, even to get it down to 5%, you're likely going to be looking at, you know, a half million. Well, potential budget cuts split between the town and the schools. I would see probably more. Or more. The one thing that I mentioned in our last two meetings, and it's simply an explanation for why it's 6.2, is that because of the financial engineering last year. You're doubling up on debt service in fiscal 28, and it's 115 basis point impact on the year-over-year tax increase as the deferred debt financing you didn't do last year. If you take that 115 basis points out of the 6.2, you're pretty much right at 5%. And so we talk amongst ourselves that, you know, if you approach it, say, we can explain You know, part of that year, you're increasing. In fact, fiscal 27 is going to be well below what was published in the warrant. Showed 4.8 in the warrant. You're going to come in at 3.3 or something. 3.4. And so you have, you know, a lower fiscal 27, part of which was due to deferring the debt. You've got doubling up the debt in fiscal 28, which is adding 115 basis points to the year-over-year increase. So our members, on balance, we're not so inclined at the moment to be simply picking a number and targeting to it. We think if you start out in your explanation saying, well, it's 6.2 or wherever it settles, and you subtract out 115 basis points, it's solely attributable to that. We did that with SPED. Two or three years ago when it was 7% and the warrant had started with the 7% and it said, okay, we had this large increase in spend. If you get rid of that, you start to get back down to the historical trends and it takes the pressure off of necessarily feeling you have to cut. Keeper than you want to cut or that you would cut to maintain level services. So we didn't take a bow. Nobody staked out firm positions, but we have talked about that the last two meetings. That, I think, was a general sentiment. And I'm just not sure if that's something that you have... In the working group I've focused on, I'm going to be attending the one on Wednesday because Karl's away. I don't plan on bringing it up. I don't plan on bringing it up, but I'm there to listen. No, I brought it up from the get-go. Yeah, but I think that, for me anyway, and as I said, I'll never turn away a budget cut if you can find them, right? Or efficiency, let's put it that way. But I also believe in fairness and transparency and unduly putting pressure on delivering sort of a level quality service, not to mention particularly the schools not being able to do newer things that they might want to do. It doesn't seem fair if the numbers masked by this. 115 basis point year over year impact. That just doesn't seem right to me. So that's why I brought it up, and I'll keep bringing it up, and whether that has any ultimate bearing on the conversations that you all have internally. If the town and the schools say we're raising our hands, and we also agreed that, you know, assuming that there is no override for fiscal 28, but seemingly more likely for 29, 30, and 31. You also have to be able to evidence that you did all you could do running into that to try to do part of it through efficiencies and controlling your budget. Every community that's done an override inevitably has an override committee inevitably has a laundry list of things that they did and they saved X amount out of the budget, but we still need Y, right? Because if you can't tell the public that, you're going to have a harder sales job. I think we've recognized that, and that's why I prefaced the budget last year saying we've been trying some of these things because when that day comes, we don't want to be going in there hat in hand and not have done anything to show. That's why I say we've, you know, we've tried to make some efficiencies. We've moved away from paper. We've not filled positions where we don't have to. We're not adding new headcount. We've tried some of these alternative, you call them, Financial Engineering to avoid it. And, you know, I guess, for lack of better words, I tend to Work on my budgeting here like I do in my own home. I try and be very conservative in my own personal budget, and I bring that kind of philosophy here. I'm using other people's money, and I need to be able to answer and be accountable to people in Wayland for the decisions I'm making. So the day comes and I need to ask for that increase in the levy capacity. I want to be able to say, Brian and I... We've tried these things and we've made these cuts here and we've worked to keep the collective bargaining in a conservative range so that we weren't being frivolous with your funds. So we're asking you to trust us based on what we've done in the past to ensure that we will be fiscally responsible going forward if we ask for that override, to your point. So I am trying to keep a log on all the things we're doing. Iris, Rob, you haven't said all that much. It's more for you. Most of the stuff that I've heard tonight I've already heard. Yeah, I had just like a couple questions listening to everything. Metro is suburban. I mean, again, I think you mentioned in terms of unclassified just becoming such a large portion of the budget. And obviously... The health care number, we just see such a large year-over-year increase now that obviously has continued through the last number of years. What's the, again, I guess my concern here is like, People, the town, right, can't really stomach a 10%, 12% increase year over year in perpetuity, right? That just doesn't seem long-term sustainable. So I guess what's Metro West Suburban saying about the outlook? Well, it's been recently there was a 10%. The year before it was 3%. If you went back 10 years, I bet you the average health insurance increase is probably 5% to 6%. It is all along the way we've made changes in plans. It's recently we're seeing a double digit. Yeah, but the three, Brian, my apologies, but the three was because they bought down the rate that year, correct? No? They did choose to buy, I was the lone dissenter the other year. It came in at like a four or five and they still chose to use some of They're reserves to buy down the rate a little bit. The other, as I said, the GIC and Maya, those rates have been in double digits the last couple of years, I want to say, and don't quote me, but I know we've been doing slightly better in West Suburban. And I agree, year over year, I mean, if it continues at either near double digits or double digits and above, it's going to break communities. Most communities have what's called a Public Employee Committee, a PEC, and they negotiate the health care rates with their collective bargaining. We have one that comes up every three years, and that really determines the breakdown between... How much the town picks up versus the employee. And you go town and town in an area like Metro West or even in eastern Massachusetts, it's pretty close to 75, 25 in most communities. And if a town were to break ranks and start shifting, you may see employees leave. Employees do go where the health insurance is. But if en masse, all cities and towns are facing that type of If you're not going to cover as much as my health insurance, I want higher OAs this year. It's all a negotiating game with your employees if you're going to start tinkering with your health care offerings. But I don't see how the rates are going to get any better. External forces, you know, costs in health care. You see things on the news when the labor in the private sector and the hospitals are demanding higher wages. That translates into higher costs, which is going to translate into higher insurance premiums. I'm not trying to oversimplify it, but there is a trickle down when, you know, they're increasing salaries for the health care workers. That will ultimately impact the insurance premiums, which will impact us. So I don't know what's going to happen. It just keeps seeing 10% year over year over year. It's just going to drive that side of the budget and make it much more difficult. You know, if we have at some point down the road, if we have to make cuts and that involves staff, then, you know, if you... Reduce your headcount. That may. Reduce some of the unclassified numbers because they may or may not be carrying health insurance. Last year, even though we saw a decline in the increase in premiums, we had a lot of our younger employees hit 26 and come off their parents' plans, so they had to pick up single plans. So some of the savings we would have realized last year through the lower rate increase were taken by we had more subscribers. So there's things that you don't anticipate. One moment you're thinking, oh, we get a lower premium, we're going to save some money, and then we get more people jumping onto our plan. And then along, yeah, that all makes sense. I get it. Again, given that Metro West Suburban, presumably they're doing lots of analysis and have their ear very close to the ground on what's happening in the industry, I would be very... I would find it informative. I suppose to hear their take on it, because like you've mentioned before, we're not the only community to sort of be challenged with those rate increases. Similar vein here. With the OPEB funding, just to get some clarity on how those benefits work, so the OPEB funding is for healthcare post-benefit employment, right? It's the other post-benefit employment, so it's for healthcare coverage for employees who retire before they transition to Medicare, or are they allowed to be over the age of 65, be Medicare eligible, and still continue their private insurance coverage?
I believe it's 65. When you hit 65, we transition you to a Medicare plan, and we offer supplemental plans for our retirees. And at different, it's 50, the town bears 50% of that, as opposed to 75 for active employees. Roughly 75, maybe 75. Supplemental of Medicare supplemental or supplemental of a retiree medical plan? Because there are two different... You have to sign up for Medicaid. Yeah. And then there are supplemental plans that cover your prescription drugs and other things, and we offer those types of plans. So they have to get on the Medicare Part B, but then there's private insurance, the retiree health insurance that we offer that has the supplemental care not covered by that part of Medicare. And the town pays 50% of that. And if they're not 65 but retirees, the town's paying how much? 75%? I think we're playing, if you're in between, say, if you retire at 62 and you're not 65, I think we pay the normal split of 75. Probably 75-20. So that's what OCAD is ultimately for. It's all the retired employees, health. Before and after age 65, the town share. Well, my guess is in 2000. Or there is a difference. So there is a difference. Like some companies offer retiree health plans. So even for participants who are over the age of 65, they could get coverage that is technically a retiree health plan. So if you think of companies like Northrop, Northrop Grumman Corporation, they offer that. And then there's exactly what I think I hear you saying, which is for. People who are over the age of 65, they could sign up for a Medicare supplemental plan in addition to their Medicare coverage or Medicare Advantage, which has become very popular. So I was just trying to understand exactly sort of the kind of coverage, but I'm sure those details are there, but I appreciate you sharing. So it sounds like what I'm hearing is between pre-Medicare age, pre-65 if someone's retired. They're eligible to remain on the health insurance that the town offers them at the same coverage rate. And then once they turn 65, they're transitioned over first and foremost, obviously, to Medicare, they're Medicare eligible. In addition to that, there's a secondary coverage that we're offering them, which we believe is Medicare supplemental, and that is split at 50-50 premiums. Okay, thank you. I'm not mistaken. I don't want to go down raffles. Some of the plans we offer are New England-based, which we've had some retirees call and express their dissatisfaction because if they relocate to a warmer climate, those plans don't cover. So then they're on their own to go get, you know, Medicare Advantage or something else. Quotable Health Care Act. Supplemental plants. So they have to go through whatever state they live through. So if they're under 65? Or 65. Once they leave the area. We've noticed that happen a few times.
So our coverage is limited to, or some of the plans are New England-based. The HMOs, they only cover New England. So if someone retires and moves the other side of the country, they may find that the plans don't work for them, and so they go off our insurance and go get something in the open market. There was a wage and classification plan completed. a year ago. Has that been factored into personnel cost line items of the budget yet or were there no changes required from the study? So we have tried to address that on an individual Unit-by-unit negotiations, and we've made some trade-offs at the table in order to make some of those adjustments, because in some cases, maybe one bargaining unit didn't really... See any changes. And other unit may have one or two people. Other units might have quite a few people. So sometimes, you know, what they were asking for and what the coal is factored in a lot of those changes. So the union piece of that, how about the non-union employees? Were there any adjustments required there? There may have been a couple of people who were reclassified, but... In many instances, or the instances I'm thinking of, the people were, say, at the top step at a lower class, and all they did were brought up to a different grade so that they would have the opportunity to, if they stayed with the town, see some step increases. So there's no comparison done in that study to market comp for the various positions that they looked at? Market salaries. Yeah, I think if you read that, what they did was they went out and they tried to compare several towns and they looked at us within that range and they were trying to target us at a 75th percentile. But a lot of the changes we made were for people that were not even on the target range. We had some people that were below compared to some of our peers. And those are the people we focused on bringing up. And you mentioned the FIRE staffing study. Is it too early to know whether that's going to result in additional headcount? I think, yeah, I would say it's too early. We're going to have that. There'll be a working group of folks meeting. We've picked most all of the people we have. We're waiting, I think, for the union to pick a couple people, and then we're going to have our first meeting. And I thought I saw a swearing-in occur here in the last week or two. I thought I saw something online looking to hire firefighters, et cetera. Has there been a significant loss of staff, or is it just normal turnover? Yeah, turnover. Had some retirements recently. Some of those were belated introductions. Some of those in promotions. I know we did make another offer to another firefighter. Rob, anything on your end?
Hopefully Rob's still there. Otherwise, we got a problem. He just said he needed to step away for a second. He's going to be right back. We have a problem. Must be present to him. Got it. Okay. We have to wait for him to return. Okay.