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[Music] good evening and welcome back to buy line this is a public affairs show of the amis League of Women Voters here at Amherst media and we're going through a really exciting transitional year as we're ramping up with our new town government and also working for the first time with our two new state legislators both in the state Senate and in the House of Representatives so this show is focused on helping you get to know who the players are and how our new system is coming online and we have two guests here this evening back by popular demand is Paul a buckle man he's the town manager and we also have Sonya Aldrich who is our finance director we're going to learn more about her long career here in the amorous town government in a couple of minutes but as always we want to start with the process so we're talking budget today it's all about the budget today so give us the top-line the headline that's going to be in the newspaper about the budget and then we're going to talk about the process okay so I think the headline is major investment in roads and sidewalks steady state budget operating budget for all for the libraries the schools in the town very good any new programs no new programs we're just trying to hold on to what we have any layoffs no layoffs sounds like a good budget yes maybe not a great budget because we all want more right it's in the nature of things but the good news is that there aren't cuts and you're able to maintain all of the services and provide some focus on a couple of key areas that you started out with okay so let's go to the process because we're all familiar well many of us are familiar with how budgets used to get built when we had a select board and a Town Meeting but now we have a town council which is the legislative body and you are the executive so tell us how the budget process differs now from them so this was a hybrid year because the council came in to office on December 2nd before that the old Finance Committee and the old select board had already met we had a four boards meeting and the those two bodies established through the the policies and what they held it was the what they want to see it come into the budget for this year so the parameters were set by the old process because if we didn't start then we're going to be behind the eight ball okay and so we used that as our starting point and felt like there wasn't gonna be too much difference from what the council and it's going to take the council awhile to get up to speed before they could articulate what their goals were going to be so we based it on the old government the big change this year's we had a very short time frame to do everything capital C PAC which is our capital community participate the Community Preservation Act and and all the different aspects of the budget came a very tight timeframe so put a lot of stress on the council on staff and just everybody four boards meeting what is that the four boards is where the board of were the select board the board of library trustees the School Committee in the Finance Committee would come together review information through a financial indicators project that the finance director or the town manager would put together and based on that information they would give us goals for the coming year so that's the first stage where each of the departments the major departments put on the table some of their ideas but you also lay out the parameters based on what's possible correct very good and will that for Town Board Committee continue into the new cycle so it's a it's a good process the town has a really superb process it won't be for it'll be three because the Finance Committee is a subset of the Town Council now so it'll be the Town Council the board of library trustees and the School Committee who will come together and talk about the finances of the towns Sonya will do projections for revenue and we everything flows from how much money is likely to come in great okay well so now you just introduced Sonya and starting to look at her role so Sonya you've been in town government for quite a number of years we don't have to say the exact number but you've been around awhile so you know the system you know the players you know how it all works how is this new system working from your perspective it's harder to judge that being a transition year I think in future years it'll be a little bit of an easier process for us because we'll have more flexibility on any adjustments that need to happen to the budget throughout the year being able to have council meetings and appropriations so then you don't have to call a special Town Meeting and go through all of that process things can move a little bit more efficiently when you need to review and revise very good and so tell us what what are the components of the budget you know as a former ways and means chair I think of it as this is what we want to spend the money on but I also need to know how much money we've gotten where it's coming from is that pretty much how you do budget down here - mm-hm okay so talk about the revenue side well there's four revenue sources the major one is taxation which is about 60 or 62 percent this year by revenue that's are more stable source and there's local receipts which are highly economically driven the motor vehicle excise people are buying new cars when the economy is better doing building permits adding on their houses building new houses that all happens in a good economy so those are iffy at times and then we have state aid which is also as you know iffy at times and then approximately how much of the of our revenue comes from the state versus local sources 20 percent it's been pretty steady at 20 percent state aid okay and so most of the money is coming from local property taxes and auto excise and a little bit from fees and permits and things of that nature right a new growth which increases the property and how much new growth is there in a typical year we've typically projected 600,000 a year that's that's 600,000 an income based upon the amount of new construction that's taking place right right and that holds pretty pretty steady it has the last couple of years it's been a little higher we had one year that it went over a million and that was due to a lot of personal property increases with every source was it ever source or Verizon they were source okay and then we had we've been experienced a lot of new growth in hammer so we've been at about 800 for the last couple of years okay so that's been a little bit better but we can't count on that right and does that get built into the budget or some of it goes into reserves it's all built into the tax rate so it's all part of the tax rate and it's all then we figure out what the department's needs are whether we're doing a level services budget whether we need to cut instead of increasing two and a half percent this year maybe we need to cut operating budgets to two percent or something we have some challenges ahead of us we lost some Ambulance revenue when Hadley went to a private ambulance service so and we didn't make any cuts to the fire department and I don't believe we're planning on doing that so we have to figure out figure that out so there's a lot to think about for next year so is that the only service that amarus was collecting money from another community well we have contracts with other communities with the other towns for ambulance service and other some other things but Hadley was by far the largest as $600,000 through the contract with the town of Hadley plus we were able to bill for the ambulance runs themselves so as we looked into it that was a significant reduction in revenue that we had to make up and we were able to do it through having new growth in town so we didn't have to layoff anybody or do any significant reductions in budget the other thing that helped the town a whole lot was that last year we moved our insurance from a self-insured program to a fully insured program and now that we're in the fully shirred program are increased for next year FY 20 is 0.6 percent which is less than 1% and that has helped us this year we can't count on that every year right and so you know we were just talking earlier today about future years it's gonna be even tougher than this year we got through this year we're pretty solid but going forward I think it's gonna be a tighter and tighter budget and are you in a commercial plan or are you in one of the aggregations so we're in a plan that the MS Municipal Association put together so it's a 110 or 120 communities who all buy insurance it's really but it's a fully insured program previously we were self-insured and so if our if we just paid the claims that people had heard and that was a very volatile experience okay so let's focus for a couple of minutes on the oh actually before we go on to that one since we're talking about revenue what what's the potential impact if things don't go as well as we hope down at Hampshire College so they don't pay taxes so we're not depending on that because they're an educational not as their I think exactly but they do use town services they use water and sewer and one of our big concerns isn't necessarily the loss of revenue from the water and so our being but the way the town is set were a long narrow town there at the south end of town and they use a lot of water so that keeps the water flowing through the south end of town and if that dries up then we have to we'll have to purposely pump water so that the Applewood and Adkins and they all get fresh water you have to have what you can't have stagnant water any corner it's got to keep moving okay Hampshire provides that leverage in the south end of town so it's it's operationally critical as well as providing some revenue yes yeah so both both parts of that you'd still have the expense yes because except they're not going to be using the water but you'll be pumping can't fill it right yeah very good okay so let's look at the spending side of the budget Paul you want to sure so let me just start by saying in most communities the largest share of the town spending or the city spending is on education is that days here it absolutely is so we're proud of our new budget we brought you a Hummer yeah and so this is everything that we talked about today is online Amherst MA gov slash budget good you will see the town's budget and this is the municipal side of the budget we also have the school budget which is the elementary schools we have the regional school district budget and the library budget and in addition we have on that same page links to the capital budget and the Community Preservation Act budget so everything that deals with finances can be linked to right from that one page to make it easier for the public to gain access so education is by far the largest part of our budget percentage-wise give you the numbers twenty three million dollars we spend on the town about twenty three million dollars for schools sixteen million dollars for the region and about two million dollars for the library just a rough numbers so all of that is education related although it's the education budget and then the library budget right so what does that leave for the rest of town operation so the town is twenty three million yeah then the elementary schools get about the same amount you know we give it we get bill from the region for about sixteen million so two million dollars from of the eighty two million eighty three million dollar total budget about twenty five million is on the town side the rest is on the school side okay but there's always pressure on the town side because you have to meet certain obligations in relation to education spending and also if you want to keep your library funding from the state you have to meet those as well yeah an important thing to remember is the library it's just a piece of their budget because they also have a trust and they raise funds and they supplement the town portion with money that they raise on their own like they raised at the Sammy's award and Sammy Awards this year so what portion of the budget is set aside for capital capital we won't talk about capital I'm sure we our goal is to reach ten percent of the tax levy to spend on Capitol area so this year we were able to maintain nine and a half percent we hope to reach ten percent next year that depends on the economy in the future we have been building up since 2011 trying to build our capital spending up knowing that we have a lot of big projects coming down the road so we're trying to build up our reserves and build up our our debt capacity to do that so this year we had about a five million dollar amount of cash to spend on capital but out of that capital budget comes any current debt mm-hmm and it's the five million that you're spending are you spending five million that year building things or paying the debt on building things we're paying debt and we're building things it's a combination of the two okay so you're playing paying principal and interest and by that method you can build more than if you did pay-as-you-go yes so if you paid for the bridge as you built it you don't borrow any money you're gonna do fewer projects in town right then if you borrow money to do the bridge and that's the normal government process but if you take on debt yep then your cash capital is gonna go Jaison good too so you have to kind of balance that right in the process but it's just like at home most people don't pay for their home in cash but you don't want to pay for your food on credit right so it's the same kind same idea correct building things that are gonna last decades you pay for it over decades you're gonna spend by something that's going to be used and gone you want to pay for it out of your operating budget okay so speaking of capital where are we on capital planning so capital planning we have what we were presenting to the council is a it's a one-year budget but a ten-year plan and so we're really focused on the one-year budget but in light of where we're going in ten years because there are a lot of major capital projects as Sonia said this year we have focused again on roads and sidewalks we're devoting a million dollars of town funds to roads which goes along with almost $900,000 in chapter 90 funds which comes from the state plus we're doing $200,000 in sidewalks to put at that in perspective previously a we were doing about $30,000 in sidewalks in about 300,000 in in roads so we really up that this is the second year we're doing that because the message has come through loud and clear from the council and from citizens that our roads and sidewalks need investment in the past the town has borrowed funds to put a sort of big infusion of funds into that but we're still paying off those roads projects from 5-7 years ago and I'm trying to not do that I'd rather establish enough space in the capital plan that maintains our roads because it's not something like you it's not a one-shot effort and then it goes away we're in New England roads get beat up yeah we're all hitting potholes you know the DPW is out there every day trying to fix the potholes we've got major roads being under construction coming up right now and coming up so we need to invest in our roads and sidewalks what's your backlog on on road construction would you say so we have about there now we're like twelve million dollars that we need the we did a survey of every road in town with an outside engineering firm who literally drove every Road and rated it based on the amount of traffic that it has and the condition of the road and the right time to invest and so they recommend about two million dollars in just roads every year we're getting close to that that's where we need to be just to get our roads over a period of six or seven years back to where it should be where they should be that's a lot of work and a lot of money it's a lot of work it's a lot of money it's a lot of disruption too I mean we this week or last week when this fares will be of work will be working on West Bay Road from Atkins to the Hadley line and that pretty much has to shut down the road for them to do the work that's a major reclamation project but it's three days of inconvenience for a long-term investment in new roads sidewalks and across and they'll just be a detour for that three days or so but at the end of that and we'll have a good solid you know a long time to come yeah so let's see what else do we want to talk about once you submit the budget to the council and what happens then so the council receives the budget they under the Charter are required to hand it off to their through their Finance Committee and the Finance Committee has a really aggressive schedule during May they're maiming every Tuesday and Thursday two three we have no idea how long it's going to be but don't be meaning multiple hours each of those days meeting with individuals you guys are gonna have long days and night yes so they'll be meeting with that every every department head and having the department has explained what their major what the highlights of their budget are what are the major changes and what their challenges are going forward so the council gets a bit of a flavor we've did a little prep work on this already we had a lot of all the departments come in and meet with the council to talk about their operations so the counselors are starting to get a sense of what the department's do because it's a complex organization here we've got 13 new people not all new but many of them new and they're really working hard at learning hello my gosh yeah yes amazing okay and public hearings there'll be a public hearing on May 21st on the budget itself and that'll be at the banks community center and then there'll be a public forum on the capital plan on June 10th I think it is okay and as I recall under the Charter you may appoint residents of the community to the Finance Committee my recollection from a previous conversation with one of our town councillors on this show was that the decision was it was unfair to throw them into the pool in the middle of the race and so you're deferring those appointments for next year's budget process but those appointments won't be made so long from now so they could potentially be at least observing and sitting on the sidelines watching it even this year yeah so I think these are count these are people that the council will appoint there's I think they've said three members from the public will sit on the Finance Committee they're going to start looking at interviewing and trying to make that appointment before July and so that whoever gets appointed will be there at the very beginning as we start the new fiscal year very good now there's another thing in the Charter which I understand is not going to happen this year but is in the sort of planning and development and consideration stage which is the special feature that we've imported from I think it's Cambridge and the name of that is participatory budgeting Commission and the participatory budgeting Commission's purpose is to have a sum of money that they will set up a process so that residents of the community can somehow participate in and say here's how we want this money spent so it's it sort of circumvent a normal budget process but Cambridge cos gives this group a certain sum of money they request proposals they make a decision just on how to spend that money and that panel makes the decision on how that money will be spent or does it make recommendations to the finance committee or to the council we don't know the answer to that because the study committee doesn't figure out how to okay make that happen okay because that's a really serious responsibility because they're not elected they were appointed then again you're appointed you're not elected but you don't make the final decision right the Town Council does so that's a very critical point that's gonna have to be really thought through is how much autonomy will that group have will it be advisory or well they're required to deliver a report back to the council with their recommendation that council must act on their report accepted or rejected and when is that recommendation doing a report it's it's due a year December of 2020 December 2020 so that means this mechanism if it were put in place might not even happen until the 2021 budget or even beyond correct but there's a shot at them participating in the 2012 solutely now if that if that panel had been in place this year given how you constructed the budget would you have had some money for them we would have had to cut something in order to have funds available we would either take some less out of capital and put it in there we would have to cut some operating budgets we are a people centered budget so most of our monies and people so that means layoffs or whatever or not keeping as many positions as we have but once once the council decides how they want that to move forward we'll abide by what their goals very good so if you would have had to cut would it have been cuts to the actual FY 19 spending levels or would it have been cuts in terms of the projected amount that you would have provided for those same programs and departments in FY 2008 would the cut have come out of the growth revenue or out of the base I think it would come out of the cap the amount that we've dedicated to capital and so that's that's we try to have that be a recurring source of revenue that's going into capital it would just be that instead of putting five million into capital you might put in 4.8 million or something like that so that's going to be a fundamentally critical there's two big decisions there at least one is should this participatory budgeting committee have authority to actually spend the money or only make recommendations and the second is are you going to do it every year no matter how much money is available and if you are gonna do that right where's the money going to come from in a level year now consider a recession where state aid goes down other sources of revenue so this this participatory budgeting committee has a lot of homework to do because this is this is new to us and it's new most places but Cambridge has done it so they can look and see how did Cambridge and Lloyd in recessions and you know what role do they have and and where does the money actually come from this is going to be a very it's a it's a wonderful idea that said let's also remember that we as residents of the community have the opportunity to influence the shape of the budget at any time independent of that committee or Commission because we can call our town councillors we can show up at the hearing we can send emails notes letters etc both to you and to the councillors saying I think we should spend more here and less there we should add this new program so it's not the only opportunity but it's a special opportunity if they recommend that we go forward with us right great well we are very close to out of time so are there any closing comments that you'd like to make I just saw that finger yes because the capital is really our focus and we have these four major capital projects that are looming in the wings this year the priority has been on roads and sidewalks which is what we've done but to get there we had to delay or say no to a lot of other capital projects and most of them you can help me on but they were a lot of vehicles we didn't purchase this year departments had numerous requests and safety equipment or radio equipment for the Public Safety a a lot of needs out there by our departments but we basically said no to all of them and joint capital planning committee supported that in order to say we're really investing in roads this year that's not sustainable until we get more revenue for our capital and that's a big thing and what are the options for more revenue from for the capital more state aid obvious or say days cities and towns have very limited capacity there is a new Community Impact fee tax that we're presenting to the council on air BnB type short-term rentals there's they this legislature has passed legislation that short-term rentals should be paying taxes just like hotels and motels do we have over a hundred in Amherst alone so we'll collect a little bit of money from that I don't think that's significant new construction when you have a new building that's paying you know two hundred thousand dollars in taxes instead of twenty thousand it's a significant and that's a recurring source of revenue so there aren't a lot of options other than state aid and state the state has been sort of pulling back from its commitment because it may put the same revenue out there but they're also charging us more on different assessments and we've done all of the Local Option taxes that the state allows yes and so another area of potential growth will of course be the taxes collected on marijuana sales yes and then another would be if there were any major economic development projects that produced some some significant commercial or other form of economic development related activity that would produce some additional revenue so I think we're out of time so I want to thank you both for being here and good luck thank you for your long service we're not going to say the number of years but you've worked your way up and you're now the finance director of town so thank you so much for your work and Paul you keep keep it up it's been great and I've been admiring and watching you and the council wrestled through this new government structure seems to be going really well saying thank you thank you all for joining us and we'll be back again for another show next week [Music]
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