FinCom FY15 budget prep gets underway
by Karina Coombs
The Finance Committee (FinCom) met on September 9 to begin preliminary budget discussions for the next fiscal year, FY15.
FinCom members noted they needed to prepare a letter to send out to all town departments outlining a budget guideline and inviting them to come in and present their proposed budgets, including any long-term capital requests. Finance Director Larry Barton suggested they work up a formal model to support 0% growth as a baseline, knowing people will ask for more. “[You] have to lay down a marker,” he told the group. Barton said that the final guideline letter should go out before Christmas, as it had in the past.
Looking at town finances going forward, Barton explained that there are a number of figures he needs to put into financial models when planning for FY15. He is looking to add 3% to both the Carlisle Public School and Concord-Carlisle High School budgets and 2% for estimated personnel cost of living increases.
Barton also needs to consider growing expenses for the Fire Department with their new three-year plan for pay increases and debt service increases for the new high school. He noted that both the Highland Building Committee and the Housing Trust might come back with funding requests for FinCom.
A $20,000 study looking at the wage and job classifications of town employees, approved at Town Meeting, is also underway and may not be complete until January. Barton noted that timing may be an issue with the report and it may be too late to make significant changes to the new budget.
FinCom member David Model asked Barton if they should consider setting money aside for this during planning or if any necessary funding should be bumped to another fiscal year. Barton explained that they would look at a reserve fund for covering any differences. Town Administrator Tim Goddard noted that the town had consistently given cost of living adjustments and the study may reflect that.
Beginning FY15, Barton is also considering putting money into the town’s Other Post-Employment Benefits (OPEB) trust account, a funding mechanism for future retirees. The town authorized the creation of the OPEB Trust at the last Town Meeting. The Board of Selectmen (BOS) has asked Town Counsel to begin drafting the documents to establish the trust, in preparation of funding. The Selectmen would be its trustees.
Barton said that rating agencies may start looking at communities to see if they are beginning to fund these trusts, but cautioned FinCom that once they start funding the trust they will need to continue, so the rating agencies do not become alarmed by decreased payments.
An estimate of Carlisle’s total OPEB obligation is $8 million according to Barton. Currently, the town self-funds retirement health benefits, which cost roughly $160K to $180K per year. As the cost of health care rises and as people live longer and the number of retirees grows, the OPEB obligation is expected to require a larger portion of a town’s budget, so the state is encouraging towns to set aside funds for the future. FinCom agrees Barton should create a FY15 financial model reflecting $200,000 set aside for OPEB.
Appointments for Long-Term Caps
Chair Michael Bishop announced the group also needed to consider new appointments for the seven-member Long-Term Capital Requirements Committee (Long-Term Caps), reflecting the changes to the way the committee is appointed that were passed during the last Town Meeting in Article 25. Instead of the BOS having four appointments, and FinCom, the Planning Board and the Carlisle School Committee (CSC) having one each, the BOS will now have one, FinCom will have three, and Barton and Goddard each have one appointee.
The following names have been suggested, but not yet appointed for the committee: FinCom has named David Model, Karen Huntress and Jerry Lerman, Barton has named David Guarino, the Carlisle School Committee has named Joshua Kablotsky. The BOS have yet to make a selection, but is expected to shortly. The Bylaw is currently before the Attorney General awaiting consideration.
FinCom will work with Barton to build a long-term growth model and finalize the guideline letter at their next meeting. ∆