Friday, August 29, 2008
Slow real estate growth raises budget alarms
The Finance Committee (FinCom) visited the Board of Selectmen (BOS) on August 12 to raise alarms that Carlisle’s continued slow real estate growth may force a hard look at cutting some town services. Short term solutions that worked to balance the FY09 budget this year will not be feasible over the long term if town revenues continue at a reduced level.
FinCom Chair Dave Model noted that:
• New growth is tracking at about $8 million per year. This is a serious fall from a few years ago when construction was adding over $20 million to the Carlisle tax base each year.
• A growing Carlisle population at CCHS will raise the assessment ratio (the percentage of the school budget paid by Carlisle) to 32% by 2011 from the low 20s a few years ago. As a result, Carlisle will see operational expenses for the high school grow faster than Concord.
• Reserves currently sit at about 8% of revenues. This is on the low end, and the FinCom goal is to raise this number to at least 10%.
Model said that successful passage of the FY09 override this spring should not induce complacency. “We had a reasonably sized override presented clearly to the town, and it passed.” But the override was reduced by deferring all capital expenses for CCHS and “we can’t just keep pushing expenses ahead.” Before the decision to defer, it had been expected the school would need as much as $250,000 in capital investment from Carlisle for FY09. Those needs have not disappeared, and will likely be added to the list of requests for FY10.
BOS Chair Doug Stevenson observed that “setting the tone early [that] things were flat” helped in negotiations with town boards, but as far as controlling operational increases, “we didn’t quite get there.” Model noted that in most departments non-salary items were slashed to allow salaries to increase and jobs to remain, a solution that will only work in the short term.
Selectman Tim Hult pointed to new projections for falling student population at the Carlisle School. “We need to discuss what the school looks like at a 600-person school versus 780,” he said. “That will be a painful discussion,” observed FinCom member Thornton Ash. Selectman Bill Tice suggested coming up with some metrics for assessing departments and benchmarking the services provided, but it was noted that this is difficult with departments other than schools.
Stevenson proposed a working session in which the Selectmen and FinCom devise a plan for cost reduction, and noted that “part of the discussion should involve a regional discussion” of whether some services could be shared with other towns. Hult pointed out that the town’s capital plan has not been updated in some time and, “you can’t run a railroad that way.” ∆
© 2008 The