Speaker 1: Good evening and welcome to the Wednesday, February 12th meeting of the Select Board. I'm calling this meeting to order at 6 0 4. Let's, for those of you who are in the room and are able, could we stand and say the Pledge of Allegiance and observe a moment of silence for those who are serving our town, Commonwealth and Nation Speaker 2: Pledge Allegiance. Allegiance Speaker 3: Of the United States of America to stand Speaker 4: Under Liberty. Liberty. Speaker 2: All thank you. Speaker 1: At this time, we will open the floor to public speak. Any individual may raise an issue
that is not included on tonight's agenda, and it will be taken under advisement by the board. There'll be no opportunity for debate during this portion of the meeting. Due to the requirements of open meeting law, this section of the agenda is limited to 10 minutes and any individual addressing the board is limited to three. While the select board endeavors to ensure that all interested persons have the opportunity to address the select board due to time constraints that may not be possible. In cases where there's intense public interest in a particular topic, the board may schedule a future meeting to allow for further public input.
Is there anyone in the room who would like to address the board during public speak? Mr. Joseph, could you come to the podium? Speaker 5: Thank you, Madam Chair. Paul Joseph, economic Development Chair. But I'm only speaking the capacity as a private citizen tonight. Just wanted to, first of all, thank the board for its continuing efforts to scrutinize our numbers, understand where we stand financially and what's best for this community. In that vein, the board itself, as well as other elected bodies in this community voted some unanimously, including the select board to endorse the idea of a charter commission.
One of the things I've observed throughout all of the debates on the topic that you've got on your agenda tonight has been a fundamental distrust or dissatisfaction or suspicion of how government operates. One of the things we have failed to do as a community is give the opportunity to the voters to elect a freely and objective body, to study our form of government, its impact on how we operate, and basically put a recommendation before the voters as to potential ways to change our form of government. There is is a group that was established a couple of years ago trying to promote the idea
of creating a charter commission. It does not obligate the town to anything but an objective process. This body has sort of suspended its work, but it is continuing and behind the scenes and it will continue hopefully until spring of 2026. The goal is to put something on the ballot that would allow the community to elect an objective independently operating body that's basically legislated by the state called the Charter Commission to study our form of government and make recommendation to the voters to then ratify. The reason I bring this up, and again with great thanks to this administration, I, I've not been able to attend a lot of meetings live,
but I've been trying to keep my eyes on the process so far for the override, which I won't get into details. I've noticed a lot of questions being asked and suspicions being raised on social media and I cannot thank the town administrator, the department heads and the people that have pulled budgets together and answering questions yourselves included as elected officials in answering things that frankly have been addressed in previous meetings in other ways. One of the things we fail to get at as citizens is how we can understand this stuff before it becomes a crisis. And I feel like we're all in a very hypersensitive mode
right now with the override discussions Form of government is one way that we can look at having a more regular beat and regular visibility into what's going on. So I encourage people to think about this. There is a website called natick charter.org. It is somewhat dormant and dated at the moment, but if you're interested in this topic, it will surface again after the town election. And I encourage people that are curious about it to look at that website and feel free to reach out to me personally if you have questions atPaul@onenatick.com. Thank you. Speaker 1: Thank you, Mr. Joseph. Is there anyone else in the room who wishes to address the board during public speak?
Is there anyone on Zoom who would like to address the board? Seeing none, we will move on to our discussion and decision in order to guide tonight's discussion and debate, I've formulated a list of suggestions, topics, questions that people have posed and given the list to the board so that we could kind of focus on them one by one, the merits, the pros, the cons in, in guiding our discussion. What I'd like to know, is there anyone in the room who would like to ask a question? We're gonna set aside a small amount of time for questions.
Mr. Scott, is there anyone online who would like to ask a question? Do you see anyone, Jamie? No. Okay. So then Mr. Scott, you're welcome to approach the podium. Just introduce yourself and I'd like to limit the time to five minutes please. Speaker 6: Roger Scott. 40 Water Street. And this actually sort of connects to what Mr. Joseph just said. We this confusion as to what goes on in the town and, and my question is addressed to some
of the spending situations that we missed out on various financial opportunities such as, You know, everybody knows about the Auburn Street sale, the a hundred dollars for the 2 million, but I also would like to discuss what happened. Why, why did we use the $1.7 million that we got from the drug settlement? And, and, and we didn't use that as a, an offset in this dangerous position, which we have with our budget expenses. That, that was like a windfall one time windfall.
And as far as, I never heard any information regarding the 50 Pleasant Street settlement. So I don't know what we paid out on that situation. I I had heard rumors it was 500,000 plus a million dollars in insurance. So you know, these things that sort of bypass us and we're trying to make a decision yet we don't really get to, to hear any of those details, which I think should be considered
whenever you're approaching, requesting an override on top of six and a what we had a passage of A CPA not that long ago, which I felt was in violation of prop two and a half. But that is my concern there. And also the fact that we had all that COID money and we didn't seem to factor in when the Covid money disappeared, that all the added expenses we did to build up to spending that money, which we were required to spend,
did not get considered on what, what happens after that's gone. So I just feel, and my question is why don't we disclose more information to the public so they're aware of these, these VA various situations that could affect their pocket books at home. You know, we got people who are on limited income, fixed income, you know, they're in residence of the town for 50 years and all of a sudden they have a budget crisis because of taxation. So I would hope you all would consider that in the way you set up this prop two
and a half override. Thank you very much. Thank Speaker 1: You Mr. Scott. Let's take those one by one, Mr. Erickson. Speaker 7: Sure. So I believe the, the funding that Mr. Scott noted as drug funding was the opioid settlement funding that is actually a series of federal lawsuits or cases that are leading to a number of payments to the town over the course. Well, it depends on the actual settlement, but over the course of basically the next five to 10 years. So it's not all at once. We get maybe, again, depending on the settlement, anywhere from 10 to $50,000 a year.
And that actually fluctuates over the years. So right now we have, I believe a balance of a, of maybe three or $400,000 in an account. We're actually obligated on an quarterly basis to report back to the courts on our expenditure of those funds. And they must be used for the purposes of basically outreach and prevention or even direct payments in some cases, to folks impacted by the opioid crisis. So those are very, very heavily regulated and restricted where we actually are required now by the state to hold them in a separate account
and they can only be used for those purposes. So we're currently planning, and this has been presented to the board earlier this year, we're currently planning to utilize those to support our Natick 180 program, including a staff person as well as some other supports that they have program supports and the like, you know, we're part of some regional consortiums and also just trying to get the word out about the funding and just program supports for that. We have about a 10 year plan for the use of those funds to try to just make sure they last as long as possible. Speaker 1: I wanna add one thing to that. The discussion of the opioid dis monies has been a regular
occurrence as we've had updates from the federal government on use and requirements reporting requirements. So that is something that the select board has been covering in public meetings. Do you wanna take Pleasant Street? Speaker 7: Well, 50 Pleasant Street was a settlement between the town and the plaintiffs. Plaintiffs and the folks. Yep. And really we're, we're bound by that settlement to as to what we can say publicly. So I'd wanna check with our legal counsel before we start really talking publicly about
what we can and cannot say about that. Speaker 1: Okay. Were there any other, did you remember Speaker 8: He was asking about AR funds? Speaker 1: ARPA funds? ARPA funds? Speaker 7: Yep. So ARPA funds, those did as noted arpa, American Rxi Plan Act funding. Well, there was a number of federal stimulus dollars that came through to the town in the schools. Schools had what I believe was called SR funding. And by and large those funds are, are, have been spent on the, and I can't speak to the SR funding, Matt is here
to provide a high level overview of SR funding expenditures for the schools. But on the townside we largely utilize those for revenue replacement, which has basically offset our lost revenue from local receipts 'cause that's where we were most heavily impacted, but basically revenue replacement. So it did not lead to increase expenditures when it came to operational expenses per se. It was really an offset for revenue loss for the townside. I believe it was 6.5 to $7 million of our 10 million that we received for that purpose. Then we use another million five, I believe,
for water project for PFAS related water sewer projects we're, we are still using some in our police department to do some social, not social work, but we work with a, it's called Advocates Outta Framingham, to provide some additional supports to the police officers when they're in the field when it comes to working with and supporting mental health related responses and some other funding.
I think we had the board was able to appropriate some funding to support a phase, a most current phase of A CRT project, for example, but really small projects beyond that. But the bulk of it was really for the revenue replacement and then the water sewer projects and, and some to the schools as well. But it was all sort of mostly in that revenue replacement side. Just really high level. I dunno if Matt wants to try to do the SR funding 'cause that was another bulk of funding from the federal government. Speaker 9: Yeah, so we got three SR grants. The first one was used in FY 21 all for supplies
for technology and like air cleaners and things like that to reopen schools. And then the other two, close to $2 million were used up in 22 and 23 with a little bit of money carried over and spent the first month or two. I was here in summer of 24 to, to close out that July August to close out the, the Esser funds grant. And that's sort of reflected with the school's budget request where we've reduced,
you know, $2 million between last year and this year from what? From FY 25 and FY 26, the reductions from level service. So we've tried to offset that. We, we added several positions and we've basically traded them off. A lot of it was used for summer school and partial payments stipends for extra work for folks. Speaker 1: Thank you. So I'd like to suggest that we start with a discussion amongst the board members on the suggestion
that has been made that the town adopt means tested senior tax exemptions. Some towns have done that and we've conferred a number of us individually with our tax assessor. So I'll open it to the board for comments, question, discussion, debate. Speaker 10: I wanted to start with one thing, a gentleman was in the room last night who is also here tonight, who made a very impassioned statement about the situation that he finds himself in. And I don't think he's alone. And I just wanted to show appreciation for that because I felt like it was extremely vulnerable
and it's some of the things that we had been hearing. And I, and I, you know, in the time that I have been in Natick, not nearly as long as this gentleman, I have heard of, you know, sometimes the struggles with the intergenerational becoming of Natick, you know, people who have been here for years and want to retire here and now don't feel like they're able to. And maybe say people who have a demographic more like me who are coming in and perhaps we are a part of, you know, the change
of natick, not because we don't love it any less, but because of where the market is. And it's interesting because I feel like I finally got it when he spoke last night. And, and I'm thankful and empathetic to what the gentleman was saying. And separately, it's interesting that I, I empathize with him from my own situation because part of the reason why my family moved to Natick was because it was what we could afford. And if we tried to move here again in our current home, we couldn't afford it. And so on the one level, I get what he's saying.
And on the, and on the other level, I, I feel very similarly myself as a, as a resident of Natick. So I just appreciate what he shared with us from the senior perspective. And, and I, I take that as we are making this discussion very seriously and how we move forward. Speaker 1: Thank you, Ms. Pope. Ms. Slager? Speaker 11: Yeah. Just a question. Did you receive any information from the assessor about a potential cost for this program? Speaker 1: Yes, I did. So there was a, there was a, there, a senior tax taxation committee formed several years ago.
And they were unable to make a recommendation for or against a, a number of proposals that had come before it. They were unable bec for various reasons. And I spoke with the, the Sudbury tax assessor because they have this program and I also spoke with our assessor. So the first, the first item that comes up is an issue of equity, which means that we're transferring part of the tax levy from one group of people to another without taking into account perhaps a 40-year-old who lost their job or had a catastrophic illness,
lost a year of work and is unable to pay taxes. That 40-year-old or family person with children may be in the home, cannot avail himself of the 2% deferral program that we have in town. And other means tested tax protection. So there was an, an issue of e equity, the law set up so that it's only funded by the residential class, meaning it's only a benefit to the residential class. But we could or would, we could split the tax rate to, to offset. So for example, when we run numbers and say is this will affect
and we don't know how many people it will affect because we don't have access to the income tax statements of our seniors or who we don't have a, a good sense of how many people would be eligible. But if we, if we were able to do that, we could or would just split the tax rate and shift that burden onto the commercial class. That's a possibility. Sudbury does not do that. A means tested and tax work off pro means test tested tax exemption has similar qualifications to the deferral program. The the difference is in the deferral program,
our town doesn't look at assets. So you could have someone with five or $10 million in assets in a home in Florida, but have income that's $40,000 a year and qualify for a means test exemption. Now, in order, when Arlington had their override and they made a commitment to endorse this program, they imp they included an as asset test. So that's much more staff intensive, at least for the first year staff intensive process whereby federal tax returns, bank accounts, investment accounts need to be looked at, et cetera.
So the first year would probably require, when I spoke to our assessor, Mr. Henderson having bringing in a temp for a period of time just to make sure that they had the staff coverage to set it up. It's not impossible, it's just, it's just a factor to take into consideration. The biggest downside according to Sudbury and our Sudbury assessor and our assessor or potential downside is that we're replacing state dollars with local dollars. Let me explain what I mean by that. If you qualify for the state senior tax circuit breaker,
you get a credit against the taxes that you pay if it's over a certain percentage of your income, I think I'm saying that right, or is it flat number Speaker 12: Is 2,500? Speaker 1: Well that's the rebate, but in any event you're entitled to that. Now we would be using the same criteria and in year one, if a person had a house, a home assessed at $750,000, they would be paying real estate taxes of $8,970 then water and sewer. So their total is $9,770 for water and sewer and real estate taxes
in year two. So they, they would be able to get a credit a, a circuit breaker, stack a circuit breaker tax credit of $2,730 the next year. They wouldn't qualify if, if they applied the next year for the senior tax exemption here, they're not gonna qualify for the state. So by putting this program into place here, what we're doing is taking our local dollars out of the tax levy, shifting it onto another class of residents and not using the state funds that have been set up. So I don't know if I've explained that very clearly.
I'm happy to take a question if that was from the board, Mr. Scott? Yes. Speaker 13: Just had a couple things to add. I think you got it mostly right. I think what we have to look at is, I forget when the study committee was, but it is probably on the order of about eight years ago, somewhere around there. Speaker 7: They started pre pandemic and they wrapped up just after the pandemic. I believe they, okay. So I believe they dissolved in 2021 ish. Okay. But they started I think in 20 18, 20 19 to do some of their work. Okay. Speaker 13: Alright, thank you. So in my view,
a lot has happened in terms of accelerating the home values in Natick. And I think it is independent of the override. We need to look at what things we can do with the a means tested program, see who it affects. When the, when we spoke to Mr. Henderson the last time, this was three years ago, he said that between 200 and 600 homeowners could be eligible for the exemption according to the study. But they didn't have firm fair numbers. We already touched on the fairness piece of
that, in my opinion. I think we do need to look at it again and I, I, I think there are enough people in this community that are, that are aging. I've had several neighbors who've had to move out of town even though they sold their property and made money, it wasn't enough for them to buy something in Natick and stay in Natick. So what I want to to see is a sort of drill down and maybe it's a another study committee or maybe it's just something that goes through the assessor's office.
I don't know the answer, but I think we need to take a good hard look at this independent of the override situation. Speaker 1: Mr. Sidney? Speaker 14: Thank you Madam Chair. I think this circles back to something I think that we ought to be really clear about. I would like to see the board make a commitment after our override vote. Should we have one to study these things? Just make the commitment to look at all of these other options. This would certainly be one of them.
One thing to look at that we could make a, you know, after we get through, you know, whatever debate we're gonna have about, you know, all the things around the override itself, there are things we could bring up that, you know, we could, we could look into sort of, you know, after the heat of this and this would be, this would certainly be qualify as one of those. But I think it does require the commitment from the board to actually do that study. I think, I think if I remember correctly, we've talked about doing that, but I don't remember if it's on an agenda or not.
Speaker 1: So part, part of the select board discussions have talked about in the context of an override, what kind of commitments can we make to the town. We will be bringing up that and working on that in the next couple of weeks. It's not what's super time sensitive is the vote. So the vote has to happen tomorrow as to whether to put the override on the ballot and in what form. So various ideas have come up from the community about things we could commit to do as a matter of trust between the board and town administration and the voters.
And that will be part of ongoing agenda items. Ms. Slager? Speaker 11: So since Mr. Evans said the last time I think we've talked to the assessor about it was three years ago, I think there have been some things that have changed including potentially some law changes that happened last fall. If I recall correctly, I had a conversation with Mr. Henderson about that, who had been thinking about potentially bringing something either to SPRINGTOWN meeting or fall town meeting about these changes. And I think that that's all part of one thing that I think we ought to work with the assessor's office
to understand if there are any new programs that we want to adopt or that the select board feels we adopt. It's up to town meeting of course. And, and I think that's a good idea. I think it's, it's part of a bigger hole and I think we need to look at the, at the whole picture. Speaker 1: So I just to be clear, I spoke with Mr. Henderson this week. I spoke, met with him on Monday and Tuesday. The research that Bruce is referencing is, is different from my conversation and I spoke with the Sudbury tax assessor, or it corresponded I believe on Tuesday of this week. Any other comments? And, and he is bringing a Warren article to change the
work credit limit. So the state raised the limit by which seniors can work off part of their tax from, I think it's now 800 to 2000, up to 2000 or 1800 just in case minimum wage CH changes from 15 to $16. So we have to adopt that and he is prepared to bring a warrant article for Springtown meeting. Oh Speaker 11: Yeah, I think that's one of several things. So that may be the only one that he felt was worth bringing forward, Speaker 1: But I think so maybe that's something we look at. Yeah. Okay. Okay. Other members of the board on this topic? Speaker 15: Just angry. Speaker 1: We've communicated
to the tax assessor's office and to our communications director that the of the programs that we do have in place for tax relief for seniors is not easily found. It's not easily easy to digest. And I know that they are working on that to make that into a single one stop shop. And also, I'll reiterate, we've said this in several meetings. I have The, one of the previous collectors in the downstairs on the first floor had told me that there are seniors who come in who have talked about their taxes.
So she had a stack, she's since left to go to another top down job, but she had a stack of my cards so that somebody could call me or text me and I could put them in touch with our assessor. And Eric has been very good. He will meet with a senior, he will meet with anybody about their tax bill and sit and talk about what availability relief there is by and tell them what documents he needs. And I know of three people who've met with him who've been extraordinarily pleased with the outcome of those conversations. So he is available, he's very busy, but he always makes time. It's a private consultation in a conference room, you know,
'cause you're sharing, you know, your personal financial information. So I do wanna reiterate that to the public that, that, because sometimes even reading the materials that, that are on the page, you don't fully comprehend. I I didn't, there were, there were, there were some, yeah, there were some, there were some funds that were available, but I, I just couldn't, you know, even with graduate degrees, couldn't work my way through it. So we, we were aware of that and we're working on that. Mr. Bruce, Speaker 13: I'm getting used to that. Just wanted to, to comment. The last time that I asked this question of Angela
and Eric, they hinted that they should, they hoped to have something done by end of February, early March. So I'm hoping ahead of, you know, the, the sooner rather than later. They, they acknowledged, we showed them actually a one stop, one page document from Arlington, which just laid out everything and then had links to it. That would, that made it much simpler for people to understand. And, and I want, I wanna explain this, just, it's not just
tax related things, it's service related things. How, how you get different services, Natick service council, et cetera. So I think this'll be of great value to the community. Mr. Scott alluded to the, you know, being able to find out the information you need that, that's helpful. We also now have a digital welcome kit in town. So when somebody's has moved to Natick, they can find out, you know, what the trash pickup schedule is and all these FAQ type things. So it's, we're headed in the right direction.
I think we'd like to be there yesterday, but let's, let's get there as soon as we can. Speaker 1: Okay, the next item, let's talk about the stabilization accounts. So we have three suggestions, three topics. Yes. Speaker 13: Any Speaker 1: Comments right now? We're not gonna take comments Mr. Scott. Not a Speaker 2: Comment question. Speaker 1: Please approach the podium and Speaker 16: Just address something. It should be addressed back. Speaker 6: So last night I went to the meeting, all right and I think we all said it was 80% of the budget is school related, if I'm not mistaken.
And that without the override they were gonna get a 6.2 something increase and if we pass the override, they're again like a 9.7% increase in the budgets. So I'm looking at that situation talking about an injustice and distribution to the community where you're saying too, well this is 80% of the budget and you have three children and you have a senior who's been through the process and paid for the kids along the way and paid for many kids along the way, not their own. And it gets to a point where the person at the other side of
that doesn't have a job anymore and needs to be considered on a fixed thing, not a borrowing situation or a claim against their home. You know, it's just the distribution doesn't seem just where you're not getting the same services as the other person paying at the same based on the price of their house. The tax is determined by the price of the property. Speaker 1: Mr. Scott, what's the question? Speaker 6: The question is, I think you need to deal with, with the distribution of the taxes between certain segments of the populace without attaching their house to it.
Speaker 1: Okay, thank you. Could someone address the questions, the figures that were just presented? Because I don't think they're correct. Speaker 7: Sure. So on the budget front, the budget percentage or, or the budget amount increases and percentage increases, no override versus override reference for the school department appear to be accurate. They're in the six plus percent range for when there's no override dialogued and obviously this is pending vote and it's determined, but, but with an override, the intent would be to be in the closer to 9.6% range. I believe the other point was 80%
of the town's budget is school related. I think that was, we were throwing a lot of percentages around last night. I think what we said was 80% is staff staffing costs and that's true school town, typically overall budget related, inclusive of the portions of shared expenses that 'cause just the school budget is about 90, well, 90 60, well it depends on the override. 92 to 96 to 95 million out of a roughly $200 million budget. But then the shared services is about 60 to 70% also school related.
'cause that's healthcare costs and other costs that also go into supporting school buildings and other school school programs. So it's, it's about 65 to 70% and that, that does fluctuate a little bit depending on the, the, the staffing models, who's got insurances where we have certain investments when it comes to capital programs because, you know, the useful life of a certain product or a school or a town building might have different impacts on a different year. Speaker 1: Thank you Speaker 17: Matt. Speaker 1: Matt? Speaker 9: So in answering some questions for the,
the portal, the, the health insurance cost breakdown for the town, the total was 12,621,000. The school's portion was 7,099,000. So we're about 56.2% of the health insurance. And where 51% of the debt, the total debt payments as 14.2 million and the schools were 7,237,000. The, the debt, the debt card share cost share can be found in the town budget book pages 2 0 3 2 0 4 and the health insurance breakout can be found on page one 90. So we're a bit bit closer to, to 50
to 55%, not 60 70% of the, the shared expenses in town. I didn't break out the, the, the littler things but we're, we're not 70%. A lot of the school staff have sort of, they can't afford the health insurance, the part-time staff to have a family plan. So they, they opt into mass health where they can. Speaker 1: Thank you Mr. Gil. So the next series of topics I'd like us to address are the stabilization funds. And I'm just gonna lump them all together. One is either choosing to not fund
or underfund the, the proposal for the general stabilization fund and the operational STA stabilization fund and the capital stable stabilization fund and or so not funding or underfunding those three. And then alternatively pulling from stabilization accounts to minimize the size of the override. So I'd like to turn this over to the board for discussion and debate Ms. Wolfer. Speaker 11: So I think it's important to note that our no override scenario, we are short of our targets
for our general stabilization and operational stabilization funds. We've been that way since the pandemic. We certainly haven't brought it up to the levels that we had pre pandemic. I know there's been questions about the usage of these funds. We have our financial management principles that the select board has adopted. Are they cast in concrete? No town meeting. Can with a two thirds vote take money out of these stabilization funds? Would we recommend it? Is it financially prudent? I wouldn't but that said, there's been I think a lot
of dialogue that we've heard from residents about with this override with the $8 million override, it feels like we are raising money to park it, to put it into stabilization. Now, whether or not that's prudent or not, it's a perception issue that we're asking the voters for money that's just gonna sit there at times when it is very difficult for many people. And this is a big ask, an $8 million override. There's only been 10 in the state since 2000 that have been $8 million or more. So this is definitely an outlier.
So I think some of the options and some of the options that I think we've asked a ton administration to consider as potentially lowering the amount of the override to and not funding the stabilization funds to the degree that we were. So with the override we had projected putting additional money into the operational and general stabilization funds. Maybe we don't do that. We've also been putting quite a lot of money into the capital stabilization fund. Now those are, you know, those are things
that we wanna be able to support but maybe we don't need to put in quite the same amount. So it's something that I've done a couple of scenarios on and then when it comes time tomorrow when we actually are going to be proposing the override and for those that don't know, we're not gonna be voting on whether or not to put the override on the ballot and what that question would be tonight. That is gonna happen tomorrow, Speaker 1: Right? We, this is a night for us to, to debate. We, we have not had an opportunity to debate in public
to discuss all of these things among ourselves. We've been reading the emails, we've been talking to residents. Tonight is a night for us to debate and go home, think and sleep and tomorrow come in with motions and votes tomorrow at six o'clock. Speaker 11: So I am, to my mind, I think for this year I would be comfortable with not putting money into stabilization funds and then re-looking at that next year and seeing what, seeing what happens and what that means. And there's other factors that go into this that I think we're gonna be talking about later in this meeting.
But do you wanna give the caution that we are not at our targets? I know there's also been some other proposals that we use, other, other stabilization funds. Oh we have other stabilization stabilization funds other than operational general and capital. That is not something I support at all. We're not gonna rate our savings this year. These other stabilization funds are there for a reason. So for Speaker 1: Point of clarification, we can't test the opep, right? Speaker 7: There's a number of stabilizations that are, are more heavily restricted. Opep is one of them. There's also an FAR Bon stabilization,
which is in theory only for open space purchases, right? There's an INI and INI is an acronym, but it's really related to sewer water infrastructure work I put up on the screen what's in the budget book. This is literally from the budget book. It's page 35 of 315 and it shows the no override scenario. A current balance is no override scenario. Override scenario. So of the general and operational stabilization, just just for public knowledge with no override, there would be no proposed increase or any, any contributions with an override 538,100 88,000
for general and operational respectively. So non-capital stabilization account increase proposed contributions, 720,000, roughly 710,000 roughly capital is the 1.7 million in in capital. And then there's an additional proposed use of free cash for capital. Capital is, has got more flexibility to it. It tends to, it doesn't have, for example, the general and operational stabilization have very specific guidelines and I would argue somewhat requirements, I know
that's not the term used, but in the financial management principles from the select board as noted by Ms. Slager, operational stabilization, interestingly that was also voted by town meeting. Yep. Those so, so those are, I would, they're probably maybe a little bit more set in stone, whereas capital is just really for capital projects. And we do regularly use capital both in the spring and fall town meeting, but we need to put budget in there if we need to use it in the fall. Speaker 11: Yeah, I just wanna point out there is an error on the start which Mr. Townsend is aware of and we'll be fixing. Yep. And that is in the override scenario, the OBE trust
contributions, you'll see that it's the same as general stabilization. That amount should be $295,560. Speaker 7: Oh fair. Good to catch. Yes. Yeah. Yeah. Good catch. Fortunately that's not one that we're talking about here because it's a very Speaker 11: Restricted fund. No, but just so in case people are Yep. Taking copies of this, that there, there is Speaker 7: A small that would be fixed in the updated budget book. Yep. Yep. So it really depends Speaker 11: By my calculations, and this could be Ron and that with the current budget, the no overrides scenario for general and operational stabilization we're about 90%
of our minimum targets. Roughly. Speaker 7: Roughly. Roughly. Yeah. Speaker 11: Roughly. So Speaker 13: Sorry, not the best. That's without the override you said? Speaker 7: Yes. That's the new no override scenario. That's Speaker 11: The no override scenario. Speaker 7: Right. So it, it, it, the a reason we did work to reach targets but it, it keeps going up each year because it's based on a factor of our overall budget. That's why in one year you might meet it, but then in the next year if you don't contribute to it, you don't meet it anymore. And so no, no contribution means we're not gonna meet that target anymore. Speaker 11: Right. It's a percentage of revenue. Exactly. And hopefully our revenues keep going up.
So, you know, I've looked at this, I've, I've looked at different scenarios about this and you know, not happy that we're not at our minimums but I personally, I would potentially support an alternative where we did not fund the general and operational. I do think we do need to put more into the capital stabilization. I'm not, I would not propose $400,000 that would really leave a lot on the table. And I'm hoping we could get more information at some point from administration about what cuts in that might mean.
But that's, I I do think that's very important. Speaker 1: Ms. Wilger, could you, I just have a question. You're saying that the no override scenario proposes a $400,000 cap stabilization and you would be in favor of that being higher? Higher, yes. Keeping higher but not necessarily the 1.7 million. Correct. Got it. So I'd like to, before we, I want Mr. Erickson to address the implication and impact of not funding that and Sure. Speaker 7: Sorry the mix has to be on. Sure.
And one thing that's missing from this, 'cause this is specific to stabilization, is there is still the intent to try to fund capital just not through the cap stabilization. And if you'll bear with me, I'm gonna stop share, but pull up another table to show Speaker 18: If it's helpful for the board while Mr. Erickson's pulling that up. Just so we know, a historical spend from capital stabilization for capital projects in fiscal year 2018, it was 2.1 million from STA In 2019 it was 4.3 million
in fiscal year 2020 it was 4 million. In fiscal year 21 it was 385,000. That was our, one of our covid years. In fiscal year 22 it was 2.5 million. In fiscal year 23 it was 1 million. In fiscal year 2024 was 781,000. And in fiscal year 25 it was 475,000. Speaker 7: Thank you John. So it has fluctuated. So it has the balance in that account and we, it definitely got hit hard during the pandemic due to just the demands of the pandemic and, and still trying to ensure
that we kept up with our capital program. 'cause one of the, as we've talked a lot in this, in this realm and in this community, if, if one's not able to keep up with the capital program, it leads to typically more cost down the road due to deferred maintenance due to just a lot of other challenges that come from not investing in the capital. Putting that aside, what I, what I put up on the board now is the free cash spending plan with the proposed, well with the, with the concept of an $8 million override obviously all pending and this includes what was on the previous slide of the investments into the various stabilization accounts.
That's what you see here highlighted. And you can see it goes from a $6.5 million use of free cash with no override preliminary budget to a $2.5 million use of free cash with an override because we can utilize free cash a little bit more strategically with an override and not have it really be reliant to support our operations. And in this case, this is where you see $400,000 in cap stabilization with no override versus 1.7 capital improvements is what I was talking about.
So with no override two 50, that's not much, that's not even a trash truck to 1.4 million. So there is an intent to continue to invest in capital, but I I'm, I'm understanding what I'm hearing from the board that that ensuring our capital program between these two funding sources is still a critical desire of the board. Yes, Speaker 19: Mr. Sidney, Speaker 14: Thank you Madam Chair. I I want to, a little bit of, this is a little repetitive, but one of the things, one of the reasons to
that our financial principles say we want minimum levels in these various stabilization funds is because it actually contributes to keeping our bond rating high, which reduces the cost of our debt. So we want to be really careful not to underfund them to a degree where it's going to cost us more money in debt service because the, the rating agencies look at that sort of thing pretty carefully. The other thing, and, and Mr. Erickson said this, but I want to like really hammer it home the reasons that,
that the stabilization funds were created with specific reasons town meeting voted. The operational stabilization fund is to be used in times of economic downturn. And there, there's a very specific definition in the creation of that stabilization fund and what an economic downturn means, and I don't remember what it is, but it's like a specific percentage drop in significantly. I have that Speaker 7: Period significantly defined as being more than 5% of the total of the respective revenue category. Speaker 14: Yeah. Right. So while town meeting has the right
to draw money out because of the rules, it really in some ways not appropriate for the administration to suggest using it unless we've met those criteria. Now that doesn't mean we have to put money in, which is a another question. And the other thing I wanna say, just sort of at a higher level, typically with the capital stabilization money's put in in the spring, sometimes some is taken out in the spring, but a lot is generally taken out in the fall for the, so we're, we're, we park it in the spring and we take it out in the fall. And so that fund goes up and down. And specifically again, town meeting said this is
for funding capital and keeping capital, allowing capital spending to be kept relatively stable. Of course if there's no money in there, we can't use it. So if, if I may go onto that other topic. One of the things I was Speaker 1: Gonna say just wait, wait on that one 'cause I wanna, I wanna Speaker 14: Well it's, it's sort of go ahead jars in. Yeah, go ahead. We can, we can I I just wanna mention it. Yeah, we can talk about it later. Okay. One of the suggestions I heard, and one of my calls was that we create a new stabilization fund for override avoidance. So it would be significantly less restrictive than any of the existing
stabilization funds in terms of the rules of its use. And the purpose would be to put money in when we have it to avoid an override in future years because it wouldn't be restricted to those, you know, like operational stabilization to those drops in revenue or capital stabilization wouldn't be restricted to capital. It would be much easier to, to, for the administration to decide to use it. And we can talk about it in more depth later, but I wanted to bring the, bring the topic up as something we could consider as a way to park money differently that
to avoid the next override to the extent we could. Speaker 1: Mr. Evans. Speaker 13: Thank you Madam Chair. I tend to agree with Ms. Slager. There's, there's kind of a time and a place for contributing to the override. If I just looked at those three areas, if we cut back, I'm sorry, operational stabilization fund, I wrote it down, but where opera, everything but capital stabilization, forgetting the other one. I'm losing my mind. General General, thank you. If we make those two zero
and get the capital stabilization fund down to 1.4 million in an override scenario that that takes 926,000 out of the budget, so nearly a million dollars and if we take maybe a little more out of capital improvements, that's a million dollars right there. So I think we're asking a lot of our residents in this timeframe and to the extent that we can reduce that number, I don't think Ms. Walser said earlier about 10 communities have eight
or $10 million overrides in the last year or so. I'd like to be one of the ones that, that discussed it and said, you know, hey we, there are things we can do that maybe are a little out of our, our comfort zone, but let's go through the, through it this year. I firmly believe that we're gonna have new growth numbers that will help next year. I look around just in my neighborhood, all the developments that are going up, we have a lot
of activity in town, the building permits are going up for both from new houses as well as renovations. So I want to see that reflected in that will be reflected in a future year budget. So I I'd like to be as conservative as we can. Yes, we're on the low end. I, I can see that. But I think it's a good calculated risks not to over or not to or I'll just say it's a good calculated risk. That's all. Speaker 1: Ms. Pope, Speaker 10: I just wanted to hear from Mr. Erickson,
what are, what's the risk or what's the impact of us not funding those funds? The operational and the capital? Speaker 7: So the operational and general stabilization. Yes, you, yeah, they run, they roll. I've been doing this a long, it takes a while for, to roll off the tongue like that. A lot of what was talked tonight, you know, not meeting our minimum targets will have an impact on our potential credit rating. Although if we can very soon, maybe in the fall or next fiscal year, keep up with our minimum targets, that would be a benefit. There's obviously we're going into an economic time
that we're not sure of what's gonna happen these next few years. Really any time there's a, and we are hearing even at the state level that there's some potential challenges with revenue, we might actually need to tap these. And if we're not even at our minimum targets and we have to utilize those in the next 1, 2, 3, 4, 5 years, then we're even below our minimum targets. So the, the more healthy we can keep our reserves, the more healthy we're able, the, the better off we are to really address those economic downturns like we saw during the pandemic. And if you look at where we are today, you know,
we have a change in federal administration, we have a state revenue picture that's a little less healthy. We have a potential bird flu challenge that's happening nationally. There's a lot going on that makes me cautious when it comes to using and, and, and not even i, I prefer exceeding our targets, lemme put it that way. I know John has a couple of points. Thank Speaker 20: You. Yeah, I just throw a follow up on that point. So during Covid we used $10.7 million our stabilization funds. So if we did not have those funds available and we had fairly robust stabilization
because at the time this town would've been in some serious trouble. So I'm just cautioning that, you know, it might be a, a risk, it is a, it is definitely a risk there as Mr. Erickson just said with regards to what we're looking forward to down the road. And the other thing just to comment on Mr. Sidney's comment with regards to our bond rating, it is sort of a dual sort of factor here. First of all, you know, if we didn't put it in for an extended period of time and maybe we miss a particular year or so, probably not that big of an effect,
but if we do get downgraded to like a double A, then all your savings is pretty much gone just in increased interest costs. Now I'm not gonna say this is a good thing, but we're not, we're not intending to go out for any major borrowings for a while. And we do have some down the road memorial course is a big one. And if we're going out for a 50 $60 million debt, debt issue, then that could have serious ramifications on first of all the debt exclusion they're gonna ask the resident to take up. But like I said, in the near future
we are relying primarily on bond on bans instead of bonds. So our likelihood of actually having a, a rating, you know, assessment done on us is probably fairly low. So that we would've time to sort of make up those payments as we go on down the road. Speaker 7: With with, sorry, just with that said, well two things. One context as, as John mentioned, we heavily used the stabilization counts during the pandemic 10.5 million roughly. We currently only have about 7.9 million in there. So if we had another economic downturn of that scale,
it'd be a very different, we wouldn't be able to sustain it basically. And two, without an override of some type, our ability to cover capital, preferably with cash, but even with borrowing means that we're probably gonna put more into borrowing, which means we're, it, it's even gonna hit make a credit rating even more critical for us to keep. So, so it, you know, has that domino impact cascades, cascades cascading impact is a better way to put it. Yeah, Speaker 11: I, I have a question because this has been asked of me
by other members of the public that they say that there, there's nothing in our credit reports and that the bond councils don't care about our financial management principles when it comes to our stabilization funds. And I'd like to give you an opportunity to address that. Speaker 7: Sure. So I mean by and large, I mean credit rating agencies are working nationally. So what they do look at is, is how much money we have in available, basically not allocated for particular purposes.
And whether you call it a general or operational stabilization account, those, they're looking at those balances. They might not call it an op, a stabilization account, but some communities just keep it in free cash for example. They'll just keep high balances in free cash. The effect though, from the credit rating agency in our, my experience anyway, and John you can sort of add to this, is that they're looking to those balances and every time I've talked to a credit rating agency and I've done it two or three times now, just in the last three, four years, when we mention the financial management principles, they might not mention them but they see that we're, that
that the town has strong principles that we adhere to that, that we have strong governance, that we have strong financial, just strength and trends. Those are all important factors. It might not necessarily exactly reference into a bond report, but they absolutely ask those questions. John, do you, Speaker 20: Yeah, so the bond reports and you can see them, we have 'em on the website when you read through those, they do credit natick as having very strong financial management in place
and that includes, you know, town meeting, putting money into stabilization funds, you're having the financial management principles. Those are all part of the, first of all, we give those materials to them 'cause they ask for them, then we have the conversation with them. So it is definitely part of their assessment of Natick and that's one of my concerns that, you know, if we, because for years we've been very good at putting money in stabilization and all of a sudden we're gonna stop doing it. We might spend it on something that's not intended for and that would be very looked, looked on by the credit agencies as not being a positive sign.
So I can't really see how there's any way that we would get past the credit agency, you know, if we're not doing what we're supposed to do with regards to our stabilization funds. Speaker 13: Mr. Evans, thank you Madam Chair. Just, I'm started thinking on the fly here, so bear with me. Is there a middle ground that says we put a nominal amount into some of these things much like we have done with Opep and just say this is a calculated risk but it affirms our financial management principles
by putting in some amount. It doesn't have to be huge, but it just has to be a positive number and it has to fill in that column and the spreadsheet, right. And then in future years bolster that I, I I can, I can see taking some of the, the budget that's allocated currently to the capital stabilization fund and putting it into the operational stabilization fund to account for the potential risk of, of the economic situation going south.
What we need to do for the taxpayers is to try to get this number down right And there, there are a number of mechanisms that have been discussed to try to do that. So I think being able to, to work with those numbers and put a nominal amount or a nominal nominal amount in the general stabilization fund takes some of the money that we allocated to the capital stabilization fund to move it over to the operational stabilization fund.
We can save, I'll, I'll just make a number up, five, $500,000 maybe. Right? And we can, we can, you know, chip away at this number, right? I don't think, you know, there's not gonna be any magic solution that says, ah, here's the $2 million that we can take out. Right? But I'd like to see us chip away by a nu there are a number of things that we're discussing now and we'll discuss soon that can chip away at that number. So I'd just like to see us chip away.
Speaker 1: Ms. Wilger, Speaker 11: I don't know if we're gonna get into any debate here or, but, you know, I think that's, you know, a, a good suggestion Bruce, but I think I would rather see where we are in the fall because a lot of times we do fund stabilization funds. If, if we can get free cash and see where we are there, rather than do that because of the optics of funding these, like I said, I think a lot of people think that all we're doing is taking it from their pocket and, and putting it into a town savings account. So you know, I, I think we need to leave that door open
to potentially fund it. And I would, I would support that in the fall with free cash. Speaker 7: If I may, just for reference, the last several years we've been use, not exclusively, but we've been using a lot of the new growth that gets certified to put into stabilization accounts, and that's typically done in the fall. Speaker 1: So I'd like to make a few observations. I don't disagree with anything that's been said here. My, my mind isn't, I'm not in a place where I've made up my mind, but I do want the public to know that our financial management principles define the operational stabilization fund for the purposes
of sustain using the operational one for sustained economic downturn. And then they define that by being a sustained economic downturn defined as more than 5% of the total for the respective revenue category. I highlighted the wrong part. So basically we need these to carry us through a three year period of an economic downturn, which they define, given I have real cons, concerns about the loss of state aid, about the loss
of federal funds. Right now we have a $2 million, roughly $1.8 million fema. We're waiting for a FEMA reimbursement for Covid that's sitting out here off our books. And if DOR decides that that's not gonna get funded, that $2 million liability hits us, that's another potential problem. So I think we need to think really hard tonight about,
we keep talking about calculated risk. I'd like somebody to talk to me about what calculations are going into their decision, that that, that this is a calculated risk. Are we, what are we calculating? What are we weighing? What elements of 6 million, six and a half million, 7 million moving from this fund to that fund? If it's going to be a calculated risk, I wanna know what calculations are going into that to win me, to win me over to that argument. Yes, Mr. Evans, Speaker 13: I can get some of it. And Mr. Erickson alluded to part of it, which is new growth.
Right? We can, I see the new growth numbers being higher than our, our normal number this year, just based on what I'm seeing in terms of the building permit permits taken out in terms of the buildings that are going up and, and will be available getting their certificate of occupancies. I think that will help. I take your point about the FEMA reimbursement. I also take your point about the risk of state and fed and
or federal funding that might be withdrawn. But having said that, I also think that we owe it to try to, to find a way to cut some of this. You know, I'm not saying, you know, you've convinced me that it's not an order of magnitude cut. It's, it's, what is the right word? It's snipping and cutting here and there. I don't, I don't see massive cuts as being appropriate. I see nipping and tucking,
and that was a phrase I was looking for, Speaker 1: Mr. One minute Mr. Erickson, could you put on the screen, page 48, the general fund forecast Speaker 7: Of the budget book Speaker 1: From the budget book? Yep. All, yeah. Speaker 7: Gimme just a couple seconds. 48 you said? Speaker 1: Yes, it's the general fund forecast. Speaker 2: Yep. Speaker 1: And those of you who have your bibles with you, he's open to verse Speaker 21: Number, Speaker 1: The book of general fund forecast. Speaker 7: So this is, this is page of, of the budget book. So, so anybody watching from home can pull this up online, or if you have your, if budget in front of you, you can pull, pull it up on that page. Can
Speaker 1: You scroll down to the bottom for me? Speaker 21: So people in our community have pointed out, it looks like we might need Speaker 1: An override. And what we've assured them is we're counting on the new growth figures, our conservative accounting principles, and, and to Speaker 21: Carry us through here and here and here Speaker 1: We're trying to get to 2030 when our oped liabilities will take about pension. Pension, I'm sorry. Yes. We'll drop about 12 to $13 million off our liabilities. So we're trying to make this work. And if we're counting
Speaker 21: On new growth to plug in, this is with an $8 million override. If Speaker 1: We, if we're counting on new growth to plug in Speaker 21: Here, Speaker 1: What are we doing? We can't count on it in two places. So Mr. Erickson, could you bring up the slide that I I'd or the information I'd asked you to prepare with a $6 million override? Speaker 7: Sure. Related to this table, you mean? Yes, Speaker 1: Please. Yep. Speaker 7: I'm gonna stop share real quick a sec so I can make sure I get it. Speaker 1: And then while you're looking for that, Speaker 11: I think it's really important to clarify this is a forecast, not a budget.
Speaker 1: Indeed. And Speaker 11: We've, and we've heard that from, and Mr. Townsend has drilled that into everyone and there's a lot, there's conservative assumptions in here. Speaker 1: Absolutely there are, but I'm, I just don't want us talking about, we're gonna count on new growth and taking 2 million out of the, and we're also gonna count on it to patch up what the forecast might be. I think we're, I really do believe we're gonna see a far more a, a far higher amount in new growth and in our excise because we've got, I I don't know if anybody saw the Boston Globe today, beautiful writeup on bossy pickleball, food critic, just entertainment complex.
I'm counting on that place to bring in a lot of local option taxes. We do have a lot of building going on once those occupancies. So I, yes, I absolutely believe in that. But if we combine, 'cause this is multifactorial. If we combine an economic downturn with perhaps a sustained rate of inflation, given the impact of tariffs on our economy or the withdrawal of federal funds for things that people are counting on or state funds that they normally get. If we combine all of these things and we take $2 million out and we count on new growth, there's a,
there's a lot of factors here. I'm, I'm not disagreeing that we need to get the number down. I absolutely agree. But I wanna make sure that when we're tossing around words like calculated risk and new growth, that we're thinking about it really holistically. Speaker 22: So Speaker 23: Could you talk about this Speaker 7: Chart? Sure. Just, just briefly. What I did is I took that prior table, right from the budget book and, and I added a bottom line based on what was asked from the chair to look at what 6 million would look like. Meaning basically reduction of that revenue in FY 26 of 2 million. It's not an exact figure. I literally just took $2 million
off of that bottom line. What actually is not factored in are a couple other things like the two point a half percent that would be in addition. So it's actually more than than that. The negative is actually gonna be greater than the 3.096. It's, it's gonna be a factor of maybe a couple hundred thousand dollars a year compounded over the years. This is a really, really just simple, threw it together really quickly, but it just shows order of magnitude. It was really more about order of magnitude. John's cringing because it's, I know there's a lot of things doing in here and it's not the way to do this, but I was just trying to show order of magnitude. Best case scenario. Yes. Yeah. It's sort of more of a best case
scenario from that perspective. It's likely to be even more impactful not having the additional 2 million or what have you. I I just was trying to show just again, order magnitude here and, and this, the first column B is FY 27. So this is assuming we get through FY 26. And that's also assuming some other factors that that an $8 million override was considering. So it's probably gonna be greater than, than just putting additional 2 million towards it, Speaker 13: Ms. Speaker 7: Hope. But as noted, it's a forecast. So there are conservative budget principles up top as well
for, for purposes of dialogue. Yep. Speaker 10: In this discussion, we, this particular discussion, we are talking about addition, like looking for more ways to cut. And I just don't want to lose the premise that the, the budget proposing the override has cuts, it's got cuts to the town, it's got cuts to the school. So I, I just don't wanna lose that. That's great. There are present cuts there, like very serious ones without the override.
And then even with the override, we are just kind of like keeping ourselves afloat. So I, I just wanted to throw that out there as we are talking about deeper cuts, which I'm happy that we are looking at. I don't wanna lose sight of the fact that these, these forecasts are with cuts on both sides. Speaker 13: Lemme just pull up on that point, which is, and I, and I take that point. That's a great point. What I think we're discussing are a little bit slightly different. It, it's more, you know, we, we, for the operating budgets,
we're in solid agreement that these cuts are as far as we can go both on the school side and the town side. What we'd like to see is the override get passed. But where I think I have an issue maybe is, and it's not with all of the stabilization funds, but it's some of the stabilization fund. And again, I'd like to see p snipping, you know, just, it, it doesn't have to be draconian, it just has
to be piecemeal. Maybe it's not the right word, but it has to add up to a significant amount and, and, and thank Mr. Erickson for doing the the $6 million figure. Because that points out that if we go too hard, we're gonna, we're cutting off our nose despite our face. Right? So I just don't want to go too far down the road unless there are other revenue sources, which is, is a conversation for soon.
Speaker 1: I, Mr. Erickson. Sorry. Yeah. Do you know off the top of your head? And I, I just, just occurred to me, so if you're not prepared, that's that's fine. Has the, has math labs MathWorks pulled all of its building permits for the new campus? Speaker 7: I don't believe they pulled all of them. They usually do it in phases based on their project, but they both, I believe they pulled the bulk of them. They will by the end of this fiscal year, I believe pull most if not all of them. But that's permit revenue, not new growth. I know the new growth won't hit until
after it's completed and occupied. And that's even, I know there's a lot of new development that was referenced here in Natick Center. Those have to be like occupancy permits by six 30 of the fiscal year. June 30th, not six 30 at night, but June 30th. So many of them might not be completed by that time to hit our new growth for this upcoming fall. And all likelihood is probably gonna be FY 27. Okay. Before some of these in downtown. So we are still keeping a conservative estimate in new growth because it, it, I I actually expect that some of them are rolled depending on the fiscal year.
We're not gonna see it all in one fiscal year. We'll see it gradually over the next several fiscal years. And the MathWorks project is a multi, it's probably a 24 month construction schedule minimum. And that, that will have a net benefit. Absolutely. It's just without knowing when it's going to to be finished and how new growth is calculated by the, by the fiscal year, it's hard for us to really not take a conservative approach. We, we can't overestimate that. Yeah. Speaker 13: Yeah. That makes sense. Speaker 1: Ms. Wolfer, Speaker 11: So you asked about, you know, our rationale and our thinking on this and for me,
and you know, it's obviously the elephant in the room is what if it doesn't pass? I mean, we've all had conversations with people that this is a real hardship for many in our community and I think it's up to the board to make that calculation of, based on the conversations that you all have had about what might be a likely number for people to support. I think the town and and schools have done an excellent job at the forums that we've had about understanding the ramifications.
If we don't have an override, certainly not, you know, it's not convincing people that can't afford it. So I would, this is why I would really like to see us go down in the number but not affect the budget numbers. Talk about those stabilization funds. If, if, you know, if we can add them and, you know, we might have a little conversation later on that might have some ways of, of adding to that. I think that has the least impact and, you know, hopefully will help get this passed. Speaker 1: I think that's an excellent point. That is a great point. Yeah, I agree with that. I think
that's an excellent point to that end. I, I would like, just on the school side, I can tell you that Dr. Bash has been abundantly clear that if the override fails on March 25th, on 26th, 41 pink notices are going out because she cannot wait till town meeting. It's not ethical for her to wait till town meeting to hope that town meeting takes money outta stabilization to shore up the school budget. She needs to let those people know that they have to find a job.
So on the town side, Mr. Erickson, I'd like you to speak to, I was putting, I was putting this towards the end to talk about the, the impact of no override, but you've raised it and I think we should just go right into it. Yeah, Speaker 7: Absolutely. And, and a a lot of this is outlined in detail in the budget book. I'm actually gonna pull up a couple pages from the budget book to show some of the impacts. And, and I'll start with, with also the position impacts. And this is on page, oh, what page is this?
I, I apologize, I don't have the page written down, but it's on, it's on, it's in the opening pages, probably page 20 or 26, so or so on the budget book. And this, this is the seven positions, the very real positions that are, that will be cut, some of them are 0.5 partially because we still need to fill some roles. So, and a good example, sorry, 28. 28, page 28. And it was in the twenties, 28 of the budget book. So, but some of them are, are full positions. So for example, the town clerk, assistant town clerk,
it's 0.5 because we still need to do some of that work. So we need to keep some budget in there. But that will go towards supporting part-time employees for example. But interestingly, we are, we will not be doing pink slips because we are actually in a hiring freeze and we have a lot of these positions already vacant. So already feeling the impacts of not having these positions. We actually have more than these positions vacant right now. I'm gonna be asking the select board later this week just to be aware that we're gonna be posting some positions that are not on this list but are other critical positions that the town needs.
But the point is that, that these are very real impacts, fire public works facilities. So those are gonna be custodians that junior night managers in one of our school buildings and, and finance and budget. And so these are extremely, extremely, very real positions that that would be really cut from our budget. In addition, and this is also from the budget book. And Bruce, you can find the right page and let me know which one it is. This is the full list of all the cuts. It includes the schools, both permanent and additional cuts. So this is where you see the 1.4 million permanent in the schools. And then the 2.7 page 30. Yes, thank you.
But there's, and I'm not gonna read through all of this. This is broken down by department and then you can look to the department pages of the budget book to see the very, what that equates to. But these are the additional cuts that make up that roughly $4 million. It's 3.9 million, but we're, we're rounding to $4 million worth of cuts on our operations. And these do conclude some pretty critical items. You know, facilities management, additional cuts, these are inclusive of the positions. So these are not, in addition to, these are inclusive. So when you see, for example, fire having a $257,000 cut
that's inclusive of those positions. Public works similarly, but there's also other ones that are really just about services we took to Bruce's point, sort of the, the measured scalpel slash cut approach. So it's not all in one department, but these will have ripple effects. The other reality of these cuts more the permanent cuts from the town side. And it, and I'm not, I don't have the page up, but if you look at the free cash turnbacks by department, those will largely be non-existent for several years
because a lot of these permanent cuts and non-permanent cuts will then impact what the term backs are that lead to free cash. And that's about one to $1.5 million, which means not this upcoming free cash season because it's this fiscal year, but net again FY 27 is when you're gonna feel those impacts on our free cash number. So if you think this past year we had a $7.8 million number, just reduce that by 1.5 and that's sort of a, a new, on average we get about six to seven. So that's, that's a very real impact to there as well. Speaker 1: So before we go any further, I have been forgetting
to acknowledge Mr. Joseph who is asked to make a comment probably long after we on a topic, long after we've moved and I, a apologies, Speaker 24: That's have to do with over. Speaker 5: No, no worries Madam Chair. Thank you. I get that a lot at home. I'm actually Paul Joseph, I am actually speaking in the capacity as the chair of the economic development committee. Not on behalf of the committee because we've not had an explicit discussion about this, but from my experience, I'm currently chair of, of as about four months. And I chaired the committee from 2009 till 2015. I've also most recently served
as the interim executive director of the Natick Center Cultural District, which honestly gave me a lot of deeper perspective on what you consider calculated risk variables. And I think this is a very important consideration. You touched on it Madam Chair. We have a lot of new growth, five major projects in Natick center of 200 plus housing units. At least a dozen retail places, which would be lovely to have all restaurants with liquor licenses generating local options, taxes. What I've learned and what I've learned firsthand from conversations and what I've observed, we are at high risk
for occupancy of our Natick Center properties. While everybody wants to hang their hats on, look at this great growth and you're not gonna believe how great natick's gonna be in 2026. What I've been hearing, and I can paraphrase a couple of these conversations, is that many of the retail spaces have not been preemptively fit out for restaurants. And in fact, the property developers are waiting on restaurants to come in and put up the capital to make those finishing investments. That puts us at a competitive disadvantage to communities like Marlboro and Hudson. I'll use them as examples
'cause I do use them as a beacon for economic development that do have ready properties and economic incentives because they've got incorporated economic development. We are struggling to invest with this override to maintain status quo. Natick has fallen behind in economic development and growth opportunities in the last 10 years to communities that have proactively invested in it. That being said, my concern, and I'm gonna use real numbers now, the average rent per square foot in Natick Center are best as we could calculate in working with the CED Community
and Economic Development office here as well as privately with the NA center Associates, on average is about 2320 $4 a square foot in Natick Center right now, some of the new properties that are coming online are asking $48 per square foot. Okay? Which sounds expensive. It's two times what the average is in Natick, but it's actually still about two thirds of what Wellesley's charging right now. So we're still a value in terms of dollars per square foot. However, the pushback these potential occupants are giving is the expectations of the property owners are too high.
Cost of capital is still too high. And by the way, interest rates today were signaled to not going down. They might go up, right? Supply chain costs are gonna be a big factor for these companies, right? So we've, we've got a lot of uncertainty and volatility ahead. So when we think about calculated risk, you future receipts are not guaranteed. And in fact, I would argue they're at higher risk than we'd like to express. So I just really, really caution this board to heavily rely on that. In addition to them normally taking a few years, it might be another protracted, my big fear is we're gonna have one foot in old Natick and one foot in future natick.
And we might be at risk of stagnating for a couple of years between those two realities. While this uncertainty plays out, the best thing you can do to manage uncertainty and volatility is save and have that money available. And I respect and I appreciate the voter's concerns about you're just basically taking my savings and putting it in the town coffers. The cost of not having that money available could be catastrophically high in terms of long term cap recapture of, of future opportunities. So I just, again, I can't express it enough. I sent to this board and to the school committee, just an email just now about
ways I, I see the biggest concern when I talk to people and I've heard from people about the override is trust. You know, you're just gonna come back and do this again in a couple of years. This, this has to, we, it's too expensive. We can't afford this on an ongoing basis. And I know you're invested in a process to establish that trust maybe moving forward. Communities like Hingham have done it in writing to the voters. They've passed an override of almost $8 million with a a, a fiscal management plan that they committed to. So it can be done, but I think it's really important, and I know this board is sincere, I know the administrations are sincere about establishing
that trust with the community, but please be careful with economic development and the expectation that we've got a a a fact cow here. It's not necessarily as big as you think. The other big factor for Natick Center, the lack of a parking garage, okay? And that's not free either. And that's been sitting around for about 15 years that we need to address. So we've got some major capital needs that are going to have to be invested in to generate that incremental revenue. So I just wanted to kind of speak to that while you were talking about calculated risk. Thank you. Speaker 1: Thank you Mr. Joseph. So in the last week I spoke
to the developers of the property going in at the corner of Union and East Central, east Central. There's relatively certain that the residences will be occupied probably by the middle of summer. They're not getting many inquiries with regard to the commercial property, which affects its assessment, which is which as, which impacts the taxes that it pays. So part of that is the rent part of it is none of them are going to be outfitted for restaurants that, that, that would compete with Moore Tavern,
which they own right next door. So I've also spoken relatively recently to the Stone Stonegate group, which has two pro projects, one on Summer Street and one the St. Pat's project. They too are pretty confident that the residences will be occupied if we don't figure out the parking situation for the businesses on the first floor, which there is a committee working on and very diligently, if we don't figure that out, it's going to dissuade businesses, which affects the property assessed value,
which affects the taxes they pay in. So where we, where we may see an increase in new growth, not may, where, where I'm, I'm I, I'm confident we'll see is in all of the tear downs and the $2 million, $3 million houses that are being built, which has its own set of consequences and implications, including shifting the, the allocation of assets from 83% residential to 17% commercial maybe residential goes up to 85%
and our commercial goes down a little bit that affects whether or not we consider a split tax rate. So I, I hear what you're saying, Mr. Joseph. I have been following up on these developments. I've, you know, with the developers to figure out what are we looking at and when, oh, and the property, property on Summer Street. I, I thought that that was gonna be ready to come online for the commercial space this, this summer. But that, that may not be the case. In any event, these are all considerations and any other board members
with regard to overrate over, what are we talking stabilization accounts? Yes. Speaker 13: Just a quick thing. And I just wanted to reinforce what something that Mr. Erickson said about the impacts of this and when they will occur, even if those things all happen, and maybe I wasn't getting this across earlier, but it, it's an FY 27 impact at the earliest, right? So we've gotta look at FY 26 almost in isolation
and say, can we get through this year and then anticipate new growth to help us with FY 27 and beyond? 'cause otherwise, I don't think we're being realistic. Speaker 1: Thank you, Ms. Alger. I Speaker 11: Just wanna add that I agree with Mr. Evans. I think that there's so much potential for volatility in the next couple years that it, it, you know, we, I don't think we can predict, and I don't think we should, Speaker 1: We should still forecast. Speaker 11: No, no, I am not saying that we shouldn't forecast, but I I think that it makes sense potentially to reassess
after a year and where we're at. Speaker 1: Absolutely. Speaker 11: Not just, you know, Speaker 1: Even quarterly, I mean, looking at quarterly, right? What we're, Speaker 11: You know, I, I've heard a talk about, you know, making some promise that you, if we, if we get this over right, we're not gonna do another one for four years. That's something Speaker 1: I think that's unwise. Speaker 11: I think that's something I would be very unwilling to do given, you know, the, the current economic potential for economic climate change Speaker 1: That aside, this board's composition changes in March on March 25th and will likely change the year after that and the year after that.
And this board should not handcuff, handcuff a future board's decision. It has been done in the past, and in my mind there was catastrophic consequences, a loss of when a former select board decided to make a special act and enshrine a hundred seat minimum for restaurants that hand, that handicapped future boards from their right under mass general law to write alcohol policy. And it took us 19 months to reverse that. In the meantime, Wellesley opened up 12 to 15 restaurants
because they, they didn't have that to deal with. And we're playing catch up. Now, in a previous meeting, someone responded with who cares how many restaurants we have, who cares about the liquor licenses when we generate local option taxes that people voluntarily pay, people voluntarily go out to eat and they spend $50 or a hundred dollars on a meal, that's money. We don't have to look to the real estate levy for Levy for. So that's why I care about making sure our alcohol policy is, is we worked really hard to rewrite that alcohol policy
and now Arlington is looking to it as a, as a model. So those are positive things that this board has been doing to make sure that the business community wants to stay here and wants to come here and open, you know, businesses, open restaurants. I don't see any, we get local option taxes from hotels. I don't see any, any new hotels are gonna go up. There's, there's no land. In fact, one was torn down, I guess Travel Lodge was, travel Lodge was torn down for, for Abby AB for Abbey Lab. So Speaker 7: Travel lodge. Yeah. And we've also, the market is relatively saturated at the moment with hotels.
Yes. Especially post pandemic. Speaker 1: Other comments on, yes, Speaker 14: I want to just put my stake in on, on the volatility issue. I'm extraordinarily concerned about economic futures. To me that's a reason not to. Certainly, it's a reason not to use any stabilization funds at this point because it, it's my opinion and my belief that we're gonna need them in the future because I think the economy is not gonna stay where it is. That concern
impacts state revenues. We're already hearing that there are potential problems with state revenues. If the state decides to do nine C cuts, then some of our state aid goes away and we can't control that. Mr. Speaker 1: Sydney, could you define what not for people at home and for lay people what nine, nine C cuts are. Speaker 14: So a nine C cut is when the state says we don't have the revenue to pay your state aid and so we're gonna cut your state aid. And they just do it. And so even though it was budgeted that they were gonna give us, say, and I don't know what the number is this year,
I can't remember, but let's say they're gonna give us $12 million. If the state doesn't get the revenue, they might give us $9 million instead. And they te tend to do that mid-year before we actually receive the money that we have planned on. That's a problem. I'm also concerned with the federal administration. Theoretically FEMA owes us a couple of million dollars from covid. They could decide not to give it to us. They've certainly been delaying it long enough and if they decide not to give it to us, that's, we're gonna have to make that up somewhere. There are other, you know, other federal grants that,
you know, we either get cut or wouldn't get that could affect, could, could cause us to have to spend money on things like transportation projects that have started based on receiving those funds that we then don't get. We have to, we have to be very, very conservative in funding and using our stabilization accounts in case those things happen. So I could support delaying funding stabilization from spring to fall, but I can't support not funding it.
Speaker 1: Okay. To be clear, for the public at home, nothing in our budget book is, is at risk for federal. We're not relying on any fe federal funding in our budget book in the budget or in the, in the forecasts. But grants that may go away that at least on the town side, I can't speak for the school side grants that may go away. That we, we, we tend to look for grants to augment programs and services Speaker 14: And capital. Speaker 1: And capital, yes. So if we have two vehicles
that have reached the end of their lot natural life and we're looking at ev purchasing for which we would get grants of $15,000 per vehicle, that's money we're gonna have to come up with when the vehicles are out of service. So for those who are worried that federal funding going away is gonna mess up whatever we come up with, with the override or the budget, that's not necessarily the case, but there could be an impact. Speaker 13: Yeah, that's a fair point. Speaker 1: So we've talked about re reducing the amount of money in the budget
that will go into general and operating stabilization accounts. What I'd like to talk about is, or have the board reflect on, and I think Mr. Sidney just alluded to this, is taking money out of stabilization accounts to plug this, to lower the plug the budget to lower the override the amount of the override. Because that has been a suggestion from the public, Ms. Slager, Speaker 11: I think I've already commented on that. I'm not in favor of that. Speaker 1: Ditto. Speaker 13: What you said. I'm not Speaker 1: Yes. So Speaker 13: Distinguishing between, Speaker 1: Yeah, so what we've been talking about is reducing the amount of the override by, by looking at the,
the planned amount of money that we're gonna put into our stabilization accounts. General operating op E Okay, now I'm gonna flip that a suggestion has been made by the public to maybe not only do that, but take money out of stabilization to lower it even lower. So right now we're counting on if with an $8 million override, we would be putting in right here with an override, we would be putting in $505 million, $500,000 roughly, or $540,000 in general stabilization,
188 in operational and then in capital stabilization, 1.7 million. So the flip side of that question or suggestion is you're talking about 8 million. Maybe you can not fund as much in these and take out what we have in the balances to get it down to say 4 million. Yeah. Speaker 13: Yes. No, I understand. I thought, I thought that's what I heard, but I wasn't, I wanted to be sure. I agree with Ms. Bollock. I think, you know, based on what we just heard in the last 15 minutes, half hour, it's risk, risk, risk volatility.
These are words that, that make me personally nervous and make anyone who does a budget nervous. And I think doing that just to, you know, one of the things that we've heard from residents is, well, if you do an override now, what's to, to stop you from doing an override a couple years down the road when you, when you need more money? To my mind, it's a false economy. Right? Taking that money out of the stabilization fund and saying, Hey, we only did 4 million, right? And then we can pat ourselves on the back
and say, Hey, we only did 4 million and then two years from now, exactly, we're gonna be right back in the same situation. And saying, well how how'd that happen? You know? And then we have to go back and face the voters and say, Hey, we were stupid. We, we didn't foresee that this was risky and, and we, we have to pay the consequences. I think there's a middle ground and that's what I'm trying to get to both tonight and, and tomorrow that manages risks appropriately, but doesn't go overboard in doing that.
We know our assumptions are conservative and, and rightly so, but I think there's a middle ground and I think that, that, again chip it away. Speaker 1: Thank you Mr. Evans. Mr. Sidney. Speaker 14: Yeah, I'm just gonna, I, I thought I said said it, but I want to just reiterate, I do not support in any way taking money outta stabilization. I think we're gonna need it in the next few years. I would like to see more going in to support our financial management principles. I can see an argument for letting them fall a little bit relative to the where we're supposed to be. Not take money out, but, you know, not quite be as,
as well supported. But I think that taking money outta stabilization, you know, that, that those are rainy day funds. I'm not, I think, and I think we've got rainy days coming, so Speaker 13: Ditto, Speaker 1: Ditto. I love the succinctness. Thank you. I'm I'm in the same place. And since we're speaking about risk, most of our conversation tonight has been rightly so on the impact of this to the residents. But we also wanna think about our business owners too. The single most, as, as somebody who owned a small business, the single most worrisome aspect
of running a business is managing risk. The beta between and, and not knowing, not having a not being assured of a certain sense of constancy when you're planning and forecasting out your business. So I do wanna acknowledge that the override is going to be impacting businesses to a lesser extent than residences, but it still will have an impact. But why don't we take a five minute break and come back on in about five minutes, get her stretch our legs and Oh really? I'm gonna go ahead and call the meeting back to order.
Speaker 2: And Speaker 1: How's your coffee? Thank you for taking your seats and stopping side conversations. Deeply appreciated. Where'd we leave off? Let's talk the about the free cash. Do that Speaker 7: Now. Yep. I worked on putting together just some scenarios based on the conversation and just to show some concepts of, let me just share my screen so I can talk through it. Make sure I pull up the right one. I can share this after the meeting with folks just to, to take a look. It's a pretty simple spreadsheet.
I basically recreated the free cash spending plan. What you see on the left in column A are just the different types of expenditures. The first row or the second row is the free cash certified amount. That's at 7.8 million. I put in the existing balances of the stabilization accounts just for reference that I didn't, I don't have 'em tied out anywhere because it kind of depends on the approach taken. And then I have a no override, which this is, these are the numbers directly in the budget book, a $8 million override, which is also directly from the book. And that's the one that was presented. And then based on tonight's conversation, I put a seven,
a 6.5 or a six. Obviously if you do a 6.8, it's slightly different or understood. Yeah, but I just wanna show those for reference. And, and based on what I heard, the idea is to, to minimize or, or reduce to zero. The, the, basically the investments in the stabilization, the general operational stabilization accounts. That's why these are zeroed out for all three additional scenarios above the 8 million scenario. I also brought back down the reserve.
So part of the financial management principles for those watching from home includes a desire to keep what's called free cash reserve, which is basically unappropriated free cash at a minimum of 1%, but never less than a half a percent. So that's what those two numbers are. Basically the 890 is roughly the one number and the 430 is roughly the other number. Very, very rough. But bringing that back down to a no override scenario amount. So 4 3 8 0 33,
keeping the capital projects at 1.45 million, which is what was proposed with an $8 million override across all of the fields, bringing back the EP trust down to the no override amount of two 250,000. And then putting really as much of the balance into the cap stabilization, we can certainly flex, move from cap stable to capital projects. But in the long run, all of them balance out to the 7.838 million across the board. And then you can see that also then relies on more heavy use
depending on the override amount of free cash for purposes of operational. So that's why 6.5 million is using the, oh no override scenario 2.5 in the 8000003.5 in the 7 million, four in the 6.5, 4.5 in the six. It's almost a direct correlation. Speaker 1: So given that a sound financial, Speaker 7: These numbers in the bottom are just for me to, I I needed those just to play with. So you people Speaker 1: Just ignore them. Speaker 7: Yeah, they're, they're, they're just helping
with formulas in, in the rest of the spreadsheet. Speaker 1: So given that a solid financial principle is not using one time funds to plug budgets, how does, how do these, IM, I'm sorry. How do the 7 million, six and a half million and $6 million override use of those funds, how does that impact future years? Speaker 7: Well a lot of our assumptions that were built that I showed previously assumed a $2.5 million use of free cash.
So if we're relying now on 3.5 million or 4 million or 4.5 million, that now becomes sort of, we have to factor that into some of our assumptions moving forward for Speaker 1: Forecasting Speaker 7: Purposes, for forecasting purposes. And with the uncertainty, not likely this upcoming year, but maybe the FY 27 fiscal year, it could very well be that our free cash numbers might not even reach a four, 4.5 million or a 5 million, which means we even have less to play with here.
So if, for example, let's say we use the $6 million override number and we are reliant on 4.5 million for operational and we only get 4.5 million for operational, that means all of those other items, opep trusts, cap sta operational capital projects will basically have zero. Speaker 1: Okay. Speaker 7: Or if we get 5 million, then we only have $500,000 to put towards those items. Now that's very, very basic. And again, this will be part of the record. We'll get the, I can share this with the board and,
and make a PDF and put it on the, on the public website. Speaker 1: That'd be great. I'd appreciate that Ms. Slager. Speaker 11: Thanks. I have something very similar but with one difference. Can you just talk to the reserve amount, which I know is made up of overlay and free cash reserve about Speaker 7: Debts? Just free cash reserve. Speaker 11: What? Speaker 7: This reserve is just free cash reserve. Speaker 11: So that's different from the budget book. The budget book has free cash reserve and overlay, you know of Yeah, it does in the, in the book. So, Speaker 7: Correct. It's slightly different from the budget book.
And so the intent here would be not to put funding into the reserve. I I was trying to do this on the fly, so I apologize if I missed Speaker 11: The line. Speaker 1: Oh, okay. So like he literally just did this during our five minute break Speaker 7: While you were talking in, Speaker 11: Alright, so, so where does overlay come in here? So the, it doesn't, Speaker 20: So corlay is not, this is just free cash, it's a 7.8, Speaker 11: Right? This is, this is the equivalent to the, the free cash spending plan on page 2 39, right? Or is this something different? Speaker 20: So your overlay John, sorry, your mic, sorry. So your overlay is in your other available months?
Speaker 11: No, but if you're looking on page 2 39, Speaker 7: There was $270,000 in the most in the, in the budget book for overlay and Correct. I did miss that in putting this together. So there's some slight difference there. I can certainly add the overlay here if that's necessary. But I was trying to come up with a quick snapshot. Basically if I put two 70 in in re in reserve, we can just insert it. Speaker 11: I'm, I'm just trying to tie it to what's in Yep. In the book and understand what it is that you did. Okay. That aside, what is
the rationale between, you know, rather than adding to the free cash reserve, putting it into the cap stabilization fund, don't you have more flexibility of keeping it in in the free cash reserve? 'cause couldn't we always just use that to fund any capital projects? I'm just wondering, you know, aren't we losing a little flexibility by making the trade off there? Speaker 7: Yes and no. I I I think it's signals that we intend to use these for capital projects rather than free cash reserve could be used for anything. So if the message is that we want to invest in capital,
I would argue put in the cap stabilization accountant because it then is, is a bit more of a yep, we intend to invest in capital with these funds. You are correct, there's more flexibility in keeping in reserve or un or un unappropriated. But that's, from what I heard, the intent was to make sure that we invest in capital. And so this was the, the thinking when I put this together five minutes ago. Speaker 11: Okay. So with that, I mean that leaves us with very little free cash reserves. I mean it's only 168,000. It's in the same as, you know, overrides scenario.
And I just wanted to ask, is that sufficient? Speaker 7: I mean, none of this is sufficient. No. If you're asking me if that's sufficient, the answer is no. No. Speaker 11: In general, what have our levels been over time Speaker 7: For at ti? Yeah, typically we've met at least a seven to $900,000 range, which is in that, that target range of of the, sorry, go ahead John. Speaker 20: This is basically going back to covid days. This is where we were, in fact I think we went down to zero a couple times during Covid. So that's what's disturb. It's disturbing about this. I absolutely agree that this is, doesn't make me comfortable whatsoever, but that's sort of how we get there with regards to the,
the moving into the cap stabilization funds, you know, if we have projects ready to go and, 'cause we do have the line for capital projects, we could put it in there. But the question is whether if we need to have to build up the cap stabilization fund for it later because, you know, 27 or something might be even looking worse than it does 26, then it's, it's there. So Speaker 11: Yes, Speaker 14: Mrs Yeah. So I'm, I'm thinking about the free cash reserve isn't one of the reasons that we keep it unappropriated is in case revenues don't come in so that we can,
can keep our books balanced. I'm j I'm just asking, you know, why do we, why do we keep it unappropriated? Why don't we put it in one stabilization fund or another, you know, what's the, what's the rationale there? Speaker 7: So yeah, Speaker 20: You, you are correct that if we did need that to balance out our books, that would be probably the last place we'd hit. But it would be one of them. Yes. But pretty much, and you're correct in the fact that, you know, one of the concerns I have is that with the cuts that we're doing in this budget, our free cash numbers is gonna go down 'cause the turnbacks aren't gonna be awful, won't be as good.
But oftentimes in order to balance the books, you know, the comptroller will use the turnbacks to sort of balance out the accounts. So if we don't have those turnbacks, which I'm concerned about, yes. That would be the, the amount that would be important to us to balance out our books. Speaker 7: Yeah. Speaker 14: Yeah. I'm just trying to get information out to the public. Yeah, Speaker 7: Appreciate that. Yeah. So here has the overlay. Speaker 11: Thank you Speaker 18: John. Can I, and hopefully I state this right, but that's also our starting point.
Your overlay number is your starting point for free cash the following year. 'cause you're distributing the rest of those funds. So then your starting point for the next year when your free cash number is 70, the free cash reserve starting point. So that's, that's, that's what you would start with before any additional ins and outs. You mean the free cash reserve amount? Correct. Yeah, the overlay is is, sorry, that's appropriation to the, that's what I meant. Yes. Yes. Speaker 9: That's your starter amount. Yes, correct. Speaker 13: Yep. Speaker 1: Any other comments or questions from the board on the free cash of this scenario? Speaker 13: Just Speaker 1: Yes, Speaker 13: Just thanks for Mr.
Erickson's Spreadsheeting on the fly there. 'cause that that's, it was helpful to see the impact of the various scenarios and I think it'll help the discussion Speaker 1: If we can move on to the next topic. A suggestion has been made in several places, either by email question or discussion in meetings to have a two year override of $4 million each. And I'd like to point out that if
that were an option, the board would wish to do those would be two separate questions on the ballot. So it can't be one question, so voters could choose one and we're back again another year. But I wanted to speak to what the implications or the impact of that would be on town in schools were we to choose to do for assuming, let's say bo both scenarios. One is that the voters say, yeah, we'll support 4 million over two years, so we get our 8 million over two years.
And the scenario where we have voters that just pick a 4 million. Matt, why don't you start? Speaker 9: So, so for the, the schools, we, we don't have the same flexibility that the town does in, in staffing, right? They each school year, the kids basically come the end of August, early September, and then they run through June and we like to have our staffing ready before the, the kids are there. So if, if the allocation of that 4 million, like our, our school shortfall's about 2.8 million in, in year one.
So if we're allocating that where we would still have to reduce staff, I think that needs to be clear to the voters, right? If, if we're not reducing staff and that's how the town wants to proceed, I guess the, the school doesn't necessarily have a a, a strong opinion on that if the town is confident in, in proceeding that way. I I I do see where there's sort of opportunities that to sort of reevaluate at fall town meeting in at other times. Like it's, it's not always easy to,
to plan the budget out 18 months in advance to where you're gonna end on June 30. So I get that part of it, but I I, there's also two school committee members here if, if, if you're willing to hear from them if they want to opine. Speaker 1: Do either of you wish to speak to, to that scenario? No. Speaker 9: Okay. Well, you know where to find them now. Yes. Speaker 1: We do know where to find them, Mr. Erickson. Speaker 7: Absolutely. And we did provide this concept for the board's consideration and to, to Matt's point, the uncertainty
and also the potential impact from a school year perspective where the town has a bit more flexibility to weather a fiscal year to the next is definitely very real. And that, that's one of the, one of several reasons why when, when this is discussed through the, through the, the dialogue was largely met with less positive reaction. The other reality is that when you're doing a multi-year, you, they're technically separate questions on the ballot. So given just the uncertainty of an override to begin with,
having that level of additional uncertainty is a challenge from a fiscal planning and and perspective. You know, as much as our forecast go f five years, we can, we still are year to year, but even if we don't have that next year, it's even more challenging. So, so that multi-year approach just was viewed that way and, and, and it, it's, it, it's just very, very much a real challenge when we're trying to figure out how best to plan accordingly. Not just with the schools, but also with our own town departments and with capital and with capital planning because it's such a diverse and
and dynamic exercise. Not having that level of certainty one year to the next is very much, is very much concerning from that perspective. John, did you have any other comments from the finance perspective? Speaker 9: No, I think you covered it. Okay. Speaker 7: And, and John, from your perspective, Speaker 18: Just from a staffing perspective. You know, I, I think one of the things sometimes in the conversation that doesn't get looked at as the quality of staff that we have, there's a lot of communities that are looking for the quality of staff that we have. So if there's uncertainty with our employees and they know that they might not have funding the next
year, if they know that their workload is gonna significantly increase beyond what it is right now, there's a real reality of us losing some of our quality staff and they're really the engine that keep everything going in this community. So that would keep me up at night. Speaker 1: Mr. Evans. Speaker 13: Thank you Madam Chair. Just for grins this afternoon I looked at the tax levy. I, I went to the calculator and, and it said tax levy for FY 25 is roughly 145 million.
If there's an $8 million in FY 26, the total tax levy goes to 1 53, 4 89, 5 59 and FY 27, if you go 1.025 times that, it's 1 57 3 million. If you divided it into four and four the first year, you'd have 149,480,959 and FY 27 it would be 1 57 2 17, 983. So the difference is roughly a hundred thousand dollars.
So in my view, the risks of, of things not getting passed, of the, I'll call 'em the soft costs, you know, to, to Mr. Marshall's point that the morale people leaving positions, we run a pretty lean staffing operation in both the town and the school side. If, if, if they sense that, hey, we might not have a job this year or this next year coming up because of funding, they're gonna start entertaining other opportunities,
they'd be foolish not to. Right. And I don't want to see that happen. Speaker 1: Ms. Yeah, Speaker 11: Ditto. But I also wanted to, to bring up another point on this and, and it's Because it would be two questions. You know, we, we, you can assume they both would pass or you could assume that one does and the other one doesn't. And, and so my concern is like, let's let's say the, the we're optimistic and say the $4 million for this year passes,
but maybe the one for next year doesn't, we're gonna be going, probably going back to the voters at that point and you know, that is another, well we already turned it down and you're coming back again. I mean, there's that perception that, you know, you're gonna beat us with a stick until you say yes. And then if it's the other way, if it's, let's say the $4 million for FY 26 doesn't pass, but the one for the later year does that causes all kinds of problems because you know, we have to do all of the cuts
that we've been talking about and then where does that leave us for, for next year? It could be that we would need more or maybe not, but it's, I think it just is a little awkward and the, you know, how we address the voters and, and what we make as, as our commitment in terms of, you know, what we're gonna do with these override votes. I think it's, it's just a little hazy because of the different scenarios. Speaker 1: Yes. Speaker 10: I think it's important that we be upfront about
what we need in total now. And there's, we haven't seen a budget that has demonstrated that a four this year and a four in the following year would be beneficial to either side of the town and with all of the dis and the misinformation about this that is circulating, I can't even imagine having to come back around in the following year and having to quell that again and, and people saying, you just asked for money, you're gonna, you're asking me for money again, despite the fact that it's half of what we were talking about, I just think
we would create an, you know, an unnecessary uproar versus just asking for what we, we have demonstrated at this point is needed. Speaker 1: Thank you, Ms. Pope. Mr. Sidney. Speaker 14: Yeah. Yeah. So ditto, ditto. The other thing is that concerns me about a split vote like that is we have very dedicated volunteers in town doing all sorts of different things and we would be more than doubling the work we'd be asking our volunteers to do. These are unpaid people who love this town
and volunteer for it. It overly complicates the situation. It overly complicates both administration's jobs. It overly complicates our volunteer people's jobs and, you know, and, and, and I think that it gets not asking for what we need, you know, whatever that number is. I, I think to Ms. Pope's point is disingenuous. Speaker 1: So I'm hearing from the board, I, I, I agree with everything that's been said, I'm hearing from the board that this is not really an option that we'll be,
we'll be considering Any other comments on this? Thoughts debate? So let's talk about menu option language. There has been a suggestion that we offer a, a menu of options for people to vote for. So the school budget, maybe this is an example, the town budget, shared services, budget, capital improvement budget, and allow people to choose what they want to fund. This has been done in other towns, it's not done very often.
And there's pros and cons to that. I'd like to hear from the board about your thoughts on a menu option to break out parts of the, the override and put it before, with or without the 8 million, whether it's 6 million. Let's not get into numbers, but just basically what, what your thoughts are. What, I know some of you have done some research on this, Mr. Evans. Speaker 13: My opinion, it creates the same problem that we were just talking about, which is one year
or one part gets funded and the other doesn't, I think, puts us at a disadvantage. I would rather see us have a single question because it's clearer. And I think we need to emphasize, first of all, go back to what we said earlier, is let's take a shot at, at cutting some of these things to a little bit, you know, the, for some reason the $7 million number resonates with, with me because I think it's achievable.
I think it's demonstrable in terms of, hey, we've looked at every rock under every rock and we're doing what's prudent, but also being cognizant of the impact on the residents in the town. So I think separating it as a menu option, I've seen other towns do it. Some of 'em, some have done it successfully, some have not. If you look at the DLS website, you'll see the win-loss ratio is about 50 50, right?
And I don't want to be in the losing side of a 50 vote, God forbid. We're in a situation where the, the bulk of the override isn't approved. But the, but the smallest one is, and that's a possibility when you split them. Speaker 1: Mr. Sidney, Speaker 14: I think that my biggest concern with a menu option, like, you know, however we would do it, it really flies in the face of, of at least the attitude I work with,
which is that we are one natick and it's not, I don't want to, I don't want to pit the schools in a, in a political situation. I want to pit the schools against the town. I don't want to pit road improvements against roofs. I just, I don't wanna do that. We're one natick it. We share the expenses, we share where a community is created to govern itself and to fund the things that the community believes it needs and wants. And splitting it up in a menu to me
violates that principle. Speaker 10: Big ditto. Big ditto. Big ditto to what Mr. Sidney said. You know, I I, I agree with Mr. Bruce, Mr. Evans as well, because that pitting one against the other, you know, there's been so much conversation of the schools need this, the town needs this, and then there's the shared service. And I would be so concerned for, for either one of them not to receive the resources that they're needing. You know, it, it, I don't know if it's been amplified enough of how lean the town operates,
you know, that they are already operating in a very lean way. I mean, same grateful to you Mr. Erickson, for like, figuring all these budgets out. We've had to, you know, the finance staff has had to create so many additional budgets on a three person staff, On a three person staff. I think it's, it's, it's important to emphasize how lean the town is working and, and, and continues and plans to continue to work. And then, you know, the, the capital stabilization to think about, you know, us having buildings in disrepair,
schools in disrepair, people not able to get their questions answered there. You know, there's emails, dozens of emails every single day. Them not getting to get their questions answered or their, or their, the services that they need as, as efficiently as possible. Because we kind of play like, we're gonna, we're gonna put this up, but we're not gonna put this up or we're gonna let you make a decision. And, and that it's, it is the voter's decision. Make no mistake. This is, this is a voter decision and I appreciate that. I appreciate that the town gets to dec decide,
but I think it, I I agree with Mr. Sidney wholeheartedly. I, this idea that there's multiple natick is not good, Speaker 11: Ms. Ger. So my argument against the menu option is that in some ways it's really presenting a false choice to the voters because it's town meeting that decides how, how to fund budgets. So let's say we, you know, Dudley was an example
that was brought up and they had specific things for libraries and schools, and then they had others for DPW and town and the schools and libraries passed. The town services did not. Well, if that were to happen, something like that in Natick, well, town meeting could decide to use other funding sources to fund the town budget. And in, in some ways, you know, would they be willing to go against the voters? I don't know. But it's a possibility. And, and I think that by giving those menu options,
we're saying that, you know, this is your decision. It really isn't because it's town meeting's decision. And the other piece of it is, it's just for next fiscal year. So however you wanted to fund things and divide it, that that's, it's all goes out the wayside the following year because money's fungible. I mean, you can always make, you know, different allocations to budgets and you could say that, okay, this amount that you paid that you approved extra for tax levy for the schools, well then you just, the town would maybe just give less to the school. So I, I think it's, you know, it it's telling the voters
that we're giving them a choice when in some ways we're really not. So, you know, and then all the other reasons that everyone else mentioned, that's why I'm not in favor of it. Speaker 1: I'm gonna expand a little bit on Mr. Sidney's point, which has been ditto by the rest of the board. When I first moved to Natick, I came from a place with a different form of government and it baffled me why we talked about school employees and town employees. 'cause I kept thinking, but we're one town. And then I learned about mass general law and the separation and how the schools govern themselves. The town governs itself and it set itself up in other communities.
But at times in our community where there was kind of like tension between town and school, something like, and this is, this is historic, but something like, here's our budget. Just, that's, that's what we need to be funding instead of working together collaboratively as one town and finding places where we can have shared efficiencies, which is everybody benefits from that. You have shared deficiencies, we don't spend as much. And so, and then there's also the culture. I, I wanna echo what Mr. Sidney said. We are one town, you know, people have remarked, you know,
my kids have gone through the school and I'm still paying. We never had children. And I gladly write out my check for taxes because I wanna make sure that the children who live here grow up and become responsible, civic minded, social emotional learning, social emotional learners and become vibrant civic citizens wherever they go on to, to be. And that's a value that, that, you know, I personally have, and I think, I think most people in EK do that is not to underscore at all the potential impact to the wallet of the, of the voters.
I'm not saying that that's not that this is more important than that. I'm just saying that I, for me, the menu option, I did some research, thought a along lot about it, and I came down on exactly what Linda said with regard to how things are actually funded. And to Mr. Sidney's comment about one naic. So if there aren't any more comments from the board on that, I'd like to move on to the next agenda item proposal came in late today. I don't know if members of the board have had a chance to look at it. Let's see. Speaker 7: Is that the one from Mr. Kaplan? Speaker 1: Yes. So a gentleman had
provided some substantive research on splitting the tax levy. Now the proposal was, is that the declining taxes paid by the commercial class, not because their assessments are going lower, but they're becoming a smaller portion of the overall asset class contributing to the levy. Because of that, we could pass an $8 million override and shift 30% when we do our tax in November when we do our tax Speaker 7: Recap.
Speaker 1: Thank you. Our tax recap and set the tax rate, we could shift that onto the commercial and this $8 million would not impact our residents. Now we really can't. That's kind of outside the scope of what we're talking about, but I do wanna bring it up and I am happy to forward that email to anyone who's interested in it. It's a public record and it does have some sub substantive research. Speaker 7: We, we can have Billy put it on the Novus agenda as well for the meeting. Speaker 1: That'd be great. That's probably easier. Speaker 7: Yeah. And I know he is on, so he is listening. Speaker 1: Well, you don't know he's listening. No, I'm just kidding.
Speaker 7: I know he's Speaker 1: On, I know camera Speaker 7: May not be listening. Speaker 1: So the pause soon, it's kind of beyond the scope of, of what we're talking about tonight, because we can't really commit to doing that until we have the numbers next and, and the recap and everything next November. But it's something that I think that, you know, historically we have not shifted, we have not had a split tax rate. And I, I think that this is something that's going to, that the board should commit to looking at again, in advance of the November presentation, having a public meeting
and talking about what this would look like and whether it makes sense. I mean, every year we look at it and every year we analyze it. And every year that I've been on the board and been watching the board, it has not made sense. But I'd like to offer the opportunity to say, Hey, let, let's look at this in October before we have everything, talk about what the pros and cons are and talk to look at some hard numbers about the businesses. It does impact specifically the small businesses that pay triple net leases. And I'm just gonna throw that out to the board for comment. Mr. Lauger. Speaker 11: I absolutely agree. I mean, I haven't had a chance to,
to look at the information that was sent in any detail. But one thing that, and again, you know, I'm always, when I get information, I like to verify the accuracy. Not to say that it isn't, but one of the things that was new to me was the claim that our, our large commercial properties, the taxes have been going down over time now, or at least not going up nearly as much. So I think it's worth a consideration of that. Our assessor does a fabulous job of explaining things at, at these meetings, the tax recap meetings
and going through various scenarios. But I think the, the part about really understanding the impact on our businesses, and like you said, the triple net in our large businesses, we haven't done that granular analysis before. So I think it's worth doing. I know that there's many people in the community that support a split tax rate, other comparable communities to us do. And, you know, whether or not we think it's a good idea, I think it's a good idea to look at. Speaker 1: Yeah, I completely agree. I i i, I wanna look closely also on other comparable communities looking at the pro, the, the percentage of the tax levy
that's paid by the commercial base. One of the issues with the commercial, commercial businesses are assessed differently than residences. So they're assessed on their revenue less expenses. Speaker 14: Oh, that's for retail. Speaker 1: So yes, that's for retail. So I'm thinking about retail businesses, Speaker 14: Right? So I I absolutely support this, and I'm sorry to interrupt, but one of the things that's gonna impact this is, and one, one of the things when we look at comparable communities we wanna look at is the makeup of their commercial. Our commercial is substantial, you know, it's,
it's a lot of it's retail. A town like Burlington, most of their commercial is industrial use. Yes. And, and is assessed at the same way residences are. Right? And so we need to understand that breakdown and how that would impact things. So I think if we can get this on an agenda for, you know, well in advance of when we have to do the recap, because we're always, you know, we get to November and, and we've got a mess of stuff to do all at once. And I, I would like to really like break it down
and I've done, I've, I've been through this with a couple of different residences, a couple of different residents a couple of times, and you know, there's a, there's a point I, I've figured this out. There's a point at which it makes sense to split the tax rate. I haven't felt we've been there, but I also haven't had the time to get like that granular with it. Speaker 25: So I would Go ahead, Mr. Evans. Speaker 13: Yeah, I just have a couple points. Yes. I think we should look at this earlier as Mr. Sidney said then, then the recap period. But I would caution against a couple things.
One is, one is we're trying, we heard earlier tonight we're trying to attract businesses to natick. Nothing scares away businesses more than a split tax rate. It it, it has that effect. You also look at, what we have to look at also is in the communities that do have a split tax rate, what did they have to offer as compensation for a business to locate their example, need them? Yes. With TripAdvisor example,
Watertown, our better example is actually BJ's, which was in Natick, right? And then went to Westboro because they offered them them tax relief for a number of years. And then when that expired, they skipped out to Marlboro who also offered them. So to me it's, it is kind of a false economy to just say unilaterally. Yeah, let's do a split tax rate. The other, the other piece that I wanted to note is the tax levy is the tax levy in terms of it's, oh yeah, good point.
It's not going to increase. All you're going to do is shift who pays for it, right? And if it's the commercial people, you have the tendency to drive out smaller retailers who can't afford their rents because it's pushing them out. And I think we need to be very careful about how we analyze this and it, it would, nothing would be easier for us to say, yeah, let's, let's do a split tax rate, but we need to really, really think about the implications of it.
The other part is if those businesses do leave town, that revenue still has to be made up. And guess who's gonna be making up that the residents, right? Right. So you might save money this year and maybe next year, but the third year, maybe fourth year, you're gonna be making up that difference. And I, I have yet to see cost go down in my lifetime in, in municipal government. So I think we need to be really careful how we Speaker 14: Approach this.
Speaker 1: So for the people at home in terms of tax incentives, Natick has historically not offered what are called tiffs tax increment financing. We've Speaker 14: Offered a couple, Speaker 1: Historically we've told businesses Mr. S that we do not do that. We've offered one and it's run out. Speaker 14: Yeah, it's run Speaker 1: Out. So we do not do that. So when businesses offer, when big businesses offer to come here, we tell them no, this is our tax rate and our tax rate's pretty low. And you get a lot of services for your tax rate. So just for the public's education, we don't tend
to offer Tiffs and Bruce or Bruce's example about BJ's is perfect. They got a 10 year tiff from Southborough or South, south Westboro, Westboro and moved there. And then when that ran out, they moved to Marlboro. When that runs out, who knows where they're gonna move. But that left a hole here. Luckily we were able to, you know, salvage that, that real estate and, and attract businesses. But all of these factors that we're talking about, I'd like to ask this board to commit to doing an in-depth study.
Maybe over the summer have a subcommittee where a lot of these, you know, polling our smaller businesses, talking about what this looks like in terms of five 10, I mean, I, I mentioned the numbers last night, a 2%, you know, a 2% savings on the residential side as our tax levy is currently comprised shifts 10% increase in taxes on the commercial side. So thinking about moving 30% over, we're saving six on the residential 6%. All of the, and and these numbers will be different
given that given November. But we can start by looking at where we are now and what those numbers are. So I, this is kind of beyond the scope of the override, but it is an opportunity to talk to people and talk to the public and let them know that we're willing to do the work to ensure that our tax policy is fair and equitable. Are there any other comments on this? Speaker 14: Thanks. Great idea. Speaker 1: Okay. Speaker 14: We can add it to our goals, Speaker 1: Tax title revenue and the overlay account. I would like Mr. Erickson to explain what the overlay account is and the tax title process, uncollected taxes
and what we're doing now, if you are Speaker 7: Sure. And, and I'll, I'll try to be brief. I know Mr. Townsend, I believe you have a, have a nine o'clock, so unfortunately John does have to leave then and I wanna make sure if there's any questions. Sure. Which on here, just briefly. Tax title? Well, the overlay account is, it's basically a required reserve account that the town all towns in, in Massachusetts are required to have. That has to have a balance that basically exceeds or in theory exceeds potential liabilities from the tax process. So there's businesses or residents that don't pay their taxes
and there's other liabilities against that personal property or other taxes. And essentially we're obligated by, by the state to have and reserve an amount that exceeds that potential liability. The annually we can, in theory, any community can in theory work through what's called a tax title process. Which basically means that for those properties that do not pay their taxes, we can through a process and it's an extensive process that includes notification and timelines and what have you.
But we can basically, if they choose, if they continue to not pay their taxes through the notification process, we can do what's called a tax title, taking or file at the registry of deeds tax title. Which basically means the town has title for unpaid taxes, bills, it depends on what it is, but in the case of the, the bulk of the amount it's taxes and then that can be something that can come off of that liability for which we're obligated to keep a balance amount very, very high level.
I'm just trying to show, just provide a very, very rough understanding of how that process works. We can have a whole night on this, another time to talk through. I just want to, to give those watching and just that, that high level review, anything that I missed that's important for that high level review, John? No, Speaker 20: I think it's a good overview. Yeah. Okay. Speaker 7: For Natick, currently we have a balance in that account of roughly 5.7 million roughly. And we have a liability of roughly 5 million. It's all actually in the budget book. You can go to page, lemme just find it real quick.
Page 2 66, it starts and you can see a breakdown at the high level of, of that overlay. It's called the overlay worksheet or schedule OL one. So 5.735 million is available overlay balance. But there's a total potential future liabilities of 5.099. And that's hyphenate just full openness and honesty. That is hyphenate. And we do have in, in years past, been able to use that overlay account as one-time funding sources to help our budgeting process
not dissimilar to free cash because they're considered one-time funds. 'cause any given year it could be zero, it it be, 'cause those liabilities can come off and off the books. The other thing that can help to cover is if we have any abatement requests towards properties. So if somebody's appealing what we're basically charging them for taxes, that can also have an impact on this balance. We're working through extensive processes. So during the pandemic town administration at the time chose to hold on tax letter processes made, made sense.
People were dealing with the pandemic to have a demand notice coming to somebody. When you're really dealing with a crisis, you know, looking back at it, I can see where, where the thinking was. But in addition, from that time, from 20 20, 20 21, 20 22 to now, there's also been some adjustments in the process. And part of that comes from a Supreme Court case actually out of Hennepin County, Minneapolis or Minnesota, whereby I'm not gonna go through the case. But it basically led to additional timeframe and,
and steps that we have to follow to put properties into the tax title. All that's to say that what we're actively working on in staff is, is very diligently doing this, is to bring down that potential liability to provide us with some flexibility in releasing more overlay from that $5.7 million balance. We are confident that within the next several weeks we'll be able to reduce a certain amount and then by the end of the fiscal year, another amount could be the, to the tune of one to $2 million, maybe more, hopefully more. And then within the next year we'll be able
to get caught back up and more normal into what our historic numbers have been. This is partly in part, part and parcel with some of the impacts of both the pandemic pause and also some additional steps that we have to work through. We do have outside counsel that's helping us with this. They barely specialize in this. Every time I've worked in has actually used them. That's how specialized they are. But it, it just has come up in dialogue and we have relied on it and it's in our forecast moving forward. So it's important I think for the board to be aware of what's happening with that. Again, we can dive into it, it can be a whole night diving into the overlay
and the tax title process, but I wanted to give a very high overview and let the board know that we are actively working on it. John, anything you wanted to add? I know you have, you're, you're like meeting on this almost every other day now. Speaker 20: Yeah, we're working on this pretty constantly. I pretty much spent the entire day on this. But the, the, the amounts that Mr. Harrison referred to within the next couple weeks that we are moving the deferral monies, which are those programs, we have about three 50. Those have been moved out of there. So that's been done subsequent amounts, which are those ones
that are already in tax title, we have to add additional money to it. Those we're doing the list on it. This what's working on getting that to our council who then will add that, that's another seven 50 or so, so within the next couple of weeks as we'll, have a million that's sort of moved off there. And then we're hopefully within the next couple of weeks we'll do the first rounds of demand notices that are gonna go out to everybody with regards to the collections on this. We're not gonna see much of anything within this year, maybe a little bit. 'cause when the demands do go out, some people go, oh, I'm sorry I missed that year.
And they'll pay up on things. But I'm not thinking anything more than maybe a half a million at the most. It's a long term project. They do, of course we pass the tax titled payment agreements so they can have Speaker 7: That was just fall town meeting? That fall town meeting. Yep. It was update from the state. Yep. Speaker 20: And we need, we're getting it updated based on the new Supreme Court case. Gonna get that back from the, the Attorney general, but basically that gives those folks another three years to pay it should they decide to sign up on it. They do have to put 25% up, but they have three years. So you can push it out to three years before we can start the,
the foreclosures of proceedings on folks. Speaker 7: Okay. So just briefly just to finalize that, that essentially the book is based on a moment in time, so that's February one with the updates that's actively happening within the finance division, that it's basically working on that total potential future liability amount and trying to bring that down. And then there can be a decision by the board of assessors. It's not a town administration decision, it's actually a board of assessors decision to potentially release some funding. It's ultimately their their sort of decision though,
Speaker 1: Right. Before we take comments and questions, I just wanted to add that. Thank you. Thank you John. I know you, you have to leave Since, since well over the last week, two weeks I've been meeting with town administration to come up with a solution including bringing in an outside contractor to staff the office. When those demand letters go out, those phone calls are gonna start coming in. So, and they're already down two people and potentially one other person. So given that I've asked the, the finance office to
actively seek temp contractor to come in and handle that, so we can capitalize on getting as much in as we can as early as we can and as often as we can, it will be a process. The second item that I've asked administration to do is to prepare a list to be placed on our website of all delinquent taxpayers in the town, commercial and residential and how much they owe other towns do it. It used to be published in the Town report back in the sixties, it was also published in the newspapers. That has not been done. And though we live in a time
where shame has not been a great motivator in the last maybe decade, I'm counting on people, holding people accountable and saying, and, and if there is a problem, people do have legitimate reasons for not being able to pay their taxes broke you down. There is a person in town, not the person is not in town. The person lives outside of town that owes a sizeable sum as and has decided not to pay that because she doesn't live there, doesn't wanna sell the house, but doesn't live there. That pro that that is an account that's actively being chased. So I I want to assure taxpayers
that we're taking this very seriously, making sure that finance has the resources it needs it to collect and that we move in, move forward in ensuring that processes and p policy and processes and procedures are in place to reduce the amount of outstanding real estate taxes. So I'll take comments and questions from the board or hear them. I won't take them out here. Yes, Ms. Pope. Speaker 10: Thank you Madam Chair. Thank you. John. A question I have is, is there ever a time and is it legal for this account
to be less than the liabilities owed? So right now the account has like $700,000 more than liabilities. Is it ever okay or illegal for the account to, to go below the liabilities owed? Speaker 7: I'll have John answer that question. Speaker 20: Yeah, so, so basically there's the criteria set out for the account. DOR only sort of looks at this when we file the paperwork in November. So yes, at times it could go below that, but as long as it's by that it's sort of trued up by that particular date, then you're, you're usually fine. Speaker 7: So thank you. If, if we were to be lower, DOR would not
think too highly of that and we'd probably have other Yeah. Potential impacts. Another, another reality is that the, the amount of the potential future liabilities, well not that total amount, it's actually the real estate receivables amount, which if you're looking on page 2 66 is number nine. That actually is also a factor in our free cash calculation that we submit. So DOR does a very good job at ensuring that we have funding available to cover these potential liabilities. Speaker 14: Yeah. And plus the board
of assessors won't release money if it's gonna take us below the liability, I would Speaker 7: Assume. Right. The board of assessors ultimately ensures the balance is gonna be able to cover the liabilities. Speaker 1: Ms. Wolfner, Speaker 11: Just a couple things I've kind of been mentioned, but I I do wanna emphasize them. So anything that we can collect in this fiscal year is really a double whammy because we get the money and then also that gets subtracted from the, the amount from the overlay account and could be potentially released by the board of assessors
as overlay surplus. So I think that's important to know that anything that we can collect really gives us a a two x benefit, of course subject to whatever decision that the board of assessors makes. And the other thing I wanna say, and 'cause this was the case when the information used to be published of, of people that owed money to the town, is that in many instances it's a paperwork error. Yes. You know, we do not necessarily notify people that they owe the town money. And that's why these demand notices are, are, are really important that they go out
and that, you know, there are people, and I know because I, two of my neighbors were in that situation where they had no idea that they owe them money. And, and, and that's really important that, that, you know, we need to do the demand notices and the collection and whatever we can do first before putting someone up on the website who, who, you know, Speaker 1: Agreed Speaker 11: Shame was the word that, that our Speaker 1: Chair used. I absolutely agree. It's Speaker 11: Important not to out somebody that is just potentially a victim of their, their mortgage company or
Speaker 1: Mortgage company. Yes. Speaker 11: The mortgage company supplying the wrong information so their, their taxes got accredited to a different account. So I just wanted to make those two points. Speaker 1: I absolutely agree with you. The yeah, oftentimes it is a paperwork or an oversight on a bill and it is important that those demand notices. My suggestion was to wait the four after the 14 days after the demand notice goes out to add the name to the list. So to be, for, for those of you who are at home, just a point of explanation, your tax bill for this year,
let's say fiscal 25 is really not due until June 30th, 2025. You get, we break it up quarterly to make it easy for you. If you miss a quarter or you're late on a quarter, you're, you're not in arrears. We can't, we can't force collection until July one of, of of 2026 for taxes that are due in 2025. So that's a DOR ruling. 'cause the bill, we say at the beginning of the year, your tax bill your is $10,000 and you'll owe 2,500. The amounts vary. They're not always the same
for four periods, but we can't start a formal collection process until the first day of the following year. So these are gonna be people who are in arrears for fiscal 24 20 24 and previous in pre in previous years. Yes. Speaker 11: If I can just make one small tweak to that, if you don't pay on time, you still owe interest. Speaker 1: Oh no. Yes indeed. Indeed. You owe interest and so we don't want people waiting till the end of the year. No, no. You do owe interest and yes. And so no, we do not want you to wait and, and that causes real trouble
with the books when those payments come in on July one of the next year. So thank you for that public service announcement Ms. Slager. I appreciate that. Any other comments on tax collection increasing revenues? Yes, Mr. Just, Speaker 13: Just a thank you to Mr. Townson and Mr. Erickson for following up on that because I know it's one more thing to look to, to chase after, but it, it's gotten to the point where it needs to be reduced and we appreciate your efforts.
Speaker 1: Thank you. Yeah, very much. Thank you. This has been, you know, just an one more thing to do. The last item to discuss is the potential for no override at all. Bye John. Thank you so much. Does anybody want to address the possibility of no override at all? Yes, Mr. Bruce. Speaker 13: I I think we've, we've kind of been dancing around this the whole night and sort of commenting on it that it's, that the impact of no override is catastrophic to the budget. There's no getting around it. It affects both the
schools and the town. We, we, they have made significant cuts in the schools side. They've, they've made about $2 million of cuts over the last two years. On the town side. We're doing something proportional in the same way. Not filling positions. Seven FTEs that will go undone if we don't have an override. There are additional cuts that have to be made beyond that and, and that that's on the school side,
especially cutting to the bone. But even on the town side, we're we run, one of the questions I got the other day from a resident was, well, you know, the town has assistance for assistance and assistance and I, and I said to them, I said, I should show you an organization chart of, of how the town is structured. And I think you'd find that no, it's actually a, a very lean organization. And one of the things that, that I I I've taken to quoting Mr. Erickson's mantra, which is right sizing
the departments when there, the opportunity arises. So I I think no override does a disservice to the town. It it, it totally compromises the schools and it and it diminishes the quality of services to the rest of the town. Speaker 11: Ms. Slager just gonna be very brief and, and ditto to to much of, of, but Mr. Evans said it, I'm just gonna put in a plug to the override page on our website where all of that information is available, including the really informative presentations that we've had at our budget forms from town administration
and from schools that, that go into the impact of no override. You know, part of it's in our, in the budget book too, but all of those resources are there and the other part of it is that if there are questions that people have, they can be submitted online and they were answered by our town and school administration on a weekly or almost weekly basis. So please send in your questions Mr. Sidney. Speaker 14: Thanks. It,
it's my opinion we need to have an override. I don't think no override is an option if we don't have an override and I'm just gonna try and be as specific as possible. We get a million dollars a year from the state in road for road work. We've been supplementing that over the past few years by another roughly two and a half to $3 million. If we we're only to use a million dollars a year, it would be tough to even patch every pothole in town. It's not enough money. So we'd see an immediate
impact on the drivability around town. We wouldn't do some maintenance on buildings. The buildings would get worse. That means that when we actually get around to repairing them and maintaining them, it'll cost more because they'll be that much worse. It's exponential Saving money now cost more money later. And not just because cost of supplies goes up, but because there's more work to do and the quality of our schools will go down. That'll affect our property taxes, our property values.
People will be less inclined to want to come to Natick. It'll, you know, if my, we're still gonna collect whatever taxes we collect, but we won't be able to sell our house for as much, quite as much money in all likelihood. These are just some of the impacts of not having an override. There are many more. It's just we get it. We're, we're at that point in prop two and a half land where we have done everything we can to avoid an override. The last override we had in 2008 was promised to last three to six years.
If we just assume we were talking about an override just before the pandemic hit. So we can say it lasted 12 years. Leave the pandemic out of it. So it lasted twice as long as, as was promised. And that's because we budget really carefully. It's because we manage expenses really carefully. The schools get a great education for less than average, less than state average per school spending. And they do a better job than a lot of districts that spend more money per student.
This is a very efficiently run town. Costs go up at, you know, over 3% a year. We can raise our levy 3% a year. So eventually that line crosses and we have to ask the public for more money. Dunno how much that is yet, but we need something. We've just hit that, we've hit that boundary 17 years after our last one. Speaker 1: Thank you Mr. Sidney. Big ditto from Ms. Pope. Any further comment? Yeah,
I don't see a way forward without an override. So to be determined is the amount, how it's structured, what it looks like and that's what we'll vote on tomorrow. Ms. Slager, did you wanna share? I think we've made it through the list. Yes, we've made it through the list. Plus a few additional things. Not to put you on the spot. Speaker 11: No, I mean I think that some of the scenarios that Mr. Erickson put forward I think are, are, are worth looking at and potentially tweaking for tomorrow. I have something slightly different, but we can talk about that tomorrow. Speaker 1: Okay. Speaker 7: I shared that with the board
and Billy has already, he is listening. He already wrote back and saying that he is going to be putting that on the website or on Novus. We will figure out exactly where, probably tomorrow morning. Speaker 1: Okay. Any comment, anything else raised? Is there anyone in the public that has a question with regard to something that we did not cover that would be appropriate for discussion with regard to the override? Seeing none in the room, none online. I'll entertain a motion to adjourn. So move Second. Moved by Mr. Sidney. Seconded by Ms. Slager.
All in favor please say aye. Aye. Any opposed? Any abstentions? Nine. Oh wait, that's a wrap.