##VIDEO ID:https://videoplayer.telvue.com/player/994DtmGEsi0VDYK3jJI2BJ72GfgNIpU2/media/927407?autostart=false&showtabssearch=true&fullscreen=false## <v Speaker 1>Good evening.</v> Welcome to the February 15th. Nope, January. Where are we? January 15th. January 15th. Meeting of the select board. This is an off cycle meeting. Ms. Pope is traveling. Ms. Slager is not well. So we are here in the school committee room and on Pegasus. At this point I would like to ask everyone in the room who's able to stand to say the Pledge of Allegiance and observe a moment of silence for those who are serving our country, our Commonwealth and our town, <v Speaker 2>The flag for the United States of America to Republic,</v> which stands One Nation Liberty and Justice for all. <v Speaker 1>Thank you.</v> At this time we will enter 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 will 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 during this section of the agenda shall be limited to three minutes while the select board endeavors to ensure that all interested parties 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 wishes to address the board and public speak? Seeing none, is there anyone on Zoom who wishes to address the board during public speak? Seeing none, we will move into discussion and decision and we'll start with the override discussion. Mr. Erickson? <v Speaker 3>Thank you Madam Chair. So this is an off cycle</v> meeting, as you noted. So what we wanted to do from the 10 administration's perspective tonight is just run through a couple of items that can help further the dialogue of the board and the community around a possible override. Bring back some of the past analysis that town administration in collaboration with our partners in the school department and and boards and committees as well that were involved in reviewing some of the materials had in the past, leading up to the sort of current proposed approach to the override. And then really just open up to the board and the public to ask questions. This is really designed as a fairly conversational approach, what we'd like to take, but we do have some information to share or at least some slides to run through. John, do you have, are you on yet? Okay. Or can you just email me the most current version of that presentation I can pull up? Okay, So we, we have a few slides. It's not really a presentation, it's a few slides. One of the things, or a couple of things that have happened since the December 16th meeting and we recognized the December 16th meeting, which was the joint meeting between the school committee and the select board was, was pretty dense, pretty pretty full of information. You know, I think it was a 30 plus slide presentation and we recognize that given the, the, the, what we were getting through in that meeting, maybe some of the materials were we, we want to go back through some of the materials to reiterate some of the components of what was presented. And we've had some additional information since that time that we'd like to present to the board and really get your buy-in and thoughts on. One of which is, and this is what we'll be sort of first covering, is the free cash spending plan and the free cash. So we got our certified free cash earlier this month. I'm just gonna pull up a presentation in a sec with that information and we'll go through the free cash spending plan. The other thing that we've also completed since that December 16th meeting is the five year capital plan. The capital program was due to the public on December, on January 1st. We published it soon after January 1st because January 1st was the holiday. And we now have a little bit much bigger, better picture of potential. Well, one, the capital improvement program, which is a five year plan, but at least the first year of the program. And then that feeds into the dialogue around, well what are some of the potential impacts of an override versus a no override that we can actually further articulate. And capital is a big component of that 'cause there are definitely really in all scenarios, capital is impacted, but it's especially impacted with a no override approach. And we can talk further about those details once I pull up the presentation. In addition, we'll have some information in here on some of the other analysis that we've done and just again, a rehash of some of the information that we provided during the presentation. We can also go off these slides to pull up the capital program if the board would like to see more detail and or the presentation on December 16th. I do, some of these slides are just from the December 16th presentation that we'll run through, but I just want to make sure that the board is aware of what we're gonna be covering in the next few minutes. Any questions from that perspective? From the board? Great. Let me share my screen And I apologize from John sending it to me, it just formatted a little bit. Oddly, we're still figuring out the intricacies of Microsoft 365, which tends the auto format between computers. But this is just a brief discussion and dialogue within the school committee meeting room tonight about some of the co potency of the override. So first is the free cash spending plan, which we, I mentioned we have since received our certified free cash. It came in at roughly $7.8 million. And these are the two scenarios that we'll be proposing heading into the budget season on how best to utilize free cash. The first column you can see FY 26 preliminary. The preliminary, what we call preliminary is a no override budget. That's how we on the townside have prepared the budget that will be released in early February, February one, although it'll actually be that following Monday, February 3rd. And then the FY 26 budget with an override shows where then the free cash would shift to should an override pass. 'cause if you recall the override, the proposed $8 million override includes 4 million to offset some of the use of free cash. And that's that $6.5 million on the first line going to $2.5 million in the second line underneath that expenses column. What that does for us with an override is it frees up capital, frees up funding to then fund some key components of our program from a financial management perspective, including additionally funding stabilization accounts, operational in general 'cause we're just that, maybe even slightly below our targets for both of those accounts. And then putting a good chunk towards capital, capital stabilization at 1.7 million and capital improvement just projects at 1.5 million. I think it's really important to note that because the more we can spend free cash for capital, the less we can we need to spend on borrowing. And borrowing is an expense that goes into our shared services line in the budget. So if with a no override of vote, and you may recall this from the presentation on December 16th, a component of the shared services that will be funded with an override is debt service for capital. So if we do not get the override, we will not be able to spend some money and we won't be able to cover some of the debt service, which means we cannot borrow as much to cover capital, let alone use free cash to cover capital. I'm looking at John to make sure I'm misspeaking so he's gonna chime in if I misspeak at all, which I'm sure I'm, you know, it's not the full picture, it's really the permanent borrowing of some of the existing capital. This will be posted on Novus after the presentation. So you can certainly take pictures but you'll be able to see it on on the website afterwards. So it's really important to note that because capital will absolutely be impacted if there is a no override vote. One other component now that we have a capital program that is out our five-year capital improvement program and we can certainly pull up the details, but they are also available on the towns website. If you just search FY 26 capital program, it was posted there on January 3rd, I believe second, the first year of capital. The first year is this upcoming FY 26. It's a five year plan, but the first year is always tends to be the most accurate just 'cause when you get further out it tends to be a little bit more about those projects that we think we're gonna need. But we're not totally sure. But the first year plan includes approximately $16 million worth of requests for capital. Now we know we're not going to necessarily cover all $16 million of those requests because as we get closer and into the fiscal year, the capital plan is a fluid document. We get really more detail from department heads. We get quotes coming in for the different expend expenditures. We hone in on the actual prices on things and that's what we start to bring forward to town meeting at spring and fall. So typically on an every given year for the last several years anyway, we've been spending anywhere from 10 to $12 million on capital. So you take that $16 million and on a typical year we might actually fund capital to the tune of 10 to $12 million. The bulk of that has been borrowing the last several years. We'd like to shift that as much as we can to free cash or one-time funds like free cash. But the bulk of it, the last several years has been borrowing with no override. We lose the capacity in our shared services budget to continue to do that approach of borrowing. The more we can free up free cash for capital, the less we need to borrow. So if we do not get an override vote for whatever amount that means we'll have less funding to put towards borrowing in the shared services along with all the other operational costs, which also means our capital program will be impacted. So the exact extent is really a bit fluid because so much depends on interest rates. Those change throughout the course of a year. So much depends on what we can get from our bond rating. If we keep AAA bond rating, we're in a better position. If we get downgraded, we are in a worse position. So, so much of that is fluid. So it's impossible for me to say exactly today how much we'll be able to fund our capital because it'll really depend on a lot of factors that we continuously monitor throughout the year. But we're looking maybe at a four to $5 million capital program for FY 26. And that's probably in the high end. Yes. So if you think about $16 million worth of potential need, 10 to $12 million on a typical year is what we actually fund with no override. We're actually looking at a maybe three to $4 million actual capital program. Those are significant deferred costs that we'll not be able to cut take on our capital program. And the bulk of our capital program includes maintenance on facilities. For example, next year we have about $1.6 million, $1.7 million in in cost just for building mechanical, electrical and plumbing. $1.1 million of that is for upgrading the elec, the sprinkler upgrades to Behem school. We won't be able to do that. We also have about $6 million worth of vehicles to replace vehicles in our fleet, including an ambulance, including some trash and recycling vehicles. Those programs will suffer. So there's very real impacts to our capital program with no override and just wanna hit that point home. And it's really important and I think it's really a critical look at it when we look at our free cash spending plan because this gives us more capacity to spend one time funds from free cash, not enough, but more if with an override vote. That's why that $4 million in that forecast for capital is so critical. It frees up our ability to spend more cash on capital from the, from the free cash spending plan if we get the $8 million override. So any questions on the free cash spending plan, you'll also see that we're proposing to continue to fund and maintain our funding contributions to the OPE trust proposing to maintain reserves. That's a critical component with no override, we'll actually be below our free cash reserve preferred amount by about half our free cash reserve. Preferred amount is about what? 10% John? 5%. 5%. 5% <v Speaker 1>Of the total budget.</v> <v Speaker 3>Total budget. Yep. Which is why 800 $900,000 is the</v> preferred about a $200 million budget. That's about that 5%. So we'd be cutting that in half. So with an override we'll be able to stick more true to our financial management principles and have be in a better position to ensure that our capital program can also be fully funded. Well, not fully funded, but more funded than without an override vote. <v Speaker 1>I'm, I was a humanities major,</v> so slow down just for a second for me. So 10% of the total budget, $200 million budget roughly would be <v Speaker 3>So free cash reserves are, sorry, it's</v> <v Speaker 1>10.</v> 10. I'm sorry. 10% is okay. <v Speaker 3>Done. Yeah.</v> <v Speaker 4>So with regards to the free cash reserve</v> under the preliminary number, the 4 3 8 0 3 3 is approximately half as opposed to the with the override. That actually is the number that would meet our obligations under the financial management principles. Okay. And And that's sort of across the board here. When you look at Opep trust under, with the override 5 65 5 60, that actually is the amount that under finish management principles we're supposed to be setting aside. Not the two 50 we have in in the most recent years. And then same thing with the, yeah, and then the free cash reserve. Those two were the the two which will go back to where we're supposed to be. <v Speaker 5>Okay, thank you.</v> <v Speaker 3>And free cash reserves is basically just un obligated</v> funding, which it's part of our financial management principles to help with unanticipated cost. Yes. Throughout, throughout the course of the year or anything like that. <v Speaker 4>Yep. Just in case we needed some money.</v> That's the last sort of resort for us. Yep. Okay. <v Speaker 5>Thank you.</v> <v Speaker 3>Any questions from the board</v> on the free cash spending plan? Any thoughts? Are we in the right direction? This is consistent with how we've done free cash spending plans in the past. This provides two components because we have to consider the preliminary budget, which includes no override and a with override proposal as well. <v Speaker 4>Mr. Evans,</v> <v Speaker 6>My reaction, excuse me,</v> my reaction is positive overall. I like what you said about the scope of this and the focus on shifting free cash to capital. That's essential. I'll, I'll just describe it as deferred MA maintenance equals expensive or more expensive maintenance. See, see the MW MBTA, right? That that's exhibit A of that. So I'm glad to hear you are, are focusing on that. I'm also glad that with the override we can get to the free cash level that we're looking to get to. And I just remind people that the free cash numbers that have come in on average the last I think five years were something like four and a half million a year. Some, somewhere in that neighborhood. <v Speaker 4>Last one, sorry, it was a little over a six.</v> I think it was in 23 or 22 we had the $4 million, which is one of our most <v Speaker 6>Ones.</v> Okay, so roughly five, six. Yep. <v Speaker 4>Approximately. Yeah, around six.</v> <v Speaker 3>Typically in the $6 million range. Yep.</v> <v Speaker 6>It's a seven. So this gives me comfort actually</v> because we're not overly, we're reducing free cash to a level that is not putting us at risk. I can't over or over, what's the right word? Overthink, no overestimate the value of AAA bond rating. It, it is essential to keeping those borrowing costs under control. Mr. Townend, could you remind me, I was trying to find this number this afternoon was what is the recommended DOR debt to revenue level? I know we're considerably below that. <v Speaker 4>Yes. The recommended level by DOR is is around 10 to 12%.</v> Yes. I thought we're, I think the latest was 7.6. Okay. So that's something we we're considering with regards to how we sort of deal with our, our, our debt. <v Speaker 6>Right. And that, that's really over,</v> I don't know what period of time where we've had bond rating agencies. They highlight that as as a significant accomplishment. Especially when you're in a post covid situation. So all in all, I think this is a positive, positive plan. <v Speaker 5>Mr. Sidney.</v> <v Speaker 4>Thank you Madam Chair.</v> So I'm looking at the $13 million in the capital plan for, that's suggested for 2026. Obviously if we have to cut $4 million out of that, it's gonna be a problem. But so I, and you know, obviously we don't know the specifics of what wouldn't be funded because we, we haven't gotten there yet. But just a couple of numbers. And then this is for the general public as much as anybody, A couple of numbers outta here. Roadway and sidewalk supplement. This supplements our chapter 90 funds, which are less than a million dollars every year is proposed to $3.2 million. If we have to cut $4 million out, we're not gonna be fixing our roads. <v Speaker 3>So just note it's not cutting four</v> minutes. Cutting 12 million, <v Speaker 4>Cutting 12 million</v> <v Speaker 3>Of a $16 million program.</v> Okay. So <v Speaker 4>Yeah, but my point stands things that won't happen.</v> I mean some of the stuff in here is gonna have to happen, I imagine. Correct. That landfill capital maintenance is gonna be required 'cause we have to maintain that landfill cap. Correct. Things like that. Which means that there's less money for vehicle replacement. Roadways tree replacement, which is kind of, you know, we, it's a, it's a really good thing to have. <v Speaker 3>There's about 3.5 million in total in facilities</v> management costs, which include town wide security replacement upgrades. That includes all town buildings building exterior envelope upgrades, which again includes all town buildings. We're gonna be targeting the more aged buildings like the town hall complex, the public safety buildings, Wilson School is part of that as well. Roof design and replacement. Those include also our ones that are coming to the end of useful life, which is town hall complex, public safety complex, Wilson School. They're all built around that same time. We have a lot of builts that were built in the nineties ish that are all coming up to their end of use. Not, not the buildings, but components of them are coming up to the end of the useful life that these next few years are extremely critical for us to stay ahead of them or at least at them or else it's gonna cost even more down the road for us to do those replacement costs. Yeah, <v Speaker 4>I mean if you don't repair a building and it</v> and it becomes unrepairable, then you have to replace it and that's significantly more expensive than maintaining <v Speaker 3>It.</v> Right. And weather tightness is key. Just in this building. Just a couple years ago we had to replace the entire much of the roof system because it was leaking pretty extensively into some pretty critical areas and that was much more costly than if we had proactively replaced the roof in this building a couple years earlier or several years earlier. <v Speaker 4>Okay. Well I just, I think thank you.</v> And any other details you could add about what wouldn't happen? Yep. <v Speaker 3>Classroom audio system at the high school</v> building route replacement, although those are some IT upgrades that we really are feel are critical. So this is where we'd have to scrub the numbers to know exactly what we can fund versus the critical nature of the components of the capital program. So there are some requirements, like you mentioned, landfill MS four permitting, which is our compliance with federal regulations around stormwater. So some of these things we'll have to figure out what we can deal, we're required to work through versus nice to haves. <v Speaker 4>Okay. No thank you Mr. Erickson.</v> <v Speaker 3>John wants to talk further.</v> <v Speaker 7>Yeah, if I could just add</v> by moving them out, I think deferring is a really important thing for everyone to understand. And I know it's been mentioned a little bit, but deferring doesn't mean going away. We're, we're just pushing that to a future year. If you look at the plan and the way that it sequences out over time, it's 16 million, little bit more close to 17 in general fund requests. So that could be a combination of borrowing stabilization free cash. But if you look at the out years that goes up and these are estimated based on, you know, what the cost might be. I think the biggest challenge we had several years ago is the supplies and material costs for everything went through the roof. So what we had planned prior was lower, but then supplies and materials, which is pretty much everything in our capital plan went up the cost for labor to do that work. We have requirements for prevailing wage. So there's a number of things that come into play that are factoring driving these numbers up that are a little bit outside of our control. You know, if we don't have the funding, we will have to make choices, but that doesn't prepare us in an event where something fails. Recently we had the boiler at the community senior center fail. We were planning on getting there. We knew that that boiler had some issues. It wasn't necessarily an old building, but it was out of warranty. And as homeowners know, sometimes we have things in our house that fail despite our best efforts with those and we have those same realities in the municipal world. So we do a good job of trying to be ahead of 'em, trying to plan for when they come. But we also have to sequence things based on town meetings, time to try to get out ahead of stuff so that we have the funding available so that we can execute when things fail or before they fail in an ideal world. So, you know, whatever we defer, it just creates more risk for us <v Speaker 4>And, and if, if we defer the maintenance,</v> that particular maintenance not only gets more expensive, but because things get worse, it becomes more complicated and it again more expensive. So it's compounding. Yeah, it's, it's a, it's it's exponential. Not, not linear. <v Speaker 1>Did you, did you want to continue or should I go ahead</v> and open up for questions from, from <v Speaker 3>The room?</v> We have other slides If if yes please. I see Linda also has her hand raised that's, <v Speaker 1>Yeah, I was, I can't see her so I was hoping Okay,</v> you'd keep an eye on that for me. Yep. Ms. Slager, <v Speaker 3>She should be able to unmute herself.</v> <v Speaker 8>Yes, I just did. Thank you.</v> So just a question on, on capital, so let's say the override doesn't pass, there is also the opportunity to borrow some of these funds given that we only, you know, we have a four or so year window where we are having budget difficulties. So had you consider that as an option rather than, you know, deferring programs? <v Speaker 3>Absolutely, and that's exactly what some</v> of the override will help fund is the ability for us to borrow. So when we borrow those costs to pay off, the borrowing goes into our shared services line. So they are still part of our operational budget with no override. Our shared services line cannot increase to the extent to absorb the cost of the borrowing that will go in to, that will be required to cover the capital program. That's in the beginning part of this presentation. I mentioned that with no override we might be able to cover borrowing for maybe up to $4 million worth of projects. I'm looking at John to correct me. No. Okay. <v Speaker 4>No I, so one of the things that, you know,</v> we haven't actually sort of rolled out the budget just yet. So this is more of a budget sort of a conversation with regards to what our debt service is. But basically most of the debt service allocations under the coming budget will be for the, the management of our current bans not for new projects. And that's under what the budget will propose. And once again, I don't wanna get too much detail with regards to the budget 'cause we're not discussing the budget haven't released it yet. But that is under the budget will be proposed. But as Mr. Eon sort of indicated with the override, then we'll be back more towards a yes we can borrow things as opposed to under the budget which will be proposed. No, we'll not be able to budget very much for borrowing. <v Speaker 3>Okay. So 4 million is not even</v> realistic. Probably closer to, <v Speaker 4>Yeah, so the 4 million all, yeah,</v> so the 4 million is coming from the free cash existing monies we've already borrowed, which we'll shift from other projects. That's where the four millions be coming from. Okay. <v Speaker 3>Yep. So what John mentioned there was</v> that basically we have past, past appropriations for projects when a project is over, there's sometimes the balance is left over, we always scrub those on an annualized basis to make sure that when those projects are complete we can free up that money to put towards the capital program and additional capital projects. And any year it can be high or low depending on the projects and, and what comes off of or what gets completed. And so the really what would be funding our capital program is just any remaining balances from projects that have been completed through the years that we can then reappropriate for the capital program, which could be in the three to $4 million range this upcoming year Potentially. <v Speaker 4>Potentially. Yeah.</v> <v Speaker 3>So it's not even</v> borrowing that we would be covering that. <v Speaker 4>Yeah. For new projects. Correct.</v> <v Speaker 3>Finish. So basically there is currently no</v> with no override, there's no additional capacity or very minimal dis additional capacity to add borrowing to our expenses, <v Speaker 4>Correct?</v> Yes. <v Speaker 8>Okay. I think</v> that's really important for people to understand. Thank you. <v Speaker 3>So just speaking through, I can't fix that.</v> The next handful of sides, and I'll pause before going into them, run through some of the scenarios that we ran to to get to the proposed or rec requested override approach. There's like three or four or five slides that we have to run through that show. You know, we looked at everything from what if we spend, you know, try to get to no free cash going towards an override that's a much higher free override number. What if we do less? What if we do a multi-year approach? We did look at all of those scenarios and so what we wanted to provide the board was, was just a look at those, many of these you've seen before, we've provided them to board and and other members in the past. Some of them are new because we just wanted to run some with updated assumptions and figures. But before going to that, did you want to pause on this particular component at all? <v Speaker 1>I wanna pause and take some questions from Okay.</v> The audience and from online and if you could monitor the online ones for me. Sure. Since I can't see them questions in the room. Ms. GL, if you could go to the podium. <v Speaker 9>Hi Carol gl I am a resident of Natick.</v> A couple of questions that I might know the answers to, but I'm not certain I figured well if I'm not sure there might be somebody else was insured either. So, and of course I forgot my glasses so there was a little discussion about the target free cash. Yeah, they're over there. So there's a little, a little discussion about the target free cash and I know a percentage was mentioned, but as I sat there and looked at the numbers, I'm like, you know, I think that should, that target is 0.5% of the total budget and that's what 890,000 thousand dollars is about that, is that correct? It is. The target is, I dunno who sets that target if it's DOR or somebody else, but half a percent with <v Speaker 4>Regards to the reserve.</v> Yeah. Yes. The free cash reserve <v Speaker 9>Item. Sorry.</v> <v Speaker 4>No, that, that's actually our financial management</v> principles for the dominating. Got it. Yep. <v Speaker 9>Okay. Thank</v> <v Speaker 3>You. I I misspoke when I said five</v> or 10%, 0.5, <v Speaker 9>We all, we all do that, so not a</v> <v Speaker 3>Problem. I fully admit that that's me.</v> <v Speaker 9>Yeah. And so I, I had a little question about</v> AAA bond rating and I remember I'm old enough that I remember when we actually got AAA bond rating the first time it was very, very exciting. But maybe to help me but also maybe help others if our bond rating were to be lowered, what kind of impact could that have? I mean, I think, okay, well it might, might, we might have to pay higher, a little bit higher percentage to borrow, but are there any other impacts or is that, you know, is, is that even an possible impact? <v Speaker 4>Well the primary impact as you should indicated is the,</v> it's more expensive to borrow. I it would, a reduction would probably be to like a, a double a plus. So I don't think we'd have any problems actually getting credit. Okay. It would just be, we would probably be paying like a half point more with regards to the project. Okay, <v Speaker 9>Thank you.</v> And my last question is, I did not go back and look at the definitions that were provided along with the slides from the December 16th meeting. So can you remind me what bands are? <v Speaker 4>A band is a bond anticipatory note</v> and it's something we will take with regards to take out, it's a, it's a note that we take to fund finance maybe a year or two between when we're gonna go out for a full bond issue and when the projects are needs their actual cash. <v Speaker 3>So it's basically a short to term approach to borrowing</v> to cover capital projects. We've found that to do permanent borrowing, it's preferred to have a certain dollar amount that we're going out for permanent borrowing and one year's worth of projects that we would need to borrow for might not equal that amount. So what we typically do is take out bans, which can then allow us to stack a couple years worth of borrowing into a bond a couple years down the road. But we need those bands to still give us the capital or the money to then pay for those projects. So usually it's in the four to $5 million range, maybe a little bit more. Yeah. <v Speaker 4>One of the other things, and it's just,</v> just service a strategic thing. We've sort of been doing the, the rates on bands have been actually far more advantageous than it has been on a longer term bond and currently it's, it's still like that the longer term bonds are higher interest rates. So we do try to roll these bands out maybe a little more than we would've maybe five years ago. Bands can go up to 10 years. But anything that the length of the band of course is then adjusted against the useful life of the, when you actually go out for the bond. So if it's a 20 year project, you have five years on the bond with bands, then you only have 15 years actually to finance it from through a bond. So they have, there's certain, certain advantages to using bands which we've sort of been using. <v Speaker 9>Okay. Yeah,</v> <v Speaker 3>Thank you.</v> Ano another potential benefit of a ban? It is a benefit is, well it's, it's a sort of a double-edged sword. It you only pay the principal the interest, whereas on a borrow permanent borrowing, you're playing principal and interest, which means that that principle is not being paid off. So it's a lower cost because you're just paying interest but then you have to absorb a much higher cost once you transfer it into a borrowing or permanent borrowing. Right. <v Speaker 9>Actually my last question is if our bond rating were</v> to decrease from aaa, could that have any impact on the interest rate that we pay on bans? It sounds like they're not necessarily tied to one another, but I, I don't know the answer. <v Speaker 4>Oh it would, it definitely would. Absolutely</v> <v Speaker 9>Would. Okay, thank</v> <v Speaker 3>You.</v> Any really any borrowing would be impacted by a bond rating change. Okay, <v Speaker 9>Thank you Mr. Scott.</v> <v Speaker 10>Excuse me.</v> <v Speaker 11>Roger Scott 40 Water Street.</v> I just wanna go over a free cash flow from a consumer's PERS perspective. So each year a consumer homeowner gets a a bill that increases each year. We can all agree upon that. So in this case here, what I was looking at is the median price price home is around seven 80 in town and that is according to what I've read, $515 increase for that medium price home. And I'm just trying to say from a cash free standpoint, from the consumer side, we're taking money from their ability to buy things and they, they have to watch their budget. Basically the consumer has to watch their budget, they've got a bill, they wanna stay in their house, but they have to live within this budget. I think with the town needs to do is they have to live within a budget, they have to establish that this is what we are going to do as far as not raid the kitty and try to manage things a little bit better so that we don't run into these situations. And hopefully in four years when you get that re pension pension thing off there, that you can actually start to reorganize the town into more sensible approach to management. So I think from the cash flow of the the homeowner, it's beneficial that the responsibility of the select board and other members of the town spending that may be given true consideration as to responsible of duties of the town. I just wanna say that. Thank <v Speaker 1>You Mr. Scott.</v> I completely agree. I think I could speak from the board when I say that we all agree with that. Thank you. I'm sorry. Ms. Edelman Foster. <v Speaker 12>Hello Karen Edelman Foster. I live in Natick.</v> If the town were to as, as the previous speaker said, live within its current budget and not expand it per the override, thank you for explaining the impacts on the capital program and what would happen in that first year. Sounds like we'd be doing less road work, all sorts of building things that would not be done or be deferred and it sounds pretty serious in the first year. I'm just wondering what happens in the second year if we continue to live within our current budget without the override. Are there additional impacts on capital? <v Speaker 3>Sure. Well basically without that additional revenue,</v> well one in the first year with no override and we did, this is part of the presentation, I'll just pop it up real quick. Lemme share my screen again So folks may remember you're one of the override would reduce, would result in over $1 million reduction from even current fiscal year costs on the town side of the budget, which would be pretty significant impacts on our ability to provide services like trash recycling, public safety, ambulance service, things along those lines. There's also the shared services line, which that $358,000 that is actually borrowing permanent borrowing. So we would not be able to roll those bans into permanent borrowing, which means we have no additional capacity to fund any capital in that year other than maybe what we repurposed from prior years appropriations. And essentially what that would mean, and there's also the school reductions. So there would be $2.8 million in school reductions, even with the use of $6.5 million in free cash. Essentially what that would mean is in the following year we would be starting from those reduction points and we'd have to still rely on $6.5 million in free cash. If we don't get $6.5 million in free cash, you're now reducing, again, there is no additional capacity for borrowing and there's no additional cash for capital. So that $16 million gets added to the next year's $22 million in capital, which means you're now at $36 million, sorry 30, yeah, $38 million and there's no additional funding to actually spend. So now you're doing another year's worth of no capital deferred maintenance. You're looking at probably additional cuts to schools and town services. And so you're just really just compounding that, that that impact. <v Speaker 12>Thank you. So, so certainly with an override decision,</v> voters can decide to stay within our current budget. That's a legitimate thing. If they vote not to pass the override, they vote no, you know, those cuts will be made, but the cost of staying within that budget is not only pretty severe in that first year, but the severity seems to compound every subsequent year. The capital builds up more, there are more and more layoffs. So it's sort of digging a hole deeper and deeper. So that's a choice that can be made, but the consequence of that is actually to dig that hole deeper every year <v Speaker 3>In in essence, yes, that would be the,</v> the compounding impact year over year. John, anything to add to that? From a finance perspective, that's pretty much what it's or other John, from a capital perspective, <v Speaker 7>Just from an operations standpoint, if we defer,</v> whatever we defer means we have more projects to complete in a given year. So that also comes to capacity in our facilities department. Right now we have one project manager to oversee the 16 plus buildings that we have. So our facilities director, our executive director of DPW and public works end up managing projects more often than not. So you know it, with more projects and out years we just, we don't have the, the people power to actually complete them. So it's just a compounding issue that gets worse and worse. Thank you. <v Speaker 12>Thank you very much.</v> <v Speaker 1>I just wanted to make three points</v> and ask Mr. Townsend and Mr. Erickson to correct me if, if these, this isn't correct. So free cash is non-recurring and can't be carried over. Free cash is not stable, reliable and we cannot pro, we can't budget project using free cash. Is that correct? Definitely. <v Speaker 3>Yep.</v> <v Speaker 1>And DOR does not recommend use</v> of it for operational expenses, <v Speaker 3>Correct? Correct. Yeah.</v> <v Speaker 1>Okay. I mean for free cash kind you do</v> <v Speaker 3>They yeah, they understand.</v> <v Speaker 1>We do understood. It's</v> <v Speaker 3>Understood that we do understand a lot</v> of towns do. Yep. But <v Speaker 7>Per permission to go a little off script I guess,</v> and you can yell at me tomorrow if I do this <v Speaker 3>Great.</v> <v Speaker 7>So I've, I've kind of thought of it.</v> What does free cash mean to the public? Right? You have your checking account and then you have a savings account. Free cash is your savings account. Right. So once you blow through that savings account, if you have those ongoing expenses the next year it, it's not coming from anywhere or <v Speaker 3>Unexpected expenses.</v> <v Speaker 1>So using your analogy, could you expound, excuse me,</v> using your analogy, could you explain what the difference between free cash and stabilization funds are then? <v Speaker 7>Certificate of deposit,</v> <v Speaker 1>I'll take that.</v> <v Speaker 3>Checking</v> <v Speaker 1>Your investment account.</v> It's an investment account. We'll take a call a person online. Ms. Doran, if you can unmute yourself. <v Speaker 13>Hi, I'm unmuted.</v> <v Speaker 1>Yes,</v> <v Speaker 3>Yes,</v> <v Speaker 13>Yes.</v> Thank you for this meeting. It's my third. I listened in December, I was on Zoom for last week's meeting. You all are trying so hard to clarify this and it's really hard for my brain. I feel just as lost now despite all your, you know, explanations. When the meeting started, unfortunately a song popped into my head. It's a good one, it's one of my favorite talking head songs Once in a lifetime in that line. And you may ask yourself, well how did I get here? And that's kind of what I'm wondering. And I don't think you could have 10 meetings trying to explain to me how Natick got to this place. But I am concerned about being what I will call like a codependent taxpayer where I keep feeding money into this system that's not stopping. It seems to be slightly off the rails for whatever reason. Last week I was fascinated to listen to Frank Fuss. I'd never heard him speak, I'd never seen him. I just heard that he was in town meeting and I noticed several of you taking notes while he was making some excellent points I thought, and one of them that we need is that we need a course correction. I agree. I know a lot of people that agree with that. And the other suggestion was to implement immediately a hiring freeze. And what I'd really like to hear from people in the town is what are you all doing? What are we doing to sort of rein it in? Because you're explaining why we need it, it what will happen. It's almost sort of business as usual. And I know your hearts are in the right places and you've done the due diligence and the, you know, calculations. But on this end it's like, I, I really like, I I wanna see that we're going to do something different. Have you thought about any of Frank or discussed any of Frank fossa suggestions such as the hiring freeze? I would suggest not fire and police included, but would you be willing to step up and make some drastic changes or say you're going to or commit to them so that those of us who are being asked to increase our taxes could feel better about it. <v Speaker 1>Thank you Ms. Do I'd like to stop for just a minute</v> and if, if it's okay with Mr. Erickson, I didn't ask you to be prepared for this tonight, but if, if you don't mind and then we can pick up with this again next week when we meet again. But I was wondering if you could go over, I know over the last three to four years the town administration has worked assiduously to write revenue. So on the school side there isn't a lot of opportunity for revenue raising. There's fees which offset costs, but on the town side we have the opportunity to bring in revenue that's not related to real estate. It's still a small portion of the budget, but things like building firm permit fees, town clerk fees, DPW fees, things like that. So I was wondering if you could, I know we've been doing this over four years, we don't talk about it, it's not sexy, it doesn't get a, you know, a lot of people on Zoom or people talking about on Facebook, but it is something that the town on the town side that we've been working really closely on or working pretty hard on. <v Speaker 14>Sure. And, and I'm just trying to pull up the slide</v> <v Speaker 3>And</v> <v Speaker 1>Then we'll get back to the main</v> question about how did we get here. I'm not gonna leave that on the table, but I want, I wanna go through this first so that the public does know that this didn't suddenly creep up on us and we woke up one day and said we needed $8 million. <v Speaker 3>Yeah, the the, and we'll get back to that in a sec.</v> The, the slide that's here is actually in the original presentation on December 16th. This is on the town side and there's additional work that the schools have done on their side as well over the last couple years. But on the townside, which is as you noted is where we can sort of talk about some of the revenue growth, some of the right sizing of the, of the budget for reference, the non-school components of the budget is approximately, it depends on the the year 30% of the budget, 35% of the budget. And so this is just the context within which this slide is provided. So just in the last couple years we've looked at some of our bigger revenue areas, those are the ambulance fees and the license and permits. So we actually had a fairly comprehensive review of our ambulance fees when our new chief Furge started a couple years ago. And he's taken a very measured approach to increasing those fees just 'cause we know that those are costs that do get that are can be impactful. And so he took a multi-year approach to increase those fees but we saw a 9.2% increase in those fees over just in FY 24. And then our building permits, we actually readjusted those fees as well to better align with what we're seeing in trends of the communities and also just the workload. And we saw a very significant increase in fees on that front in FY 24 revenue. So those are two areas where we actually saw increase in fees. You also mentioned looking at other areas where we do have fees or costs. Some of them we're still doing, we're actively doing a comprehensive review of our trash and recycling program. That's a big cost area. We've done a comprehensive study with outside support consultant support to look at our recycle center to see how that can be better organized and and have some that's a cost driver, a cost potential cost savings. They're just not ready for fiscal year 26 for implementation but they are actively being looked at. But we have also looked at some other, other components like the, you mentioned last time the the replacement for your trash recycling bucket. We used to not charge even the cost to cover that cost and now we are charging that cut that cost. And so those are the types of examples of the fee structures and areas that we've seen where we can actually better align fees with actuals or actually have some revenue growth. Like we note on this slide, we are also actively looking at doing some other things that should have financial benefit or at least service benefit and financial benefit in the future. These include regional dispatch. We entered an IMA with Framingham last year and we're actively looking through that. We got the Framingham Natick partnership actually got a $4.6 million grant to basically fund that regional dispatch center. We're not ready to fully transfer into that because it's literally not built yet. We only just hired an executive director who's starting at the end of this month for that dispatch center. Our hope is that by this time next year we'll be transferring into, not transferring, we're already in it but actually shifting our, some of our actual work into that dispatch center and those grant funds come with some economic benefit to the town for the first several years of that dispatch center being up and running again that's more of an FY 27 benefit, not an FY 26 benefit. And we're constantly scrubbing for grants. Behe I noted for a capital impact but we did receive a $2 million grant that our sustainability manager applied for and received on behalf of the town to basically revamp their entire HVAC system. We also received same sustainability manager, actually received about a million dollars worth of funding to help replace the Moore Institute libraries HVAC system and about a million dollars of other sustainability projects over the course of any given year is what we typically receive. That could be for the electrification of our fleet because we constantly are looking for upgrades to our vehicles and and other systems and just other programs. We're also looking at a lot of the other, not a lot of other non town funds to support our storm water system. We have a couple examples here for the South Natick Park and roadway improvements. So we're constantly looking for those grant programs and on the town side it's where we can see the most ability is through those types of programs. Other highlights, you know we're looking at ways where we can just increase just general revenue growth. The town to its credit town meeting adopted a series of zoning amendments in the last couple years that will lead to new growth. We see some of those developments in Natick Center including down at the corner of union right in Natick Center and and in the area. Those will lead to additional tax revenues in the future years. And then just right sizing our departments. Since I've started we've had fairly minimal increase in overall numbers of staff but we we've actually been able to do is work with department heads as a team and see where we might be able to shift some of our resources to better align our staffing models with the needs. A good example is even just in the finance division, John did a great job when we had a couple of retirements. Instead of just replacing those positions, we actually used that to create a position that was actually more of a floater position to give capacity where it was needed in that department. So we didn't add net new, we actually repurposed those dollars to add net capacity and we've been doing that across all of our departments. We had the same thing happen in the community in economic development health department, which helped us also reshift some of our, our resources towards some of the other areas that we're able to support those departments. And just the town as a whole. We also merged is is a bit of a strong word, but we looked at how we can better do town school it we aligned our IT departments. We have a single director now and he's able to actually look at the staffing models within those departments to improve efficiencies and just improve overall quality of our service in our IT department. And we're looking at all of those potential ways for efficiencies. We've also done things that might not even be on this slide such as we revamped and redid our revolving fund account for rec and parks. That's gonna give us more flexibility moving forward to be able to utilize those revenues that come in through those programs to help fund additional programs or just fund staff in those programs. We also realigned our community services departments so that we can add more capacity to their services. They're doing a bang up job now providing services without adding additional staff. So we're trying to look at all ways we can to provide better service, higher quality service, improve service with minimal to no impacts on additional staff on the townside and and still meet the obligations and the expectations of the residents of Natick. <v Speaker 1>Quick follow ups, can you talk for a moment?</v> I mean it seems, can you talk for a moment about the impact of a hiring freeze on actually hiring for positions that are required? In other words, can we have a hiring freeze without announcing we're having a hiring freeze? <v Speaker 3>Excellent question. So what we've actually done</v> is put on essentially hiring freeze. But what that essentially means in practice is that every time there's an open position, we are going to be looking at that from the town administration perspective to see if it's a critical position. 'cause there are some positions, many positions on the town side of, of sort of the shop whereby we might be required by state law to have that position or, or the services of that position are required by the state. So for a good example are inspectors. We can't not inspect businesses from the health department perspective. We have to inspect, we have to inspect for building permits. Another component might be some of the, I mean we have laborers and custodians and that's where we see more of our turnover in staffing. But if we were to not hire to certain levels in those positions, in those in those groups, we might not be able to plow snow. We might not be able to pick up trash. Those will be impacted even as it is today. We are, we have a a at least one if not two openings in the DPW department. That's going to have an impact on our ability to provide those services to the community. So while we do have a hiring freeze in place and there are some existing positions that we're actively looking to fill because they're critical and and we feel they're necessary to our operations, we are looking at every new position that comes open and seeing how critical is it to the services that we provide to the community or to the function of town government because there are some mandates from state and from the community for us to provide those services. <v Speaker 1>You mentioned that a executive director</v> for dispatchers has just been hired, that's grant funded, is that correct? <v Speaker 3>That's part of, well it's grant funded</v> because it's part of the regional dispatch and that regional dispatch got $4.6 million of funding which included the funding to cover that. And <v Speaker 1>How long will that grant funded position be funded?</v> <v Speaker 3>Well that's again, that's part</v> of the regional dispatch, right? So that regional dispatch has to get up and running in all likelihood the funding to cover really all the costs including construction of that dispatch should be grant funded for the next several years. And then once it's up and running, the way the program at the state level works is the first full year of operation of the dispatch center is a hundred percent of the costs are covered by a grant. Then 75 and 50, then 25. And then what the town covers is we're one of many towns right now it's just us in Framingham. But in theory, let's say there's more than just two, the assessment then gets peeled back to the communities. Kind of like how we do technical schools, right? It's an assessment that comes back to the town but we'll no longer have a dispatch department. So those funds will then theoretically go over to cover that assessment. <v Speaker 1>Okay. And the last question was that you,</v> you mentioned LEC electrification of the fleet. There's a conception that has been kind of floating around that I've heard from various people about we just keep running out and replacing our vehicles with electric vehicles to meet some kind of sustainability goals. Are we replacing vehicles before the end of use? <v Speaker 3>Absolutely not. No. And John can talk a lot about the</v> electrification of our fleet and also just how we manage our vehicle fleet. <v Speaker 1>Okay. Mr. Evans? No. Oh, okay.</v> I wanted, actually, yes, I wanted to get to Ms. Do's question. Yep. Now that I've taken up all this time, <v Speaker 6>Just thank you Mr.</v> Evan. Thank you Madam Chair. I just wanted to talk briefly about the assistant fire chief 'cause that's been a question that has come up. Why is this position needed? So I spoke to the chief about this. He currently supervises the chief does 90 people and it's very challenging for him to properly equip the team and build in resiliency. They want to have a succession plan firefighter and a fire chief is a very, very tough job when he is ill or on vacation. He needs somebody who's second in command who is not in civil service. Well why is that not in civil service important? It's important because all other positions within the fire service are union positions. So it's very difficult for someone who is in a union to, for example, discipline someone who is also in that union. It's very awkward to say the least. And it's essential also, he has a lot of meetings that he goes to when he's absent the, either the assistant fire chief can act on his behalf and be the man in charge or person in charge. The other reason also not to be in civil services broadens the pool of candidates when and if we hire an assistant chief, hopefully when you get the broadened pool, that person or persons go through an assessment center or an assessment center like review process. And so you get the best possible candidate out of that. That typically has been the result. It's worked well for the fire chief, the police chief, and the town administrator as an example. I think it's, although he wasn't in civil service. So another question that's come off often is overtime levels and, and earlier iteration of this slides deck, it mentioned that the deputy chief was going to be hired to manage overtime levels. Well that's very, very small sliver of what that person would do. But I wanted to talk to people about overtime. Briefly, less than a minute. Madam Chair, the minimum staffing level at our fire stations is 18. People with injuries on the job, illnesses, vacations, it's hard to get that number. We also have had retirements and it makes it difficult to get full staffing. That's when overtime comes in and that's where that cost goes up. However, chief Ske has worked very hard and we get a monthly report on the overtime report. He has brought that down to 2020 levels. He's, he's made it a priority and he has reduced that number. So that goes directly back to the town's operating budget. So all in all, the, the assistant deputy Chief, I'm sorry, assistant chief is an essential position. You know, much like Mr. Erickson pointed out earlier that you wouldn't hire him unless it's an essential position and we have yet to hire them. So, or that person <v Speaker 1>Along those lines, two points.</v> One is even with an override, the projected that the town is planning on cutting a million and the schools will have cut 2 million over two years. So it, it's not, we're not, it's not business as usual. But I'd like to, I'd like to get to the core of what Ms. Doran asked. I'm asked this a lot, like how did we get to where we are? Pretty complicated. Lots of people have different ideas about how we got to where we are. I think I'm gonna start with a simple sentence and then I'm gonna turn it over to you, Mr. Erickson. Okay. So the state allows us the town to raise taxes, a ceiling of two real estate taxes, a ceiling of two and a half percent on the assessed value of the real estate. Eight plus or minus, or plus new growth. The value assess the value of new growth. So these are new buildings that are coming on onto the tax rolls, plus or minus state aid plus or minus excise taxes, which are set by the state. We don't set the value of your car. When you get that excise bill in March and you say, my car's really not worth this much. It's not. It's the, it's a state plus or minus local options. Taxes. Over the last two years, the board's worked really hard to change our alcohol laws so we can get more restaurants. Wellesley's has 50 restaurants to eat at 15 of those have come on board in the last two years since they changed their alcohol, their alcohol policy, which means that that's generating taxes, that real estate that we don't have to take or they don't have to take from real estate taxes. So that's the formula about how, you know, how we figure out the tax levy is. But then you have to keep in mind the rate of inflation. And I'm gonna turn it over to you, Mr. Erickson. <v Speaker 3>Sure. So in addition to</v> the prop two and a half, and it's interesting, when I started in the TA position about four years ago, I was asked to, and I have to do this every year, write a budget message. And I went back and looked at the history of budget message for the last 10 plus years. And the town for many years has really been operating in an operational deficit whereby they've been relying pretty heavily on free cash to cover operational expenses for 10 plus years, 15 plus years. And so part of that was how the town had been operating. I know when I even started here 10 years ago, there was dialogue then about the need for an override to fix that operational deficit. Then in 2020, right before the pandemic was hitting the town was exploring the need for a potential six, $6.5 million override at that point, about six point million override at that point. And then the pandemic hit and it really just sort of exacerbated all of the costs of to the town. Now, we were fortunate that we had some federal stimulus dollars come in to help offset those costs that did go towards that revenue replacement because just in year one of the O of the pandemic, our local receipts went from a projected 18 to $19 million in revenue to about 11 to $12 million in revenue. And that was replaced largely so that we didn't have to cut significantly in our services, which are, were critical, especially at that time in public safety, which is on the non-school side. Our three largest departments are basically our public safety departments, police, fire and DPW, which is the silent arm of public safety, is what they would call it. We were able to keep those services going during those years in large part because of the federal stimulus that ran out last year. This current fiscal year is our last year of using some of those federal stimulus dollars. So when I say last year, I mean last year's appropriation process. So now we're at a point where we're at that crossroads again, where are we going to work to address our structural deficit? Now, we ran a lot of scenarios and to truly address our structural deficit would be a much more significant override ask to go less would really have us still rely more heavily on free cash. So the dollar amount that is being sort of discussed right now, the $8 million is a compromise between fully addressing versus not, versus less than addressing. I can't speak for the additional costs that occurred, but there are a lot in there in the slides with regards to non town school spending, non town spending. 'cause there is a significant, there was a significant impact to our school department due to the pandemic. A lot of that is in the presentation. I know the school committee has been covering a lot of that also with the new superintendent. That's not for tonight's dialogue. I just want to note that there is, is detail in the presentation from December 16th that covers some of that information. And I think it's really critical to also know that as well, because the impacts that the town has been feeling, the schools have also been feeling there's been increased costs in the schools, there's been increased mandates, there's been increased just impacts from the pandemic on social and emotional learning. All those are extremely real and are all really part of what we're working to address with additional revenues in this case with the proposed override. So a lot of what we're seeing with regards to how do we get here is part systemic. It's been been in Natick for many, many years, predating at least I know my time around the table and the johns' times around the table. And some of it's been exacerbated by the pandemic. You know, I wish looking backwards at the last override in 2009, you know, would, would the, should the town have done started then at doing something? I, I don't know, it's hard. You know, you can't go back in time. We have to work at this moment in time moving forward and look at how can we ensure that we can utilize the resources we have moving forward for the benefit of, and, and for what we're hearing from the community are the needs. <v Speaker 1>Thank you, Mr. Erickson. Ms.</v> Kelly's hand's been up for a while. If I, if I could just Ms. Kelly, just one moment. Mr. Sidney. <v Speaker 4>Yeah, I just, I wanna take this</v> to a very high level on how did we get here. Prompt two and a half allows us to increase tax, the tax levy by about 3%. When you include new growth inflation on normal things runs about 3%. That means we could theoretically provide absolutely level services, assuming no cost exceeded three 3% of inflation. Unfortunately, there are a number of costs, health insurance, pension liabilities, and other things that we have to spend that far exceed 3%. That means that every year that we want to not increase use of free cash or other one-time funds, we would have to be cutting services. Instead, the town is elected not to do that and therefore we are in a position where we need an override. Thank you Madam Chair. Thank <v Speaker 1>You Mr.</v> Sydney. What happened? Ms. Kelly? Ms. Kelly, if you could unmute yourself please and then sir, I'll take you in the front. <v Speaker 15>Thank you. Yeah, I wanted to address the</v> point that we've been potentially needing an override for years and knew this day was coming. You know, I'm digging into all of the different things, decisions I've been made recently in the last couple years in Natick. And one of the big standouts is the fact that we sold Elliot school for a hundred dollars when we could have gotten $2 million for that school or more. And I wanna know why would we make a decision like that when we knew already our budget was precarious? And also now that we shut down Johnson School, that $2 million that we could have got from Elliot could have paid to update Johnson's school and not have to close that down. And it also could have went towards any kind of re, you know, upgrades to Memorial. So I just, I just wanna understand like, why would that decision get made when we knew already we were in trouble with the budget and, and if we hadn't made that decision, that $2 million or more that we would get for that property, how would that affect the budget today? Would we be in this bad shape for an override? So it's kind of two-pronged question. <v Speaker 1>So we, we would be in the same shape we're in now.</v> The difference would be some of that money could have gone towards capital improvements for real estate and parks. So how did, how did we get for five, you know, why did we turn down? It wouldn't have been 2 million or more because we just had four offers on the table. One was 2 million, one was a hundred million. I mean, I'm sorry, 2 million Went from Trask, a hundred dollars, $1,000,001. And so one 3 million, 1.3 million. So of the four, the five select board members had a, the select board members aren't in charge of marketing the procurement bid that goes through a procurement office. There we are prescribed by state law on how we can advertise and sell real estate or transfer assets from one asset class to another when it came, when the offers came before us. My recollection, I hadn't anticipated answering this question because I've answered it several times on Facebook and in writing to you, Ms. Kelly personally, but I'll take a shot at it. So the 2 million task was for an $11 million, the developer had anticipated it would be $11 million tax assessed property for 10 units. That would've been in year one when the construction was completed. That would've generated 180, $138,000 in taxes in year one and no affordable housing. That's really important to keep in mind. TR offered $200,000, which will not even pay rent assistance for two years through the natick affordable housing trust. $200,000 doesn't get you a affordable, I mean an A DU in somebody's backyard right now. So the board, and I won't speak for anyone else except my decision made some calculated back of the envelope looking at what the property would be. So the property would, according to Metro West Collaborative, they were going to the, the pro the value of the property would be 20 million. Now, the way affordable housing is assessed is one of two ways, either on the value of the property or the value of the revenue. At that time, we did not have a model in town for how that was going to be done. Right now, what we can do is we can plug in the revenue because we know how many three bedroom or we know exactly what the revenue could be at its highest and best, you know, fully, fully, fully rented. And that, that generates taxes that exceed the 138,000, or it would be more by now because of the properties would be valued more. What's really tricky about this is, and I've, I've talked to our assessor, I've talked to people who are far smarter than I am in, in assessing. What's really tricky is you need to be able to pick a year where both projects could theoretically exist and what those values would be. And it's still my contention that with 32 units of affordable housing to house our police and our fire who by law have to live within a certain, excuse me, distance from our town, our teachers, it's hard attracting good teachers if they have to drive from central mass. That, that, in my, that was the reasoning behind my view. I, I'm not prepared in this meeting to go through all the numbers, but I have promised that to both you and many other people on Facebook. So when I get around to doing that, I'll be sure to share it widely. Mr. Evans, <v Speaker 6>Thank you Madam Chair.</v> I won't go into too much detail, but one of the comments on Facebook was why didn't you have a public forum for this? And the answer to that question is we had multiple public forums. We had a lot of people pro and con come before us and offer their opinions. And in my view, Metro West collaborative development beat drafts bid on for several reasons. Number one, that the possibility of a hundred percent affordable housing was, was very attractive to me. Most builders at best might do 20% of their multi-family units as affordable housing that is not gonna get it done. Right. We had the opportunity, we control this school, we, the 50% of the units will be at 50% of the a MI or area meeting and income. The other 50% is at 30% of the a MI as Ms. Coughlin pointed out, there are teachers, there are nurses, there are DPW workers who can get into those apartments. 70% of them are, it's a lottery. 70% of them would be reserved for Natick resident. Right? So that, that's a, that was a plus for me. The other thing that I liked about Metro West collaborative development is they had expertise in historic preservation. And at Elliot School was a historic building that we wanted to preserve and upgrade in terms of HVAC. Metro West Collaborative Development has that capability. Trask does not, Trask builds million dollar homes and I did not see the benefit of adding 10 more million dollar homes to our registry that would add probably two or three children to the school system per building. So multifamily developments are less likely to add children to the school system. So that was what the basis from my decision was. <v Speaker 4>Mr. Sidney. Yeah,</v> and I just wanna make it really clear, the $2 million we might have received from TRASK could not be reused for operational purposes. MGL chapter 44, section 63 for anybody who wants to look it up says it can only be used for like purposes. Ms. Kelly asked why couldn't we use it to renovate Johnson. One of the problems with renovating a building like Johnson is that if you put a certain amount of money into it, you trigger a DA requirements, which is a much bigger project. We would not have been able to repair Johnson to a US to a, a future usable situation with a DA compliant additions for that $2 million. So we wouldn't have been able to manage to fix that building anyway with that $2 million. It just wasn't enough. So I just want to like kind of wrap up what the, the rest of the question that Ms. Kelly had asked. Thank <v Speaker 1>Mr. Evans.</v> <v Speaker 6>Sorry. Thank you Madam Chair. Very quickly, Mr.</v> Sidney's remarks made me think of another item that I wanted to add. We were in a situation with Johnson School and Memorial School. One school was 75 years old. Rough numbers. The other is about 50 or 60 years old. In order to get a school built, we want to go, we wanted to go to MSBA and we, speaking of collectively, the select board and the school committee wanted to go to MSBA and say we're gonna have a consolidated school that's gonna be usable for 50 plus years. Generally, excuse me, when you build a school, you wanna have a life of at least 50 years. So the sense was given the A DA restrictions or needs that would have to have occurred in Johnson school coupled with the need to upgrade Memorial school, which had power problems, roof problems seem to be talking about that a lot tonight. It was a better use of funds that we could get from MSBA to fund Memorial school, which is often the future. We've gotten approval to do a design that means it's a couple years away having served on the Kennedy Middle School Building Committee. It's a 5, 6, 7 year process to from design to build. So hopefully, you know, for those in the audience who are looking at well an override and a debt exclusion, I think what you're gonna see, first of all is it's gonna be moved out quite a bit. Also, MSBA generally speaking is about 35 to 40% of the cost of the school is reimbursed. I think for Kennedy it was roughly just under 40%. So that is essential for us to, to maximize the benefit that we get from MSBA while creating a school that's 50 plus years availability. <v Speaker 1>I'd like to gently scare, steer us back</v> to the overrides since the schools are not on our agenda tonight, but you sir. Gentlemen, if you could just give us your name and whether you're a resident of Natick that would be great. Yep. <v Speaker 16>Ann Zula, three Clearview Drive in Natick.</v> So I have two areas or two questions. One, in looking at the five year capital budget and the school discussion brings it up both the DAM and Memorial school, presumably that those go forward. How are those built into the five year budget and what are the costs or estimated costs particularly of the DAM and the school for that matter? <v Speaker 3>Sure. So do you mind if I take that madam please?</v> So the school, there's an initial cost and this will be likely reviewed at this upcoming town meeting pending some additional work with the MSBA process to seek funding to complete the study work, which then informs the final project that we're anticipating repurposing some of the remaining funds from the Kennedy project to cover. So that would not impact the capital program nor our current town finances. They a, a project of the scale of a, of a memorial. It's project, let's say the final program is to rehab and expand the memorial school, for example, you're talking about tens of millions of dollars. A project of that scale would likely be a dead exclusion, which would be a vote of the voters. That's how Kennedy was handled. That's how the West NATA fire station was handled. That's how the, the high school was handled. So does that <v Speaker 16>Mean an override or no,</v> <v Speaker 3>That's essentially another type of override.</v> Yes, the occlusion is a type of override. So it'd be similar to the Kennedy, which was a vote taken at the ballot box. I wanna say that was six years ago now, five, six years ago now to cover the costs and that would be additional tax above the levee to the, to the Natick resident. And it is time limited to the debt that is in our capital program. You can see that on the sheets. It talks about that and actually identifies it as a debt exclusion item. The dam, the removal or even really anything that happens with like a capital program like the dam. As much as possible we seek grant funding to cover projects. The DAM is one such avenue that we think we can get some grant funding to cover the bulk of that work. We're not sure yet. We have to wait for the final design to date. We've actually been successful at getting grant funding to cover all the design work. So we actually have not spent much money on the DAM project at all for the removal in the capital though we can't anticipate future grants. So I believe we've identified that. I'm just looking at it now. John, do you know, <v Speaker 7>So there's two components of the South Natick area.</v> There's the parks and the dam. We have two kind of tracks that we're running at the same time. When the select board made the decision to move forward with the removal based on the work of the committee and the information that was provided, we are proceeding with that. We're using grant money and there's other grant money that we feel we can use to actually complete that work. So we don't anticipate needing any town funding for that. At that same time, there was a request for us to look at the parks surrounding the spillway that actually had been part of the 2016 master plan that was completed for parks and fields town wide that had basically waited until we figured out what was gonna happen with either repair or removal. Now that that's proceeding forward, there's funding in the capital plan looking at the parks, CPA is a potential opportunity for us to look at. That was something that town meeting had supported and the voters had voted in last year. We just got our funding the first wave in July and we'll be moving forward with requests, you know, going forward. So that's certainly an area we could look at to fund 'cause that would be an eligible project on that <v Speaker 3>CPA is Community preservation</v> Act for those who are unaware. <v Speaker 16>Is it the hope that that will be funded, the,</v> that DAM project will be funded by state and federal monies. Is that the hope or do we anticipate that in fact NAT is gonna have to have additional monies put toward that dam. <v Speaker 3>So the removal of the two pro, of the two components,</v> the park project as John just mentioned, community Preservation Act funding is a possibility which is not hitting the general fund and the dam removal project. Our, our hope is that there would be some state and federal grants that could cover the project. A benefit of, of the removal among the many that were already reviewed by the select board. I wanna rehash that debate that's been made. But some benefits are that there's no more long-term costs. There are, there are annual costs that we have to incur including test engineer reviews of, of the DAM that no longer go away with the removal of the spill away and long-term liability costs as well as the costs actually removed versus repair are actually cheaper. So the capital costs are actually less to remove the spillway. So there's, there's net benefits there. <v Speaker 16>Overall, good news, I guess that's,</v> I mean from a financial point of view, what you're telling me, which <v Speaker 3>Is a good thing, the decision, one of the, one</v> of the reasons, one of the probably many reasons why the select board made that decision but, and a lot of the information is available on town's website. You can see a lot of the history of the South Natick DAM decision as well as the current updates from the park project are all on the town's website. <v Speaker 16>So my second area relates to some of the questions</v> that people raised here and I don't know that anybody here can answer these questions, but I'll raise them as a, a concern as it relates to the override and also as a area of possible review by the select board in any budget over the next couple of years. I hope I have these numbers right, but I don't like 'em. So I looked at the numbers that were on the question and the answers on the, the budget, which is a great thing to ask questions and get responses. But in terms of expenses, I looked at teachers of the school. So between 2019 and 2025, the numbers of people on the administration have gone up. 80 people from 2 69 to 3 49 80% increase in five years. The teaching load or the, those who are actively teaching went up. 17 people, 3.1%. Again, I don't not looking for answers right now. Maybe you do have the answers. 80 people, 30%. So I figured 80 people at roughly $50,000 a year plus you throw in a benefits override, you're talking probably 55 to $6 million in additional administrative costs. And I'm assuming that is every year. And now we're looking at an $8 million override. So again, I'm not looking for answers from this group. Maybe I, maybe you do have answers. I just have a hard time imagining where we are increasing the admin by that much versus the school. If we were increasing the teachers I'd say hey look, you know, that makes some sense to me. But to have it 10 times the increase. So anyhow, in terms of looking at the override is a big concern for me in terms of how that school budget is managed. Again, I'm assuming the 80%, 80 people is accurate. I don't know. I'm assuming that the average increase is salary is 50,000, it may be higher, maybe lower. So that's an issue that I've raised to the select board to the extent, I'm not sure our fares into your, your thoughts about the override, but it surely should be an area of focus moving forward and looking at the school budget. I would like to ask, and I did ask online, I'd like to have a listing of those positions and if they're multiple, just tell me what they are. Or for everybody, matter of fact, should know in the, in the town, I don't wanna know individual salaries 'cause that's private. But I would like to know overall for those 80 employees that were hired, what are their functions or their job title? They don't wanna make it overly complicated. What is their overall compensation together and also the benefit load for that, just so I have a sense, if it's reasonable amount, I'll feel better about the override if it's consistent with what I'm thinking. Hmm. I don't think it's being managed well from my perspective. I could be wrong 'cause I don't know what the jobs are. They may be jobs that are absolutely necessary. So yeah, I just make that comment. Any comments from the, I wasn't at the meeting December 15th, but I did look at the material, <v Speaker 1>The, the select board has no authority over any</v> of school expenses or that doesn't mean that I don't want that question answered. I think that's a really important question. I was looking for the answer that you were refer referencing and what I'd like to do, if you don't mind, I did you say your last name was Bull <v Speaker 16>Ula bu REB like in boy ULA,</v> <v Speaker 1>Boy.</v> I was way off. That's okay. Pretty Clearview Drive. <v Speaker 16>It's not a co. Yeah, right. It's not a common name.</v> <v Speaker 1>And what I'd like, what I'd like to do is</v> have the school superintendent contact you to give you the information that you need because I think that's really important and we can get that up on the website so that everybody can have it. I would, yeah, I'm not sure that the, <v Speaker 3>Those questions did come through the,</v> the online questions. We, I believe, <v Speaker 16>Oh, I submitted, I just haven't gotten</v> an answer yet. So I don't <v Speaker 3>Know.</v> They're in our next batch. We're actually meeting on that when they should be released end of this week I think, or early next week. <v Speaker 16>Okay, so maybe they'll be online, you're saying? Yep.</v> <v Speaker 3>Yeah, as the chair mentioned, the school depart,</v> this is not unique to me. This is a, this is a, actually a state law per state law. The school budget is actually a bottom line across the board budget that the town administration and the select board really have very little oversight over. It's all through the school committee and the superintendent. So basically, is it <v Speaker 16>Approved by the board?</v> <v Speaker 3>It's approved by town meeting?</v> No, it's approved by town meeting. <v Speaker 1>Okay. Approved by the legislative body,</v> which meets twice a year. Legisl. <v Speaker 16>I didn't know that. Yeah,</v> <v Speaker 1>So a lot of people, I mean,</v> <v Speaker 3>Yeah, yeah, yeah.</v> That's, it's unique to Massachusetts to a certain degree and it's, it's actually partly and partly a creature of prop two and a half as well. But putting that aside, that's a more of a history lesson than we have for tonight. But the, the budget once approved by town meeting, which happens annually in advance of, of the fiscal year, that's essentially for the school committee and the school department to manage. We receive their requests for funding and, and, and work through that process, through the budgeting process. But then once it's approved by town meeting, it's, <v Speaker 16>It's kind of interesting though that the select board has</v> to approve the budget or request the, not approve the budget, but it has to request an override to help fund the school. That's the way it works, right? <v Speaker 1>Well we have to request the, we have to put it</v> before the voters and the voters have to <v Speaker 16>Yes.</v> That's what I'm you just the override presumably. Right. It's kind of interesting dynamics there. Right. <v Speaker 3>And the override one, one,</v> this is an, I think an important clarity. The override only increases the amount that we can actually collect in tax. It has it, it's, it then leads us to be able to budget more, but it's not actually the budget. So what the select board is actually asking voters to do is increase the amount that we can tax then town administration with the school department and with everybody needs to, when the finance committee proposes a budget underneath that ability to tax up to that level town meeting ultimately needs to approve that. So an example, let's say, let's say, let's use the numbers that we have. $8 million gets increased in our levy by the voters town meeting could then choose to only appropriate additional 4 million or $5 million of that 8 million, leaving $3 million left not to be spent and therefore not to be taxed. It's really town meeting to determine what the budget is. The levy is the vote of the voters and you, you can tax all the way up to it or you can not. Natick unfortunately has, well it's not unfortunate or unfortunate. Natick has historically spent and taxed to the levy. This predates again us around the table, the <v Speaker 16>Town meeting for my education, maybe others.</v> Does the town meeting then have the authority to decide, let's just say the 8 million passes, how much of it will go to the school and how much of it'll go to the other? <v Speaker 3>That's what they vote essentially? Yes.</v> <v Speaker 16>They actually vote split.</v> <v Speaker 3>They vote, they vote, they vote the budget,</v> they vote the budget, they vote the details of the budget. Correct. <v Speaker 1>And they can amend the budget from the floor.</v> They receive recommendations from a finance committee that's appointed by the moderator of town meeting. So we, this bo body, the select board doesn't have any authority of the finance committee will go through the budget recommendations very, very thoroughly. It's a 15 member body and they ask questions, they interrogate, they make recommendations or not recommendations. And then that recommendation book goes to town meeting in April. Yep. <v Speaker 3>This town meeting is for springtown meeting,</v> which is the annual appropriation process for the fiscal year is now typically starts the fourth Tuesday of <v Speaker 1>April 4th.</v> Tuesday of April. Great. And then, and then that, that body, that legislative body would make the decision about how that money is spent, where it is spent and so forth. Okay, <v Speaker 16>Great. Thank you. Appreciate</v> <v Speaker 1>It.</v> But we'll get those answers to you. Yeah, <v Speaker 16>If you could.</v> Thank you. I think others would appreciate it also. Thank you. <v Speaker 3>Of</v> <v Speaker 1>Course, of course. Ms. Dr. Mackenzie.</v> I have two online and one which precedes you. So I'm going to call on my eyes are so bad. <v Speaker 3>Andandand</v> <v Speaker 1>Ander, could you unmute yourself?</v> <v Speaker 17>Hi, sure. This is Uhand.</v> I'm 13 one road resident of Natick and also a member of the town meeting. I wanted to ask a couple of questions if that's okay. Madam Chairman, through you, the levy increase that we are talking about, this is permanent, right? Like this happens year after year going forward, unless it is I guess voted not to happen again. Is that, is my understanding correct? <v Speaker 3>If I may madam? Sure. Yes. In in in essence, yes.</v> It's, it's resetting that levy to a new level and then on from that new level is where you then apply prop two and a half. The town could do what's called an underride in a future year, which brings that levy back down. Or as we noted just previously, town meeting could just not budget all the way to that levy. <v Speaker 17>Understood. Thank you very much.</v> The other question I have is, have we gone through or done an exercise of playing or role playing that let's say the override does not happen and what would be the services specifically that would get, that won't be available to the residents of Naing? Because I, I believe it would be helpful to understand what that extra levy brings you and then the town is more informed to determine whether that is something that they would want to vote for or not. But what I'm hearing so far has been vague. And if there is a document, please point me to it. I'm happy to go and review it too. It would be good to know specifically what does this mean that my trash pickup becomes two times a week, sorry, two times a month as opposed to whatever the frequencies are. So it would be helpful <v Speaker 3>Sure.</v> And some of that detail. Thank you for the question. If I, if I'll take it madam chair, some of that detail will come out with the budget. You'll get a more line by line detail when the budget is is released again early February. February one is the due date, although it's a Saturday so anticipated on that Monday. But on the December 16th presentation there are some, there is a highlight of the cut areas is what we're calling them. And there's a slide for the non-school and then a slide for the school. And I'm, I'm projecting right now those slides. So slide 15 talks about the cut areas on the non-school side. One thing to note is the shared services also includes healthcare, which does cover school debt service, which also covers school buildings and the like and other school related costs. So it's, it's not an exact, you know, town school versus non-school. And just providing that for context. So on the the non-school side, we would be looking at a minimum of 6.5 plus full-time equivalent jobs being removed from our payrolls. A good chunk of those, given our three largest departments are public safety, police, fire and DPW are in those departments. So that could lead to delays in, for example, ambulance service or police response times or trash pickup. The exact impact is to be determined because we will have to see if there's no override where we can better provide our services the best we can. You know, we'll have to shift some of the, the staffing around depending on availability of, of positions. Then we'll have the delay in new initiatives, which are items that that, that can add value and service to the community and, and what we do such as new efficiencies. Some of those things are, are investments in our IT infrastructure and other things debt service. That is our ability to borrow. So our capital program, again, our capital program would be massively impacted with a no override. That means our buildings will deteriorate more quickly. Our ability to improve our IT and security infrastructures will be depleted. Our ability to replace our aging vehicles or prevent vehicles from aging will be depleted, which means again, impacts to our trash and recycling program, impacts to our public safety programs and the like. And then other operational costs of approximately five to $600,000 on the school side. And I, I don't wanna speak for the school, I'm merely showing their slide. They would have an an about $2.8 million worth of reductions including a reduction of approximately 35 to 40 largely student facing positions. This is directly from their slide, that's slide 16. So these are all on the town's website in on the override page. This is the presentation that was provided to the school department and and select board on December 16th. And there's much more detail in this presentation as well. Dr. McKenzie, <v Speaker 18>First of all, thank you all very much</v> and my question doesn't so much go to the merits of the override. I do have a lot of questions and it mostly comes because I have a background in science. You might not realize that, but I have a degree in molecular biology and I like to know everything about everything before I make a decision, which can be absolutely paralyzing at some point. But my question tonight has to go with process. I understand and I, I, I think Mr. Fo made me think about this from his comment the other night about how the override could be staggered or in amounts over a period of time. But I was struck when I read about the Arlington override, which was about $8 million that, and I know we're fond of the moniker one town, right? Natick together. But Arlington and I understand towns have the option of splitting up overrides. You don't have to ask for the ask all together. You can ask for the schools separately. You can ask for the towns separately. You can ask for things in the town separately. So I'm, I'm wondering about that. And I wanna tell you a little bit more about Arlington. Arlington also employed the Massachusetts general law that allows you to use a means tested approach to using a circuit breaker to reduce property taxes for elderly people. These would be homes that had assessments under a certain level. So I'm not talking about let's give a tax break to somebody who owns a million and a half dollar house. I'm talking about people who are struggling and people who live on the edge. And I wonder a Arlington also offered this option. So when they did their override, they had three options. They had an override that totaled an $8 million override. They had an override for the schools, an override for the town. And they had the circuit breaker property tax for elderly residents under a certain income in a home that was under a certain value. And I, you know, all three passed. They didn't know that they would, but I think all three passed. And I was thinking about this and I thought, well yeah, people like choices, you give choices and they feel like they're more empowered in terms of how they're gonna have to allocate their resources. So I just wondering if you can give a little bit more thought about this. I'm assuming that it's one town and you want these overrides together, but I'm still arlington's now the sixth community that offers the means tested circuit breaker for elderly residents. Do you have the demographics on the numbers of elderly people in Natick who own homes under a certain assessment who only have social security? I mean, when I took care of my father, that was all we had for two people. And there were times when we didn't have food. And I know that's not a cool thing to say, but my father did not vote against those overrides because if it's for children and it's for education, yes we're gonna do it. And in my experience, I've always find that people who have less tend to be more generous because they know what it is like to live on the edge. They know that. And sometimes I go to these meetings and I wanna go home and cry because it just seems like where the hell did this mean spiritedness come in the town that I love. So I just as you think about this, would respectfully request you to consider the process. Are there ways that we can be more sensitive to people living on the edge? 'cause it's not enough to say, oh, they're just gonna have to make choices like everybody else makes, because sometimes those choices are not just like what everybody else makes and also let's to empower people. Let's give them as many choices as possible about this override. And again, I I have a lot of questions about what's in it and I look forward to seeing the February 1st needs. And I certainly know the schools need the money and I certainly know that you can't have a town without good quality schools and that that's really important. And so I'm not, my question tonight isn't on the merits, not that I don't won't have them in the future, but I it's on process. So I respectfully ask you to consider that. Thank you. <v Speaker 1>Thank you. Dr. Mackenzie.</v> Last on, on the 11th, so last, this past Tuesday, our tax assessor was at the community senior center. He did a presentation on some of the programs that are available for seniors of limited means to defray the cost of their taxes. And I don't mean only by working off their hours with the town, that presentation he will be doing before at the select board, most likely the second, second meeting in February, still working on a date. I was, I did talk to him for a bit this morning about the, the circuit breaker and what that would look like. And I do not have, I do not have the information about what percentage, I do know that 25% of our town is age 65 or older. That is not to say that all of them are meet that criteria, but it, it is a concern. I I do recall the taxation. There was a senior taxation committee. I don't know if Dr. McKenzie, if you served on that, Sue Slomoff, Patty Ciara, a few other, I can't remember. I wasn't on the board. I was just watching meetings and I'm not saying that this is my position, but the, they could not come to a recommendation on that because what it came down to was shifting the tax burden from one group to another group. Okay. And so they did not make a tax recommendation or a recommendation on tax policy. I will discuss this with the town administrator and also with the assessor and see what those numbers look like. And I appreciate you again, advocating for seniors of limited means in town. Yeah. <v Speaker 3>There to the point of, of of that there are a number,</v> we're actually working to revamp our website as well to make it a little bit more readable as well. But that's, that's an ongoing project of our communications director along with the various department staff. But there are a number of programs that are noted on the town's website to yes. To just help various populations including older citizens, property tax deferral programs and, and others. So I encourage anybody who's interested to definitely, if you can get to, if you have access to the website, can look at those website or call the assessor's office or call hu our human services division and the community services department and we can work with whomever to see what might be possible. <v Speaker 4>Madam chair,</v> <v Speaker 1>Mr. Sidney has some questions.</v> <v Speaker 4>Yeah, Dr. McKenzie gave me</v> a great segue on these. So I wanted to see if you, there were, there were a few ideas that I discussed with you earlier about having multiple votes either across multiple years or, or for different purposes. And I also wanted to see if you would discuss your thoughts on using capital ex exclusions for which is a one year debt exclusion essentially for a given capital project. So for example, if we could, we could put something on the ballot, I'm just gonna explain this for the public, we could put something on the ballot that says let's appropriate, let's, let's give us a capital exclusion of $3.2 million to pay for roads that would take it outta the operating budget and outta the levee. That's possible. It's just another kind of a de it's another kind of a, an override. So if you could discuss your thoughts on that. I know that you and the rest of the administration have been discussing possibilities. <v Speaker 3>Sure, yeah. And we, when we continue to look at some</v> of these options, even even this today, I was talking to John about some of our options and I do have some slides that I can share providing context as to sort of where we landed on the 8 million. But to the point of, of like a, a capital override, and we talked about this a little bit earlier today. Tonight, you know, a lot of the way we've been funding capital for right or for wrong, it's just how the town has been doing it for, for many years is part is partially to include it as borrowing within our tax levy. So for example, a $2.5 million override for roads, we're not spending $2.5 million of operational cash on roads. We're spending 2.5 million of borrowing, which actually is much less than our actual operational cost because we borrow for that. So it's a bit of a different impact. It's not a direct one-to-one impact. And when we look at, at, at that exact question and we are actually continuing to look at that exact question, I'm not confident there's an enough there to pull out of the levy to make up the need that we have and a one year item for like a capital program won't necessarily solve us for that long term. Now I know that there's a desire to get to 2030 because that's when we're gonna have additional revenues, but it might not solve us even to get to that point. We have to, we have to be very strategic on how that looks over the course of many years. John, do you want anything else else to add to that? Just for that component? Yeah, and then I can go maybe into the slides. <v Speaker 4>Sure. J just quickly,</v> so the financial management principles of the town, the select boards policies do require us to actually take a look at everything over a million dollars to decide whether it actually is worth going out for a debt exclusion on that. So we, we do that analysis but honestly, you know, a million dollars is not actually a very high number with regards to the cost that actually goes to, into going out to borrow for things. So we do that sort of analysis, but you know, at the end of the day, yes maybe that would be something we could look into and if you could also discuss the possibility of doing, you know, staged operational overrides or you know, what your thoughts are on, on splitting the override votes to the public. <v Speaker 3>Sure. So we did look at a multi-year override approach.</v> We looked at many multi-year override approach, but I can throw one scenario up on the screen right now just to show sort of an example and it's part and parcel with what was sort of suggested in the past. But we actually had already looked at this as part of the dialogue for an override and I'm just gonna share my screen again, make sure I have the right screen. Sorry about that. So the what's on the screen now is a two year phased approach and you'll see the format's very similar to the format that's used in, in really a lot of our presentations, but especially the one that was presented on December 16th. And a couple things about this and, and just wanna level set the assumptions. The assumptions here are similar to what we were proposing for, for example, an $8 million override. You'd have a, a desire to try to reduce our reliance on free cash down to 2.5 million. Ideally. Again, ideally we all, I I would argue we all agree but maybe we don't all agree but you know, our goal is to get to zero free cash for operational. We know that that's not realistic in, in many cases, but it's something that we aspire to. But in this case it's, it's assuming a $2.5 million use of free cash for FY 26 and moving forward it's also assuming an overlay surplus use of 1.5 million as well as funding the schools as requested at about approximately 10%, which is in line with what the 8 million override would be doing town at 0.75 for the first year. And then over the life would be in that three to 3.2% range and then shared would be in the 4% range in that first year, which would then go back to fund being able to fund some of that capital borrowing that are required that, that we would need for continuing up with our capital program. And what you'll see is Justin year one and FY 26 is year one. And I'll note at the bottom, and I guess I'll use this mouse, you have the bottom line without override and it says seven, it's in a negative 7.9 roughly million, that's the $8 million that we're talking about. And then with an override, so if we added $4 million of override capacity, then you're still in a deficit of approximately $4 million. So we would still have to figure out how to cover that gap. Now that's possibly where an additional $4 million in free cash comes in, which would then increase our use of free cash, the 6.5 million similar with our proposed no override budget scenario, but then that also then impacts capital 'cause now we don't have that cash to cover capital. So there's other sort of compounding impacts by taking that approach. Then in year two you would add additional 4 million. You're still looking at a, at a deficit of 1.2 million just in that year two. So either we're cutting or again we're putting more of free cash to cover that deficit of the 1.2 million and so on and so forth. And actually by year three and four you're almost back up by your FY 29 back up to almost $3.5 million. Even with the override with those two overrides of a deficit of about 3.5 million. Which means again, we're heavily relying on free cash to cover operational expenses. <v Speaker 4>And and just to be clear,</v> overlay surplus isn't available every year. It's available occasionally. <v Speaker 3>Yeah, I mean and this is assuming</v> that we'd be using a million dollars every year moving forward of overlay surplus and it's also assuming certain presumptions on growth of expenses over that same time. So we did put this together, this is very similar to the scenario that we did back in July, which was shared at that time. I think at that time we're actually looking at 5 million and 5 million, not 4 million and 4 million. So this is a little bit of an update for tonight because we are looking at that $8 million scenario that we presented on December 16th. So we want to have it sort of more relevant to the $8 million dialogue and just sort of showing really what those potential impacts are and how that works. I will say that we did do a scenario, while I have that sort of audience, an ideal use of free cash, which would be zero free cash. We did run a scenario and the numbers that we had and also overlay surplus and that's what I just put up on the screen overlay surplus backed down to $500,000. 'cause 1.5 or even one 'cause John, correct me if I'm wrong, but that's above our typical use of overlay surplus. Yes. On significantly above. So $500,000 is more in line with even some of what we've been using for overlay surplus, $0 in free cash and looking at the funding that was, you know, requested by, by the parties, by, you know, for education for town and shared services and $15 million was that scenario. We felt that that was just far unattainable really beyond, but we had to run the scenario, we wanted to know what it would take to sort of reset everything, reset all of our needs, reset our capital program, reset our use of free cash, reset everything. And that's where this scenario came about. We actually ran this back in July and I believe we showed it to many of the members of the board as well as the, the members of the school committee and the finance committee to, to get some just general feedback and you know, we knew going into it that it wasn't the ideal, but we needed to run that scenario to say, okay, what does that mean? What does that look like and how can we get there and what would that tax impact be? Then you look at a 5 million scenario, that's our next slide here and 5 million, which would be just one, one year, one time, one 5 million. That again speaks to that challenge with the no override of still needing that 5 million or 4.7 in the case of what's shown on this sheet of, of additional costs or additional revenues. And this is also assuming using 4.5 million of free cash consistently moving forward. So it doesn't address our reliance on free cash. It actually increases our reliance from pre pandemic levels and we still have a significant deficit, which means we're back to needing to cut pretty much year one right away. Right. Like if you notice in this scenario, it's actually assuming education is only funded at 5% increase over FY 25, which what we've heard and what's projected in the, in the override scenario is actually a near 10% I think is 9.6% increase is what is the identified need from the school department in the school committee. So this would lead to that cut scenario that is part of the override presentation of at least the 2.5 million I think is what the schools were proposing. The current scenario that's also here, this is directly from the presentation on the 16th. This is what we were, we were discussing and and dialoguing on the 16th and it's, it's what's on the town's website and then that two year phase override approach, which I just presented. So those are the, the components of the, and these are only four of I know how many did you John Dozen minimum scenarios that we've run through the last year. I'd say because we have not seen this and I think it's been part of my budget message for the last four years, the realization that we're going to have to have a dialogue around on override. So we've been running these scenarios for the last several years and we have done some looking at just capital as well. I didn't put 'em in here because I wanted to cover some of the more operational side, but absolutely there's some potential impacts. One consideration with a multi-year approach that is also important I think to note is the way we need to structure a vote on a ballot is you my understanding now, I'm not a legal expert, this is just my understanding and John can correct me if I'm wrong, is each year would actually be a separate sort of, still can be one ballot, but each year would be a separate question. So in theory the community could vote for one year and not the other year, which then leaves us in that tricky situation of okay, you know, reliability of, of those funds. It's a challenge. <v Speaker 4>Well, thank you Mr. Ericksons.</v> I I did wanna make sure that the public knew that administration and the board we're looking at every possible approach to solve this problem. <v Speaker 1>I appreciate that. Thank you for the question.</v> We, we had decided that this would be about a two hour meeting since it's an, it's an off cycle meeting and by which I mean we generally meet, we by practice meet 24 times a year. Last year we met 44. I'm gonna try to keep it under 40 this year. So I, I do know that Carol's iPad has had her hand up for a while, so I'll take that as a last question and then we'll move to consent agenda. So Carol, if you could take your, if you could unmute yourself. <v Speaker 19>Thank you. Carol Gates, longtime resident.</v> I've made a couple of very specific questions that I'll, I'll try to ask the person that I was listening to regarding first was John. I listened to your presentation with the school committee and the select board. Good presentation. Thank you for that intro. There was a slide that said, and it was referred to tonight, zoning amendments lead to new development and revenue growth. Can you tell us, in your projections, is all the tax revenue from all of the multifamily developments included in your projected forecast for 2030 and beyond? And if not, is there any new zoning amendments that you are anticipating that will be put into the forecast? That's just my first question. If you'd like me to go on with my questions, I'd be happy to do so. Otherwise, we can answer as we go. Let's <v Speaker 1>Just do one at a time.</v> Go ahead, Mr. Taylor. Okay. <v Speaker 4>Yes. With regards to the forecast, no, we don't.</v> If you take a look at, especially the out years, it's fairly, you know, we have set sort of increases, but it's just too difficult for us to sort of try to take into effect projects, which may be delayed years or might, you know, never happen. So in the forecasting aspect, no, we don't take into account those. <v Speaker 19>Thank you. I appreciate that.</v> Regarding the, the school budget, I, I would like to say that I share my, one of the previous residents thoughts regarding the growth of not only the admin portion of the school budget, but obviously the Natick public school represents 70% or so of the total budget. And I know you, you were very clear that town meeting is the one that has the responsibility to ultimately vote on this, but you folks are obviously in a position to ask questions and very spec loaded questions regarding the growth of that budget. I believe that in the past 10 years, the school budget has grown about 76%, and that's concerning, particularly as IT app applies to some of the shared services, the, the roads, the infrastructure, et cetera. So John, one of the questions that you were asked during that presentation was, was what is included in the school budget for growth? And I, I believe the question was asked regarding, there are so many multi-family developments that are under construction and going to be completed. And also with the advent of the ADUs, we can anticipate more students in the school. So, but I didn't, I didn't hear the answer. Do you know, do you remember or recall what the growth was that was included for the school budget? <v Speaker 3>So, so that's an excellent question.</v> Thank you for asking it. The forecast assumes after the first year of FY 26, which would be proposed at approximately 9.6% ish, 10% roughly a future year, year over year change of about 4%. That's just for forecasting purposes. It's not the town like we, the town don't have projections on school age population on school growth costs. That, you know, again, I would probably refer to, I'd refer you to the school department and the school committee to, for some of those, those questions. I know that there has been a popula, if you look backwards 10 plus years, there's been population adjustments for the school department, which I think has led to some of the increased growth that can be a factor in that growth trend. Looking backwards, moving forwards, I mean, part of the work of, I believe, well, I know that part of the work of the memorial study work and which is not complete yet, and it's gonna be complete in the coming year. We'll include some population projections for the school department, but we don't have those right now for the purposes of, of our forecasting. And, and unfortunately this is not a school committee meeting, so we don't have that answer to share with you tonight. <v Speaker 1>And I, I'm not comfortable trying to confirm the, the rate</v> of growth that you mentioned Ms. Gates, I would wanna defer to the school committee to, to address that. But the role of this body, the select board in particular, is not to interrogate the school committee budget or to ask loaded or otherwise questions. It's to allow the town administrator to work with the school superintendent to come up with a unified budget, putting as much as possible where, where we can share, where there can be shared services that are allowed by law, because there are areas where we can't necessarily share services, but they've done a good job over the last three to four years working together to put together a unified budget. It's the job of the finance committee to ask some of those questions about their budget and also the, the school budget and also the town budget. And that's what we'll see starting probably shortly after the budget's been revealed. <v Speaker 3>Yeah, town administration really doesn't have any</v> oversight over the school department specific budget, so. <v Speaker 19>Okay. Understood. Understood.</v> That's really understood. Committee, <v Speaker 3>School committee role. Yes.</v> <v Speaker 1>And did you, another question, Ms. Gates?</v> <v Speaker 19>Yeah. Yes. Can you hear</v> <v Speaker 1>Me? Yes.</v> <v Speaker 19>Okay. Understood.</v> I look forward to hearing that discussion. Jamie. I, I, what I believe what I heard you outline is that the allowable increase is the proposition two and a half percent. And then as John presented during the select board and school committee meeting, that that's the override is an additional 5.35%. So we're looking at a 7.85% increase in permanent increase in our tax base. Now, with that, correct me if I'm wrong, Jamie, but I understood your answer to be regarding the Memorial school is that we will need another override for that. And I have two questions. One is, couldn't that the $2 million that we would've gotten from the sale of Auburn Street been put towards the capital cost for Memorial School? And secondly is has there been any discussion whatsoever about eliminating the CPA tax? Because as, as one of our, my fellow residents mentioned earlier this evening when she was discussing Frank FO's comments at the last select board meeting, we feel like we're getting inundated with taxes here. And so is there something that we can do to start cutting? And, and can you address my, my question about the $2 million that could be put towards the Memorial School Capital Project? <v Speaker 3>Sure. So, so the, on the Memorial School side of things,</v> and just, I'll, I'll, I believe I'm gonna be answering your question, but I'll, I'll pause at the end so that you can correct me if I'm not answering the question. There's two components of the Memorial School. There's an initial component whereby the town would have to basically upfront some funding to do the study that MSBA, the Massachusetts Massachusetts School Building Committee Commission requires communities to do, to get into the pool of funding for them to receive the, it's not a, it's, it's funding that they provide. So it's that 40 to 60% of funding approximately, depending on the demographics of a community to help fund the school. That initial cost is proposed to be about 1.5 to $2 million for which our current sort of thinking is to repurpose some funding that has only just recently been due to the closeout of the Kennedy School of about $2 million to cover that cost. To your point though, about the sale of really any property, but you mentioned a five Auburn Street, could, the, could, could funding from that sale of property go towards the school project? I mean, the funding of a sale of property per state law does need to go towards other similar one-time costs like a school building. Yes. So yes, a $2 million sale of property could have gone towards a school building project. One thing about the Memorial school, just given what it's likely to be in scale, it's likely to be much, much greater than $2 million to do a renovation of that property. To what extent? Don't know yet. We'd have to do, run those figures and have to run those numbers in the, in the most recent past, the town has typically utilized the debt exclusion, essentially an override vote of the voters to fund school projects. That's how the recent Kennedy is being funded. The Kennedy was actually on the same ballot as the West Natick Fire Station. So we're also doing non-school building projects that way. In recent past, the town has, the high school was also funded with debt exclusion. The community senior center was funded with debt exclusion. So a number of building projects in the last, even just this last couple years and 10 plus years have been funded with debt exclusion. Did that answer your question regarding the Memorial school and the repurpose of funding from a sale of properties such as five Auburn <v Speaker 19>Y?</v> Yes. So what I'm, what I'm concluding is that $2 million could have gone towards the capital cost for memorial school, which obviously the capital cost is gonna be a lot more, but from what I've read thus far, it's project, the feasibility study, as you said, is 1.5 to 2 million. And then we're looking at from what MSBA projected based on, I believe it was the Brookline School of 70 million. Right. And so that 2 million, although it may seem like peanuts could have helped us with the project cost of $70 million in 2028, as opposed to coming to US taxpayers again and saying, we need more money. So that you're just hearing a, a level of frustration in, in terms of the taxes. The, the last question was regarding CPA. Has there been any discussion or thought regarding eliminating that tax for now considering the ki the tax burden that Natick residents are now facing? <v Speaker 1>I'll take</v> <v Speaker 3>That. So, so I'll leave that to the chair</v> 'cause that's not really a ton administration call Okay. For <v Speaker 1>The voters that, that was something voted in</v> by the, by the voters. So that <v Speaker 19>I understand that.</v> <v Speaker 1>Excuse me. So it would need to go back on the ballot.</v> I think it's not something that the select board could just choose to arbitrarily undo the will of the voters. So we need it, it has to be, yeah, it can be reconsidered after three years. So this is our second year collecting it. <v Speaker 3>We're in our second year.</v> <v Speaker 1>We're in our second year.</v> So the town could collect it for one more year and then it could go on the ballot for the, for voters to rescind it. But the select board cannot make a decision to over, you know, to over, to change what the, the voters will to do. So not, not until we could vote to put it on the ballot again in another year, year and a half. <v Speaker 3>Year and a half. Yep.</v> <v Speaker 1>So thank</v> you for your participation. Great, thanks. Eight 15. We're gonna move to the consent agenda. For the consent agenda. I think what we need is a mo I we need a, <v Speaker 4>Shall I take it? You</v> <v Speaker 1>Shall take</v> <v Speaker 4>It.</v> Thank you. So there, there's one item on the consent agenda, which I'm gonna pull because the thing that was missing from the consent agenda was the actual motion. So I'm gonna move that we approve the town administrator to sign the lip on behalf of the board for the 21 Summer Street mixed use project. Mr. <v Speaker 1>Sydney, are you moving to remove</v> <v Speaker 4>LIP is I I've already re I've removed it from the consent</v> agenda, so there's nothing left on the consent agenda. Gotcha. <v Speaker 1>And now I moving, you have your motion</v> <v Speaker 4>Second and I have my motion.</v> And you're looking for second for that one item, which is to approve that the town administrator signed the lip on behalf of the board for the 21 Summer Street. <v Speaker 1>And Mr. Evans would like you to define lip, please.</v> <v Speaker 4>Oh, I'm gonna ask</v> <v Speaker 3>Local incentive, pro project or program.</v> It's the state's program for essentially town select board. In our case, select board supported projects that include affordable housing units. This is gonna be helpful with our subsidized housing inventory, or SHI, which is per master law. Chapter 40 B towns are our encouraged to target at least 10% of their housing stock to be affordable, deed restricted, affordable. This project is not a full affordable housing project. The, there's just a small component of the project that qualify for the SHI and because it's a lip project, because we're, we're working with them on the project, it's a benefit and, and we actually get benefits in the sense that we get the protection of those units through the LIP program. But the select board is the signatory authority. Although you're asking that I sign on your behalf the final agreement. <v Speaker 1>Is that a second Ms. Rens? Yes,</v> <v Speaker 4>It is.</v> <v Speaker 1>All in favor. Please say aye.</v> <v Speaker 4>Aye. Because you have to do roll call</v> <v Speaker 1>Ms.</v> Wilger. Yes. Mr. Evans? Yes. Mr. Sydney? Yes. And I'm a yes. Four zero. Zero. Thank you. I'll entertain a motion to adjourn. So moved. <v Speaker 4>Second.</v> <v Speaker 1>Moved by Mr. Sydney. Seconded by Mr. Evans.</v> All in favor, please say Aye. Ms. Swogger? Oh, sorry. Yes. Mr. Evans. Mr. Sydney? Yes. And I'm a yes. Four zero. Zero. Thank you and good night.