Williamstown Fin Comm Pushes for Higher Free Cash Reserves
WILLIAMSTOWN, Mass. — The Finance Committee on Wednesday generally was pleased to see a fiscal year 2024 town budget that included no projected increase in the property tax rate.
But in the penultimate meeting of this year's budget review, the panel had one last request for the first-year town manager: Leave more money in the town's free cash account.
Robert Menicocci presented a spending plan that sees a 3.7 percent increase in the town's operating budget from FY23.
Thanks to a slight decrease in the town's assessment from the Northern Berkshire Vocational Regional School District (McCann Technical School) and a tentative 3.16 increase in the assessment from the Mount Greylock Regional School District, the town's total operating budget is up just 3.1 percent for the fiscal year that begins on July 1.
The "all in" town and school operating budget for the current fiscal year is $23,122,255; the FY24 plan that Menicocci presented Wednesday is $23,838,195.
"Given the salary increases we all want, health insurance costs and inflation, I think it's remarkable this budget comes in at 3.7 percent, and I'd support it," Fred Puddester said on Wednesday.
There was one aspect of Menicocci's plan that gave the committee pause. As drafted, his budget severely draws down the town's free cash reserve, taking it from nearly $1.9 million to about $95,000, according to the numbers cited at Wednesday's meeting.
Menicocci's budget summary document listed $1.8 million in spending that he intended to fund from free cash — the residual of higher than anticipated receipts and lower than anticipated expenses in any given fiscal year.
Before explaining his reasoning, Menicocci quipped that he needed to put some distance between himself and Town Accountant Anna Osborne, lest she kick him under the table from which they addressed the Fin Comm.
"Free cash is one of these things that is a 'secret squirrel' item that, traditionally, all cities and towns want to keep in their back pocket as their own reserve to get through the year," Menicocci said. "What we want to talk about is what is the right balance of this that we have a little held aside for emergencies, what the out year looks like in terms of our expectations around free cash. But I also think it's an opportunity to think through transparency and really be forthright around what is available to the community.
"I think if we do this as a collective, accepted risk, to say, ‘We know if something happens, we'll have to scurry and figure out a solution.' That's what stabilization is for. Even if we have money designated for capital expenses, we can pivot and pull back on those projects and redirect those funds back. This upcoming year, we have just shy of $1.9 million in free cash available to us. What makes sense is to be transparent about that amount and put some of the money to work for the community."
The biggest items on Menicocci's list of targets for the free cash were capital projects ($1.3 million), reducing the property tax levy ($250,000) and stabilization ($150,000).
Stabilization concerns the town manager because of research showing the town's balance of $850,000 (including last May's town meeting approval of a $50,000 deposit) is low relative to similar communities in the commonwealth. The benchmarking was not merely an academic exercise; the town's stabilization balance is one indicator credit agencies will look at when determining the town's bond rating, something the town will want to keep as high as possible as it approaches major infrastructure projects, like the recently approved fire station.
Fin Comm Chair Melissa Cragg suggested that Menicocci amend his proposed budget to instead leave $250,000 in the free cash account, a number that the rest of the committee members indicated they could accept.
Puddester, who repeated his long-standing concern about "taxing people more so we can have money in free cash," said he could live with the $250,000 balance in order to allay the concerns of the long-time town accountant.
On Thursday, Menicocci told iBerkshires.com that if he adds money back to free cash, it would come either from the stabilization or capital project expenditures.
Wednesday's meeting featured followups by Menicocci on a couple of open topics from previous meetings of the Fin Comm, which went through the budget by department over the previous four meetings.
On the sewer rate, Menicocci said the indication from town counsel is that the town cannot preemptively raise the rate in anticipation of a possible change in state regulation that could hit during the fiscal year. On the topic of low wages paid to town employees at the Milne Public Library, Menicocci said he decided to wait until the town receives this spring a report on a wage classification study for all town employees before adjusting salaries in one department.
Menicocci said he was struggling with how to address the inequities at the library.
"I absolutely, whole-heartedly agree that we will deal with this," Menicocci said. "The end result of how we go about it, the net is the same. It will probably happen at the same time. The one item I'm really concerned about is the equity lens. … My work experience, leading up to here, was in government but very much in the social welfare arena, and social justice was a big, big part of our daily drivers of how we thought about our work.
"We've laid out a process of how we want to do that. I think jumping that process, putting someone at the front of the line, doesn't help create the confidence we're trying to build in how we address these issues. Everybody's right. It's a small amount of money. It's not about that part of it. It's really about establishing the transparency and the threshold of how we're going to address equity issues going forward."
Osborne told the Fin Comm that the administration did bump up the hours allotted to a couple of part-time library positions to allow those employees to become eligible for benefits; Menicocci previously referred to the town's limit of 19.5 hours per week for the position as "gaming the system."
And Menicocci said he followed a recommendation from Cragg in the updated FY24 budget by removing a position in the Department of Public Works that has been unfilled for some time.
On the revenue side of the town's ledger, Menicocci offered a couple of insights — one favorable and one not.
The town is planning for less revenue from cannabis sales taxes ($225,000 compared to $300,000 in the FY23 budget) because of the impact from neighboring states legalizing recreational pot.
On the other hand, the town is projecting $650,000 of revenue from new growth of taxable property due to the conversion of much of the original Cable Mills housing project to condominiums from rental units.
"Sixty-one rental units, 13 of them affordable, 48 of them market rate are going condo this year," Cragg said. "The building counted as a multifamily rental building and was assessed on an accumulated value of the enterprise at a much lower value than we will enjoy when you add up all the different units and multiply them by the tax rate."
Assuming no change in the assessment from the Mount Greylock Regional School District after Thursday's School Committee meeting, the net of Menicocci's first budget shows an overall expenditure of $24 million with an overall revenue $24.2 million. That keeps the town's property tax rate projection at $16.17 per $1,000 of assessed value.
Tags: fiscal 2024, williamstown_budget,
