Westborough – Total spending in Westborough is projected to go up 4.2 percent for fiscal year (FY) 2012 but for the “first time in many years” the town will not need to use Free cash to balance the operating budget. This information was relayed to the Board of Selectmen and various department heads by Town Manager Jim Malloy during the selectmen's Feb. 8 meeting.
Malloy noted that the town's total spending is projected to be $92.4 million, which is $3.7 million more than FY 2011. As is the case in many other communities across the commonwealth, major increases in spending include funds for the schools, insurance, wastewater and water. There is an estimated debt increase of $3.17 million, which includes $2.8 million for the wastewater treatment plant renovations and $1.4 million for multipurpose improvement projects including those for roads and water. That amount is in addition to the $479,200 operation costs for the wastewater treatment plant and $257,653 for water debt service.
Malloy noted that he has been meeting on a regular basis with School Superintendent Marianne O”Connor so that they could develop a school budget that was within the confines of Proposition 2- 1/2. The projected school budget is $39.9 million, $700,518 more than FY 2011, but still $125,000 less than what Malloy said the schools were requesting.
School Committee member Stephen Doret cautioned that the committee had not actually met yet with school administrators to develop a new budget.
“This puts us [the School Committee] in a box,” he said. “We would have much rather have had discussions first. Be advised that this number is just a number.”
Health insurance continues to be a major factor, Malloy said, with an estimated 10 percent increase in FY 2012. Currently, the town contributes 75 percent of the medical coverage for single employees and their families.
The FY 2012 retirement assessment estimate is $2.18 million, with the town's projected share of unfunded liability for Worcester retirement at $21.6 million.
Municipal employees are not eligible for Social Security, Malloy noted, adding that they “pay a lot higher rate [into retirement accounts] than those who pay into Social Security.
The town's annual debt service is estimated at 9.5 percent of the overall operating budgets. Malloy recommended that any large municipal projects should be scheduled so that the debt service would not be due until FY 2014 or FY 2015. The first year of any major project is mainly to establish permits and the second year is normally the construction phase, both of which could be paid for with short-term debt, he said.
Selectman George Thompson, noting that there was a lot of money going toward wastewater treatment, asked Malloy if there were any indications that the Environmental Protection Agency would be relaxing any of its policies in the future.
“No, I think if anything they are ramping them up,” Malloy said.
During his explanation of the five-year forecast, Malloy said the projected tax rate was $18.78 per thousand, which would calculate to $7,745 for an average single-family tax bill. Free cash and stabilization funds are projected to be $4.2 million, which is 5.4 percent; the recommended goal is 7 percent. State aid is predicted to increase by 2.2 percent and local receipts are estimated to grow by 1 percent.
Malloy said based on current projections the town will have a balanced operating budget for the next five years with no need for a Proposition 2 ½ override.
Two of the most expensive items noted in the FY 2012 Capital Plan – $330,000 to replace the Forbes Municipal Building roof and $251,600 for a new HVAC system for the Town Library – would fall into the category of debt issuance.