By Melanie Petrucci, Senior Community Reporter
Shrewsbury – Town Manager Kevin Mizikar presided over an initial budget workshop at the Board’s Jan. 8 meeting. The workshop was an opportunity for Mizikar to detail recommended changes to the budget in a discussion format. The discussion touched on many of the total budget aspects but with particular emphasis on utilities.
Mizikar began with a review of the town’s estimated revenue, $139,225,662, which included $500,000 in Free Cash, taxation, state aid, sewer and water revenues and other available funds.
He then introduced a few financial management structure changes that will affect articles presented at Town Meeting, notably the establishment of a Stormwater Enterprise Fund, a special sewer revenue fund (separate from the operating budget) , and operating budget articles which capture indirect costs of water, stormwater, sewer and solid waste and utility articles (direct costs and capital.)
He said that the operating budget articles will only include indirect costs which are things that are related to utilities that are provided by other departments.
Relative to utilities, he recommended restructuring warrant articles to be streamlined to include not only salaries and direct expenses but also capital expenditures and satisfy all expenditures in one article (per utility) at Town Meeting.
“I think this will aid in the efficiency of Town Meeting and also allow the voters to understand the total revenues that we are anticipating and the expenditures that we will make through the course of the year,” Mizikar added.
“I think this is so much clearer to understand laid out in this manner. I think (hope) that it will be well received by the Town Meeting members,” noted Selectman Moira Miller.
Mizikar then segued to his proposed Capital Improvement Plan focusing on public property.
“The proposed Fiscal Year 2020 Capital Improvement Plan with $2,441,200 in new investments is 58 percent greater than the investment proposed in non-utility projects in Fiscal Year 2019. The planned investment represents 1.13 percent of the town’s total building, vehicle and equipment assets. Like the previous year, this plan primarily focuses on maintaining the existing assets although a study of existing police station may lead to a new building project,” according to his draft Capital Improvement Plan.
Free Cash has historically been the funding source for many of the town’s capital expenditures. The question was raised whether or not that was the best funding source and should the town continue this practice.
Selectman Jim Kane asked Mizikar to explain the distinction between Free Cash and the Stabilization Fund.
Mizikar clarified that his goal for the Stabilization Fund would be to serve as an emergency fund and not as a “savings account” whereas Free Cash would be used for discretionary expenditures beyond the realm of the operating budget.
He said he would like to see the town put $750,000 aside from Free Cash to the Stabilization Fund this year. Once the fund is where it should be, near $7 million, then the allocation would be approximately $200,000 annually.
The selectmen were in general agreement with this thought process. Benefits include a better bond rating and future financial security.
At the next Board of Selectmen meeting, Tuesday, Jan. 22, Mizikar will present the second budget workshop which will include utilities, public safety, community development and public works.
