 |
FINANCE COMMITTEE
ANNUAL REPORT 2003
During 2003, the Finance Committee (FinCom) was chaired by Allan Tosti assisted by vice-chairs Richard C. Fanning, Abigail DuBois, and Charles T. Foskett. Peter B. Howard served as secretary. The FinCom has twenty-one positions, one for each precinct. The appointing authority (Moderator, Trust Fund Commissioners Chair, FinCom Chair) acted to reappoint all members whose terms had been completed and to fill two vacant positions.
The economic recession’s impact on State revenues and the continued increases in health insurance and pension costs together with the restrictions imposed by Proposition 2 1/2, increased the economic pressure on the Town for the second year in a row. After the budget had been approved at the Annual Town Meeting, the State had reduced its local aid contribution to Arlington for FY03 by $370,000. At a Special Town Meeting in the Fall of 2002, the FinCom recommended, and the meeting voted, corresponding budget reductions. The departments were able to accommodate these reductions by eliminating vacant positions and, in the case of the schools, by using grant funds. In February, the State further reduced local aid to the Town by $915,000, which required further
reductions in Town expenditures. The Town Manager’s level service budget projection for FY04 predicted a deficit of $10 million, about ten percent of the entire budget. The FinCom Chair provided budget reduction targets for each appointing authority according to the O’Neill formula. The FinCom also voted to allow the Town budget submission to be delayed a month until early February in hopes that by that time the newly-elected governor would have submitted his budget proposal and the amount of State aid would become better defined.
In February, the FinCom began its yearly effort to develop a comprehensive balanced budget recommendation for the spring Annual Town Meeting. The predicted deficit had grown to $12 million. The budget of each department was reviewed with the department head by one of the subcommittees. The school budget subcommittee attended School Committee meetings in order to gain an understanding of the school budget. Hearings were held on all Warrant Articles which required an appropriation or had a financial impact. Sixteen full committee meetings were held which, when combined with numerous subcommittee meetings, made for a busy winter schedule. In addition, the committee met for a half hour before ten Town Meeting session to formulate a recommendation on last minute
proposals.
The recommendations in the FinCom’s report prepared for the annual Town Meeting were in two parts: a budget that required reductions to accommodate the predicted revenue reduction, and a second budget that was dependent on passing a general Proposition 2 1/2 Override. This vote, called by the Board of Selectmen, took place in June. The reductions were less than originally feared because of the cooperation of key departments and the continued use of reserve funds. For the first time in many years, the budget did not fund cost of living salary increases for Town employees. In addition, along with budget reductions, the pension-funding schedule was stretched, the Dallin School renovation was delayed, and the Park Circle Fire Station renovations were delayed. The
second budget became moot when the voters rejected the override. Consequently the first budget, which contained substantial service and staff reductions, was voted.
The FinCom also continued to monitor other ongoing activities that could have a large financial impact. The FinCom followed the progress of the school renovation projects and the Reed's Brook project, and the Symmes project through regular reports by the responsible Town officials.
For the third year, the printed budget was prepared by a system that utilized the Town’s computer and database directly. This successful effort, which was begun four years ago with the Deputy Town Manager and the Director of Data Processing, has become routine.
Future issues will continue to include funding for the next round of school renovations due to inflation of construction costs and delay in State reimbursements, the renovation of the Town's fire stations and the increasing costs of health insurance and pensions for current and retired employees. Hopefully an improving economic climate will permit the Town to fully fund its operating costs and to rebuild its depleted reserves.
| |
