4/6/1999 FINANCE COMMITTEE Minutes

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WARRANT ANALYSIS TOWN OF MASHPEE FINANCE COMMITTEE ANNUAL TOWN MEETING MONDAY,MAY 3, 1999 AT 7:30 P.M. QUASHNET SCHOOL This is the Finance Committee's recommendation to the Town's citizens on the Town Meeting Articles,as required under the local by-law. The Finance Committee's mandate is to act as the fiscal watchdog of the community and, as such,has made serious inquiry and analysis of the various articles and our recommendations are found below. The guiding policy of the Finance Committee is to ensure that the Town lives within Proposition 2-1/2. Most Departments have successfully submitted budgets which have stayed within this guideline. Those Departments whose proposed budgets exceed the Town's "Proposition 2-1/2 Policy"must be required by the voters of our Town to exercise fiscal responsibility and scrupulously justify any excess increase. The Finance Committee and the Board of Selectmen have achieved an uneasy consensus on the FY2000 budget. Although the School Department has pared its requested budget to$13,350,000,all Town Departments,with few exceptions,again have borne the brunt of the school's demand for an ever- increasing share of our operating budgets,with the result that department budgets are again at a level- serviceamount. Even so,fimding of the FY2000 budget will require the expenditure of$300,000- $400,000 from our stabilization fund and authorization of a Proposition 2-1/2 override in the amount of $1,150,000. Because of this situation,taxes wilt rise on the order of 13-1/2%,or approaching$2.00 per thousand dollars of current assessed value. This means that a family with a home assessed at$150,000 wilt have a permanent increase of$300 in taxes. The current tax rate is $13.60 per thousand dollars. In the event the Belcher property, Article Number 20, does not pass, an additional tax increase will be required. T'hankfuHy,however,this is the last year in which we expect large school budget increases: the high school will be fully occupied through grade 12 and, so,we will expect the schools to be able to live within Proposition 2-1/2 thereafter. Looking forward,we anticipate an extraordinarily large amount of free cash to be certified this coming fall and recommend that these funds be used to replenish our Stabilization Fund and reduce taxes. The integrity of this Stabilization Fund is essential to both our ability to obtain favorable bond ratings as well as to meet extraordinary and unforeseeable capital needs. It is not to be considered a source for operating funds. Mashpee faces-signifrcant financing needs in the coming years: new fire station, library addition,new elementary school, rising costs in solid waste disposal and road maintenance,to name just a few. These large capital expenditures are necessary to the efficient operation of our government. Accordingly, it is more than essential that operating budgets are held in check to allow our overall tax burden to remain stable while allowing for moderate expansion and maintenance of our capital facilities. Where the Finance Committee takes no position on an Article, it is because the Article has no material impact on the Town's finances.