Town officials again wrestle over merits of budget deal - Stoneham Independent: News

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Town officials again wrestle over merits of budget deal

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Posted: Thursday, January 24, 2013 12:03 pm

STONEHAM, MA - The Board of Selectmen and School Committee will adhere to a multi-year budget agreement for one final year, despite dissension among members over whether to continue following the plan.

During a recent meeting between the two boards, a bid to scrap the budget agreement led by veteran Selectman Robert Sweeney failed in a 2-to-3 vote amongst the Board of Selectmen.

Rookie Selectman Thomas Boussy joined Sweeney in the attempt to kill the multi-year pact, while Chairman Frank Vallarelli and members John DePinto and Richard Gregorio continued to support the budget guidelines. 

“I know we’re not going to live by it,” said Sweeney of the proposal, which the Selectmen, School Committee, and Finance Board agreed to during the spring of 2011, when a $1.6 million trash fee was instituted to bolster the town’s limited cash coffers. 

“I look at the whole thing as a marriage pre-nup agreement between the Selectmen and School Committee.  We need [this deal] because we don’t trust each other,” Sweeney said earlier of the pact.

“To cut to the chase and get to the budget agreement, I’m not in favor of it,” Boussy commented.  “I think it’s time we sit at the table and appropriate money to the schools and to the School Committee as it needs to be funded.”

School Committee Chairman David Maurer and member Shelly MacNeill also spoke out against the budget pact, arguing that its terms had been violated just months after it was inked by town officials in the spring of 2011.

Meanwhile, veteran school board member Marie Christie, joined by Jeanne Craigie, continued to support adherence to the budgeting guidelines as town officials ready a FY’14 budget. 

The budget deal

Crafted by former Selectman Paul Rotondi and Town Administrator David Rotondi, the budget deal was presented in the winter of 2011 as a way to create a firm plan for Stoneham’s financial future, while also giving leeway for local officials to deal with unanticipated revenue streams.

 In the years prior, town and school officials often fought prior to and during Town Meeting over how free cash and other revenue streams should be allocated between departments.

Under the financial plan, departmental budgets and revenue streams are set on a fixed percentage basis.  By doing so, revenues are automatically split based upon those rates, while departmental increases are set by the same standards.

A break down of those percentages, which are based upon available revenue in any given year, is as follows:

• School department - 41.4 percent;

• Municipal departments - 33 percent;

• Health insurance - 13.5 percent;

• Pension contributions - 7.5 percent;

• Vocational schools - 1.4 percent;

• State charges - 2.2 percent;

• Overlay - .9 percent. 

Because fixed charges such as health insurance are uncontrollable, the town and schools split those budgets — when increases exceed the fixed percentage estimates — based upon how much each department spends in those areas.

For example, if health insurance jumps by more than 13.5 percent, the school department would be responsible for the lionshare of that increase, because the district employs more workers than the town. 

By contrast, if the town’s pension contribution was to exceed the 7.5 percent rate, the town would have to offset the bulk of those expenses, since school employees are enrolled in the state’s pension system. 

Another part of the agreement stipulates that no departmental budget, besides fixed, uncontrollable costs such as health insurance and pension contributions, will be allowed to increase over 3 percent in any given year. 

In instances where a departmental budget does stand to jump by more than that fixed amount, the excess amount will be placed into stabilization or reserve accounts.

The three percent cap overall departmental increases has generated the greatest amount of controversy, with School Committee members alleging that the town has violated that proviso multiple times in recent years. 

“I voted against it to begin with, because I felt like everybody’s hands were tied and that we were coerced into it,” said MacNeill during the recent meeting.  “I don’t see how [we can continue with this agreement] if the Selectmen haven’t followed it and [its guidelines] have been broken on several fronts.”

Those in favor of the budget rules don’t deny that the agreement has been broken on several occasions.  However, proponents argue that local citizens were promised the agreement would be followed when a trash fee was instituted. 

In addition, the agreement was touted last spring as a sign of the town’s fiscal stability in the buildup to the election on a debt exclusion needed to build a new $40 million middle school.

According to Selectman John DePinto, to abandon the budget agreement now would be a violation of the trust of local citizens, many of whom endorsed the tax increase knowing that Stoneham’s officials had a solid financial plan. 

“If you know what’s going on in this country with the fiscal cliff and these clowns in Washington [D.C.], it’s uncertainty that has put the economy in the position it is in right now,” said DePinto. 

One of the reasons we tried to do a budget agreement was because we had an important debt exclusion vote coming up.  We did it to show the people in town that we had our act together.”

“They knew we agreed to how the money was to be spent.  We weren’t going to have any more problems at Town Meeting with unbalanced budgets.  We weren’t going to be fighting over money.  We showed the people of Stoneham we could get along and put guidelines together,” the Selectman concluded.

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