 Hello, everyone, I'm James Milan. Welcome to this episode of your Arlington dollar, which is a, we have an annual ritual on your Arlington dollar of speaking with our deputy town manager Sandy pooler about the upcoming budget at around this time of year. And that's what we get to do today. So first of all, I just want to welcome you. Thanks so much for joining us, Sandy. We always appreciate talking to you. Always a pleasure. I'm glad to be here. Yeah, really, I know. I know this is a very labor intensive time of year for you so very nice for you to carve out the time to sit and talk to us about what's going on. Well, the topic this year is the FY to 2023 budget. And we find ourselves talking to you in early February this year, sometimes we talk to you in January, sometimes in February. And that means for our purposes today that we're about three weeks or so out from the mid February date at which our town manager has to submit the budget for that then various bodies will review and give him put on. And all of this leading up to town meeting, which starts in two and a half months or so right. I'm sure it seems like a comfortable amount of time away now and it will all be surprised when it gets here. Anyway, I just want to ask you to start by in a place that we've started before and I do want to tell our audience, we're not going to go into the kind of exhaustive detail I don't know if that's good or bad news for you we're not going to go into the exhaustive detail we often have in the past but I'll refer you to the fact that on ACM is YouTube page you can find as much information as you want as well as of course you can do that out the town's web page etc. But on ACM is YouTube page you will find budget 101 which Sandy did with us a few years back and which is still pertinent and all of the details in terms of how the cycle works etc. So we're not going to be doing that today but let me ask you to start with just a brief overview of what that budgetary cycle looks like over the course of the year and where we find ourselves now. So in October we really started by doing our initial forecast for our revenues. We sent letters out to department heads and gave them monetary allocations and then started setting up meetings with them to go over both what's in their budget now already, and we allowed them to make requests for additional money. That took us pretty much through early December and then at that point we decided what things we could add and what things we couldn't. Overall this year I think we had something in the order of about $2 million of extra asks from people. And when it came right down to it we were able to fund a couple of them. But most of them we had to say no to. And I will get back to that in just a second. That all culminated in a manager's budget which under the town manager act our town charter is due on January 15 to be delivered to the select board in the finance committee. We put that all together and now the finance committee and the select board are going through their processes of meeting with department heads reviewing the manager's requests and getting ready to make their recommendations to town meet. So let me talk a little bit about the numbers. We have a long range plan here in Arlington which scopes out our budgets are revenue and are spending over a five year period. And in that plan, it allows the town side of the budget to grow by 3.25% per year. It also forecasts when we're going to need overrides in the future. So looking at that, and we've realized that we have to have an override, I think an FY 24. Because of that we've sort of constrained some of our spending on the town side. This year, we've gone up only 3% instead of 3.25%. That's in line with the previous year we went up only 2.6%. We've really tried to constrain some of our spending. The town side of spending isn't really going to make all the difference for how much an override we have because I'll show you some numbers in a minute. But I do think it's part of the town manager's effort not to add a lot of new positions these days and try to constrain some of our spending because we know there's going to be another need for an override. Can I ask you, Sandy, excuse me for jumping in, but can I ask you whether the 2 million that you had said that, you know, in cumulatively the department heads had requested. And you kind of, I think you said it was an extra 2 million and some you would be able to respond to and the rest not. Is that was that part of what you're talking about as well where you're trying to constrain spending in these years leading up to a potential override and so that's why that happened. Yeah, I'd say there's two things that are going on one there are needed increases that are just just basically have to be funded probably the biggest of which was changes to our trash collection and recycling collection contract. We had just ended a, or just about to end a 10 year contract that we have with a company that picks up the trash from your sidewalks. Over the past year or so there's been a lot of back and forth between trash collection companies and towns about major increases have been imposed in other communities. We kind of held back kept our powder dry and negotiated. And what we ended up with was a first year increase of 8% in the overall excuse me, 9% in the overall costs, but then 2% for the next two years for a three year contract. We also kept the system where we have where we don't pay a per tonnage rate for recycling to be picked up to pay per tonnage for trash but recycling is just a flat fee. And we think that's a good thing in terms of encouraging recycling here in town. So there's, there's a few things like that that we just had to put into the budget. There are a lot of other things where departments have recognized more and more demands from the public for services or more staffing needs or more funding needs for things. Most of those only in one case did we add any staff we added somebody to help the zoning Board of Appeals with all its work because we've found that the number of permit requests that have been coming in have outstripped the staff's ability to service the Board of Appeals and the Historic Commission, both of which, you know, have to review a number of different plans that people put forward. And then we added a few dollars here and there for things like upgrading our internet connection for the town that increases the speed of our internet our new it director thought that that was really essential to meet the growing demands. And that we didn't really add much of anything. So those are the kind of things that people asked for and I think they asked for a lot of things again because I think they see demands from the public. I tell them, it's just a truism of budgeting that there are always more demands than there is money. So that's what it was. I apologize again for for the fact that I tend to interrupt you and I might really mess with your train of thought but if you can get back to what you were saying before that. Please. So, yeah, I think what I thought I do at this point is just talk a little bit about the numbers I think I'm going to share my screen a little bit. That would be great. I think you see this moving. This is the manager's budget. And we're going into FY 23 here. So, you can see that overall, we have a revenue budget that's going up that originally is going up about 3% 2.96% The school budget that's going up 5.42%. This is one of the reasons we have a structural deficit in town because some of our expenses grow faster than our revenue. One of the things that we did with the school budget that will be important to people this year is because they had a decline in enrollment. Instead of adding money as we have every year for an enrollment growth factor, because they were down 189 students from their previous peak. We cut $1,397,700 out from the growth in the school budget. So you can see this number here it's in parentheses which means it's a negative. We did our usual increase of 3.5% for the regular cost plus adding in the previous year's enrollment numbers and everything. 7% in sped spending. We added $1,030,000 which is the last tier of the amount we had our last override that we said we would fund for the school's strategic plan. And then this year, we're proposing added $970,000 as a one time infusion into the school budget to deal with some of the costs associated with COVID. There are kids who need remedial help tutoring some of them for their emotional needs. And we know the school department has to deal with those things so we added that. Just sticking with the schools for a second because we've talked about this in the past. I recognize those outlays and those classes of outlays. Of course the general education and especially the special education costs and noting as I look across the table just to confirm for people that the special education costs. They go up by 7% a year and that's partly because they're treated differently in terms of how we can raise those costs, right? Well, on the one hand, it's true that any money in the school budget like this is just taxpayer money. It's all just money. And if we have extraordinary special ed costs, the state will reimburse us sometimes they have that kind of what they call a circuit breaker if we particularly have to place kids outside of Arlington schools and which gets to be very costly. The state does share in that. Guys, it's just a trend that was identified a number of years ago. We look at it from time to time to make sure we're still on track and there's still conversations in the long range planning committee about whether this is still the right number. And we'll continue to talk about that but that is more expensive than regular education and that's why we account for here. Thank you. A couple of other things I want to mention that as I said there's that we have other education costs the cost for a minute man, regional technical vocational high school which have gone up fairly substantially partly because a lot more Arlington students are going there than have in the past. We have the town budget at $40 million, which is going up at the 3% by mentioned. We have the MWA debt shift so that there's no more. There will be no more tax dollars supporting the water and sewer fees that will all be in the water and sewer. And so people's property taxes will see reduction because of that capital is still 5% of the budget. And then we have other fixed costs like pensions and insurance and assessments from the state. A few other things here to get us to the bottom line. One of the things I want to point out one is that by FY 25 in this version of the budget, we were projecting a $9 million deficit. The other thing that I want to point out is on the revenue side. $5 million of revenue in FY 23 and $5 million of revenue in FY 24 from ARPA, the American Recovery Plan Act. And that is one time money that the federal government gave us to make up for the revenue that we lost during these years of COVID because we've had losses in motor vehicle excise tax, hotel motel tax, meals tax, permits. I mean, various things went down. So we are using that's $5 million is going to plug that hole and make up for, for some of those losses. So that is a big change in the budget and really helped us out a lot. It's something we only found out about for sure in December. So the feds kind of kept changing their rules. I wanted to keep up with it. Unfortunately, it's worked out well for us. This is the budget that we presented the finance committee. And if I could just say one thing I was going to talk about how we have an updated forecast but if you have any questions about this before I go to the updated forecast. Let's see if there are any other questions. I wanted to just point out a couple of things. So first, it looks like the red comes in on the bottom line there as you as you already pointed out in fiscal year 2025. And so therefore, right now, according to your best guesses and estimates. And that's when we may be looking at, you know, a structural override being necessary in order to address that deficit. So just, you know, folks, just say one thing about that I think it's likely we would ask for an override to start going into the fiscal year by 24 budget to sort of build up our override stabilization fund in this year, so that we could ask for a smaller override if we do it a year early. Then if we waited till the next year with when the numbers start to get pretty enormous. If we asked for an override will be at a number that we think voters would support so probably in the spring of 23 is my best guest today as to when you would see an override. Thank you so much for that clarification Sandy that's exactly right in such a good illustration of the kind of, you know, really reliable thoughtful fiscal management that this town is known for. And, you know, just, just understanding that yes, doing the ask earlier. It's nobody ever wants to hear that news, but obviously it just makes a lot more sense to try and get out or stay out in front of these building numbers in the way that you just described so thank you for that. The other thing I wanted to just point out is how rare it is, but nonetheless you just have to make accommodations for these things. You, you had a little while back pointed out that the growth factor, it was actually it's in parentheses in that first column as you said, the growth factor for student population in the schools, which happened to go down. Probably a corresponding somewhat corresponding number of additional Minuteman students as you said before. But nonetheless, we are used to those numbers going up and up and up on the enrollment side over these last number of years but just kind of shows you that you can never tell for sure what the trends are going to be right and that you just have to make the adjustments as you go along. Absolutely right and I think we think for example Minuteman may be attracting more students because they have a brand new facility school there. I think it'll be interesting to see is our high school opens up. We have the new wing opening up this month and we construction is continuing. It's going to be a beautiful school when it's open so it will be interesting to see what that does to enrollment to. Absolutely. All right so you said that that you have more updated bunch of numbers to share with us I guess that is true so I want to show you this, which is now are updated forecast, and you can see the number out in FY 25 has gone down for $9 million to about $6.8 million so we had a decrease in the size of the override and the deficit, and that's really because our state aid here in FY 23 went up. Instead of going up $178,000 it went up $1.4 million because we got a lot more state aid for education aid. That's a reflection of our previous increases in enrollment, which under the state aid program sort of take a while to catch up. And some increases in general education aid, and excuse me general government aid at 2.7%, which matches the state's predictions of its increases in revenue. We will continue to look at state aid numbers as the legislature goes forward with its process and will make adjustments to this as we go forward into town meeting. But I just wanted to point this out for the viewers at home because you know they may have heard news about increased state aid. We did not increase any of our spending, we're just then using less money from our override stabilization fund and putting more often to the future to reduce the impact on taxpayers. That makes a lot of sense and I just want to point out something that I have done in the past. But again it continues to, as I was mentioning to you before we went on, it continues to fascinate and puzzle me. And that is you've just given us updated numbers. And obviously a lot of work went into the first set of numbers and then you had to update them and the reason why you had to update them. And that is of course good news in a lot of ways because the, the, the governor's budget and state aid in the governor's budget was higher than we might have anticipated or certainly than was in previous versions of our own town budget here. And that that goes right to something that I just would love to hear your thoughts about and that is every year, as you said, a town, the town mandates that the town manager's budget be submitted on January 15th. The governor's budget for the state is always just a little bit after that. And it can change things fairly fundamentally or dramatically I've noticed at different times over the years. So, you're the main person I would think that this falls, you know falls on. Is this just just something you just kind of shrug about and just say well that's just the way it is this timing is, you know, it makes more work for all of us here. Is there really much we can do about it or do you wish we would. I think it would make sense to have the manager's budget submitted after the governor's budget so we have more certainty as to state aid which is really the biggest variable that we try to predict. I know there have been discussions with the select board and the finance committee about this issue and there's a variety of opinions about this. I would say it, we want to make sure there's enough time for the finance committee to consider the budget. But I also think it would be wise to put it off probably toward the end of January or something like that so that when we submit a budget. It's really based on more solid evidence so that would be my recommendation. I just have to say I would second that I mean as a person who on whom none of the burden of this falls but nonetheless, it just doesn't make sense that every year, you have to go through all that work and then, and then just do some more work. And so, I don't know to hear we speak about it hopefully folks who are in decision making roles will recognize it and and and take action at some point I think, you know, it would make your January and February much more sensible I would think. You know, speaking of the burden of doing this, there's one thing I wanted to add, which I didn't mention to you before but I'm going to mention now. I am the deputy town manager and finance director so I oversee this whole process. And I have management analyst, a woman named Julie Wayman was an Arlington resident who's worked in this office for about three years now. And this year I said to Julie, alright Julie, you've really been doing a good job. I'm throwing you into the budget waters. Swim. So she really did a lot. She really put the budget together and a lot of the details. We obviously work together a lot but I want to give credit to Julie for the tremendous work she's done to get the manager's budget to the finance committee. To work on the team here and really lead the team with the department heads. I think sometime in the future, you at home will probably hear more directly from Julie. It's been her first year doing the budget. And I think in the future, it'd be appropriate for her to be speaking to you too. But I wanted to make sure she got some credit publicly today. Great. We always like to be a platform for that kind of message as well. So I want to, you know, before we kind of wrap things up here, let's kind of do a little synopsis for folks. Basically, obviously there's some good news in that there is this 10 millions million dollars of extra infusion from the ARPA funds. Of course, those had been that that's something that I had been talking to Adam chapter lane our town manager about consistently over a whole lot of months now since it first became apparent that some money was going to be heading in our direction and then we found out how much etc. So obviously there's going to be an effect from this 10 million being taken out of what was an overall 34 million that had been at least provisionally allotted. So we just want to acknowledge that right I mean obviously it's good news for Arlington property tax payers, like myself and many others. I don't know what to do with that but you know also it is going to mean that maybe the largest does not get extended as far or as deep as it might otherwise have been so. So, initially, the town manager presented a plan to the select board allocating that 34 million dollars. I think that's precise figure it's about 35 and a half million dollars. As it got it's gotten tweaked over time. The federal government has tweaked things, but that's the final number. We will definitely continue to spend that ARPA money on some things that we said originally to the select we're going to spend on, such as the $4 million in premium pay to our workers who had to work in person. There definitely some money is definitely going to be spend on improvement of our water and sewer system. There's money going to public health programs and so forth. We've yet to spend money, all of our money on water and sewer all or much money at all on on homeless relief or affordable housing all those things are going to have to be looked at and presented again to the select board to get their endorsement as we've moved $10 million into the loss revenue column. We had really started at three. So now it's 10 so we're going to have to find 7 million from other things. The managers in the process of working through that he will present that again to the select board I think probably in the next month and then it will be publicly available for comment and and and vote on the select board. Undoubtedly, there will be public comment about that no doubt. So you have also though during our time today mentioned I just want to again summarize that there is a there is a new DPW contract related to trash and recycling. And that that in general is good fiscal news because I think you like the the structuring of that it's a bigger cost up or bigger increase upfront but then followed by really minimal increases over the the next couple of years so that sounds good as well. There will be more money going to the schools as as seems always to be the case. And of course is I think very few people in the end, argue with because Arlington schools and their excellence are a big part of what makes our community tick. And then finally you were mentioning really kind of minimal staffing changes. That's exactly right. That pretty much sums it up. Do you think that we, you know, should have mentioned or covered more extensively. Do you think or or are we good. I think we're good I think people will see this come forward to town meeting be published in in April from the finance committee. And I think the experience at town meeting is that we do a very thorough process ahead of time so the budget is one of the least controversial things at town meeting and I hope to keep it that way going forward. Here here exactly to all of what you just said yes it is traditionally one of the least controversial and thank goodness right and let us hope that you continue that streak. But low drama is what we're looking for from this year's town meeting if possible. All right. Thank you so much for your time again and best of luck with seeing this through to the finish line which I know you're, you're still working on. I have been speaking of course with our deputy town manager sandy pooler who is in charge he's had able assistance from from Julie as he has mentioned. He's in charge of this whole process, and it's a big one, and it matters to all of us so thanks again for coming on to explain some of the major elements of it. We really appreciate it we'll see you next year if not before. And again wish you good luck. All right, thank you. That's sandy pooler our deputy town manager I'm James Milan this has been a conversation about our fiscal year 2023 budget upcoming. And this is your Arlington dollar thanks so much for joining us. We appreciate Sandy's time, and we appreciate yours. We'll see you next time.