Selectman Candidates’ Question of the Week: ‘What’s Your First Act if the Override is Approved, Rejected?’

Photo: Jim Williams

Every Wednesday leading up the Town Election on Tuesday, April 7, the Belmontonian will be asking a “Question of the Week” to the candidates running for a seat on the Board of Selectmen: incumbent Andy Rojas and Glenn Road resident Jim Williams.

This weekly feature will allow the candidates seeking a three-year term on the board to answer topical questions concerning Belmont and help demonstrate their ability to lead the town.

This week’s question: The $4.5 million Proposition 2 1/2 override before Belmont voters on April 7: What would your first act be as a selectman if voters approve the override; and, if they reject it? Be specific.

The position of the answers will alternate each week with Williams having the top spot this week.

Jim Williams

Now that the current Board of Selectman chaired by Andy Rojas put a $4.5 million override on the ballot, it’s very important for the long-term financial stability of the town, its citizens and its creditors that this override is approved as proposed on April 7. Approval will prevent $1.7 million of unnecessary cuts to the school budget and, equally as important  $1.1 million unnecessary cuts to other Town services  in fiscal 2016.

However, even with approval, Belmont’s  financial crisis will continue for the next thirteen years and beyond unless we do something about the $113 million pension fund amortization schedule thru 2027 and the $200 million OPEB (Other Post Employment Benefits) obligation projected for 2022.

I have a clear plan for addressing  both obligations. The two key drivers of the plan are 1) refinancing the pension obligation with a bond issue and 2) funding the unfunded OPEB  obligation by making a $2.5 million annual contribution to the fund. We can pay off the  pension obligation by issuing a 20 year, $60 million, <3% municipal bond in 2016. The bond would be paid off  by $4 million annual payments thru 2035 which would be funded by a debt exclusion. The OPEB fund contribution should be funded by override because the operating and capital budgets cannot accommodate such a recurring contribution and the growth of OPEB obligations were not anticipated by Proposition 2 1/2. The door-to-door cost of the pension strategy is $80 million compared to the cost of the current strategy which is $113 million. This approach will save us $33 million, fix the cost of the pension funding for the next 20 years, and  return the $113 million in scheduled pension amortization payments  to the operating and capital budgets thru 2027.

My plan is not only the most responsible way of getting over these huge financial obstacles, but it is also essential to the future financial well being of the town. Also, moving forward from 2016, if we can control our expenses to <3%  annual increase per year, the town’s budget would remain in surplus through 2031 which will allow us to replenish our reserves for the inevitable unforeseen need.

So, when  the proposed $4.5 million override is approved, my first act would be two fold: begin to work on refinancing the pension fund amortization and  funding the OPEB obligations in 2016 which will return the $113 million in scheduled pension amortization payments to the operating and capital budgets thru 2027.

If the voters don’t approve the override, my first act would be to seek alternative funding to avoid the school cuts for, at the least, 2016. Then, I would do the same things outlined above for the pension and the OPEB funds.

Again, my plan is essential to the future financial well being of the town and should have been adopted in 2012 when it was clear that the pension fund amortization would put the town’s budget  in deficit.

Andy Rojas

Regardless of the override outcome, as Selectman, I will use the in-depth experience and knowledge obtained both in my first term and from extensive town service to faithfully implement the will of the voters.

Approval

If the override is approved, I will follow Financial Task Force (FTF) recommendations closely. The FTF worked for over a year to develop its carefully thought out, unanimous blueprint.

Immediate FY 2016 actions will include fully funding seven new school positions (approximately $500,000), stabilizing the school department budget (approximately $1.7 million shortfall) and implementing approximately $620,000 in capital budget items. These consist of $300,000 for the pavement management plan, $200,000 for annual sidewalk repair and $120K for debt service payments. I will direct the Public Works and Community Development Departments to undertake road and sidewalk repairs and replacements.

The override completely funds Belmont schools for the coming fiscal year. Increased enrollment, new unfunded mandates for special education, English language learners (ELL) and out of district (OOD) student placements will be accommodated effectively.

The remaining override funds will be placed in a stabilization fund designated for unforeseen budget fluctuations and, per FTF recommendations, for preparation for FY 2017 and FY 2018 budget needs.

Additionally, I will work to enact the other important FTF structural and non-structural budget reform recommendations (among other reforms) so another override will not be needed any time soon.

Andy, Allison & Smudge Rojas - IMG_0827

Andy Rojas, his wife, Allison Miele Rojas, and Smudge.

Rejection

If the override is rejected, I will work carefully with the School Superintendent, Town Administrator, Warrant Committee and my Board of Selectmen (BoS) colleagues to make necessary town and school cuts.

  • Schools would require targeted, prioritized reductions to remove approximately $1.7 million in expenses from the FY2016 budget.
  • The town, with a very lean current operating budget, is not directly affected by the override. However, it would not receive the override’s approximately $620K for road and sidewalk capital budget improvements.

This will necessarily be very challenging. It’s why Belmont needs an experienced Selectman who already understands in-depth, the relationships between budget items and department needs and who can work within the available revenue budget without compromising town services or the Level 1 ranking of our schools.

If additional revenue sources are identified during FY 2016, I will work with the School Superintendent, the Town Administrator and my BoS colleagues to allocate the funds to the highest priority needs. I am already up-to-speed on the budget, the appropriation process, town and school operations and requirements and, as the current BoS Chair and a Warrant Committee member, will be able to make the requisite difficult decisions based on experience.

Conclusion

Both scenarios depend on effective communications between the BoS, School Department, Town Administrator, Warrant Committee and related town departments. I have worked closely with all these groups and have a proven track record of effective communication and engagement that has resulted in forward-looking financial management of town resources. Continuing this broad engagement will give Belmont the best outcomes in the future.

I respectfully request your vote for Selectman on Tuesday, April 7, 2015. Thank you.

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Comments

  1. Tony Oberdorfer says

    Why is it important for the override to be approved simply because the BOS has chosen to put it on the ballot if it should not be on the ballot in the first place? Mr. Williams has not answered that question while proposing still more spending in the future.

    • says

      In 2016, Belmont’s budget contains a $6.3 million payment to fund its unfunded pension obligation as agreed with the State. During the next three years this payment thru 2019 escalates at 7% per year to a $7.9 million payment in 2019. So the total payments to this one line item are $28.3 million for 2016 thru 2019 versus $18.0 million raised by the $4.5 million override for the same period. So, what the BOS .strategy is doing is to continue to cut the schools and other services to make the payments for the unfunded pension obligations now by another $10.3 million for the period. This same approach was used in the period from 2012 to 2015 with a total of $21.4 million cut from the schools and other services to make [payments against the unfunded pension obligation. Also, the current BOS strategy essentially ignores the buildup in the unfunded retirement healthcare obligation known as OPEB by making a token contribution to the fund annually. This obligation has grown under Andy Rojas’ as a Selectman from $43.5 million to a projected $143.5 million by 2019. When all of this is added up, the average annual cost to the Town and its citizens, and its creditors of the BOS pension and OPEB strategies from 2012 thru 2019 is $6.3 million annually for unfunded pensions and $12.5 million for unfunded OPEB. The average annual total is then $18.8 versus my strategy’s total annual cost of $6.5 million. I should also mention here that the period 2020 thru 2028 presents a much worse picture and the likelihood, in my opinion, of another override. Unfortunately, I failed to convince the BOS chaired by Andy to consider the strategic alternatives presented by my plans, but without any true explanation which led to my declaration of candidacy for Selectman. In my opinion, given this dire outlook, the best voter strategy now is to vote for the $4.5 million override to prevent even more Draconian school and service cuts and to vote for me as Selectman so I can restructure these obligations in a more sensible way and preserve the Belmont we all cherish.

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