At a time when many towns are making cuts to balance their budgets, Medfield’s town finances look pretty good this year, according to Town Administrator Michael Sullivan.
“We’ve been through a couple of rough years but this year we seem to have a variety of factors that come into play to weather the storm … It’s not just one thing,” Sullivan said.
First, voters passed a $500,000 operating override at last year's Town Meeting and special town election to make up a difference in the school department budget.
“So, instead of having to drain down our free cash and other reserves, we were able to maintain good levels of reserves,” said Sullivan.
Second, Sullivan said the town tries to “look out long-term and not try to budget year to year but rather two or three years ahead so we don’t drain down our reserves one year and try to dig ourselves out the next year.”
Third, “it’s a little bit of this and a little bit of that,” said Sullivan.
“Some of our major budget increases in past years did not go up this year,” he said, including the school department budget and health insurance, to name a few.
The proposed 2013 school department budget – which represents 60 percent of the town’s overall budget – includes only a slight increase of less than one percent, down from what had been an average of four to seven percent, said Sullivan. The modest increase is due to trimming within the department, possible in large part to decreased enrollment.
The town’s health insurance, which had been increasing by double digits in the past (one year saw an increase of 23 percent), did not increase at all this year.
“Health insurance premiums stayed level so that was a huge help,” he said.
Sullivan said town departments, boards and commissions submitted decreased, level-funded, or only slightly increased budgets, which also helped the bottom line.
Over the past four or five years, the town has eliminated several positions so the number of employees is down and the benefit expenses related to employment is also down.
The town receives about $1 million each year in new revenue from property tax increase. A lot of that money, said town officials, has been used in recent years to cover lost revenue such as decreased state aid and local receipts.
Sullivan noted the town’s interest income has also taken a major hit.
“We used to make $800,000 in bank interest earnings [but] last year we earned $39,000 so we've had to use the additional revenue we've made under [Proposition] 2 ½ to cover drops in other receipts and other revenue resources.”
Sullivan said the town did lose income on bank interest but, at the same time, was able to take advantage of low interest rates by refinancing town debt, which is now at $5.4 million (it peaked in 2003 at $7.4 million due to school and library projects and land purchases).
He noted that excise taxes have “stagnated” but market research shows that consumers are buying cars again so that number could improve next year.
One thing that steadily increases is the residents’ use of the recycling program where it costs the town only $35 a ton to dispose of recyclable materials versus $100 a ton to dispose of regular household refuse. This translates into continued savings for the town.
“So, it’s not just one thing. This may be a one-year aberration,” he said. “Even though we’ve had a good year this year, we’re cautious about future years. We may be back to a 10 percent increase in health insurance next year. If the school department budget went up less than one percent this year, there may be some pressure to increase it next year … I have a lot of sympathy for the communities who are going through hard times; we’ve been through them and it’s not a pleasant thing.”
Medfield's Annual Town Meeting will be held Monday, April 30 in the Medfield High School gymnasium at 7:30 p.m.