During a joint meeting with the School Committee and Appropriation Committee on Thursday, the Select Board adopted a budget message with an option for a 5.1 percent capping increase.
That adoption occurred following a presentation by Town Manager Norman Khumalo and Chief Financial Officer Tim O’Leary that addressed some of the challenges the town faces in fiscal year 2024 and beyond.
Leary noted that the town manager had put forth two options: one with a 2.7 percent increase that would meet policies but not sustain current services, and the second 5.1 percent option that would have the town enter the budget process with a $1.8 million shortfall that would need to be made up through adjustments in spending.
“If the revenue situation does not improve, clearly we’re coming off the 5.1 percent,” Khumalo said.
O’Leary noted that Hopkinton’s property taxes provide a stable revenue source. It costs about $450,000 to collect $90 million in property taxes, he said, with one glaring exception.
He said that ongoing “hostile” tax appeals by Eversource Energy result in a detriment to all other taxpayers. O’Leary estimated that a best-case scenario would have litigation for FY17, FY18, FY19 appeals resolved in the town’s favor for $1.9 million by next summer — not early enough, however, for this budget.
In FY24, the town could have a backlog of up to $14 million pending from Eversource. He said it averages $100,000 to $200,000 annually in legal, administrative and engineering costs to fight the utility on the valuation of its assets in town.
“That is wasted money that the town will never get back,” O’ Leary said, noting the funds would be better spent on tax relief for vulnerable residents or increased services.
Further discussions while building the budget will have to focus on what level of risk the town might assume in its overlay reserve fund to “deal with this challenge,” O’Leary said.
Another issue will involve the use of free cash and whether the town wants to spend it on one-time costs or operational costs or put it in reserves.
Earlier in the presentation, Khumalo said the budget process was not going to be an easy one but he is confident the town will get to a solution before Town Meeting.
He said that in addition to economy, efficiencies and tax impact, factors like diversity, equity and inclusion are important priorities.
Khumalo said that new growth has traditionally paid for the expansion of services, but the days of substantial new growth “may be numbered.”
He also wanted to put a “human face” to the process, noting that in Hopkinton, growth in income is not evenly distributed and the number of people below the median income has increased by 35 percent. In comparison, the population grew by 20 percent between 2012 and 2020.
Further data he showed addressed seniors age 55 and over, with one in five foregoing necessities like medicine and food to pay energy bills; one in 10 keeping the temperature at unsafe/unhealthy levels; and one in 10 unable to pay energy bills or pay the full amount.
He praised the “experienced, talented” financial team and said that the budget process would be a “marathon.”
School budget impacts described
Superintendent Carol Cavanaugh said positions added in FY23 will impact the FY24 budget and include 1.4 special education (SPED) teachers, 1.9 SPED paraprofessionals, a request for a K-5 SPED coordinator, a part-time (0.4) administrative assistant, a 0.6 social worker and a middle school ELA (English language arts) director.
She said some of the positions, like the social worker, came in response to the changing demographics as well as the pandemic.
Cavanaugh also noted that 27 SPED students placed out of district costs $1,094,000 out of the SPED stabilization fund and is a required allocation.
The superintendent also outlined the enrollment, noting that a consultant estimated there would be 4,104 students by the end of the school year. However, at the start of the school year, enrollment was at 4,178, already exceeding that prediction.
If 41 more students join the district before the end of the year, those additional 150 students translate to 7.5 groups of 20. She added that 1.4 teachers are needed per 20 students.
Cavanaugh added that she has asked her principals and directors to provide data to support everything they ask for in their budgets. The focus is on the needs of all children and on what they need to have, not what is nice to have, she said.
Elmwood update provided
The superintendent noted that the building committee for the Elmwood School project looked at 44 possible sites for a proposed new school, each of at least 10 acres. The parcels were ultimately narrowed to five. Because some of the sites are privately owned, Cavanaugh said she would not be disclosing their locations at this time.
Additionally, she said 30 people had expressed interest in participating in a “visioning” group for the project and would be meeting over the next couple of months.
Should the new school ultimately get approved and funded, the superintendent reiterated that whatever happens regarding grade configurations would impact the other buildings as students are shifted around.
Mental health days to be considered?
In other business, School Committee member Holly Morand again asked that her suggestion that students be given an excused absence for mental health reasons be considered in the policy.
She said the policy had room for improvement and growth and said that there is state legislation pending to provide two mental health days per six months for students. A dozen other states adopted similar measures, Moran shared, and she added that she’s seen research indicating that 77 percent of families approve of such absences.
Morand added that Hopkinton likes to be a “trailblazer,” and it would make sense to de-stigmatize mental health and recognize it is just as important as physical health.
She also spoke about the rising rates of suicide in males aged 10-35. Morand said she could share the research she’d gathered with other committee members.
Chair Nancy Cavanaugh said the board would discuss the policy proposal at a later date.