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Select Board roundup: Officials continue work on budget with eye on future major expenses

by | Jan 24, 2023 | Featured: News, News

At Tuesday’s Select Board meeting, members received an update on the town’s budget process for fiscal year 2024. The relatively good news, according to Town Manager Norman Khumalo, is that the budget needs a trim of $1.1 million — down from $2.8 million.

“More work remains to be done,” he stated.

Khumalo noted that the anticipated budget would lead to a 2.32 percent increase on residents’ tax bills, which comes out to a $276 increase on the average annual tax bill of $11,910 (for a $753,000 home).

There could be additional smaller tax increases depending on if and how much the town borrows money for capital projects, as well as repayment of the previous year’s debt.

“I am confident that we can come together to achieve what must be done,” Khumalo said. “What’s different this year is that we have stated publicly that we, as your staff, can balance this budget. However, given what we’re seeing and looking at in the coming years, it’s even more important and imperative that we do this together with the community. As a local government practitioner, I’m always sensitive to not getting ahead of the community.”

Looming projects in the next few years — primarily school expansion plus a potential replacement for Elmwood School — could come with a price tag of about $300 million.

“We are very mindful of what is coming down the pike in terms of capital projects,” Khumalo said.

Tim O’Leary, the town’s chief financial officer, said he agreed with Khumalo that the town as a “path” to a budget solution for FY24, but there are concerns regarding Hopkinton’s long-term financial health.

“When the amount of new revenue available to the town within the tax levy is about $2 million, and when a single town department — a single important town department — has requirements for increases that are more than twice that amount, there’s a structural problem on the horizon,” O’Leary said.

“New revenue from new growth has carried the town this far,” he continued. “That new growth has come from real two things: rapid expansion of the residential tax base and a very large recapitalization project that Eversource has done at their LNG [liquefied natural gas] facility. Residential growth is slowing, and the LNG facility is going to throw off its last new amount of new growth for us in ’24. So we see new growth going down. It’s hard to see how, without another burst of new growth, the town can continue to increase departmental budgets at 6 percent or 8 percent or more within the tax levy limit, 2 1/2 percent, plus what we can get from a smaller amount of new growth.

“It might be prudent for decision-makers to keep that in mind when considering and prioritizing over-target requests this year, because they’re really competing with requests from next year and the year after within the operating budget.”

O’Leary noted that Hopkinton has a $275 million debt limit, and town currently has $73 million in debt. “So we have a little over $200 million in allowable borrowing authority, and we have the prospect of more than $300 million over the next five years,” he said. “The tax impact from this borrowing will be inescapable.”

Added O’Leary: “In this situation it’s important to think about all planned capital projects as competing for scarce funding, and to remember not just to look at the next project in front of us — just like when we’re driving down the highway, you have to look four cars ahead, or five cars ahead. And that view down the highway is a little daunting right now.”

Select Board member Shahidul Mannan asked about reducing the distribution going to OPEB (other post-employment benefits) and the Stabilization Fund for a year, but O’Leary stressed the importance of continuing the funding, which not only avoids pushing the problem down the road but presents a better appearance for potential lenders.

Mannan also questioned why waste collection is seeing a 20 percent increase.

Said O’Leary: “There are a handful of things where we have seen large contractual increases for longstanding services, and that’s certainly one that stands out.”

Khumalo added that part of the reason for the spike has to do with China no longer taking the United States’ waste, and local waste management company E.L. Harvey being bought by a much larger company.

Another issue hurting Hopkinton’s finances is Eversource’s ongoing appeals of its tax assessments dating back many years.

Said O’Leary: “This is a big, growing problem, but it’s going to be decades before it’s all resolved — unless Eversource is bought by a larger, more friendly company and they begin paying their taxes; then it will be solved very quickly.”

Additionally, fewer houses are being built in town — although, O’Leary noted, the houses that are being built are more expensive, which pumps more money into the town.

“We’ve been relying on new growth for the past several years, and it’s finally coming home,” Select Board member Irfan Nasrullah said. “But we’re still spending like that, like we have that source. In my mind, we’re learning that we need to be more disciplined, because we’re going to lose that source. And part of that discipline is the capital projects that are being requested. So we’ll take a good, hard look at that and see what can come off. I think we need to be responsible in how we spend your money.”

Select Board member Mary Jo LaFreniere implored residents to take a bigger role in determining how the town allocates its money.

“What we really need is more than 128 people at Town Meeting making decisions for all this money that’s being spent,” she said. “What’s coming down the road is enormous, and they have to be made aware of that, that it’s not just this year anymore, it’s this year and the future of the town. It’s just disheartening and disappointing to not be able to get a quorum for Town Meeting when we’re talking figures like this, budgets like this, and other articles at Town Meeting.

“I really want to encourage people to get involved in the town, not just occasionally, and not just what you’re interested in. The town is a large entity, and we all need to be involved. And this is getting tougher and tougher and tougher, and it’s not going to get better. So please, pay attention, read the budget and come to Town Meeting.”

Cumberland Farms objects to barriers

An attorney for Cumberland Farms appeared before the board during the public forum to complain about the town’s proposed plan to install barriers in the middle of West Main Street. The barriers would prevent left turns into and out of Cumberland Farms and Alltown Fresh and is designed to cut down on accidents in an area that Police Chief Joseph Bennett previously stated was the most dangerous in town for accidents.

Attorney Doug Troyer said Cumberland Farms was not advised until this past September about the plan, and he said the town has not been returning his calls. He added that Cumberland Farms has conducted its own study and would like to present alternatives. He also said the barriers would create issues for tankers delivering gas.

While typically town officials do not engage in a dialogue during the public forum, Khumalo responded, saying the project already has gone out to bid. He stated sternly, “We will implement the project.”

Following further protesting from Troyer, board members said they would consider putting the matter on a future meeting agenda.

Construction materials might be moved

Khumalo provided an update on the Main Street Corridor Project, which is on pause for the winter. Following complaints from residents, the town reached out to see if the items being stored on Marathon Way (next to the Town Common) could be moved.

Khunalo said Dave Daltorio, the town’s engineer, reached out to the Massachusetts Department of Transportation (MassDOT), which is overseeing the project. MassDOT in turn contacted the contractor, A.F. Amorello.

Khumalo said the items potentially could be moved to the rear of Center School, but because the contractor already has demobilized for the winter, it’s not clear how the items would be transported.

PFAS plant permit approved

Touching on the PFAS issue, Khumalo shared that the Massachusetts Department of Environmental Protection approved the permits for the town’s filtration plant, which has moved into the procurement phase for construction.

The PFAS test results continue to trend in the wrong direction, with the December reading at 31.7 parts per trillion.

Khumalo added that he soon will begin negotiations with Southborough on Hopkinton’s planned connection to the Massachusetts Water Resources Authority water supply.

Misc.: Town Meeting articles discussed

The board discussed proposed articles for the Annual Town Meeting warrant, which closes Jan. 31. One proposed article that arose from the Zoning Advisory Committee regards oversight of short-term rentals of residences.

Some board members questioned the need for such an article.

“At this point it seems like a non-issue to me,” Nasrullah said.

Board members said they would like to hear from residents who brought up the issue or someone from the Zoning Advisory Committee before deciding whether or not to push it forward.

An article that originated with the Sustainable Green Committee supporting a net zero resolution received unanimous support for placement on the warrant. …

John Cardillo was appointed to fill a vacant seat on the Veterans Celebration Committee. …

The board accepted the resignation of Renee Dean from the Sustainable Green Committee.

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