Finance Committee: April 27, 2026

Transcript captured from MHTV’s Vimeo auto-captioning. No speaker labels; proper names and dollar figures occasionally misheard. Click any timecode to jump to that moment in the source video.

0:00 Just quickly going to pull up my list of remaining articles. Is it… What’s that?

0:10 Let’s just do these three quick. That’ll be really fast. Article six, unpaid balances. Let me share my screen.

0:25 So we previously voted a number for unpaid balances, and there was a very small update to that, so it’s probably not worth discussing, but a late bill was identified from the schools for how much? For $36.98. For $36.98. So I’m going to make a motion to recommend of $60,182.20 to include the additional $36. Go ahead. We got to go around. Lindsay’s online. Mr. O’Neill. Yes. Mr. Jankel. Yes. Ms. Pates. Yes. Mr. Goldfein. Yes. Mr. Frankel. Yes. Mr. Garcia. Yes. Mr. Szotmeijer. Yes. Excuse me.

1:11 No problem. All right, then the second quick update- And Ms. Douby. Oh, is Douby online? Oh, and Ms. Douby. Sorry.

1:25 Ms. Douby?

1:31 Can she hear us? Lindsay? I can barely hear you.

1:38 Oh, need to use a- You have to turn your mic on. Oh. Sorry, Lindsay. Sorry about that. We didn’t have our mics. That’s better. Did you vote for it? Yes. Great. All right, so then similarly, quick update on the le- Is this the leases? Yes. Yes. It was actually a reduction of the number we voted by about 13,000, if you want to just… Yeah. So we just added the school bus lease, and we took away community vehicles. The police is done this year. But we reached out to the schools, and we just missed one bus since we added branding this year. All right. So the overall number has gone down by about

2:23 $13,000. I’d like to make a motion to recommend the total of $510,682. Re-vote. Second. Second. Mr. O’Neill. Yes. Mr. Jankel. Yes. Ms. Pates. Yes. Mr. Goldfein. Yes. Mr. Frankel. Yes. Mr. Garcia. Yes. Mr. Szotmeijer. Yes. Ms. Douby. Yes. All right. So the next follow-up is the Article 19 collective bargaining for fire. I believe the contract has been finalized at this point. Is that fair? Yes. Which is actually a new thing for me, because I think every time there’s been contract negotiations, they’ve gone until town meeting, and we make the

3:11 recommendation on the floor. My understanding, Alicia, is that there’s estimates that went into our balanced budget for this contract, and that the contract for the fiscal year ‘27 budget has not significantly been– The budget has not been significantly impacted by the contract- Correct … versus estimates that were already in there. Correct. They included what they thought mismanaged, which was a good offset, and they also put money aside too for a buyback if any somebody to retire to execute that. So less impact on it. If any differences, we’ll come back to income to supplement income, so everything’s okay. So we’re not adjusting the

3:57 balanced budget for this, because there’s not a material amount that would need to be adjusted. One other update is that free cash is officially certified at $6.1 million, which is about what we were projecting it to be all year. So there’s $1.1 million in free cash that has not been appropriated. So that’s another area that, if needed, could be used for this contract difference. But, unfortunately, Thatcher is wrapping up. He’ll be here soon, but he’s wrapping up at, I think, the Council on Aging presentation related to the override. So, he’ll have more information on the contract, but it’s not significantly higher

4:43 than what went into our balanced budget. Does that make sense?

4:48 Any questions? When does the contract begin? July 1st. July 1st. It’s three years? Three years. Were there any adjustments to the overtime calculation do you know? Or that’s a question for Thatcher? Yeah. Okay. Yeah. So we can table this until the end of the meeting if we want to hear more about it from Thatcher. Do you guys want to hear more about it? I do. Okay. Yeah. So we’ll wait until Thatcher’s here to revisit this. All right. Tabled Article 19 until later on tonight. Article 21, Essex Tech. We’ve already voted on the number, because I think that’s set in stone. However, I think there was some communication lapse, so we wanted to hear some presentation on Essex Tech, so we’ll invite you all. Thank you for joining. Mark Stroud, your school committee representative for the last 10 years.

5:36 This is Dr. Heidi Riccio. She’s the superintendent director of Essex Tech. Hello. This is Marie Zamierowski. She’s the director of business operations at Essex Tech. Thank you. Yes. This is- Last month, I gave you your budget books with my summary report, as I do every single year, and I’m sure that you’ve all read it. Do you have questions? Do you want me to- Do you mind sitting in front of the mic, just because people are online? I think Thatcher- We’re talking into one … that matters.

6:02 Thank you. Casing your voice. So

6:06 I’ve never been asked before to use the mic, but whatever. Oh, I see. No, no, we can hear you. It’s just- That’s okay … folks online maybe. That’s okay. It’s scary, so.

6:15 Now, do you have questions as to whether or not it’s on the budget, or you want to talk about the state-mandated lottery, or? Yes. I think what would be most helpful is sort of to understand the impact of that change and some of the changes in enrollment and how that will impact enrollment going forward as well. And I did some analysis as well, so I’ll let you guys present and then I’ll have some follow-up questions. Yes, because the year over year change from ‘26 to ‘27’s budget, the same article last year, is not that material to me. It’s sort of in line with previous years, but our understanding is that things could get a lot- Sure … higher increases into the future. Sure. So that’s what we’re kind of looking at. Well, let me read a prepared statement that I made, okay? One final issue that I’d like to address is the new state-mandated

7:00 vocational school lottery for vocational schools with student applicant wait lists. Now, we have a wait list because we had over 1,700 kids apply for next fall for 427 seats. Essex Tech had 1,750 applicants for next fall’s freshman class. Our admissions subcommittee, which was formed six years ago to ensure equity in our admissions process, recommended that we use the average of each town’s acceptances over the last three years. So our original intent was to accept 10 kids because over the last three years, in effect, over the last five years, we’ve had 10 kids from Marblehead come to the tech. That all changed, however. On January 6th of this year, at our legislative breakfast, we were presented with a proposal signed by the

7:49 superintendents of Danvers, Beverly, Peabody, and Salem public schools, supported by the presence of their mayors and town administrators, allowing for seats to be allocated equitably across member communities based on the number of total attending students in the sending municipalities. They stated that their proposal would allow municipalities to budget for known costs associated with student attending numbers while committing to a more equitable distribution of available seats across all the towns, across all of our 17 towns. I’m sure that you know that all of the towns that I’m speaking about have dire financial issues, Beverly, Salem, et cetera. We’re going for a two and a half override ourselves, but

8:35 our Essex Tech administration countered their proposal by limiting in-district student admissions to 427 annually for the next three years. So we’ve made a commitment for the next three years, 427 kids from the 17 sending towns, that’s going to be our limit. As well, instead of using their K through 12 total attending students per community proposal, we opted to use the total eighth grade attending students per community. The result left Marblehead with a minimum student target of 39, and as of the closing date to submit applications, Marblehead had 28 students apply for the fall. Since then, seven of the 28 applicants have decided to go elsewhere, and we won’t have the final Marblehead student number until October 1st, when we have to submit

9:23 the October 1st DESE submittal. Please take note that our admissions subcommittee worked diligently over the last six years to ensure equity in our admissions process. Our formula included seventh grade grades and the first term of eighth grade, guidance counselor and/or teacher recommendations, personal interviews of every applicant, which was worth 40% of the admissions decision, attendance, and discipline. That’s what we always did. Then DESE said that you can no longer consider grades, you can no longer consider teacher recommendations, and you can no longer consider personal interviews. They did say that you could consider two things. Attendance, as long as a student had fewer than 27

10:09 absences, and they said that you could consider discipline. We opted not to consider the attendance and discipline, realizing that middle schools have different attendance and different discipline procedures. The end result is that students might have applied to our school with no investment in the application process at all, simply by checking a box this year. Tonight, I am pleased to announce that our state reps will be voting on Amendment 1580 to House Bill 5500, allowing vocational technical schools to return to a merit-based application system, focusing on grades and an active interest in why they want to attend. And in case you’re wondering, we had 15 kiddos apply from Vets, one

10:55 from Epstein Hillel, two from Landmark, three from Marblehead Charter, one from Saints Academy, one from The Seam Collaborative, three from Short Country Day, and two from Tower. And as we know, Marblehead paid for the construction of Essex Tech. It is our CTAE alternative for any of the families, and we will continue to support the success of all Marblehead students who wish to attend. So if you have any questions, we’ve got the superintendent and the director of business operations. So if I could, so it sounds like then, and it’s very helpful to hear that background. Thank you for putting that together. Yep. So it sounds like Danvers, Beverly, Peabody, Salem, they wanted to send fewer students there. Absolutely. Okay.

11:40 Without a doubt. And so they wanted to sort of push it- Yep … onto the smaller ones and- So give you one example, Danvers typically sends 60 kids. Yeah. Their number this year, in quotes, is 39. Danvers had 132 applicants for 39 seats. Marblehead had 28 applicants for 39 seats. So, and what’s interesting- That tells you something … so they switched it to be looking– What’s not jiving for me is when I look at the total enrollment of those districts- Yep … right? And compare sort of the number of students that the allotments that we have to theirs, it’s off, right? It is. I mean, we’re a smaller district, and we have a higher percentage going, right?But that’s not how you did it. You did it based on eighth grade.

12:26 So would that imply that Marblehead has an outsized eighth grade class? I’m not following why- Sorry … I’m not following that methodology. Right? Okay. Sorry for my voice. The eighth grade class, it’s not kids that just went to Marblehead public schools. So it’s any eighth grader that resides in the community of Marblehead. So, as you see, there are kids that are in private schools, there are kids that are at a collaborator. Those are all kids where their families are paying taxes into the town of Marblehead, and they all have a right to apply to come to Essex Tech. Okay. So sometimes it’s a good question because sometimes people will

13:14 say, “Well, we only have X at Marblehead Middle School. Well, how did you get that number?” But it is all kids that reside in that community. And so that would imply that we have a higher percentage of kids who are going to private schools, than maybe some of the other districts, or- Well, the demographics definitely- No, I’m totally … as I’ve said, we have a 20-member school committee. We have one person from every 17 towns, and we’ve got three gubernatorial appointments from agriculture. And I’ve said time and time again that there are different demographics for the towns. I was an administrator in the town of Danvers for 22 years. The demographics in Danvers are quite different than the demographics in Marblehead. And when you say,

13:59 like I said, 132 applicants to our school from Danvers, 28 applicants to our school from Marblehead. Yeah. Yet they both have the same number, 39. Yeah. Target number. Yeah. So this is just also– This was a one-year procedure because it’s the first year of us doing the lottery. So we did need to come to some sort of resolution for that first year. So I will say that it is up for discussion, and we do believe that we will work with our admissions subcommittee to alter that a bit to be more realistic to the numbers based on applicants. But again, working through the admission subcommittee, and then

14:47 our school committee. Okay. And so that allotment could- May change … potentially be reduced. And so- It could. And the other thing, too, is that private schools just sent out their acceptances this week. We sent out our acceptances in February because we did the lottery. Typically, we’d send out our acceptances for the fall this week, and we were two months ahead. So the number right now, it was 28, it’s down to 21, and probably, I would say it’s going to fall further. Just to quantify for you, the 21, when we looked at the number of seniors that will be graduating next year, results in a net increase of 15- Right … students for us, which is still highly

15:34 impactful on our budget. It sure is. Absolutely. And from our… Do you want to- Well, I want to simplify. So what was the maximum number of students from Marblehead in fiscal year ‘26 that could go? 10. Oh. There was no allocation. So we never, in the history of Essex Tech, had any seat allocation for any of our admissions leading up until the lottery. So it was strictly on merit. So what’s the increase from- It was strictly merit-based, and every single kid- Yes … had a personal interview. 1,700 kids this year would’ve had personal interviews by our admission staff, actually, by everybody- Yeah … at Essex Tech to determine-

16:20 Okay … do you want a vocational education? And out of 100 points, the interview was 40 points, and that we can’t do anymore because of the lottery. Okay. So the intent of the allocation was to not push out the smaller communities like Nahant and Essex, where they wouldn’t have any kids able to go to Essex Tech because of the number of applicant pool from our cities, and then the large town of Danvers. So the intent of that was, I will say if you were to look on our admissions portal or our admissions website, you can see that the next up to get in are

17:06 primarily Peabody, Beverly, Danvers. Because those are the three communities that have the largest applicant pool. I think- Peabody has over 400 kids that go to our school. And I think it’s really helpful to hear the background of why this happened, because- Mm-hmm … it’s a bit of a box from our perspective. And so I understand why these changes were made, some of which you didn’t have a choice in. From my perspective as a finance committee member, this injects a significant amount of risk- Mm-hmm … to our budgeting process, especially now as we are looking ahead for a three-year override, trying to plan for the long term. The range of outcomes that this leaves for us is massive.

17:51 Mm-hmm. Right? Because if we were to fill, for whatever reason, if there was a push by Essex Tech and we filled all of those slots, we would go from having an allotment of 750,000 to, in fiscal ‘32, it being over four million. That’s almost like a separate override of itself, right? And as a finance committee member, and I’m giving you, that is worst case scenario, right? Where are we now? I don’t expect that to be- Yeah … an option. However, if we stay at this trend of 15 newPer year. Again, we’re coming from a base of 35. Right. Mm-hmm. That’s a 50% increase- Mm … for us next year. Right? So that alone gets us to well over two and a half million during the course of

18:36 our override period. This is significant risk for us, and we analyze and go into significant detail the financials of our town departments, of our school departments. It’s different here. You would become, then, a very significant user of our taxpayer dollars. Right? Mm-hmm. But we don’t have the same sort of window into your operations. We have a school committee, but it feels more opaque, if you will. And the truth of the matter is that with our constrained revenue, I know you know this because all the other towns feel the same way, that anything that comes at that level to you, we’re having to take it away from our school district and our town departments. Right? So, I think that’s why we wanted to bring you here, because we want you to know

19:23 that these are our concerns. And I think for me, the biggest one right now is the risk, and the range of outcomes, and our inability to project what it’s going to be. Right? Because if we have of 20 next year, which is still a reasonable estimate- … again, that is very impactful to our budget. So, I just wanted to- So thank you … make that clear. Yeah. We do understand. I do want to just make a point of reference that we are your school, too. So, when you say our school in Marblehead- Mm-hmm … Essex Tech is your vocational public school. We are not a charter school. We are not a collaborative. We receive Chapter 70 funds just like

20:09 Marblehead Public Schools. So, I do really need to make sure that people do recognize that, is that we are your school. On your website, when it says schools, Essex Tech should be listed there. And I don’t mean to imply that’s not the case. It’s okay, but all communities unfortunately imply that. I think the difference, though, is we share a tiny piece of your school. Sure. Our vote on your school committee is one out of how many? Right? 17. Right. So, we don’t have the same sort of operational insight and control that we do over our own school district. Right? Sure. And so, it feels different. And I love Essex Tech. No. You guys are a fabulous school, and I love your presentation every year at town meeting.

20:54 Thank you. And I love that we have this. It’s such an important place for our future. But, again, as a finance committee member, I have to deliver this message to you to sort of protect the finances of the town. Sure. And I would also recommend, your town manager did eventually sign on to that same letter that the other four communities signed on to. So, I do want to let you know that. So, that also has an impact. However, in addition to that, we do hold legislative breakfasts every year, and the town managers and the mayors are always involved, or always invited. They do not come. Mm-hmm. Two of them in my nine years as

21:40 superintendent have come. And that is an area where we do discuss projections and budgets and everything else that anybody wants to talk about as it relates to Essex Tech and funding and grants and any legislation that we talk to. So, we do send those invitations out. We did have a breakfast back in January, and people did come, so thank you. For the first time. For the first time. But I think it was because of the- To present the letter … I think it was because of the shock- Yeah … of the application fee. Yes. Yeah. And so, I also recommend that we do come together as communities,

22:26 because I do empathize for the smaller communities. I will tell you that. And I’ve said it- Yeah … publicly as well, is that our vocational school really should be about enrollment and the kid that wants to go there, and not necessarily because they don’t want to go to a new school.

22:50 Yeah. Molly, what I’m looking at is helpful. It’s obviously the millions of dollars she’s mentioning is the maximum exposure, so let’s not go crazy- Right … with newspaper articles about $4 million. Yeah. I gave you the printer. But I guess my question is, she has a trend here of how many students from the town of Marblehead have attended Essex Tech from ‘24 through ‘27. 25, 35, 32, 35. And not to put you on the spot, but would we be able at some point, I don’t know if you have it off the top of your head, or directional number as to how many folks from Marblehead applied in those years? We have all those numbers. We have that. If you had to guess, would it be in ‘25 when 35 were accepted, were there 70 applicants, or were there-

23:35 No … 40 applicants? No. Do you know what I’m saying? Similar to this year. Did most of the kids from Marblehead get in, or did only half of them get in? I would have to look at the data, so I don’t want to give you an answer, but we do have a very informative dashboard on our website that has all of this information on there. Yeah. You can actually disaggregate it by community, as well as by agricultural students, which are our out-of-district students. And then you could pick four communities, and it has it for the last five years. It has also where they came from. Right. So how many applications, how many were accepted, how many declined, how many- I feel like- … had an IEP, how many had a 504 and an MLC.

24:22 Yeah. In terms of estimating, which is- I can tell you from the past 10 years, because I do pay particular attention to that number that you’re talking about, between 15 and 17 kids Don’t get in. No, apply. Oh. So but this year was 28. That’s pretty consecutive percentages. So this year was a lot higher then. So this year was- This year was a lot higher because they had no investment in the game. Oh. Check a box, “I want to go to Essex Tech.” Yeah, I mean, we did try- There was no personal interview. There was no personal interview. That’s what I’m saying. Grades, it didn’t matter. Attendance didn’t matter. That’s what I’m saying, so. Yeah. Okay. So it’s gone up. We’ve seen it gone up due to this change over one year. In order for this maximum to be hit, we would have to have a wild epiphany town-wide that says, all of a sudden, 100 kids want to go.

25:07 Right. Overnight. And, I do think this is going to be significantly impactful to this warrant article every year, just because, like you said, sounds like right away we’ve got evidence of people applying that, “Well, why won’t I apply? Might as well…” And then that- Hopefully we’ll be able to go back to a merit-based system. That’s what we’re hoping. So. Thank you. Wouldn’t the question almost be if the number keeps going up from Marblehead of applying or whatnot, wouldn’t the question really be to the Marblehead Public Schools as to what isn’t being met there? I guess there’d be- That’d be almost a- There’d be a question as to like, what are the savings from those kids leaving the district, but I don’t know that it’s like- It’s-

25:52 … easily one to one. Well, the issue is, is that Marblehead Public Schools have no Chapter 74 programs. That’s it in a nutshell. It would be, we have our finance director here, but essentially it would be not material. And we get different Chapter 70 amounts per pupil. Yes. They’re diverse. Yeah. And I would say if you were to look at on the DESE website, there’s a per pupil expenditure report. They’re always behind, but if you look at FY24, Essex Tech billed 23… I’m sorry, Essex Tech to educate a kid at Essex Tech was $23,000. We billed you significantly less. So we actually billed you less than what Marblehead,

26:41 less than what it costs to educate a kid at Marblehead High. And that data is all public information. So although it costs $23,000 in ‘24, if you were to look at your assessment in ‘24, it’s significantly less. And if you looked at the expenditure per pupil for Marblehead Public Schools, you would see that it’s higher than what we billed you as an assessment. Public information, so- Yeah … which I can provide for you if you’d like. Because we do that. Yeah. We want to be affordable. We know that this is stressing communities because it always is looked, unfortunately, as an extra and not part of the school system. So we write significant amounts of grants.

27:29 We get revenue in from our out-of-district tuition. That really is how we’re able to offset our budget, is by the out-of-district tuition that we take in. Yeah. No, and I do appreciate that, and I think for us though, when I look at the fiscal ‘27, right, that went up by over 9%. And in our district, we’re cutting expenses by 3% compared to fiscal ‘26. So, I mean, this is- Yeah. Our- It’s- Yeah. Not that you need to stick around, but we’ll get into a recap of our balanced budget before our override presented tonight. Before we get to funding the year over year increase in the Essex Tech article, we’re $500,000 less of available revenue net of offsets

28:17 than last year. So we don’t even have a dollar to increase this, and we’re increasing it by about $100,000 this year. So if that number starts creeping up into the $300,000 range, we could be in some trouble here. Which is based on, again, based on the enrollment that we know now, right, which may decline, we are easily well above that number for fiscal ‘28, fiscal ‘29, and beyond. So it’s just highly concerning. Yeah. So it’s not something that’s going to change our vote, for this year’s budget- Right … but it’s something as we work to navigate this structural deficit, whether or not the override we’re going to talk about tonight passes, it’s certainly something we’re going to have to consider that I think in our forecasts we’ve done the last few years, we’ve sort of done like a

29:06 three-year average trend analysis. I think it’s just an additional factor we’re going to have to think about, but like you said, maybe it goes back to the merit-based system. And over the next couple of months, we’ll make sure that we give you up-to-date numbers as far as acceptances. Yeah. If the kids have declined. Yeah. And I- Also- Oh, no, you go. You go. I just, and I hope you don’t think I’m yelling. I just don’t have a voice. So I apologize if it’s coming off repeated. I’m actually not, I’m just trying to talk. However, I would ask, I guess, is that the communities become more involved in the admissions allocation process. Because we want you all involved, and we do think we have an equitable solution

29:52 moving forward, but it’s really difficult to be the lone fighter in it against larger communities, unfortunately. It’s just difficult. It’s kind of like going against Goliath, essentially. Yeah. And it’s a challenge. So if we could, we would love your support, whether it’s one member that comes and discusses with us how that allocation. But we do have a proposal that’s not yet on the table, that would make it look a lot different. Would also love to have you visit the school. Looks great. Yeah. Drove past there a few times. It looks incredible. It is incredible. Yep. Yeah, we’ll send an invitation for a tour. So you’re going to ke- Not you personally.

30:38 Yes. The system is going to continue going forward with the lottery process. It’s just you guys are looking to reinstate some of the criteria for acceptance under the lottery system? Or- No … is the lottery system a one-year experiment? I didn’t quite get that. So there’s an amendment- That’s- … on the House floor- Yeah … to actually allow vocational schools to decide what kind of process or admissions policy they would like. If that gets approved, hypothetically speaking, I’m not too optimistic, unfortunately. But if it does, then our admissions subcommittee would look

31:26 at what that admissions policy would look like- For your school … for the ‘28. Yes, for the ‘28 year, not for next year, obviously, because it’s already been through. So it may or may not be a lottery- Correct … next year. And if it’s- And in future years, going forward. But- Correct. And our admissions policy had to be approved by DESE every single year before the state mandated lottery hit us. Geez. That’s crazy. It is crazy. But like I said before, check a box. There’s no investment by the kids- Yeah, there- … applying to schools that have an overabundance of applications like we do. 1,750 kids for 427 seats. Yeah. The good news is that we have two kids from Landmark and one kid from

32:14 SEAM. So there may be special education assessments that are coming back to you if you had to pay any of those- That’s true … tuitions, which is mandated, right? And that costs a lot more. Yeah. Yeah, we track those. Yes, it does. Right. Yeah. Yes, it’s tracked. I’m actually going to check. So it may be a quid pro quo that we do have 11 of our 21 accepted from Marblehead are on IEPs. So over 50% of those accepted have an IEP, that as you all know, we are required to complete those services and provide those services, whatever those services are. Unfortunately, as you know, our budget is done in February and March, and then gets approved.

33:01 So we don’t know these kids yet until they come to us. Yeah. So we may need to make adjustments, not necessarily for the assessment for you all, because once that’s done, it’s done. But internally, we may need to make adjustments due to the amount of services that a student may require. This is a really, really big change- Huge … for you all to manage. Huge. Yes. Great. But- Well, thank you again … there you are. So- We look forward to being more involved in the admissions- Yes … discussions, and to definitely stick up for ourselves. We have two legislative breakfasts every single year. Please, we’d love to see you all come and speak.

33:47 Yeah. You know? And like I said before, please come for a visit. It’s a phenomenal school. Absolutely phenomenal. I probably will reach out to you, and then it may be whoever you want or anyone wants to appoint to assist with the next year’s allocation will be great. Sounds great. Okay. Thanks so much. Well, we hope we’ve helped. Very helpful. Thanks so much. Thank you so much for coming. Okay. Thank you. All right.

34:23 Through…

34:25 Did we want to go back to Article 19 quick before we go to the override, the fire contract? Fire contract. So we discussed that the balanced budget that we’ve approved is not being adjusted by this contract being signed, but we were just looking for a few highlights of the contract. Yeah. Number of years, annual increases, COLAs, why we don’t have to adjust the budget. If there’s sort of an overage, where that would come from, i.e. free cash or the FinCom reserve, I’m guessing. But I’ll turn the floor over to you. Sure. So thank you. So yeah, we were pleased that we have an agreement for a new three-year contract. The basic term, the COLA, is three, three, three and a half

35:11 over the next three years. So it puts on par with all the other agreements that have been settled over the last couple of years. We sort of anticipated that that was the pattern, so we did build the 3% COLA as part of the underlying budget. So that takes care of a significant chunk. There are a few additional provisions like tweaking education stipend and longevity stipend by small amounts. So we anticipate, when we add those costs up, about 171,000 that we’re going to carry within the budget. There’s a component, for example, creating a sick bank

35:56 with the firefighters. So by creating a sick bank, it’s joint management union that sits on this, that screens the applicants.

36:08 On that provision, rather than trying to calculate out the total potential cost, that would be dependent if and when there is an access to a sick bank that we need to draw from, we would probably come to FinCom reserve for it. That’s how we balance out the limits of the dollars we have, but also to be able to enter into an agreement. So, the question at town meeting will simply be to ratify the agreement, and then our source of funding will be the existing fire department budgetand/or reserves if necessary. So, that was our approach.

36:54 Any questions from the FinCom? We’ve heard over many years- Many years … about the overtime and the issue with the rates. So, can you walk us through why that is so difficult to address in these negotiations? And was there any change? There probably wasn’t. So, no. So, the nature of negotiating collective bargaining agreements, they’re almost a ratcheting effect. When something gets in, let’s say, that’s a benefit to the union, to get that out is next to impossible, or you have to trade it for something else as valuable. So, it’s a challenge. So, what you try to do is limit the future

37:36 exponential growth of provisions, right? So, it’s hard to fix any sins of the past. You try not to create any new sins, and hope economically it catches up. So, yeah, part of the challenge is there are a number of components in the agreement of different stipends and such which get calculated towards the overtime rate. So, in the negotiations, we took a position that limited to the extent possible of making agreements to some of those factors. Now, the salaries, there’s no getting around the COLA, and that obviously has a direct impact on new overtime. Some of the other provisions, there were proposals from the fire side that they

38:24 wanted that calculated towards overtime, and we said no, and at the end of the agreement, we held off. There’s a couple small provisions that do have an impact, but they were small dollar adjustments to keep it under control. The real answer on the overtime really comes through the override scenarios of bringing back a number of firefighters- So you don’t have- … on the staff so that we’re not pulling overtime every shift. So, we couldn’t solve that necessarily in the contract negotiations. We have the potential to solve that or address the problem to the extent possible through the override scenario. The only issue I have with any of that, though- Yep … is that if you’re going to compare the COLA that you’re giving to them to all

39:11 the other COLAs that other unions have gotten, other unions don’t have overtime rates like what they do. No. So, I’m not sure that that’s the right benchmark to be basing their COLA on. So, in the other agreements, there are other factors. Okay. I’ll give the example. Police, POST, police… I always forget the acronym, but the oversight of police departments. So, the trend is, in collective bargaining for police, that they get an additional stipend to meet the requirements of POST. And so, there is an added percentage, not in the COLA, but as a stipend. So, in the dollar

39:58 amounts, it washes out to be the same. And to answer the question, why would we even do that for the police, because I’ve been asked that in other forums. When you’re dealing with public safety collective bargaining, both fire and police are subject to the Joint Labor Management Commission, and that’s binding arbitration. And so, what happens is if we can’t come to an agreement at the table locally, it gets sent to JLMC, and the decision JLMC makes is binding on the parties. And so, what JLMC will do is their decisions will follow the patterns that are out there. And so, it forces us on the town

40:43 side that we can’t just dig in our heels and say, “No.” We have to at least concede to the level of what the pattern is out in the marketplace for the similar contracts. So, the example of the POST, if we just said, “We’re not going to agree to a POST stipend,” we would’ve gone to JLMC, and they would’ve awarded it, and they may have awarded it more than what we would’ve awarded. So, that’s the challenge of collective bargaining in the public safety. So, there are different factors in the different type of contracts that add up to the same overtime. Thank you. Any other questions from FinCom?

41:25 So, it sounds like we really don’t have a whole lot of leverage in the bargaining. We don’t. We have leverage to some extent, but in Massachusetts, there’s a lot of leverage on the other side.

41:43 So, we’re sticking with the 171? But we’re not asking for any additional funds as part of the bargain. So, that was already in our projection. Yeah. We’re not making a recommendation on a number. Okay. We’re just making a recommendation whether we recommend that the contracts be ratified by town meeting. Right, okay. Not with a number attached to it. Although, I guess you could present whatever you want to present at the town meeting, asking the citizens. Any other questions? Like to make a motion to recommend Article 19, Collective Bargaining Fire contracts be ratified. Second. Mr. O’Neil. Yes.

42:29 Mr. Jenko. Yes. Ms. Keith. Yes. Mr. Goldberg. Yes. Ms. Franklin. Yes. Mr. Garcia. Yes. Mr. Schoffner. Yes. Ms. Dupee. Yes.

42:43 All right. So, article, what number is it? 28?20? No. Which one is it? Oh, 28, 20. 28. The school override. 29 is- Okay. So the schools are not asking for a separate override. So those have not technically been indefinitely postponed by the school committee, but my understanding is they’re voting on them this week. But I believe the schools are part of the Article 29 supplemental appropriation expenses of several departments.

43:17 I was just at the forum at the Council on Aging, or at the Judy Jacoby Center, and I decided before the article, the warrant or the override article was presented that I would do a quick recap on our balanced budget and how we got there. The reason for me doing this is because it’s my article that I get to speak at town meeting on the balanced budget, which just happens to be, I want to say, four or five articles ahead of the override article. But everything between the balanced budget and the override article, I believe, will be indefinitely postponed. So they’re really back to back. And to me, it’s really hard to present an override request, although it’s not my article to present,

44:05 without reminding taxpayers about what was cut before certain things are being asked for back and above and beyond that. So I will try to go through this quickly because, at town meeting, I will not go through it that quickly, but quick enough, Jack. But I have presented most of this information at this point, probably a combination of the slides, probably five to 10 times to this group. But I don’t think it hurts for everybody to get a reminder of what we’re working with. So very quickly, I’m not going to go line by line here on the available revenue, but I plan on presenting to town meeting our available revenue for town and school operating budgets of 97.1 million last year, and that data point this year

44:52 is at 96.5, which is $600,000 less. I plan on explaining quickly Prop 2.5 for those who have never heard of it. We’re at about 2.8%, which brings about $2.1 million of new revenue. However, our local receipts, largely driven by a declining interest rates and the amount of principal invested, is down about a million year over year. So that’s wiping out about half of our increased property tax levy. And our free cash, which is now officially certified at 6.1 million, so good job with the estimate. I think that was right on par with what we thought. We’re using 5 million of that six this year, which is 2 million less than last year what we used in the budget.

45:39 So that 3 million of less available revenue on those two lines is significantly– We’re wiping out plus 900,000 the other direction, the property taxes that are being raised under Prop 2.5. We do get net state aid of offsets of about 200, so those items right there kind of reconcile to your $600,000 less. So I’ll be presenting that to town meeting a little bit more in-depth and letting people know that we obviously know our expenses on both sides are rising significantly, and right away, we’re starting with $600,000 less to address those rising costs.

46:20 My second slide at town meeting, and these will be in slides. I’m just more of an Excel guy, just I’m looking for some help for a PowerPoint presentation. Sure. So we will get them into PowerPoint. This is a very long process to get to these level service budgets, right? So both town and schools, town departments went through a very detailed process of developing their own level service budgets, meeting with Alicia and Thatcher and team on the town side and reviewing those, meeting with liaison groups and reviewing those. These budgets, as I presented earlier tonight in the forum, are level service. These do not include new positions. These do not include new curriculums. These do not include new technology services on the town side.

47:09 These are the same items that were in last year’s budget, adjusted for contractual obligations, for lack of a better way of describing it. So that’s the $7.7 million deficit in the accounting format we all know with all general government costs on the town side. So we have total requested level service budgets of 104.2 versus that 96.5 million of available. I will present a slide that will summarize what is driving that $7.7 million deficit. So the first thing driving it is we have $600,000 less available revenue than last year. So right away, we’re going down. So that’s a driver of the deficit. And then what are the major expense line items that are increasing that can’t be funded because we have,

47:55 without cuts, significant cuts, because we have less revenue available than last year? The town side wages increases in the level service were about 1.5 million. The school wages increase in level service were about 1.8 million. All based on contractual obligations, all based on prior union contracts and the admin positions that sort of follow on from a COLA perspective. Pension costs we’ve talked about comes from an actuarial report. $500,000 a year keeps us on pace to be fully funded in line with state requirements a couple of years early, I believe. Health insurance, we’ve talked about this in depth. That’s $1.7 million. We spent, I would say, months analyzing this this year to make sure that that number was

48:41 right. We had the GIC come to our meeting. We saw that six years ago, on average, the five years leading up to that, it was increasing by about 2% per year, and then the last four to five years we’ve seen 5% increase, 6% increase, 7% increase. I think it was 12 to 14 last year. Yeah. And then it’s back into that 10 to 11 range this year.So that is a major pressure on our operating budgets right now, that like the contractual obligations on the union contract side, is a bit out of our control without renegotiating with the GIC. Right? The trash contract that we’ve been talking about for 10 years, a million bucks increase year over year. And then out of district tuition and transportation has increased by about 300,000. And then, the other costs townwide are

49:30 about 300,000. There are other things outside of wages that go up. The cost of grass seed last year is less than the cost of grass seed this year, is one that the old head of the park and rec board used to always joke about. So that’s kind of what’s driving it. This is not the override, this is not what we’re asking for back. This is what drove us to have to make cuts. Right? And the next step was, well, how are we going to make these cuts? And more specifically, who is going to make these cuts? Is the town going to cut… I know the schools early on cut back to level, I think. What was the total cuts before they got the 1.5? 1.7 million, I think it was, 1.6.

50:16 Were they done there, or did they have to share in more of the burden of the 7.7 ? So we went through what we’ve talked about in many meetings, a deep dive into that other general government budget on both last year and this year. First, we went into it last year, and we determined that the actual percentage of the town-wide budget when we allocate the school’s other general government costs to their actual bottom line budget, was about 68% of last year’s budget. So when we went and said the available revenue of 96.5 million, we’ve allocated it based on a 68%/32% split. But then when we look at the level service budget requests, which on the town side of

51:01 that 52.9 million I showed on my earlier slide, only about 27.9 of it related to the operating budgets outside of the other general government budget. And the schools, the 51.3, they didn’t have anything in that line for the other general government. So we had to analyze the 25 million of other general government costs, which like I said, we spent a ton of time looking at. There were six line items in other general government that are shared between the two. And we determined that about approximately 12.4 million, which is just under 50% of the total other general government, is attributable to school employees. Of those six lines, I know that everybody has heard the 60/40. It’s more of a 60/40, even 65/35 split. But there are lines that are not attributable to school at all in other

51:49 general government. So when you shift those costs back over to the schools, the budget to compare to the available revenue that we’re allocating 68/32, says that the $7.7 million deficit is driven by four million deficit on the town side, and 3.7 million on the school side, taking into account each side’s share of this other general government that is putting massive pressure on our town-wide budget. So from there, I’m not going to go through these crazy in-depth. I will highlight a couple things. This is the town deficit. So, I’m presenting the balanced budget, so even before we talk about override, I’m going to let everybody know what was cut to get there. How the four million was addressed.

52:35 The first major way it was addressed was through the new user fee created for trash of about 2.2 million. Now my understanding is that an override will be asked as part of the article you’re about to present, that would actually shift that service, that curbside collection trash service, back into the operating budget funded by taxes. However, if that override was to fail, this user fee has been authorized at this point. Is that fair? Yeah. By the Board of Health. So it would come out of our tax base effectively. So that’s been addressed in our balanced budget. It’s in the budget, but it’s being funded by a user fee rather than tax dollars. From there, the town had to find the remaining 1.8.

53:23 We all have to remember that in order to find 1.8, you have to make more than 1.8 of cuts because 80% of our budget is personnel, so if we’re cutting positions, we have unemployment costs that have to go in to offset that in the short term. So the town had to find $2.4 million of cuts, which resulted in, like I said, most of our budget is personnel. About 1.8 million of that impacted departments outside of other general government. That’s FTE positions cut from last year’s budget on the town side, of about 22 positions across all departments. That is 12% of last year’s FTEs funded by the other general government.

54:09 So if you think about it that way, 12% of our employees paid for on the town side with tax dollars have been cut out of the budget we voted on today. Of that amount, I know there’s a lot of questions over the years about, well, how many are actual people getting laid off, which is not fun to talk about, but about 18 of those 22 positions are actual layoffs that will happen in this level funded budget, absent any other additional funding through an override. Four are vacant. However, that does not mean that those four are not necessary either. On the town side, we have close to 200 funded from the general fund. It’s not uncommon to have a few vacant positions when you have 200 employees in any organization.

54:55 The other significant cuts were to the stabilization reserve of 250,000, workers’ comp of 90,000, and OPEB of 250,000Molly has gone in depth a number of times about how our reserves are improving over the last five years, but we are still well under the Massachusetts recommendation of 5% of your operating budget. I think our stabilization has 1.5 million in it right now, which is restricted reserve. We have 1.1 million of unrestricted free cash that we’re not appropriating. So that would total up to 2.6 million. And then we’ve got a $400,000 or so FinCom reserve, so about three million in reserves that I can think of off the top of my head. So we like that number close.

55:40 We are among the lowest in the state in terms of our stabilization. So cuts to these items are not ideal. So those are the town side cuts. I see Mike’s in the audience. I spoke with him earlier. We’ve been tracking along the cuts that the schools have made to address the $3.7 million deficit. Probably not perfect, and I know you all will present this yourself when we get to town meeting as well. But my total through all of the information shared was 18.25 FTEs eliminated from the school’s budget. That impacts 22 positions because remember, some positions are part-time, or half an FTE. So it’s 22 impacted. 9.5 of

56:26 those are active employees, or are active FTEs, which would impact 11 positions. So those are legitimate layoffs in this budget this year. And then 8.75 relates to either vacancies, expected retirees, or attrition estimates of FTEs, which is another 11 positions if you totaled up the total humans that would be in those seats if those 8.75 FTEs were full. There’s about, I think, 520 positions funded by the general fund last year, and we’ve cut about 20 of them, give or take. So there’s 500 positions funded by the general fund, 500 employees at the schools. So they’ve cut about

57:14 4% of their FTEs that were funded last year from this year’s budget. Again, I will just take a moment to say, vacant positions when you have 500 employees, if you’re cutting eight to 10 vacant, that’s not crazy to me. So how did they address it otherwise? The prepayments of 1.5 million of out-of-district tuition. By doing that, every year we get the estimated out-of-district tuition costs, and then we get the offset to the circuit breaker, and maybe another IDEA grant offsets some of the transportation costs. But that out-of-district tuition and transportation that we know is very volatile, has been reduced in their general fund budget by this $1.5 million prepayment.

58:01 With how tight this budget is, the expectation is that $1.5 million prepayment is not going to be an option at the end of fiscal year ‘27, right? So if you take that line item that we already knew was going to increase by anywhere from 2 to 500,000 annually, and then you increase it next year by the 1.5 plus 250 to 500,000, we’re looking at a line item next year because this prepayment won’t be available, that’s going to increase by close to $2 million. Right? They’re certainly not going to have an allocation of revenue when we get to the override in a minute here of $2 million to them. So it’s basically saying that it’s a short-term solution. It’s preserving jobs from my perspective for the short term, but the override is very necessary for the schools just as the town, even

58:49 though the positions being eliminated aren’t as high in the short term. It’s probably more problematic in the longer term. And I just want to clarify that when you say next year, that two million, that’s fiscal ‘28. That’s right. So quickly, just to bring it all back, I will present, because everybody likes to question what numbers we’re presenting. I think I was pretty clear that the 96.5 is not debt service, it’s not enterprise departments, and it does not include the user fee. If we present the balanced budget, the 36.5 million which was looked at in determining the deficit to be found, if we move the 12.4 million of other general government costs back to the town side, the presentation in the FinCom

59:34 report will be 48.9 million on the town side with all general government there. And then on the school side, it will be 47.6 million, which is that 96.5 million that is funded by taxes, user fee, or sorry, not user fee. What are the other ones? Local receipts. The local receipts, state aid. And then on top of that, we bridge back. There’s a new user fee to fund the trash. There’s the debt service that’s funded by previous debt authorizations, and then previous debt issuances that town finance makes on a schedule. And then enterprise departments, which are funded by enterprise fees, bring you back to the total town-wide budget that gets voted on of 123.5. And just one last summary

1:00:21 so people understand the impact of these cuts. The town operating budgets, the school operating budgets, and other general government budget, if we show it from that perspective year over year, the town has cut $1 million from their non-general government operating budgets. That’s a 4% cut year over year in this balanced budget. The schools have cut 1.5 million of their non-general government budget, which is about a 3.1% cut of their budget year over year. And the other general government, which is similar to the union contracts out of our control, is up 8.4%. So it’s up 1.9 million. So those three shifts

1:01:07 represent the $600,000 less of available revenue. You can see that the less available revenue isThe increase in the benefits and the pension is significantly pressuring the ability to fund the budgets of the town and the schools. So with that, that’s my quick recap. I’ll go in a little bit more depth at town meeting in a cleaner presentation. But I’m interested in understanding the override and what it brings back in each tier, and then what it means to taxpayers. It’s going to be a thing. Yep.

1:01:45 Okay.

1:01:53 Good evening, Finance Committee. Happy to go over the three-tier override with you tonight. Tier one being a partial restore at $9 million, tier two being a build at $12 million, and tier three being an invest at $15 million. I can scroll through. Okay. The tier one, we would borrow $9 million over three years. The first year would be $1.3 million, the second will be $718,000, and the third fiscal year, 29, would be $811,000. This would restore 15 positions cut in fiscal year ‘27. It allows the library to apply for their accreditation waiver. It brings back the police student resource officer. It restores the DPW cuts, the rec and park,

1:02:38 COA, public buildings, and finance. It’s a partial restore of the community development and labor and cemetery. It only would fund the director of community development. I’m sorry, did you say borrow? You mean taxes. Sorry. I’m sorry. She always says that. I always say that, sorry. Tax. So this is the tax on the Marblehead tax payers. Yes. Correct. Sorry. $9 million in addition to what they’re paying already. Correct. Okay. Over three years. Over three years. And what she’s describing, just feedback. Yep. The 2.8 is the town side only. There’s going to be slides later on the school’s portion of that $9 million. Correct. In the tier two, the build, the $12 million for three years would be $4.8 million on the town broken up as fiscal year ‘27, $2.8 million in additional taxation. Fiscal year ‘28, $1 million additional taxation.

1:03:26 Fiscal year ‘29, another $1 million in taxation. This build would include a $450,000 maintenance to public buildings. Marblehead does a wonderful job of investing and borrowing funds for their buildings, but we don’t have a maintenance budget to maintain those buildings. In most communities, that is the first thing that is deferred, is maintenance to pay for salary cost. It would fully restore the library and their materials. It would give them one part-time assistant librarian and additional money for expenses. It would add two firefighters and one police officer. It would have an IT director and a budget analyst, a part-time social worker for the COA, one GIS position for DPW, and it restores one special clerk and one assistant planner,

1:04:14 and one conservation agent, which was the former grants, and the assistant planner was former sustainability. Tier three, which is invest for $15 million over the three years for the town, $6.5 million in additional taxation in the first year. Fiscal ‘27, $4.3 million, fiscal ‘28, $1.2 million, and fiscal year ‘29, $1 million. This brings everything that’s in tier one and tier two, all tiers build on each other. Plus, it would add two firefighters, one police officer, one foreman for DPW, one specialized heavy equipment operator, or HEO for DPW, a grants writer for community development, $60,000 for mental health counseling, which health has asked for every single year, and $1 million in recurring capital. So there’s three recurring articles every year, the leases, the equipment, and the public buildings.

1:05:00 Those aren’t one-time costs, which we would use for free cash, but they’re ongoing recurring capital that we have to budget for. Next slide. I just want to make a quick point, okay? Mm-hmm. Because the reason for me going on my rant and presenting the balanced budget again is because I need people to understand tier one partial restore, and I can clarify this with a question. We look at year one, fiscal year ‘27. Does everybody see the $1.3 million in year one on the town side? Yeah. Right? $1.26 fiscal ‘27. Didn’t I just present that we cut $2.4 million of costs from the town side budget, right? So this override is not even restoring all of the $2.4 million that we’ve cut from this year’s

1:05:49 balanced budget. It’s restoring $1.3 million of that. Now, there is a reduction in the unemployment costs that we had to cut the 2.4 to get down to, I think it was the 1.9 gap in year one, after the trash user fee. So that 1.3, those unemployment costs would go down. But to be very clear, there were 22 positions cut on the town side in the balanced budget. Tier one’s override is restoring 15 of those 22 positions. So it’s not a full restore, it is truly a partial restore. Tier two restores more of those positions, plus I think some adds, and then tier three restores all of them effectively,

1:06:38 plus some additional adds and some reclasses between titles- Yes … I think is what I’m viewing. So people need to understand that this override is not an ask of taxpayers to add to our operating budget, certainly not on the town side, right? Correct. And I don’t believe so on the school side, which we’ll get to soon either. So this is a partial restore of what we’ve cut, and we’ve been making cuts for a number of years. Alex, how long have we been level funded, basically? It’s been going up and down. We’ve had years where we’ve had to make cuts, but we’ve added some over the years. But net, I think we’ve been pretty equal in terms of positions funded, which is most of our budget.

1:07:24 And I think if I could maybe, Thatcher or Alicia, you could give us sort of a little bit of a higher level in terms of your strategy and the cuts you were preserving as much as you could, or putting focus on public safety, for example. So as you think about how you laid out what’s coming back in the tiers, maybe you could give us a high-level strategic view. Yeah. So I think basically your question is, when we had to make decisions about cutting, we had to prioritize, right? That’s the approach. And so as far as rebuilding the scenarios, it was reprioritizing how things get restored, and especially as it’s stated in tier one, it’s not a full restore.

1:08:10 So what we chose to put in the tier-one level were the most critical restorations first, and then tier two would have that next level of that. And I say that, it doesn’t mean that items in tier two or three are less important.

1:08:30 Some in the higher levels are investments that generate benefits going forward. But to your question, especially in the partial restore, what was the most critical pieces to put back in while keeping the total dollar value of that tier one somewhere manageable? If we tried to fix everything in tier one, that number would’ve grown to a level that we think would’ve been less desirable.

1:09:01 Yeah. We can bypass the revenue slide. I think it’s worth talking about, and I’d like to see this presented- Okay … at least somehow at town meeting, because again, it gets back to if we start with tier one. When we’re looking at a multi-year projection, we need to project out the revenue, right? What’s available revenue for the town side and the school side in ‘28 and ‘29, and why? Right? So what is up on screen is in ‘28, we’re projecting a total of increased revenue of 1.3 million, and then in ‘29, we’re projecting a total of 1.6, right? And we’ve talked about the 38/62%

1:09:48 methodology, right? So when you apply that 38%/62% methodology, town 38%, school 62%, the town is going to get estimated new revenue of $500,000 in ‘28 to fund whatever its budget that is approved this year, whether it’s the balanced budget or the override, tier one, tier two, or tier three to fund it, right? And the schools will get 800,000 in the 62/38 split. And then in ‘29, of the 1.6 million, the schools will get about 1 million of it, and the town will get 600,000. So when forecasting out the expenses that we currently have in our budget on each side, even after all of these cuts, the town’s restoring a portion of them in their tier

1:10:35 one, and then they have to estimate out how those expenses grow versus these revenue figures. And the reason why it’s important for people to understand, the same thing that I presented on the balanced budget with revenue, where the 2.2 to 2.4 million of new tax dollars that are raised through the levy under Prop two and a half, it’s offset by a declining use of free cash in ‘28 and ‘29 of one million. That’s based on the fact that we’ve seen declines in the availability of free cash, which will continue, certainly, in a non-override scenario, as things have gotten very tight. And also the Select board’s financial policy to reduce the use of free cash. There’s 1% increases on state aid estimates, which is about the 10-year average

1:11:24 net of offsets. I think there’s 2% to 3% increases across all local receipts. Mm-hmm. There’s not really a lot of flexibility here. I think these are pretty solid assumptions to do a multi-year projection, and the point is that there’s an override necessary even without restoring all of what we’ve cut this year. The schools are not restoring any of the short-term cuts. But then when you see what they present in a minute here on their override, they still need an override to adjust the balanced budget that we voted this year out two years, partially because of the $1.5 million prepayment that won’t be available. But also because their contracts on the new

1:12:10 number of employees that are funded by the general fund are still growing at a much higher pace than the revenue they’re being allocated in this revenue forecast. So that’s something that I think maybe we can be a little bit more concise at town meeting about, but we need to describe how we built the override from the tier one first, and then going forward. So I’ll go back to your spreadsheet. Mm-hmm. You want me to keep going on the bottom pieces that allows for abatements, state aid, or do you want to just go to the next slide? No, I want to go to the next slide. Okay. So this slide is talking about the override tiers. So when you go to town meeting, you will be voting on whether or not to let the Select board place on the ballot two

1:12:56 questions, one for the three tiers, and one for the trash curbside collection. And the first question, I don’t know if it’s going to be the first question, but if it was, I’m going to say you’d have options of tier one, tier two, or tier three, and then the one with the highest majority, correct? The highest value tier that receives a majority yes is the number. That would pass. That’s on the ballot, though. That’s on the ballot. Yeah. Well, so we’re voting on what shows up on the ballot at town meeting?

1:13:31 So- On town meeting, you’re letting up to, I would propose say up to 15 million for- No. No. What was I going to say? So at town meeting, we went through this in the last session, we’ve got to separate what happens in the ballot and what happens at town meeting. I said that part. They’re asking the question of- Oh … I said it’s just to authorize us to put the question without the question they’re asking- Which is the- … is there a dollar value in that ask? So it would be the highest tier first year number, which is the 4.8 million- Okay … is what would be presented at town meeting. Okay. So at town meeting, we would be using our clittars to figure out what shows up on the ballot or no? At town meeting, the role of town meeting is to authorize the select board to put the question on the ballot-

1:14:18 Yeah … to appropriate the funds. So there’ll actually be the three-tier override will be broken out. So you have the three scenarios, tier one, tier two, tier three. But the overall appropriation number would be the highest number. So think of it as up to the 4.8 million for the first year of the override. Okay. So- Thank you for clarifying. Yeah, but what’s going to be voted on is, yes, this three tier, a no, or of the three tiers. So town meeting just authorizes the question, the amount of the appropriation, and the purpose, which would be for general government and schools. The select board

1:15:05 are the ones who put the question on the ballot, who define the question. But presented at town meeting is the intent that’ll have three tiers. In tier one, we’ll fund these items. Tier two will fund these items. Tier three will fund these items. As one package, like we see here. Yeah. Okay. If passed at the ballot.

1:15:29 But then when you get to the ballot, do you check one box, two box, three boxes? Voters will have the option to vote yes or no on any combinations. So Dan, what was the phrase you said? You

1:15:48 will have the option for all three. You can vote yes or no, whichever one has higher than the other ones. If you want whatever highest tier you want to pass, you should vote yes for that, and yes or no again. But you used a word that- So it sounds like if you vote for yes on tier three, that’s a yes for tier two and one. No. No. Yes, and will you have the whole- They’re totally independent. They’re not dependent on- They’re, that’s the- They’re not dependent on the binary. They’re not… Right. So,

1:16:20 you can vote, let’s do the straightforward logical. I want to vote for something, but I don’t want to vote the total. So you may vote yes for one. That’s acceptable. You may vote yes for two. And you may say, “Eh, number three is a little too out there. I’m going to vote no.” Okay. Right? You can do the opposite. You can like, “I’m voting for three and no on one and two.” That’s not logical, but that’s an option. That’s confusing. Yeah. All that matters- You can also leave them blank, right? You could vote no on all of them. You can vote yes on all of them. You can vote any combination. So what happens is when the voting is done, each question, each tier is looked at individually. Is there a majority of voters that said yes or no? If tier one, there’s a majority of voters that said yes, okay, it got through that

1:17:07 gate. Tier two- Hold on a second. Dave, just so you know. That’s fine. Go ahead. I’m just saying, because you could vote no on one, and still no on the rest. Yeah. So each question,

1:17:21 each tier, if it receives a majority yes, whichever is the highest tier that succeeds at majority yes is the number. Now, here’s the question that was raised, and the DOR has a guidebook on this, and they do a better job than I can on this. Here’s a scenario. Tier three gets 51% yes. Tier one gets 90% yes. Tier three is the number. It’s not based on what’s the most popular vote. It’s simply the highest number that succeeded in getting a majority yes vote. That makes sense. And that majority may be exactly an even number

1:18:10 plus one. It’s a yes vote and the highest number is the- So, in theory, two could get more votes, but just because three got the majority, that would be the number. That’s, yes. Cool. I had a question. Forgive me, I’m a simple man, and I’m just trying to figure this out. So if we vote yes at town meeting for an override, we’re automatically getting an override of some sort? No. No. You’re giving the authority to the select board to put it on the ballot. Put it on the ballot, and then, okay, so it’s not putting it on the ballot and- It needs a yes just to get on the ballot

1:18:55 … it still, I know that. I understand that part, but so it still needs to get a majority of the votes in the town for…

1:19:05 At the ballot box, all three could get nos. So all town meeting is doing- I don’t want it … is authorizing putting it on the ballot. Okay. But they have to

1:19:20 tell what the appropriation is and, right, for fiscal ‘27. So we would use the single number would be the highest tier. Okay. Right?That authorized it, then the select board will put it on the ballot with this, it’s called by the state a pyramid override. Right? So that voters have the three scenarios, and they can choose yes or no on any one of them. But let’s just say at town meeting, the question would be to appropriate, I don’t think the language will say this exact, but up to the 4.8 million, which is tier three. But let’s say only tier one passes in the override.

1:20:06 Only the tier one dollar amount is actually raised in the levy.

1:20:13 Okay. Does that make sense? Yeah. This makes sense. I just was a little confused at that, if someone was voting for tier three, it’s hard to imagine they wouldn’t be voting for tier two or one. Yeah. So if that someone doesn’t fully understand that, that was just my thought there. And I think of the guardrails about it being, it just has to get 50, I guess takes care of that, but it just, that wasn’t- That’s part of the education process. It’s- It’s hard to understand at a Sunday school sermon. Yeah. I’m going to guess those who are advocating for it, that will be part of their task, is to educate people to that. Our job is to put it on- Right … on the ballot. Yeah. So the number you said is 4.3 million? That’s what this says.

1:20:58 If- Yeah. Because there’s zero- Because the- The schools have zero draw in year one. Yes. So 4.3 is the number that- Up to 4.3. Right. For fiscal ‘27. Up to. Up to. Up to. Yep. Up to, for… Okay. So that’s the vote at town meeting. At town meeting. Right. Right. Will you let this override question pass town meeting to get on the ballot for up to 4.3? For up to 4.3 million. Not up to 15, because those amounts have to be appropriated in future years. If it was to pass at 15, those amounts would still have to be appropriated through our balanced budget then, that included those numbers. Right? But it would have already been approved because the override

1:21:45 for tier three had passed. So- So you only have to authorize the override once, but you have to appropriate each year of the override dollars in each successive year. So it’s potential that in fiscal ‘28 and ‘29, town meeting could vote not to appropriate? Any budget, they can vote not to appropriate. Yeah. So the override could pass authorizing, basically it raises the levy ceiling. Up to. But it’s up to town meeting to actually appropriate- Each year … each year- Okay … to appropriate the dollars. Okay. Right.

1:22:23 Okay. So my interpretation of this, this is town side’s portion of the nine, 12, and 15. Tier one, we’re restoring part of what we’ve cut, and then we’re running those expenses, plus what’s in our balanced budget, out two additional years versus the revenue allocation, which is very reasonable estimate, and I don’t think has a lot of room for movement. Um, and as a result, the 1.3 represents what’s being restored, which Alicia has summarized here. Um, for example, the library’s only adding, what, 300-ish thousand? Right. And we know we cut 7 or 800,000 from the library this year. Mm-hmm. So it’s not a full restore. That first year is what’s

1:23:10 coming back, right? That’s been cut from the budget. So of the net 1.9 million we cut, we’re bringing back 1.3, right? Um, and then in years two and three, it’s simply the structural deficit between the revenue allocated to the town and the available costs on the town side. Um, and then obviously tier two and three, we’re adding to that. Um, we’re going to get to some school slides here as well. You ready to move forward? Yes. Um- The next slide is just the losses which we’ve discussed. I don’t think we need to do it again. Mm-hmm. We can go past that, and the next slide’s in detail, which is up on the website, that we’ve done this presentation before. The next slide is the school deposit. Please. Yes.

1:23:58 Steve, you want to do it?

1:24:04 Good evening. Oh, I can’t…

1:24:09 Oh. Joe.

1:24:13 Good evening. Good evening. Thanks for being here. Thank you for having me. Um, so I guess I got a bunch of screens here. Uh, so as was mentioned earlier, the school department has no intention of requesting any tier one money in year one, which is fiscal ‘27. Um, we feel that the cuts that we have made, the 22 positions that Mr. Gillsbee mentioned earlier, um, 11 vacant, 11, um, not vacant, um, sending people in them right now. Uh, I know that we talked about cutting staff. What we want to make sure we’re not doing is cutting educational programs or educational quality. So that’s one of the things that we’ve been looking closely at.

1:24:59 Uh, so in year one would be a zero for us from an override standpoint. We would draw zero of the override money if it were to pass in tier one. Uh, in tier two, you’ll see it’s a bigger number. It’s $4.4 million, and there are two primary drivers in that. One is our contractual obligations. As you remember, we had a work stoppage a little over a year ago. Uh, this will be the third year of that. Fiscal ‘28 would be the third year of that contract, and our contract was weighted heavier at the end than at the beginning of the contract. Uh, the other driver there is in fiscal ‘27, in order to cut $1.5 million additional out of our budget. So I think it’s already been said, our budget was 49.1 millionIn fiscal 26 and fiscal 27, it’s dropping by 1.5 million to 47.6 million.

1:25:47 Rough numbers. We need to restore that $1.5 million because we had,

1:25:55 for several years now, probably six or seven years now, since we had a special education situation years ago, at the end of every fiscal year, any surplus funds we have or some surplus funds, I know we’re returning a lot to the town also, but our surplus funds, we would prepay tuitions. It’s the only thing that we’re allowed to prepay by Mass General law. When I arrived, we were prepaying. We had prepaid 900,000 just before I arrived in fiscal 25. For fiscal 25. And this year, for fiscal 26, we prepaid 1.1 million, and in fiscal 27, we will prepay 1.5 millions. What we’ve always done is we’ve budgeted special education for what we know, even though we anticipate being able to get to the end of the year and

1:26:40 prepay some of that money. What we’re actually doing is we’re taking a risk. We are prepaying, but we’re also reducing our budget line item for special education tuition. So if it’s $5 million in special education out of district tuitions, we are reducing that to 1.5 because we’re prepaying 1.5 of that. In the past, we would’ve left it at five, prepaid what we could, and we’d always have that little buffer for years to come. Because we are now dropping our tuition just roughly three to 3.5 million for fiscal year 28, we will need that back up at $5 million. So the 1.5 plus whatever it is. We’ve assigned agreements with families. There is no, “Sorry, we can’t afford to provide your

1:27:28 education at the placement that you’ve got.” There’s no option here. So, 1.5 of that 4.4 million, and Mr. Gillespie’s right, plus another half a million for increases, just normal cost of

1:27:44 inflation increases- Sure … gets us to $4.4 million.

1:27:51 Can I just insert real quick, too, as a FinCom member, I’m comfortable with you making that decision to, with the prepayment, to take that risk because you have gotten to a place where your circuit breaker reserve is at a full year. Because what we don’t want to happen is what has happened- In the past … years ago where those tuitions came in, and we didn’t have funds for it. We’re protected, so we don’t need the prepayment to the extent that we used to in prior years because we have been able to build up that circuit breaker reserve. So I just wanted to throw that in. And I think part of this is that people say, “Why are you able to prepay $1.5 million?” It’s

1:28:37 multi-faceted, right? We have 11 vacant positions that we’re cutting. We have not filled them part of the year. That ends up as surplus at the end of the year. So we have part of that. And in addition, knowing what situation we were going to be in in fiscal 27, we have frozen our budget, meaning discretionary spending. If you haven’t purchased your supplies by, it was pretty much March 1st, and we kind of extended to April 1st, but if you hadn’t purchased your collateral supplies, you’re going to have to make do with what you have. We have frozen the budget with the anticipation of having to prepay 1.5 million for next year’s special education. And on the circuit breaker side, somebody could say, “Well, you’ve only budgeted 3.5 million, rough numbers, for tuition next year. What happens if you get a move-in? What happens if you get a student that goes out

1:29:22 of district?” You’re right. We still have two mechanisms. One is circuit breaker. We have that in reserve, full year in reserve. And the other thing, which is great, but it doesn’t do us a whole lot of good, is the Special Education Stabilization Fund, which requires town meeting authorization to spend. By the time we got authorization in May, it’s kind of too late. But it’s a nice safety blanket to have in case we ever need it.

1:29:48 So those are the drivers. In fiscal 27, we had originally, when we built our level service budget, which is everything we have now with the cost of living or an inflationary number added into that, we had put a 2% inflationary number on utilities. No, I’m sorry, on supplies, contracted services. Those are private contracted services, not our contractual obligations for salaries, but 2% on for just translations and different services that we contract out for, pop years and whatnot. When we had to reduce down to a level funded, we cut all those increases to zero. So we level funded all of our service supplies and contracted services lines also.

1:30:33 The other thing that we did in fiscal 27 or so, we moved quite a bit of salary to revolving accounts. The first thing we do is our kindergarten and pre-K, we decided to charge 50% of each teacher and instructional assistant, paraprofessional, depending on what they’re called in this district, they’re called instructional assistants. They were called tutors before negotiations. We were only charging off half of the teacher salaries and not all of them. So in the fiscal 27 budget, we are charging 50% of every kindergarten teacher, and 50% of every preschool teacher, and 50% of every instructional assistant in kindergarten and preschool to the revolving account. We feel comfortable being able to do that for two to three years. That’s the one account that we felt comfortable doing that for an extended period

1:31:21 of time. We also charged off some salaries to our special education revolving account. That account has money that comes in when we tuition a student into Marblehead. We may offer a program in, and we don’t currently tuition in any students, but we were tuitioning in students previously, that students would come in to Marblehead from Swampscott or Salem or Lynn or somewhere where we had a specialized program that their district didn’t offer. And we would tuition them in. It wouldMaybe we only had two or three kids in our program, but if we were to bring in two or three more kids from another district, it made it cost-effective to run the program versus sending all the kids out of district. So that fund is bringing in no revenue right now. We have no tuitioned-in students right now into Marblehead.

1:32:09 So we are spending every dollar we have to make 27 work. So again, we’ve tapped every revolving fund that we can tap to the extent that we feel comfortable tapping.

1:32:22 On tier one. Well, first, if I could just make a couple of comments. So first off, when we talk about the prepayments and prepayments turning back money to the town, combination of the two and the history, prepayment of 1.5, I want to remind everybody about the balanced budget that I presented earlier, and that the school’s budget, when we think about their full all-in share of this 96.5 million, is roughly $60 million. We’re talking about a massive number in terms of the school budget. In any finances, if you’re missing 60 million by one million, that’s a pretty solid miss. You certainly don’t want to go over, right? So I think people like to throw around $1 million misses in

1:33:08 a budget and think that that’s some sort of nefarious act, and that’s just what I’ve heard over the years being part of this. And to me, if you’re missing by 1% to 2%, that’s a pretty good miss. And the school has turned back money to the town for a number of years straight here. The fact that they’re prepaying all of their out-of-district tuition with what you have available now is to really make 27 work. So that’s my first point. And my second point is, and I’m working through this all in my head myself, and I tried to say this at the COA, and I even saw some school committee members in the audience look at me like it was a little bit of a bold statement, but I will ask you. If you have to cut, if this override tier one, if all

1:33:53 tiers fail, and you’re assigned that exact revenue number that I showed before when we split up the revenue projection for fiscal year 27, or sorry, for 28, and then you get 62% of that. And then your costs grow at what you forecasted after removing all of these positions we talked about and whatnot, and you’re $4.4 million short. What will that mean to the school district in Marblehead next year in terms of cuts to balance without an override? Because I think that question, and I let you answer, is very important for taxpayers to understand as they consider voting on this. What cuts are coming next year for the schools? So 75% to 80% of our budget is personnel.

1:34:39 Probably another 10% or 10% to 12% is in special education, out-of-district tuitions, transportation, services and whatnot, which cannot be touched. Probably 4% or so, or 5% is in utilities, which is that heat and electricity. So when you look at what the greatest portion is, that 80%, 75% to 80%, it’s in personnel. Yeah. So the only place that we can cut would be in personnel. I’ll let somebody do the math in your own heads because I don’t want to project what the layoff or the RIF, reduction in force, would look like. But on 4.4 million on an average salary of just say $70,000 to $75,000,

1:35:21 it would be devastating. The

1:35:25 educational quality for Marblehead would be drastically impacted. Yes. It’s like 60 positions- I know that, yeah … if I use 72 and a half. Yes. I’m saying- And I did back of the- It is absolutely devastating … back of the envelope math on that, too. And we already talked about the town reducing the general fund FTEs this year by 12%. We talked about the schools having 500 FTEs funded by the general fund. I would think that that percentage might be close to that next year in some sort of range in that 10 to 15. If we’re at 528 right now and we’re cutting 22. Yeah. Or sorry, we’re 528 right now, we’re cutting 18.25. So we’re getting down to 510, and if Ms. Teet’s number, 60, is accurate. He confirmed it.

1:36:11 I did the same thing. That’s 10%, right? So we’re cutting 4% now and we would have to cut another 10% the year after that. And then take the 1.8 the year after that and that’s probably another…

1:36:30 4.4 is 60, 1.8 is 20.

1:36:36 So I guess- And that’s- … from my perspective- That’s just tier one … the communication about this, the town is pretty easy in the tier one what are we bringing back situation. They’ve made significant cuts and they’re asking for some of them back. The schools have made significant cuts and are not even asking for most of those back. But in year two, because of the 1.5 and the contractual obligations versus the revenue estimated in growth, it’s going to lead to significant cuts. So a vote against a tier one override is not only voting against 15 to 20 positions on the town side just being eliminated, reduction in library days offering, it’s voting against next year saying, “Yeah, we want the schools to be up against

1:37:24 12% workforce cut effectively.” And that’s what I think. That’s why for me, tier one, it’s the structural piece that for me. Tiers two and three, we will get to in a minute here, and Alicia covered, is adding on top of that, and I think that there’s probably a lot of argument for that, but I want to make sure that tier one, everybody understands how much has already been cut. We’re not bringing it all back. And how it’s just going to escalate year after year after year. And this is a long-term plan that’s been put together that addresses this, that people have been asking for. And if I can make a point too, in terms of the long-term plan, what this slide shows, what I like about having a long-term override is that it is the best use of

1:38:10 taxpayer dollars because we’re not drawing down from it in the first… The schools are not drawing down from it in the first year because they don’t need it. They’re doing these short-term stopgaps, and they are only asking for it in the year that they need it. Right? And same for the town. Thoughtfully being able to allocate as it’s needed instead of taking it all up front and hanging onto it because we need it in the future. Yeah. And this, again, it’s a risk the way we did this because I personally would’ve preferred us return $1.5 million to the town, but it wouldn’t have gotten certified in time for now an appropriation for next year. Right. Because then we would not have cut the 1.5 out of special education budget, which, anyway, we do it now or we do it later. Either way, we still need a 4.4 the next year,

1:38:56 so… Right. I like your wording on the last sentence of why the override is needed. I’d like to take credit for that, but I can’t. Oh, the override is not about blaming school spending, it’s about the cost the district cannot control. I think that goes for just about everything. It’s not the tsk tsk finger that you’re not meeting two and a half. Yeah. I think it says bloated, not blaming. Yeah, but bloated. Okay. All right. Yes. Good. Good. Yeah, it is not a bloated budget. I think this was a great exercise. I believe that we were able to look at efficiencies. Superintendent’s got a great job in his second year of identifying where inefficiencies were occurring. If we can keep this team together, I know that’s been a problem in the past, we can continue this work that we’ve

1:39:42 started. And I think that he has done a great job with Julia and Lisa Murray identifying some of these areas where maybe staffing was… Like I said, if you’re cutting 22 positions and you’re not asking to restore any, obviously we found some efficiencies. I mean, it’s not rocket science to figure that out. And responded to lower enrollment over the long term. Correct. Yes. Enrollment numbers have… Right.

1:40:08 All right, so tier two. So tier two for us, again, not restoring any of the 22 positions, not adding any new positions. It really is just a couple of pieces. The first thing is we’d like to start a technology lease, and we talked about this last year during the budget process. And I think we’re all just so new into the role, we needed to digest this a little bit. But the concept is in fiscal 2028, so this would be the second year, in fiscal ‘28, we would increase our budget by $150,000. That would allow us to go out and lease between $400,000 and $450,000 in technology. Smartboards, laptops, Chromebooks, iPads, projectors,

1:40:55 servers, switches, infrastructure, Wi-Fi, the Wi-Fi wireless access points. It would allow us to go out and lease that. 150,000 would need to stay in our budget because it would pay the year lease one, year lease two, and year lease three. It would be a three-year lease. In fiscal ‘29, we would, on top of that 150, add another $150,000 so we could then sign a second three-year lease for the same thing. We can’t buy everything in one year. You have to cycle through these things. You can’t just go out and buy every laptop and Chromebook in year one, and then not buy anything for three or four more years. And then theoretically, because we’re not into fiscal ‘30, we would add $150,000 on top of that in fiscal ‘30 as a

1:41:40 three-year lease. By the time you get to fiscal ‘31, your first lease is off, you’ve already got the money in your budget, you can just keep signing new leases every year. And this would stop us from having to come back to the town for capital funds for technology. It would solely put the money into our budget, and we wouldn’t have to be relying on capital requests or going to town meeting for the separate appropriation or separate warrant ask for appropriation for technology. And we are very technology dependent. We are. And then kindergarten would become free. Right. And then the other part of tier two, in fiscal ‘28 also, we would look to be, I believe we’re one of 10 communities in Massachusetts that still charge for

1:42:26 full-day kindergarten.

1:42:29 Baffling to some extent. It would be that we would now leave the state with nine communities who still charge for kindergarten. The state is actually talking about providing free full-day preschool, and we still haven’t provided free full-day kindergarten. So that’s a goal for us, is to provide full-day kindergarten without charging a tuition cost. The impact or the learning that occurs at that early age is impactful for first grade, how much further ahead they are in first grade when they have a full day. This is about equity also. Some families just can’t afford full-day kindergarten, so they choose not to put their child in full-day kindergarten, and that puts their child potentially further behind the students who

1:43:17 were in full-day kindergarten, whose families could afford to or made the sacrifice to somehow fund that opportunity for their children. So that’s tier two. And again, so these are

1:43:35 the $7.2 million. This is adding tier one with tier two. Yep. So, we’re going from 4.4 to 5.7 and 2 point… I’m sorry, 1.8 to one point…

1:43:50 ByeYeah, because there’s no additional ask in fiscal ‘28. ‘29, I’m sorry, for tier two. And then tier three is our invest.

1:44:03 To get our budget to work for ‘27, we did have to make some cuts to curriculum. We had added some money to our curriculum budget last year, two years ago, just to keep our curriculum refreshed. The idea is that every year you should refresh one subject matter. So in fiscal, just say ‘29, we’re looking to refresh, and I don’t know Julia’s plan, but it might be mathematics. In fiscal ‘30, it might be English language arts, then science, then social studies, then world languages, and then it would refresh back down to, it might be a five or six or seven-year cycle, depending on how many subject matters we’re looking to refresh. Julia Ferrer felt comfortable being able to cut $100,000 for a couple of years.

1:44:48 So in tier-

1:44:52 Sorry … next year, fiscal ‘28, to restore that $100,000 that we cut out of the budget. That’s not just curriculum, it’s professional development for teachers to learn the new curriculum, so they don’t walk into class and try and fly the plane while they’re building it. They have to learn the curriculum over the summer. We offer them professional development time to do that. That costs money. Teachers don’t come into work and know, any of us, over the summer for free to learn something so that they’re ready for the start of the school year. None of us would do that. So, when we roll out new curriculum, it’s best practice to give them time to learn it before we put them in front of the students. The second part is, we talked a lot about out-of-district tuitions. One thing that Marblehead does not have is a post-graduate program.

1:45:40 By Mass State law, we are obligated to offer an education to students who are not able to earn a high school diploma.

1:45:52 Previously, you had to pass the MCAS to get a high school diploma. There are new graduation requirements coming out now that MCAS is no longer a requirement. But if the students still can’t meet those minimum requirements, they will not get a diploma. If they don’t get a diploma, we are obligated to provide them an education till the age of 22. A lot of that is life skills education, job training, job skills, things like that. We don’t have a program, so right now we have to send those students out of district, and it would be great. We had a program like this. We built it when I was in Wakefield. It was amazing. It kept the kids in Wakefield. So they got jobs in Wakefield. We put job coaches for them in Wakefield. They lived in Wakefield. It was their community because that’s where they were going to be when they turned 22. It would be great to do that here in

1:46:39 Marblehead. That we’re getting them jobs here in Marblehead. Maybe at a grocery store, maybe at a small nursery or something, but getting them jobs here because then that’s something when they turn 22, they would still have that job. And we used to have that. I can’t speak to that. I think we used to have something similar. Yeah, at Evelyn. Yeah. Yeah. But it also- Yeah. So I’m surprised we don’t have it now. Yeah. And again, it’s driven by population, it’s driven by need. Yeah. And it’s one of those ones that we would tuition students in from other districts because a typical environment like that might be 10 to 12 students. Yeah. And it could be number of students could be supported in town. So you’re saying they could be sent out of district?

1:47:25 Right now they’re required. We are required if they don’t have a diploma. Yeah. Okay. So this could result in savings to the out-of-district tuition? Yeah. Correct. This is an initial investment of a half a million dollars. Yeah. We need to build out a space. And it can be within one of our existing buildings. Could be. But we usually set up some type of an apartment type thing where there’s a bedroom, a laundry room, a bathroom- Oh, okay … a kitchen, so they can learn to be self-sufficient. That they can learn to do laundry, cooking, cleaning, make their beds, whatever it is. And again, special education runs a wide spectrum. Some students are very highly effective, and some students just need that day-to-day reminder of how to get things done. So part of it would be that you would have a classroom. You would also have a classroom where they’re learning skills.

1:48:13 And I’m not an educator, so I can’t speak to what skills they might be learning. But you’d also have an apartment type environment. And it’s not a large apartment. And the kids don’t sleep there, and they might make stuff, but it’s probably cookies and whatnot. Easy meals. I’m not sure that they’d be making filet mignon for us all, but they’ll be making some basic meals that they can do for themselves. And then the other part of that is we have job coaches as part of this program that would go out into the community with the students and actually get some job skills and work a job, and students actually get paid, which is great. It’s just the start of their career. So it would be great to have that post-graduate program. And the $500,000 is to get the program up and going. Once it’s up and going, we’ll realize the savings from not sending them out of

1:49:00 district to a collaborative school, typically is where they go. And potentially bringing some in from out of district. Correct. Yes. Right. If we only have four or five kids in it from Marblehead, and again, now they’re young adults. They’re not kids anymore. Yeah. They’re young adults. But if we only have four or five young adults, maybe Swampscott or Lynn, Beverly, Salem, they may come here because those students going out of district are costing 60 to $70,000 a year. If we can do it in district for $50,000 a year, they’d be more than happy to send the students here. I’m not saying they’d be more than happy, but they, yeah. They should be.

1:49:37 So that’s really our slides. I think I covered the next one.

1:49:48 We talked about out-of-district costs, talked about benefit costs, talked a little bit about technology, staff salary increases. For fiscal 29, we don’t have a set of contracts, so we did have to put a-Just a placeholder in there for 29. Again, one of the biggest things is we want to make sure that we can hold our educational quality. A decline of educational quality would be disastrous, especially for a community like Marblehead, who prides itself in its educational value. And just compounds every year. I think that’s it for me. The next slide just shows what each tier would happen if we didn’t have the tiers. Yeah. And then Alicia, you want to quickly go through kind of- Thank you … thank you so much.

1:50:33 Yeah. Thank you. Appreciate it. Thank you. Thank you. The impact to taxpayers.

1:50:55 So, 90 million with the tier one partial risk score for 9 million, year one would cost $130 based on the median value of $990,600. Year two, it would be $533. In year three, $256 for a total of $919. On top of your current tax bill. Yes. Each year. Yeah. Current tax bill. The median, is that median tax assessed or median- Value of home … market value? Value of the home, right. Assessment. Assessment. Okay. Yeah. Tier two bill, 12 million. Year one would be 208. Year two would be 76. Year three would be 274 for a total of 1,230. And that would be on top of your regular

1:51:40 tax for the coming three years going forward. Tier three, 15 million, would cost 430 in year one, 720 in year two, 380 in year three, for a total of 1,538 added to your tax bill. Top of your bill, that will be increasing without this override annually if- 2.5% … unless your valuation’s going down. Right. Has that been included in this as a compounding thing? This- Oh This is just the override on top of everything. This is the override on top of everything. That would be the permanent increase for year 919. Permanent increase. On top of the 2.5 a year growth, excuse me, per cent. Yeah. This is your levy now. Right. Next slide. So it’s not just three years, it’s forever.

1:52:27 Right. This is- This one’s just showing on the average home versus the median. So on the average- Yeah, and whatever … it’s 907, so it would cost 168 year one, so the 9 million plus the risk score, 159 year two, 331 year three, for a total of 1,188 for the partial risk score on the average home in Marblehead. For tier two bill, 12 million, $362 year one, $875 year two, $353 year three, for a total of $1,590. In tier three invest of 15 million, the first year’s cost would be 556, second year 931, third year 502, for a total of 1,989 cost in the levy. So we’ll be growing at 2.5% every year.

1:53:15 And here we just show it again, the override tax impact cumulative at the end of the three years. So instead of showing it by year, here’s the cumulative effect. Yeah. So this is at various home values and then tier one, tier two, tier three at the end of three years, and then the month- Correct … of the override cost.

1:53:36 That one is the memorandum of understanding between the Black Board of School Committee and Finance Committee on if the override passes, how much will be drawn each year, what the revenue assumptions will be, how the funds will be split. Anything more? No. I think there’s a separate agenda item after this warrant, so we’ll move on, but I think we can talk about the MOU a little bit more detail in a minute here. But we can pass on it for right now. All right.

1:54:13 Any questions? I think we’ve asked questions throughout. Does everybody understand how the override was built and the various tiers and the various number of years that go into each tier?

1:54:29 Yes. And we will be voting a recommendation on this separately from the trash override, correct? Yes. Yeah. Does everybody understand the trash override question? That’s separate. Yeah, that’s a separate question. Basically, after talking to Andrew Petty with the million-dollar increase this year, it will be growing on the contract at 5% each year. So if it does pass the override, it would be fine for three years, but then since we’re stuck on probably two and a half, we’ll probably have a gap each year because it’s going to keep growing at 5% or more.

1:55:06 Does he have a view, I haven’t heard this, on which he would prefer, Andrew Petty- I- … would he prefer the override versus the annual fee, and why? The fee he said would be preferable only because of that 5%, whereas the constraint with the two and a half growth, where the contract’s going to constantly outgrow that at 5%, we’re probably going to have to keep coming back for additions. So the fee will just increase 5%- Because the fee would just increase. You could just increase- Per year … the fee by 5 where you wouldn’t be constrained by the top two and a half. Okay, so I thought the override ask though, covers- For three years … for three years. Only three years. And then after that, if it continues to grow, because then once it’s permanently in there, it grows at two and a half, and he’s going to keep going

1:55:51 above that. Okay. Yeah, no, are we talking about the- Yeah … trash- Yeah … yeah, override asks? Yeah. Having done some research in terms of how other towns do this and looking at benchmarking, you know, m- Only 20% of towns in Massachusetts fully cover their trash services by property taxes. Right? They have other forms to supplement that. Oftentimes, that is an annual fee. And then more specifically to Marblehead, we’re one of 10% of communities that have the option of either taking our trash in or having it picked up at curbside. Right? So to me, what I like about the annual fee is it takes advantage of something that makes us

1:56:38 kind of special and gives residents a choice. Right? You can choose. If you don’t want to pay the fee and have your trash picked up, then you can opt out of it and do it yourself. So if we pass an override, then you get that choice taken away. You’re paying for it out of your taxes anyway. So to me, the annual fee preserves residents’ choice. And at a moment when this trash fee has increased so dramatically, it seems like the appropriate time with this new contract to think, are we funding this the best way possible in a way that, again, gives residents as much choice as possible? So, and to your point, is structured in a way that reflects the realities

1:57:25 of trash increase, of waste increases. Right? And from what it sounds like, I’m not sure that’s going to be going away anytime soon. So, in my view, I think that the annual fee is a more thoughtful way to structure the funding of this new contract going forward. So…

1:57:47 Any other discussion on- Oh, can I have another couple other points, actually, before I forget? So I do see two areas of risk with the annual fee. Right? So one of them is financial risk. Right? We are estimating what percentage of people are going to opt out. Right? And we can’t know for sure. We’re using Danvers as a benchmark, which I think is a good one. But at the same time, we in our meeting, our last one hearing, we talked with Andrew Petty about having $250,000 set aside on the waste revolving fund, to supplement if the opt-out rate is higher than what we expect. So if you think about it, a 4% opt-out rate is, I think, 320 households. If we add another 250,000 of cushion, that gives us another

1:58:36 900 households that could be covered. So that bumps up sort of a safe area of an opt-out fee in the first year to 15%. So that gives me a lot of comfort that from a financial risk standpoint, we are recovered from an… And then there’s some operating risks too as well. So, you’re having a new fee. They have to hire an additional person, so there’s a cost associated with it. I think it’s 76,000. Correct. So that’s a negative to the fee. Again, I still sort of think it’s worth giving residents the choice, but there will be some operational risk. But I think we’re lucky to have Andrew Petty running our department, quite frankly. And again, a lot of other towns have figured this out, and I’m pretty confident that he will too. So anyway, in my view.

1:59:22 No, I agree with you. He really bargained a great contract. When I talked with him- Mm-hmm … the numbers, he brought it down substantially. So I think he does a great job at doing those well. Yeah. On the trash fee, the curbside collection fee, as I’ve mentioned in previous meetings, the town was on the town side, I mentioned tonight, was short $4 million. I look at the fee as a funding solution to a very wide budget gap to address. Without- Without the- … creating the fee as an option if the override to replace the fee failed, we would’ve been cutting 25% of our workforce on the town side, not 12. I’m not passionate about it being funded by property

2:00:08 taxes versus the fee. I think I support the select board’s decision to give taxpayers the option of where they want to fund it. But I understand their decision also to effectively move it to a fee if the override doesn’t pass. So I guess in terms of where my head’s at in terms of a recommendation personally, it’s I’m okay with the override being asked of taxpayers at town meeting. Yeah. But I’m also okay if it goes with the fee if people don’t want it to be part of the tax base. Does that make sense? Mm-hmm. Mm-hmm.

2:00:49 And then with respect to the override, I think let’s just talk about the way that we’ll make a recommendation tonight and then vote on it tonight, and then I’ll probably think a little bit more deeply about what to put in the FinCom handbook. But if I’m understanding things correctly, the article says to see if the town will vote to raise an appropriate or transfer from available funds a sum of money to supplement the town’s general government operating budget beginning in fiscal year ‘27 contingent upon a Proposition 2 1/2 override. So if I was to make a recommendation to support and recommend the passing of Article 29, it would be to make that recommendation in favor,

2:01:35 but also for fiscal year ‘27 to appropriate up to that first year amount. That would be part of our recommendation we make tonight because that’s the way that they would have to vote at town meeting. Is that fair? Yeah. Okay. So how do we break out the waste override from- Yeah, we can make two separate recommendations. Okay, two. Okay. Yeah, I think. Okay. It’s not really detailed in what’s shown on screen as the article. So, any questions or further discussion? This is our time to talk about it. Yes. I just have one tiny question. Oh. It’s just to say It’s not endorsing one- Not endorsing tier one … just to say, this is what the select board wants to do. It’s doing-

2:02:21 I didn’t know that that’s right. Is that right? How would you frame it? I would frame it as we are voting to recommend that the override article pass town meeting up to a certain amount in the tier for year one, if that makes sense. And I think you’re, as a member of FinCom, giving your opinion about the override, right? This is your recommendation. Do you recommend that residents vote yes or no? Is that not the way we’re working this? No, we’re recommending that the residents have the option to vote. Period.

2:03:06 Yep. We’re not talking about yes or no on any of the tier options. We can talk about anything we want tonight. If you’re- Yeah … against a tier, by all means, speak out. Yeah. Yeah. I’d just like one tiny question, Alex. Ms. Alicia, so in part of the presentation that you actually were presenting in regarding to reducing the reliance on free cash, is that actually tied to the passing of any of the tier votes? No, that’s based on our financial policies. Free cash is actually declining, and we need to build up our reserves. We don’t have enough reserves, so we’re going to push less and less. That was the beginning when Thatcher first came on, was to get us less and less off of free cash reliance. And what the override does is it gives us

2:03:53 that constant revenue stream where we can depend on and grow at two and a half, whereas free cash, you can’t depend. It’s going to be one level or the other, and you can have one year where it’s actually nothing. So we need true recurring revenues. Got it. Thank you for the clarification. Thank you.

2:04:12 Or… For our recommendation. No, I don’t think we go tier by tier. Yeah. Mike, you were… Michael, you were next. Is your question about each tier specifically or- No, it was just more just conceptually. So I always thought our role was advisory, advising. So a yes vote is advising that the override goes forward to the town to vote on. Up to- That’s all … a certain amount. Yep. That’s the way I would think about it, unless you all think we should vote tier by tier. Would you like to vote tier by tier? I don’t think we should. Oh. Yeah. I think that’s- Yeah. No, I think- That’s like us endorsing- Right. Yeah … which I don’t think we’re supposed to do at all. Right. And just personally, because I’m not afraid to say it, I’m in

2:04:59 huge support of tier one. I certainly think there’s valid requests in tiers two and three. But I’m not ready to endorse all of those right now. But I am certainly ready to endorse the need for a tier one, and I think taxpayers deserve the right to choose because they’ve asked us many, many times if they want tier two and tier three. So I would prefer to make a recommendation based on how town meeting will vote, which is whether or not this override will pass town meeting up to a certain amount. And like I said, I’m not sure personally. I’m not going to share my thoughts on how I’ll vote at the ballot box, but I’m not ready to endorse all three tiers. But I will endorse the process that went into it and the options to vote

2:05:48 on each tier in- Yeah, I agree That’s key. That’s all we needed to know … I will make it clear in my FinCom handbook what our recommendation means. And I think your personal vote has all the things that are personal to you that go into it. But again, if you believe in the work that was done, yeah. That’s a great- That’s what I wanted to hear. Yeah. So it’s about the process that we- Yeah … all went through, and that’s… Yeah. Okay. That’s fair. Any other deliberation on this one? Well, I will say, I will be voting no on the waste override because I don’t think that that is the best funding mechanism for the trash contract on this one.

2:06:37 That’s fine. Yeah. So that’s- And my opinion is that I’m not passionate about it being in either spot, and let taxpayers decide. So I will be making a recommendation in favor, but you can vote against it. So public comment? Thank you. I just think Molly helped clarify that

2:06:58 for me. Okay. Jack Attridge, 67 Beach Street. So each tier comes with more money that gets added to the general fund, which will come with appropriations under each tier, which I believe will be in appendices to the motion, which I believe is something that you need to recommend on- Up to … before it is appropriated. Yeah. So the up to amount would be the max amount. No. So if we go to the polls and vote in tier two or vote in any of the three tiers, I believe there’s going to be an appendices at town meeting that’s going to say that the money is allocated and appropriated

2:07:45 to certain departments as if it were in our regular budget. In future years? In next- Next year. Just for one fiscal year. So there’ll be appropriations connected to the override. So our recommendation will be, the recommendation I’m going to make to be voted upon, I don’t know what everybody else is going to vote. Yeah. But to recommend the passing of Article 29, appropriation of expenses of several departments up to the maximum amount in year oneAs summarized at town meeting in the motion. Something like that. Great. Yeah. And I don’t think we need to go three separate votes and separate appropriations. It’s just up to the max amount. Right. I don’t think any department in that first-year appropriation, as the

2:08:34 tiers go up, I don’t think any department goes down as they move up the tiers. Right. So if we make a recommendation up to as presented at town meeting, then we will cover the maximum. That’s our recommendation. So, that’s the way I thought about it, but I’m also- There’ll be- … learning this on the fly how the motion’s going to look Yeah, there’ll be a specific appropriation schedule- Yeah … for each tier. For just year one, though, right? For just year one. So I just don’t know how you break that down to make sure that we’re all- I’ll figure out how to be clear in the FinCom handbook- Right … regardless of how we vote tonight, but I hope my intention on how I’m trying to vote tonight is clear to the FinCom. How can we avoid being bit in the rear end? Because say if we don’t vote it the right way,

2:09:21 it goes to ballot and then somebody raises a bruja on, brings a legal action or something. No, legal will make sure that it’s correct. Okay. So we’ll be reviewed by counsel. Legal is writing the question. So we’re not the ones being- No. So as- I think there’s a meeting between Jack, Alicia- Yeah … and everyone from the state I work close with Alex, so I’ve been sharing all my documentation with Alex. So I’m just meaning our legal to just give us the final. And our legal works with the state folks to clarify the proper structure of the language. So there’s a lot of due diligence that’s happening as to how exactly it needs to be written. So are we not going to use the 4.3 million number that’s currently been worked up? Once I know what the motion is, because I need to meet with legal, I will forward

2:10:07 that to Al Kamali. But I have- Yeah, I’m going to vote tonight with the $4.3 million number. Right? Up to 4.3 million. Yes. Up to 4.3 million. Appropriated up to 4.3 million in year one- Yep … as allocated and presented in the motion at town meeting. Yep.

2:10:26 That’s the motion I’m going to make in a minute here, unless we have further deliberations. And that’s the tier three number, right? Yes. Up to that. That’s why it’s up to. Yeah, up to. Gotcha.

2:10:39 All right. Any other discussion on the override article?

2:10:46 So let me find the number for the trash. I’ll do that first. I do think we should recommend those a little bit separately somehow. Yeah.

2:10:54 So I’d like to make a motion that a curbside collection cost of 2,186,516 be raised through a proposition 2.5% override, as opposed to the user fee it’s funded with in the balanced budget today.

2:11:18 That sound right? Awesome. Yeah. Yeah. Mm-hmm. I’ll second it. Mr. O’Neill? Yes. Mr. Franklin? Yes. Ms. Teets? No. Mr. Golsby? Yes. Mr. Franklin? Yes. Mr. Garcia? Yes. Mr. Scheffler? No. Ms. Dube?

2:11:42 Ms. Dube isn’t here. Okay. Well, we- Oh, sorry. She’s got her hand raised to talk.

2:11:52 Okay. Lindsay has her hand raised. Yeah, she can speak. Yeah. Yes.

2:11:59 Lindsay? Can you hear me? Now I can, yeah. Now I can. Yes. Okay. Great. All right. So six in favor. Seven in favor. Seven. Two against. Two. So that passes our recommendation vote, but I will make sure that I’m letting everybody know about our votes and how they went in the FinCom report. So on my second motion, I’d like to make a motion that the override request related to the town and school operating budgets, not related to the curbside collection fee,

2:12:39 the multi-year, three-year override, would like to make a recommendation in favor and to appropriate up to $4.3 million in year one, as summarized and allocated in the motion to be presented at town meeting. Second. Second. Mr. O’Neill? Yes. Mr. Franklin? Yes. Ms. Teets? Yes. Mr. Golsby? Yes. Mr. Franklin? Yes. Mr. Garcia? Yes. Mr. Scheffler? Yes. Ms. Dube? Yes.

2:13:20 Okay. So that’s the override. Thank you very much. I think we still have more work to do to figure out how to perfectly present it, but I think it’s a very challenging thing that’s clear to me, at least, so . All right. Are you ladies here to present an article? Because I probably should’ve asked that an hour ago.

2:13:46 It’s beneath you all. Well, now you don’t have to go to town meeting and listen to that article. You are very philosophical. It’s article 40. Thank you. Hello. Okay. It’s article 40.

2:14:01 King and I were looking at how things are going in town, how angry everybody is at everybody else, and how split. Maybe you don’t see that, but it feels like, well, because of various different things- Sure … that we thought it would really be nice for the town to celebrate the 250th anniversary of our country by asserting that we support the ConstitutionIt’s a simple, I think you have it before you, a bunch of whereases which basically say that we resolve that we as a town, we have the pledge of allegiance at the beginning of every town meeting, and that we support the Constitution. Nothing really controversial at all.

2:14:49 So, that’s the way we created it in order to make it palatable for everybody and bring everybody together with a big rah-rah. And I did want to just say one more thing because there’s going to be a lot of celebration of battles because of the revolution, but the foundation of our belief in the welfare of all and the equality of all, as stated in our Constitution, is something that was a result of the Declaration of Independence of 1776 and the Massachusetts Constitution. And of course, the US Constitution happened in ‘86, much later. But still, that

2:15:34 Declaration of Independence had in it the Constitution for us all to support and believe in. So, okay. And just to add, I was born in the Midwest, but my ancestors actually were whipples and potters that came over, I don’t know, Mayflower or something. They got married in Ipswich, so I’m back where I belong, where I came from, and I love those here. And I just am fascinated. I read a book about the Revolutionary War period and Essex County that someone recommended to me, and it just reminded me of how vibrant this part of

2:16:20 the

2:16:23 States was at that point. It was a hotbed of activity. It has population, the most educated group of people in the colonies, and just reading about all the towns that we now drive through every day and what Marblehead did, different people. And Dolliver, someone corrected the spelling of Dolliver, and I said, “Well, the Dolliver that lived in the 1700s was spelled with two Ls,” so go figure. But to have names like Alger or Gerry, Manley, and Orne, and gee, my daughter went to school with an Orne, and to think generations of people. Then what a curio in the spirit of ‘76, and

2:17:09 Washington crossing the Delaware with General Glover. There’s just so much history here. It’s just wonderful to remember all of that and appreciate it and think about what these people fought for, these basic rights. They wanted a better world, a fairer and better way of governing. And that’s what we want, too. We want to reinforce that. So I hope you all support the article at the very end of the night. I hope you stay. We’ll be there. We will be there. Not allowed to leave. Right here.

2:17:52 Yeah. Anything else? No. Thank you for the… Yeah, I’m going to read this. We have 500 to give out. The League of Women Voters- Oh, wow … is going to help us give it out. You should help print our Fin Comm reports.

2:18:07 But yeah, we will not make a recommendation on this article because doesn’t seem like- There’s no financial implications … there’s financial implications, but we’ll be there to vote on it, so. Thank you. Thanks so much. Thank you for waiting. This was so impressive. I’m exhausted. Sorry. Your brain worked so hard. Thank you. Thank you. Oh, thank you. It’s interesting to me that there was some confusion among you about voting on the tiers. I thought, “Oh, boy, that’s going to…” And we haven’t even talked about this. We’ll get there. I hope so, because I wouldn’t have voted at all. I don’t think there’s- Pull it forward … a lot of confusion about the tiers. The question is what our recommendation as Finance Committee

2:18:54 is relative to town meeting based on the article, the warrant article. So that’s the question. To me, the discussion about what you have to vote for. Do you vote if you wanted tier three, do you have to vote for one and two as well? And what does it mean if you don’t? I think that’s going to be challenging. Well, we’ve got to- Well, yeah … ask the town meeting to figure that out. We just need to- Nice to see you … we need to get past town meeting, right? Thank you so much. My pleasure. Thank you. Thank you. And then, Dave, are you here to present one, too? Oh, okay. I didn’t know. I got worried because you were behind that pole, and I took the ladies first there.

2:19:41 So you mentioned you were going to invite some others to the non-financial ones towards the back, but- There’s only one missing. Okay. From the finance account. Okay. I know. It’s on our list. True, a few of them we’re pausing on it. I was going to speak to some of those, but- Okay. So yeah. All right. So two quick ones, Article 31. So that was the one we followed up on related to- Administrative … financial impact of the administrative amendment, and at one point, there was discussion at last warrant hearing about not even bringing that forward. So is that going to be brought forward at town meeting? Yes. Select Board has voted to bring that forward. There’s a very minimal impact. It’s 12,000. Their benefits haven’t been updated in over 20 years, so with it being such a

2:20:28 minimal impact of 12,000 for morale for them, and the three personal days have no cost We thought that that was worth it. So it’s the three personal days for benefits- Yeah, from before earlier … to go with all of that, that haven’t been updated for two decades. Correct. And then there’s a little bit of cost through stipends or something? A longevity. Longevity, that’s right. Yep, went up by 750 each level. Or for a limited number of administrative positions. Correct. Yeah. And the vacation. All right. So we’re not adjusting the budget. No. It’s nominal in terms of a $100 million budget. It’ll be funded through other lines or the FinCom reserve- Correct … if needed. If needed, yes.

2:21:14 Yeah. So we discussed indefinite postponement. We’re not doing indefinite- Well- … postponement on this now. Correct. Well, so the sponsor’s not indefinitely postponing it. Right. So they’re bringing it forward, and we have to make a recommendation. Oh, that was- That was the select board … that was my note from last time. Right. So the select board had- Because the- … indefinitely postponed it, and then once I got the cost- Got it … analysis, they revoted it to bring it forward. Yeah. Any questions? I’d like to make a motion to… Just got to read the article, sorry. Hang on.

2:21:46 Amends Chapter 43 of the bylaw. To recommend that Article 31 be adopted. Second. Mr. O’Neil. Yes. Mr. Jenker. Yes. Ms. Teets. Yes. Mr. Golsby. Yes. Mr. Franklin. Yes. Mr. Garcia. Yes. Mr. Schoffner. Yes. All right. And then- Ms. Dubie … last but not least, so art- I’m sorry, Ms. Dubie. Oh. Ms. Dubie. Oh. Yes. Thank you. All right. Last but not least, Article 39. There was a follow-up question. So this article,

2:22:21 to repeal Article 34 as passed by 2024 town meeting establishing, thereby eliminating, disbanding, and defunding said department and all offices, positions, and associates. So- This would have a financial impact … it’s clear there’s a financial impact of this. And from my perspective, the balanced budget that we’re recommending only includes two of the five employees that are currently in that department, and those two employees existed prior to this department being created. That’s correct. So I think the question is whether this article, I don’t know what the intent of it was, but it reads as if all five of those positions would be eliminated. That’s correct. And I do not support eliminating the town planner, so I

2:23:08 will recommend against this article. I don’t remember what the legal opinion question was. Was it that? Is it, last time we had- Yeah … one like this, it was advisory only? This is not advisory. Okay. So this would actually reverse the vote that the town- Yeah … had voted for that department. Right. Okay. Right. But does it also eliminate the two positions that aren’t- That’s correct … already eliminated? The way it’s written, yes. It would eliminate the current- That’s not advisory, it would- That’s not advisory. Okay. Correct. Okay. Okay. Because he has language that says defunding said department. Yeah. So any discussion on this? Three of the five have already been cut from the budget we’re recommending. So… But I don’t think we should go without a town planner, personally. But they wouldn’t be reinstituted either with an override.

2:23:56 What’s that? Yeah, only one of them is being reinstituted with an override. Right, so the plan, right, since they’re already there, the three are in the override. Those other two aren’t in the override. So if this did come to pass, you’d lose those two, because there’s no- The override would- … to bring those two people back. Gotcha. Okay. Could you say that last part one more? This was the plan that I was- Yes … seeing in my head. So in the override scenarios- Right … there are three cut. Right. Those are the three. The other two that are in the budget currently, if this was to pass and all five were to go, there’s nowhere, if an override did pass, for those two, because they weren’t included. So we wouldn’t bring them back, you’re saying? We wouldn’t have any money to bring them back. They weren’t included, because they’re funded as part of the budget. Okay. So if this passed after, then those will remove. Right. They remove, even if you pass an override, it wouldn’t fund them.

2:24:45 All right. Any other questions? I’d like to make a recommendation to indefinitely postpone. Is that how we do it? Oh, no. We recommend- Recommend- … against … against Article 39. Second. And the vote is no or yes, if we agree with that. Do we vote yes, that we are not recommending it? Not recommend. Recommend against it. Good question. Yeah. Oh, I first have to- Yeah. Yes- … yes on my motion. So a yes is you support my motion. So a motion to recommend nous- Well, you could construct it two different ways. You make the motion whether to support, and if you’re against it, you vote no, no, no, no, no. Oh. Versus what you have is a negative question in order to get a positive yes to support the negative question.

2:25:30 What would you recommend we do? You- Do you support the article? No. No. No. I think that’s your question. So I say no. That’s the question. Do you support it? So I think we need to restate your recommendation. Yeah. Your- Do you want to support article- And then if you oppose this, you would vote no. Okay. Yeah, you need to restate. I’d like to make a motion… Wait, how do you want me to say it? You say recommend. You say- We recommend, and then we vote no. Okay. Oh, wait, but then if he makes the motion, then doesn’t he have to vote yes? No. No. Okay. Oh, he doesn’t. Okay. All right. I’d like to make a motion to recommend Article 39.

2:26:05 Now take the vote. Okay. Second. Could you say, are you- I’ll second it, yeah. Okay. Mr. O’Neil. No. Mr. Jenker. Uh.

2:26:15 No is against it. No is against the article. Yes. Ms. Teets. No. Mr. Golsby. No. Mr. Franklin. No. Mr. Garcia. No. Mr. Schoffner. No. Ms. Dubie. No. She followedAll right. Let’s leave the MOU now, right? Okay. Yeah, I was going to say, don’t we? Yeah. All right, so the MOU. That’s the warrant article bullet point for the agenda. Can you give us a brief overview of the MOU? Yeah. Sure. So I’ll be signing this MOU once it’s finalized. I think it’s close to being finalized. Yeah. We have the final numbers. Final whatever.

2:27:02 So, and can I also give just the reason we’re taking a vote? So the school committee will be signing it, the select board, the chair of the school committee, the chair of the select board, and then the chair of the FinCom, both of the other bodies took a full vote of whether or not to support it. So that’s why we’re doing that here. Yeah. So it would be an agreement amongst the three boards to make a commitment. So, I

2:27:32 think the reason for the MOU, and there was discussion earlier, confusion, we’re asking the voters to raise the levy, authorize raising the levy to whatever amounts it ends up being. And so, with a three-year schedule, right, the scenario takes care of three years. So the question is, how do we control the commitment of how much of that increased levy we’re going to draw from in each of the three years? And so the concern would be, I’m going to use tier one. Right? Authorize, it could be nine million. Why wouldn’t it say that the boys just raise the nine million and

2:28:21 run with the money and bank it? And that was the concern. So the idea is between the three

2:28:30 boards primarily responsible for funding the vast majority of the budget, that there be a commitment to each other and to the community that over the next three years, if you authorize us the additional levy capacity, we commit that we will only utilize a certain amount in year one, a certain amount in year two, and a certain amount in year three. And in further detail, how much is being allocated to the town side, how much is allocated to the school budget in order to be consistent on all the work with the ratio between the two. So all the work you’ve all been doing as far as the calculations and figuring it

2:29:18 out, that the numbers are calculated to achieve both. A commitment of how much we draw each year and how is that split between the two major bodies. And then there’s a section that references insurance benefits and the assumption that’s gone into this three-tiered, three multi-year override is that the health insurance will grow at 6% in ‘28 and ‘29. And that’s actually below the five-year average that I talked about earlier. I think when I did the five-year average, including the most recent GIC, it was about 7%, but we know it’s been skewed very high the last two years. The reason for that section of the MOU is my understanding is that, let’s say that number

2:30:06 actually comes in in ‘29 at 3%. That delta, I believe, will be put into stabilization rather than just to be creating a new position, for example. So there’s a memorandum of understanding, and it’s pretty detailed, that sort of dictates the process quarterly or maybe to meet quarterly, I think it is. Yeah. Quarterly. And sort of publicly meet and discuss everything that’s outlined in that MOU and talk with Alicia about where we think healthcare is going to come in if we do this at this time next year or maybe last quarter of next year. And it kind of puts some controls over the drawdown of that money and that the town’s not just saying it’s going to do this and then change course. Right?

2:30:55 Right. And the understanding between the three boards and committees is that whoever’s in the seat to do it is committed to meet quarterly and follow the guidance of the memorandum effectively. And if health insurance comes in above 6%, then we won’t be taking down more from the overhead. Like it is set. Yeah. Right? There will be cuts made. We’ll have to adjust in other areas. Right. The commitment’s not to be back if this passes, at least until- Yep. 23, I think it said. 23. And there are reporting requirements by the town administrator, the state of town, and the superintendent of schools, so there’s some public reporting out as to the progress on this.

2:31:40 By definition, memorandum of understanding is not binding, right? It is a public commitment by each of the boards. You’re voting to support it. So you’re doing it publicly, so there’s that. Additionally, and the real control is, town meeting is the appropriating body. They’re the ones that are going to hold you all accountable, because if you say, “We’re only going to use X millions of dollars to build the budget,” and you’ve made a public commitment to it, and if you don’t adhere to that, town meeting will have the power, like, “No, this is what you said you were going to utilize. We are not going to vote a budget above

2:32:27 the commitments you’ve made.” So I think the public at large has some level of just public embarrassment. You didn’t follow your agreement. It’s town meeting that has the actual legislative power to enforce this to what you’re committing to. And these are elected positions- Yeah, you’re voting on them … voted on the select board and- Yeah … in full committee. So I would guess that they would not be reelected when their seat came up too. Right. So basically, it’s like a put up or pay up thing. Yeah. Not us. Yeah, they’re stuck with us regardless. I can sign it- … and just go against it tomorrow. Community promise. It’s a community promise. I’ll be the secret. Yeah.

2:33:10 All right. So it’s a commitment attached to if the override passes, that we’re going to do things the way we say we’re going to do them, and we’re going to meet regularly to make sure that’s happening, and work with one another effectively. Yeah. And this is based on similar agreements from other towns that have gone through override process as well. Do you want us to vote to support you- Yeah … in supporting this? This isn’t like a recommendation to town meeting. The MOU is not being voted on at town meeting, but I will make a motion to support the MOU, in that I will be signing it, and ask the FinCom whether or not you support me signing it. Yes would be yes, and no would be no. Thank you. To authorize the chair to sign on behalf of the FinCom.

2:33:57 There you go. Oh, there we go. That sounds better. Yeah. Second. It’s 10 o’clock. You asked me to come to two meetings tonight, so. We do this all the time, Noah. Authorize the chair- I don’t follow the rules, I just look at the numbers. That’s it. Mr. Gingrich. Yes. Mr. Gingrich. Yes. Ms. Teague. Yes. Mr. Kolsky. Yes. Mr. Franklin. Yes. Mr. Garcia. Yes. Mr. Shohmire. Yes. Ms. Stuby. Yes.

2:34:22 Meeting adjourned. Thank you very much. FinCom. Oh.

2:34:32 I got it. Thank you. Thank you for coming. Thank you. Thanks for sending it. Thank you, Lucia