Today’s Fig City News published these two overviews of the upcoming override votes by Bruce Henderson
The proposed override & debt exclusions:What will they provide?
The proposed override & debt exclusions: What’s the impact on taxes?
Fig City News’ override primers
by Jerry Reilly | Mar 1, 2023 | Newton | 14 comments
This is great work by Bruce and the Fig City News team. Thanks!
One thing that the “impact on taxes” article points out is that the debt exclusion override items remain constant over time (except for a short phase-in period). It’s like a fixed-rate mortgage: your monthly payments don’t go up. They may change a little from year to year because of the relative value of different properties, but the cost of the construction bonds remains fixed from year to year across the whole tax base. No compounding interest, and no permanent increase in the city’s tax levy limit.
That also means that as more development comes on line, the cost of the debt exclusion construction bonds is spread across more properties and more taxpayers. The financial impact of the bonds on each taxpayer (the actual cost in dollars) will actually decrease.
For something like $140 per year per million dollars of 2023 assessed property value, we can fix Franklin and Countryside. And that amount essentially never goes up over the life of the bond.
Some initial thoughts
*the Operating Override was initially stated to still leave the schools with a $2-4M gap. Without it a $6-8M gap. Now with some further budgeting the gap would be less than $2M with override and around $6M without override – this leaves me to wonder how they were able to get to the new lower figures…what drove that change? Is there something they were predicting that has changed? Then the second question is if there is still a significant gap if the override is approved, why didn’t the Mayor’s override ask for more? Is it that there was no attempt to dig deep enough when the override questions had yo be created? If so why not?
*The Senior Center a 57% increase in their budget. One of the bullet items is to “Potentially increasing weekly hours from 22 at Senior Center to 55 at NewCAL”. You would think if you were building a new a senior center that you would have already factored in longer operating hours. Let’s also hope as they talk about increasing programming that the are considering what the Seniors want not just what they perceive they want.
*The Debt exclusions make sense to me. So many of our schools are in poor shape. It allows partial state reimbursement. This is a lot more concrete investment of funds. There is better city and state oversight to school building projects. Josh Morse the City’s Commissioner of Public Buildings does an excellent job. He is a straight shooter and seems to manage projects in a transparent and methodical manner. When he did the HVAC school project he did not just share top level information, he also put the detail out there so if anyone wanted to review it they could.
Newton Highlands Mom, good thoughts again.
I think the amount of the schools budget increase is both an educational and a political calculation.
* There is a “no regardless” base of voters, which includes “the schools get too much money” voters..
* Then there are “this isn’t a good time” voters.
* Then there are voters motivated by the impact on fixed income and low income households.
*Then there are people who need a reasonable explanation and number.
* Finally, on the other side, there are “you aren’t funding the schools enough” voters, combined with the “you aren’t funding the schools enough, I will vote against the override” voters.
Given that the economy doesn’t favor an “over-ask”, I trust the Mayor’s political sense combined with her assessment of low- and fixed-income residents to set a palatable number.
On the Senior Center, I heard the discussion in several planning meetings that staffing would be an issue to get value from the Center, and one not covered under any construction bonds. It’s as as basic as providing staffing to keep the building open reasonable hours, all the way up to more specialized services. I appreciate the follow up to make it happen.
I also appreciate that NewMo funding is in there. NewMo, as Lisa Gordon mentioned in an email I saw, is the transportation component that makes the Senior Center available to every older resident in Newton. Without it, it becomes a more exclusive club. NewMo does more than that, but it’s an essential component of our services to older residents.
And yes, I agree that Josh Morse brings credibility to every project. That he is both highly competent and has the time to explain things in great detail and with respect is a credit to him and the city. The debt exclusion override items are tied directly to school projects that almost everyone admits we need, even if none of us are especially excited about having to pay for (including all the schools after Franklin and Countryside).
@NewtonHighlandsMom, regarding “how they [NPS] were able to get to the new lower figures…what drove that change?”: In my two interviews with the Interim Superintendent, she said that…
– The two preliminary budgets she presented to the School Committee in January were prepared in a short time-frame — about two months earlier than usual — because the School Committee asked for an early understanding of the budget situation.
– Since then, NPS has had more time for more careful budgeting, and also with this elapsed time, it has more certain knowledge of how expenses are looking for this year.
I guess we’ll learn more at tonight’s School Committee meeting, when she is scheduled to provide an update.
I don’t use NewMo a lot, but when I do I see it benefiting a wide variety of people. Every time I’ve taken it in late afternoon, a school kid has shared the ride with me – I think it’s great that it’s giving kids flexibility to stay after school without worrying how to get home afterwards. As someone who lives alone and has an older car, it means that I have an affordable way to get home after dropping my car off at the mechanic. The service is clearly getting a lot of use, as shown by the wait times. I wish it had been around when my son was a teen.
And I third the comments about Josh Morse. Our city is very fortunate to have him.
Newmo has been great for my family. Old and young.
Why does Newton need its own exclusive and subsidized ride share service? I was happy offering and subsidizing the service for seniors. Let parents chauffer their children around town. Or let them call an Uber.
Biased trash
This, along with Amy’s piece on structural deficits, is really helpful. Thanks to the Fig folks for digging in and pulling all of this information together for the community!
Since people were discussing the Senior Center in this thread, I thought I would ask folks if they’ve been to the new Y facility on Wells Ave? Wow! An impressive building which in my mind begs the question why do we need a gym and and an indoor track in the new Senior Center? Talk about a waste of money.
The New Y has a great indoor track and a great gym-four basketball courts. The Y in Newton Corner has a good indoor track and basketball courts. Couldn’t we have just given subsidized memberships to the Y or JCC or other groups and saved millions of dollars on a gym and indoor track that we don’t really need.
And speaking of funding so the new Senior Center can be open. Newton North right down the street has an indoor track and gym and that facility is sitting empty when the school isn’t using it. Spend a few dollars on employees to open up that facility and again we wouldn’t need to waste millions on the Senior Center.
Arthur, it isn’t funding for the new senior center to be opened. It is providing funding for full staffing to take advantage of everything a new building can bring. Classes. Later hours. etc. Far more than just a track and gym.
If you cobble together various resources from around the city do you get the same thing, most often for a fee? Yep. I thought having the Y host our senior center was a viable option, but I’ve been convinced otherwise, even if I’m not a fan of the location.
But even if I’m not the biggest fan of the new senior center, eliminating it doesn’t save as much as you think on an annual basis, and we are still left with a really crappy senior center.
At this point, I just want it not to be half done. If you are going to build a new one, make it as usable as possible, as open as possible, as valuable to the community as possible.
Other communities have very active senior centers in much smaller communities, so it is certainly possible.
In today’s electronic Chamber newsletter mention is made of an article in the Newton Beacon about a little known $27 million overlay fund. Possibly this fund and or other options can be used to avoid the Operational Override.
Plenty of good reasons to vote NO.
The property tax overlay fund, which I didn’t know about either, backs up property taxes that have abatements or are otherwise contested.
Here it is how the money was explained to me.
The fund acts a little like an escrow account. It’s artificially large because of the Eversource settlement. Eversource was charged by multiple municipalities with undervaluing their properties (substations, etc). The case is still pending. I understand it was won and Eversource paid with interest, but they haven’t dropped their appeals. If Eversource wins on appeal, the city will have to pay something like $8M+ 8% annual interest. That money is being held in the overlay fund as an insurance policy to prevent a win on appeal from blowing out the city budget.
This stuff is way beyond my expertise, so I’m going to trust the city. Given the political temptation to spend all available money, the fact that the city is holding back money suggests to me there’s a good reason for it.
See more here: https://www.newtonma.gov/government/mayor-fuller/override and search for “overlay”
@Peter Karg – This is the first I’ve heard of the “Overlay Fund”. Here’s what the city’s web site says about it ….
Cities and towns must maintain an account to fund anticipated property tax abatement, exemption and receivable exposure for all fiscal years. This is referred to as the “Overlay” account. As part of the annual budget and tax rate process, the Board of Assessors must analyze the balance in the overlay account and determine whether it is adequate to fund anticipated property tax abatements, exemptions and receivables during the upcoming fiscal year in addition to existing abatement, exemption and receivable exposure for all previous fiscal years, including all tax relief and tax deferral programs.
As a general rule, each year the City of Newton sets aside approximately one percent (1%) of the property tax levy for this reserve.
Currently, the City’s Overlay account has a higher balance because of higher than usual potential tax abatements.
More specifically, Eversource has been appealing their assessed value from the City of Newton (as well as Boston, Brookline, Cambridge and Springfield) since FY2012. Eversource has lost cases with Boston and Springfield but had continued to withhold payment and appeal to higher courts. The Board of Assessors have set aside a cumulative amount of $8 million over the last decade for a potential tax abatement, depending on the outcome of the appeal. However, last spring the City received full payment of the principal and interest for Fiscal Years 2013 through 2022 from Eversource totaling approximately $12.7M. As the City already had set aside $8 million in the Overlay fund, $8M of the $12.7M was transferred to Free Cash and is available for investments. The remaining $4.7M from the Eversource payment (as well as the $8M already accumulated in the Overlay Fund) remain until the appeal process is resolved. (The City has kept the $4.7M to pay the interest to Eversource if the appeal is resolved in their favor.)
In other words, Eversource has not withdrawn their appeals against the City of Newton. Therefore, their case continues to move forward. Should Eversource prevail, the City of Newton will be responsible for returning all payments in this case plus interest at the rate of 8% per annum beginning on the date of receipt of their payment. Therefore, the full amount of the Eversource funds in question (now estimated at $14.7 million) must be treated as a liability for the City and must remain reserved in the Overlay account until the appeal is adjudicated.