First "draft" budget for FY2025 includes 8% increase in town payroll expenses, budgets about $1.3 million less for NRSD than NRSD is budgeting from us

 

On Friday, town hall released the first public draft of the "Town of Lancaster FY25 Budget".   It includes an 8% hike in town payroll expenses, and a few mysteries.   Right now there's a $1.3 million gap between what this budget allocates for the Nashoba school district,  and what the school district said they'd assess Lancaster in their budget presentation last week.

The town released the first draft of it's FY2025 budget on Friday, you can grab a copy here:

Town of Lancaster FY25 Budget

The one I'm looking at is "budget_master_draft_2025r4a.pdf" last edited on 1/25 at 2:31PM -- I imagine it will be updated as time passes.

The Select Board and Finance Committee have set a meeting to look it over on Monday at 6PM.


"Budget Summary"

The summary budget shows we had a "surplus" in the operating budget of $156,454 for FY2024, which looks a little weird.   Lancaster levied the legal limit for FY2024, even after the override. (We reported $7,216 in available levy capacity under the limit for FY2024).    When the tax rate is calculated an additional amount is added to allow for "Abatements and Exemptions."  Our "Budget Summary" doesn't have a line item for that, but I think that transfer to the tax overlay scooped up this excess for FY24.

The town will need to count its pennies in FY25 to keep its levy under the proposition 2 1/2 levy limit.  The towns levy limit for FY2024 was $24,056,507.   For FY2025, that automatically increases by 2.5% plus some amount of certified "new growth."    The town seems to have estimated $200,000 for new growth this year.

        $24,056,507 * 2.5% = $24,657,919.68 + $200,000 = $24,857,919.68

So the town can increase it's levy by about $800,000 for FY2025.   The town voted to exclude the new highschool debt from Proposition 2 1/2, so our debt assessments shouldn't count toward that.

 

 This new budget includes an 8% increase to non-school personal services, and 5% decrease to non-school expenses.  That will combine for a 3.52% increase.  The town will add about $230k in new costs for operations in that section of the budget.

Reclassification of a lot of town employees

The town expects to save about $209K on "Risk Management", in savings on "Group Health Insurance" and contributions to Worcester County Retirement.    That seems to be coming from defining "full time" employee as "those who worked between 38-40 hours a week" (page 27).

 The chart on page 28 show Full-Time Equivalent employees decreasing by 25%,  from somewhere around 80 to 60.

                    

 Large Gap Between the School Districts Proposed Assessment, and this Budget

The Nashoba Regional School District  budget presentation earlier in the month showed this slide:it appeared to show that in FY2024 Lancaster's assessment was $15,285,485 and they proposed an increase to $17,296,801 this year.  This is slide 75.



$891,369 of that assessment is "Capital Debt Assessment" and should not count towards our levy limit.

This draft Lancaster FY25 budget only allocates $15,921,894 for the Nashoba district -- $1.3 million less than Nashoba showed in that presentation.   It's typical for the NRSD to reduce the budget they share in January, but maybe not as much as this draft budget might indicate.

Residents should demand transparency this spring and ask to see full "Actual" FY2023 expense figures before approving an FY2025 budget

Some of the department detail sheets in the "FY2025 Budget" include a column for "Actual" FY2023 expenses. 


After approving the FY2024 budget last May (and a $1.2 million override) it came to light that there were relatively large surpluses among the FY2023 actual expenditures. 




Those FY23 surpluses would impact "Free Cash" this year once the towns balance sheet was reviewed.  Lancaster has not had its free cash certified this year.   (Bolton, Stow and Sterling had their free cash certified before October.) 

Lancaster also should request an update on how ARPA funds have been used and what balance is available. 

Residents certainly have the right to insist that any excess beyond what's needed to stabilize the budget be returned to taxpayers, by using those funds towards the next budget.