The budget Lancaster will vote on tommorow night projects another override request in two years.

 

If you're asked to support another override in May, 2028 -- what will you do?   It's projected in the budget book that we'll refer to tomorrow night.

The budget Lancaster will vote on tomorrow night (Monday at 7PM at Mary Rowlandson elementary) projects that Lancaster will be unable to support current spending in two years:  we'll either need to "drastically cut services" or approve the second Levy Limit Override in five years.

 The same budget would increase town staff -- already up  50% in 12 years through last year -- with four new hires and expanded hours for another position.   This will add another $240K in recurring expenses.    It asks the town to increase the budget for municipal services by 12% next year.

The old adage goes: "if you find yourself in a hole, first: stop digging."    We're in an increasingly deep hole at the moment.

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The brevity of text messages sometimes makes  them especially apt: 

 "They're celebrating that we're not 'one of the many towns asking for an override this year.'  Did they forget that we JUST APPROVED AN OVER RIDE?"   

"They're projecting another override in TWO YEARS.    We didn't "avoid an over ride", we didn't even make it to this year?    Am I the crazy one?" 

No you're not crazy.    This year's budget book is the first in my memory to include a five year projection of future budgets.      The numbers are not pretty:  this year we'll use free cash to balance the operating budget.  Without that the levy would exceed the current limit.

For the subsequent years budget (July 2027 through June 2028) we'll dig even deeper into town reserves to balance the budget.   From page 30 of the budget book:

 This year's omnibus budget request for "Municipal Services" will be a 12% increase over the prior year.    If the school district had requested an increase like that, we'd be devastated.

For the FY2029 budget, the projection is a budget that we can't support.   Even projecting especially modest growth in school and municipal budgets that year, we will need to take drastic action.   From the narrative on page 23 of the FY27 budget book:

"At that point, the choices facing the town will be whether to drastically cut services provided by the Town...or implement a Proposition 2 1/2 override to maintain the full gamut of services.

At the May, 2023 town meeting we voted to send a $1.2 million dollar levy limit override to a ballot vote.   (It was approved there, 649-536)    If you were there, you may well remember being told that "...we've been balancing the budget with free cash" and it's unsustainable.   We were told that using "one-time funds for recurring expenses" would be disastrous.   Tommorow night, some of those same voices will urge to to use our reserves to balance the operating budget.

The state explicitly recommends against using free cash to balance the operating budget:

"As a nonrecurring revenue source, free cash should be restricted to paying one-time expenditures, funding capital projects, or replenishing other reserves. We do not recommend that free cash be budgeted for ongoing operational purposes.  

DLS recommends that communities adopt robust free cash policies that address uses of free cash, including what percentage of free cash should be carried forward to the next annual certification, budgeting for the creation of free cash using conservative revenue and expenditure estimates, annual pay-go capital project uses, and reserve funding policies. 

Further, DLS recommends that communities understand the role free cash plays in sustaining a strong credit rating and strive to generate free cash in an amount equal to five to seven percent of its annual budget."

I had a friend in college who ran his budget this way -- if he could close the year without immediate financial ruin, he was satisfied.  It didn't matter how many cash advances it took, or how many balloon payments were just around the corner.

Unlike my friend, we have more on the line than ourselves though:  the FY2029 budget process would be extremely stressful for town employees.  None of them want to find themselves part of a "drastic cut"  -- but will Lancaster approve two large overrides in five years?   In addition to the debt we've taken on to build a new high school?

Despite the gloomy forecast, the budget for next year adds four new staff positions and increases the hours for a fifth.     Lancaster reports it's "Full Time Equivalent" employee count to DLS each year; we've increased our FTE count by 50% in 12 years through FY2025.

When you attend town meeting in May, 2028 you'll be told that Lancaster needs to approve another Levy Limit override and has few options.    As in 2023 you'll be told that the decision was really made "in the past" and nothing can be done now.

Tomorrow night you'll be in that "past" -- still in a position to change the future.   

What will you do?