Templeton selectmen should read up on this:
Debt and Borrowing Limits
Bill Arrigal - Bureau of Accounts Public Finance Section and Susan Whouley - Bureau of Accounts Analyst
The sky is not the limit when it comes to borrowing for certain purposes for every city, town, and special purpose district in Massachusetts. In this case, it's not just a matter of affordability or restriction based on a levy limit. In this article, we're focusing on the debt authorization limit.
Background
The concept of an authorization limit can be traced as far as the mid-19th century and is discussed in Tony Rassias' "A Sketch of the History of the Massachusetts Bureau of Accounts and Related Matters in the Growth and Development of Municipal Finance."
Passage of the Municipal Indebtedness Act was an attempt to control the use and rise of debt after the Civil War. The increase in municipal debt was unbridled. A municipality was allowed to borrow in anticipation of the current fiscal year's tax revenues as well as for the next. Borrowing was allowed for ordinary operating expenses, could be incurred to meet other loans at maturity, was allowed with no limit and did not require proper provision for payment when due.
The Municipal Indebtedness Act of 1875 contained an indebtedness limit of 2.5% for cities and 3% for towns of their last preceding assessed valuation of taxable property. The current debt limit law has its roots in that legislation.
Current Debt Limit Law
MGL c. 44 sec. 10 requires that debt authorized by cities and towns under certain sections of law, primarily MGL c. 44, sec. 7, cannot be authorized in total in excess of 5% of their most recent Equalized Valuation (EQV) or in excess of 10% of the EQV if approved by the Municipal Finance Oversight Board (MFOB).
The current law also authorizes special purpose districts to incur debt. This is done by determining the percentage of the district's previous fiscal year's total assessed value as it relates to the municipality's previous fiscal year's total assessed value.
Regional school districts are not governed by MGL c. 44, sec. 10 and therefore have no debt authorization limit.
Special legislation or a specific general law, of course, could authorize a debt limit to an amount or percentage other than that allowed by MGL c. 44, sec. 10.
Debt Authorization
Cities, towns, and special purpose districts may authorize indebtedness by a two-thirds approval vote of their respective legislative bodies. Three particular general laws are most often referenced: MGL c. 44, sec. 7 (within the debt limit), MGL c. 44, sec. 8, (outside the debt limit), and MGL c. 70B (outside the debt limit for school construction). The sections of Chapter 44 provide multiple purposes for which borrowing may be authorized.
posted by Jeff Bennett
Sunday, October 2, 2016
What is a Levy?
The property tax levy is the revenue a community can raise through real and personal property taxes. We will refer to the property tax levy simply as the levy. In Massachusetts, municipal revenues to support local spending for schools, public safety and other public services are raised through the property tax levy, state aid, local receipts and other sources. The property tax levy is the largest source of revenue for most cities and towns.
What is a Levy Ceiling?
What is a Levy Limit? Proposition 21 ⁄2 places constraints on the amount of the levy raised by a city or town and on how much the levy can be increased from year to year. A levy limit is a restriction on the amount of property taxes a community can levy. Proposition 21 ⁄2 established two types of levy limits: First, a community cannot levy more than 2.5 percent of the total full and fair cash value of all taxable real and personal property in the community. In this primer we will refer to the full and fair cash value limit as the levy ceiling. Second, a community’s levy is also constrained in that it can only increase by a certain amount from year to year. We will refer to the maximum amount a community can levy in a given year as the levy limit. The levy limit will always be below, or at most, equal to the levy ceiling. The levy limit may not exceed the levy ceiling. Proposition 21 ⁄2 does provide communities with some flexibility. It is possible for a community to levy above its levy limit or its levy ceiling on a temporary basis, as well as to increase its levy limit on a permanent basis. These options are discussed in more detail in other sections of this primer. The concepts of levy ceiling and levy limit are illustrated in Figure
How is a Levy Ceiling Calculated?
The levy ceiling is determined by calculating 2.5 percent of the total full and fair cash value of taxable real and personal property in the community:
posted by Jeff Bennett
The property tax levy is the revenue a community can raise through real and personal property taxes. We will refer to the property tax levy simply as the levy. In Massachusetts, municipal revenues to support local spending for schools, public safety and other public services are raised through the property tax levy, state aid, local receipts and other sources. The property tax levy is the largest source of revenue for most cities and towns.
What is a Levy Ceiling?
What is a Levy Limit? Proposition 21 ⁄2 places constraints on the amount of the levy raised by a city or town and on how much the levy can be increased from year to year. A levy limit is a restriction on the amount of property taxes a community can levy. Proposition 21 ⁄2 established two types of levy limits: First, a community cannot levy more than 2.5 percent of the total full and fair cash value of all taxable real and personal property in the community. In this primer we will refer to the full and fair cash value limit as the levy ceiling. Second, a community’s levy is also constrained in that it can only increase by a certain amount from year to year. We will refer to the maximum amount a community can levy in a given year as the levy limit. The levy limit will always be below, or at most, equal to the levy ceiling. The levy limit may not exceed the levy ceiling. Proposition 21 ⁄2 does provide communities with some flexibility. It is possible for a community to levy above its levy limit or its levy ceiling on a temporary basis, as well as to increase its levy limit on a permanent basis. These options are discussed in more detail in other sections of this primer. The concepts of levy ceiling and levy limit are illustrated in Figure
How is a Levy Ceiling Calculated?
The levy ceiling is determined by calculating 2.5 percent of the total full and fair cash value of taxable real and personal property in the community:
posted by Jeff Bennett
Saturday, October 1, 2016
It is Public safety damn it!!!
Phillipston school assessment goes down, Templeton stays the same, Templeton debt goes up, big. . . really big, as Papi says, Phillipston dispatch cost stays the same, Templeton dispatch costs goes up, Templeton needs to transfer more money into the council on the aging, Phillipston comes in to Templeton COA and pays nothing, as far as I know. Templeton taxpayers fund more costs for Phillipston and they pay practically nothing! Are you happy Templeton? Templeton fire department needs a pump, call them and tell them to contact the Advisory Committee for the reserve funds for this purpose. Do not let the selectmen shaft you more!
posted by Jeff Bennett
Phillipston school assessment goes down, Templeton stays the same, Templeton debt goes up, big. . . really big, as Papi says, Phillipston dispatch cost stays the same, Templeton dispatch costs goes up, Templeton needs to transfer more money into the council on the aging, Phillipston comes in to Templeton COA and pays nothing, as far as I know. Templeton taxpayers fund more costs for Phillipston and they pay practically nothing! Are you happy Templeton? Templeton fire department needs a pump, call them and tell them to contact the Advisory Committee for the reserve funds for this purpose. Do not let the selectmen shaft you more!
posted by Jeff Bennett
Town finance still not right and Templeton fire department needs your help! Call them and the selectmen to tell them to go to the Advisory Committee to request funds from the Templeton reserve fund to pay for a pump repair or replacement. 25 thousand is needed and it is public safety!!
According to Templeton Town Administrator, Templeton group insurance (health insurance) will probably need a transfer of +$50,000.00 by May 2017. Templeton unemployment insurance fund will need a transfer by May. Town building and vehicle maintenance will need five figure transfers by next May (or before). Selectmen are also taking money (actually asking you at town meeting) from many accounts to cover their shortfall as it is demonstrated their so called budget was not balanced after all. They promised more than they had to promise.
On another note, the fire department needs about 25 thousand dollars to pay for a pump repair/replacement. Call them and the selectmen and tell them to come to Advisory Committee to request a transfer from the Town reserve fund, that is what it is there for. Public safety!!!
Selectmen want to keep the reserve fund in place to cover their ill-advised spending of snow & ice money on a truck. Which is actually more gambling and credit spending, remember, deficit spending on snow & ice is allowed. Tell them to take care of public safety now and allow fire department to come to advisory committee and request funds, that is what it is there for, unforeseen and unexpected emergency funding. Public safety is at stake!!
posted by Jeff Bennett
According to Templeton Town Administrator, Templeton group insurance (health insurance) will probably need a transfer of +$50,000.00 by May 2017. Templeton unemployment insurance fund will need a transfer by May. Town building and vehicle maintenance will need five figure transfers by next May (or before). Selectmen are also taking money (actually asking you at town meeting) from many accounts to cover their shortfall as it is demonstrated their so called budget was not balanced after all. They promised more than they had to promise.
On another note, the fire department needs about 25 thousand dollars to pay for a pump repair/replacement. Call them and the selectmen and tell them to come to Advisory Committee to request a transfer from the Town reserve fund, that is what it is there for. Public safety!!!
Selectmen want to keep the reserve fund in place to cover their ill-advised spending of snow & ice money on a truck. Which is actually more gambling and credit spending, remember, deficit spending on snow & ice is allowed. Tell them to take care of public safety now and allow fire department to come to advisory committee and request funds, that is what it is there for, unforeseen and unexpected emergency funding. Public safety is at stake!!
posted by Jeff Bennett
Some more town finance for Templeton.
From the DOR; Templeton's new growth dollar figure will be $69,000.00. This is 11 thousand lower than what the selectmen voted in to present to town meeting back in May 2016. Even as the Board of Assessors were saying 65 thousand was probably a likely number. Advisory Committee recommended a dollar figure of $50,000.00. I believe it is better to get the "surprise" that you have a little bit more money coming in rather than learn you counted on more and you end up short.
At the recent meeting of Advisory, the Town Administrator informed the committee that the Town's group insurance (health insurance) fund may run out and require a transfer before the annual town meeting in May 2017. The administrator did say the time frame is a little flexible, as in it could be sooner than that. In my opinion, this shows again that Templeton selectmen need to open a can of moxie and change the health insurance approach. Put the lower cost plan on the table along with the cadillac plan now available. Then change the town / employee cost split. employees are going to have to pay more. With union contracts in place and pay adjustments in place to be more competitive or in line with other area towns, this can and should be done. Time for selectmen to think about the good of the whole town. Looking at town finances and the numbers, the system in place now cannot keep going without some changes. Back to the health insurance cost, when I was a civilian federal government employee, I had a yearly choice to pick the health insurance plan I wanted. If I wanted the cadillac plan, which I mostly chose after one year on the cheap plan, I agreed to pay more for it by choice. If town employees wish to keep the current plan, they have to pay more.
We need to take a close look at the amount of Templeton Town debt, Town median income, property valuations and a five year look back at revenue. The current interim Town Administrator stated "we budget on expense, not on revenue." Regardless of how it is done, you cannot spend more than you have or expect to have. If you spend 20 dollars every week even as you only take in 15 dollars every week, sooner or later, you are in trouble. It does not change no matter how many zeros you add in, 20 dollars or 20 million. Spend more than you have, you get in trouble.
watch the Advisory Committee meeting of September 28 to see!
posted by Jeff Bennett
From the DOR; Templeton's new growth dollar figure will be $69,000.00. This is 11 thousand lower than what the selectmen voted in to present to town meeting back in May 2016. Even as the Board of Assessors were saying 65 thousand was probably a likely number. Advisory Committee recommended a dollar figure of $50,000.00. I believe it is better to get the "surprise" that you have a little bit more money coming in rather than learn you counted on more and you end up short.
At the recent meeting of Advisory, the Town Administrator informed the committee that the Town's group insurance (health insurance) fund may run out and require a transfer before the annual town meeting in May 2017. The administrator did say the time frame is a little flexible, as in it could be sooner than that. In my opinion, this shows again that Templeton selectmen need to open a can of moxie and change the health insurance approach. Put the lower cost plan on the table along with the cadillac plan now available. Then change the town / employee cost split. employees are going to have to pay more. With union contracts in place and pay adjustments in place to be more competitive or in line with other area towns, this can and should be done. Time for selectmen to think about the good of the whole town. Looking at town finances and the numbers, the system in place now cannot keep going without some changes. Back to the health insurance cost, when I was a civilian federal government employee, I had a yearly choice to pick the health insurance plan I wanted. If I wanted the cadillac plan, which I mostly chose after one year on the cheap plan, I agreed to pay more for it by choice. If town employees wish to keep the current plan, they have to pay more.
We need to take a close look at the amount of Templeton Town debt, Town median income, property valuations and a five year look back at revenue. The current interim Town Administrator stated "we budget on expense, not on revenue." Regardless of how it is done, you cannot spend more than you have or expect to have. If you spend 20 dollars every week even as you only take in 15 dollars every week, sooner or later, you are in trouble. It does not change no matter how many zeros you add in, 20 dollars or 20 million. Spend more than you have, you get in trouble.
watch the Advisory Committee meeting of September 28 to see!
posted by Jeff Bennett
Tuesday, September 27, 2016
Templeton Town by-laws - Article IV - Advisory Committee.
Section 5. In the discharge of its duty, said committee shall have free access to all books of record and accounts, bills and vouchers on which money has been or may be paid from the town treasury. Officers, boards, and committees of the town shall, upon request, furnish said committee with facts, figures, and any other information pertaining to their several activities.
Section 6. It shall be the duty of the Advisory Committee to make an annual report of its doings, with recommendations relative to financial matters and the conduct of town business, to be contained in the annual town report.
It is the duty and responsibility of all Town departments and selectmen to provide Advisory Committee all financial documents involving public money. After the 2017 financial presentation of 2017 by the selectmen and the financial presentation to the Town by the Advisory Committee in 2014, both at the annual Town meeting, there needs to be much discussion and thorough breakdown of all financial matters involving the Town. Financial information should be readily available and easily obtained.
posted by Jeff Bennett
Section 5. In the discharge of its duty, said committee shall have free access to all books of record and accounts, bills and vouchers on which money has been or may be paid from the town treasury. Officers, boards, and committees of the town shall, upon request, furnish said committee with facts, figures, and any other information pertaining to their several activities.
Section 6. It shall be the duty of the Advisory Committee to make an annual report of its doings, with recommendations relative to financial matters and the conduct of town business, to be contained in the annual town report.
It is the duty and responsibility of all Town departments and selectmen to provide Advisory Committee all financial documents involving public money. After the 2017 financial presentation of 2017 by the selectmen and the financial presentation to the Town by the Advisory Committee in 2014, both at the annual Town meeting, there needs to be much discussion and thorough breakdown of all financial matters involving the Town. Financial information should be readily available and easily obtained.
posted by Jeff Bennett
Monday, September 26, 2016
Since someone in Town hall really hates this blog, here's to it:
Article IV – Advisory Committee
Section 1. There shall be an Advisory Committee consisting of seven legal voters of the town who shall be appointed by the Moderator as hereinafter provided. No elective or appointive town officer or town employee shall be eligible to serve on said committee, except that a representative from the Advisory Committee shall be entitled to serve as a member of the Capital Planning Committee and the Insurance Committee. Amended 5-13-03 & 5-11-11
The above is from Templeton General by-laws, and there in lies the problem, seems like the Massachusetts General laws now say something different:
MGL, chapter 32B, section 3:
Said committee shall consist of eight members as follows: seven persons to be duly elected or appointed to membership on such committee by organizations of the employees affected, and one person who shall be a retiree of a governmental unit who shall be duly appointed to membership on said committee by the appropriate public authority.
I was going to serve on insurance committee until a "discussion" came up as to how I was appointed to the insurance committee, hey, some people in Town Hall do not like me, but hey, who cares. During this "discussion" it was noted that the law said something else which contradicts the Town by-law so the Advisory Committee requested an article for the special town meeting in October to have 3 words removed from that by-law section. That would make the by law follow state law. Seems simple and logical, until it reaches the selectmen, who, voted to not place this item on the warrant. They stated they wished to wait until they bring in a consultant, for a fee, to have all the by-laws looked at and changed, eliminated so as to be compliant with current law. I agree with the concept, but why wait to remove 3 words which does what they say they wish to do.
from my personal opinion: "Perhaps they do not like Advisory Committee bringing something up that may derail their school project. Since the Town would be getting very close, if not passing, what is the allowable debt limit for the Town, and to allow the Town to get word on the condition of it's fiance, it does not seem to be a bad thing to do, to put the brakes on the project. The Town will be able to go into 47 million dollar debt later. So the beat goes on and it seems that this board of selectmen still has advisory Committee on its target deck and wants to go around it and not follow Town by-laws, they still feel like they are the superior board." You can make the call as to how you see it.
posted by Jeff Bennett
Article IV – Advisory Committee
Section 1. There shall be an Advisory Committee consisting of seven legal voters of the town who shall be appointed by the Moderator as hereinafter provided. No elective or appointive town officer or town employee shall be eligible to serve on said committee, except that a representative from the Advisory Committee shall be entitled to serve as a member of the Capital Planning Committee and the Insurance Committee. Amended 5-13-03 & 5-11-11
The above is from Templeton General by-laws, and there in lies the problem, seems like the Massachusetts General laws now say something different:
MGL, chapter 32B, section 3:
Said committee shall consist of eight members as follows: seven persons to be duly elected or appointed to membership on such committee by organizations of the employees affected, and one person who shall be a retiree of a governmental unit who shall be duly appointed to membership on said committee by the appropriate public authority.
I was going to serve on insurance committee until a "discussion" came up as to how I was appointed to the insurance committee, hey, some people in Town Hall do not like me, but hey, who cares. During this "discussion" it was noted that the law said something else which contradicts the Town by-law so the Advisory Committee requested an article for the special town meeting in October to have 3 words removed from that by-law section. That would make the by law follow state law. Seems simple and logical, until it reaches the selectmen, who, voted to not place this item on the warrant. They stated they wished to wait until they bring in a consultant, for a fee, to have all the by-laws looked at and changed, eliminated so as to be compliant with current law. I agree with the concept, but why wait to remove 3 words which does what they say they wish to do.
from my personal opinion: "Perhaps they do not like Advisory Committee bringing something up that may derail their school project. Since the Town would be getting very close, if not passing, what is the allowable debt limit for the Town, and to allow the Town to get word on the condition of it's fiance, it does not seem to be a bad thing to do, to put the brakes on the project. The Town will be able to go into 47 million dollar debt later. So the beat goes on and it seems that this board of selectmen still has advisory Committee on its target deck and wants to go around it and not follow Town by-laws, they still feel like they are the superior board." You can make the call as to how you see it.
posted by Jeff Bennett
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