The Lynnfield Finance Committee expressed their desire for the town to explore structural and/or legal changes to the Golf Enterprise Fund in a recent statement. The changes would allow profits from the two town-owned and operated golf courses to be regularly and repetitively used for other capital or operating needs.
The Golf Enterprise Fund is currently structured so that retained earnings from operating the Reedy Meadow Golf Course and the King Rail Reserve Golf Course can only be used to fund operations and capital expenditures in support of the golf courses.
“While the town needs to be increasingly efficient on the expense side of the budget, the Finance Committee believes there are also opportunities on the revenue side of the ledger to explore,” the statement reads. “For instance, the town owns and operates two golf courses, which combine to generate healthy and consistent retained earnings on an annual basis.”
Town Administrator Rob Dolan told the Weekly News that they are “always committed to working in partnership with the Finance Committee to examine all options and to achieve our collective financial goals for the town.”
The Finance Committee also voted to recommend a FY25 operating budget of $69,414,528 and a capital budget of $1,683,570.
Seven members voted to recommend the operating budget, with one member voting against. The committee unanimously voted to recommend the capital budget.
The budget includes the funds for two new full-time firefighters and a 4.3% increase in the school budget.
“The two new firefighters will bolster overnight coverage and continue to ensure the safety of our residents,” the statement reads. “The 4.3% increase in the School Department budget represents an increase of $1,452,715 and allows for the district to staff three additional elementary school classrooms and partner with NECC (The New England Center for Children) to operate two DLP (Differentiated Learning Program) classrooms.”
Even though the committee voted to recommend the operating budget, it said that it does not believe that using $260,000 of free cash leftover from FY24 to help fund the FY25 operating budget is a prudent financial practice because it creates a structural deficit heading into FY26.
“(It) should be avoided going forward,” the statement reads.
The committee also emphasized that it supports the measure for the schools to enter into a one-year contract with the NECC to operate two DLP classrooms within the district as a solution to an acute issue at Lynnfield Middle School and the two elementary schools. However, the committee wants to see a strategy effectively developed going forward to help limit the growth in costs of out-of-district placements and in or out of district transportation, while still meeting the needs of the entire student population.
“The partnership with NECC is not intended to stem the rise in special education costs beyond the two classrooms,” the statement reads.
The committee also stressed that, from its perspective, “the costs of providing services such as public safety, education and public works are rising without an end in sight,” higher interest rates are making borrowing costs more expensive for individuals, companies, and even municipalities, and that there is lack of new growth that make town capital spending decisions critically important.
The committee also said that it received a commitment from town administration to create a five-year capital plan, a charter mandate, and a municipal management best practice.
“Our expectation is this plan will be updated on an annual basis,” the statement from the Finance Committee reads. “This plan is a necessity to guide capital spending into the future.”
In addition, there is also a commitment for the Select Board to create a new Capital Planning Committee, which would take the capital plan forward and help prioritize the capital needs of the town.
Future Outlook
In the statement, the committee also recalled how in the 2019 Town Meeting, they wrote a letter to the town outlining what financial models and trends suggested, and endorsed three paths forward. An excerpt from the letter read:
“As a committee, we feel that the sustainability of Lynnfield’s expansion of services is challenged by future revenue trends and do not see an opportunity similar to that of Market Street to grow revenues at the pace necessary to continue our current pace of expense growth.
FinCom believes there are three paths forward, though these are not mutually exclusive and can be combined as needed to achieve a desired outcome:
Path 1: The Town could choose to slow down its expense growth, potentially meaningfully, to ensure a pace that is commensurate with projected revenue trends. This could mean, for example, that we stop net new headcount growth and demand the Town Administrator and Selectmen limit or potentially eliminate salary increases in future labor negotiations with town unions.
The second and third paths are alternative ways the town could fund expected future expense growth:
Path 2: The Town could become more receptive to revenue-positive development opportunities. This would include voting for developments the town has historically rejected like the Sagamore development at the 2018 Town Meeting, which FinCom supported.
Path 3: The Town could decide to finance the expense growth ourselves with a future Prop 2.5% override. In full disclosure, FinCom does not know with certainty when an override would occur or how much it would entail, nor can we guarantee that a focus on the first two paths would completely eliminate the potential for an override. Still, without shifting our views in the first two paths, we believe it is inevitable in time.
Each of these options would have impact to the town. By aggressively limiting expense growth, we could see a reduction in town positions or turnover in our departments. By becoming more receptive to new development, we could change the “look and feel” of our community. Lastly, openness to an override would clearly mean that we each pay more in property taxes. While there is not a unanimous view among FinCom members as to which path is most appropriate, there is a consensus that there are challenges to face and that these are the three options.”
According to the statement, the three financial paths described “remain the philosophical options for the town,” even after the COVID-19 pandemic that has affected economies around the world.
The committee says that any questions can be directed to fincom@town.lynnfield.ma.us.
