Tonight FinComm had a regular meeting. This was actually my second FinComm meeting of the week – on Saturday the subcommittee that I’m part of met to prepare for our budget reviews. Tomorrow the subcommittee meets with the treasurer, and on Thursday with the deputy town manager to talk about insurance. Four meetings in 5 days – not too shabby.

Tonight’s meeting was focused on the warrant. We received a draft copy of the upcoming Town Meeting warrant. We reviewed the articles and decided which ones to have hearings on. For many articles the selectmen have hearings, for some the Redevelopment Board hears, and some come to FinComm. A few of them end up getting heard by more than one group. The draft warrant has 73 articles. There were chuckles and groans as we went through them; some of the articles are repeats of past years’ debates.

In the middle of that review we had hearings on 5 different warrant articles proposed by 10 citizen signatures. Each of those was sponsored by Gordon Jamieson, so he ran through them over about 90 minutes:

• The first discussion was on an article to recompute the town and school budgets for FY07 as 4% increases, not the 3.1% raises that were approved this past spring. The 5-year plan says that health care expenses must be held to 7% increases and other expenses held to 4%. If health care exceeds 7%, then other expenses must be lower to meet the bottom line. This happened in the FY07 budget, and other expenses were held to 3.1% (plus or minus .1%). Gordon argues that the actual health care expenditure in FY07 is less than 7%, not over 7%, and the budgets should be restored to 4%. There are two issues here. One is a factual one: when you look at the FY07 budget and compare actual FY07 spending, are we really going to be less than 7% increase? The second is a policy one: If it turns out that a budget constraint turns out to be uneeded, do you go back and recompute the spending within the 5-year plan? My first reaction to this is that it is a bad idea. This reaction is based on policy, regardless of how the actual numbers turn out. The financial projections show that the town has serious fiscal issues in FY10 and FY11. If we adopt this article we significantly increase those issues. This article will increase spending in this year and every year – we dig ourselves an even deeper hole. The 5-year plan was a way to limit budget increases. It was not a promise to spend to the limits.
• The second was about how health insurance is charged to the Water and Sewer enterprise fund. Ryan Ferrara and Walter Fey’s subcommittee will look into this one.
• The third one was about creating a position of energy manager for the town. We’re going to look at how other towns handle this. The idea was well received, but I sense that FinComm will recommend that it be put to a temporary consultant rather than a permanent employee.
• The fourth was about creation of an Arlington Carbon Bank. We decided this was a selectmen’s article, not a FinComm article. My advice to the selectmen: Ask why this should be done by the town rather than a private group. It seems to me that a private foundation can do this as well as (better than) the town can.
• The fifth article relates to how the town should structure its accounts that handle funds for health care for active employees, retired employees, and savings for future health costs. This article is stimulated by “the GASB change.” GASB, the accounting group, has mandated that all government entities list the liability of retiree health benefits on the balance sheet. This has inspired Arlington (and others) to seek ways to fund the liability so that it can maintain a good credit rating. The article would create two accounts, one for active employees, one for retired employees, and describes which balances would transfer and which revenues would flow into which accounts. The article doesn’t describe any new revenues or any new liabilities – it just says which money should go where. We’ll learn more about this on the 14th when John Bilafer (former treasurer, member of retirement board, and studier of this issue). My gut says that this article is premature. For various legal reasons we can’t move on this fund until 1/1/08, and there is no benefit to voting in May. We should let the OPEB group complete its recommendation and vote the issue in ’08. Push this complex issue off until we have more information, especially when there is no benefit that I can see to acting sooner.

No meeting on Wednesday, but we look solid for two meetings next week.