The School Committee’s FY 2012 Budget asks for no new contributions from the Towns, does not affect the tax rate, and maintains level services in the schools. Wenham voters have already approved this number, which is the figure printed in the Hamilton warrant (Appendix B, page 6).

Town officials are recommending lowering the contribution to the Schools to an amount, which when added to a proportional decrease on the Wenham side, would combine to de-fund the schools by $500,000.  This recommendation would open the door to a second Town Meeting or more, and will require the School Committee to reconsider their budget which could result in service cuts.

PROCESS AT TOWN MEETING TODAY AND BEYOND:

  1. The School Committee first will present its budget, detailing the reasoning behind it and explaining the consequences if its request for funding does not pass.
  2. A town official will make a motion to amend. He or she will request that the number be decreased by approximately $300,000, the figure that, combined with a proportional amount from Wenham, would combine to represent a $500,000 decrease to the schools.
  3. If you agree with the School Committee’s reasoning and want to support its budget, you should VOTE NO to this MOTION TO AMEND.
  4. Note that you have to VOTE NO AND THEN VOTE YES —once to reject the motion to amend, and, if that rejection succeeds, YES once more to support the budget with the schools’ original appropriation.
  5. If the de-funding amendment passes, the schools won’t have a budget.
  6. What happens then? After Town Meeting, the School Committee will reconvene. They may opt to stick with the same 0% figure or adopt another appropriation number. If they adopt anything other than the exact amount that passes at Hamilton Town Meeting, they will have to present the new figure to Hamilton voters at a second Town Meeting.  If the School Committee’s proposal fails again, we could even be looking at a third, district-wide vote. (When you hear people speak of “going to the gym,” it’s this third meeting they’re referring to, which, in 2003, was held in the High School gym in August.)

To avoid any subsequent town meetings, VOTE NO (on the amendment) AND THEN YES for the proposed school budget.

THE NUMBERS BEHIND THE PROPOSALS:

Town of Hamilton (everything other than HW Schools) HW Schools
How Much is Spending Going Up?
FY 2012 vs. FY 2011 forecast
$498,000 (5.5%) $1,200,000 (4.5%)
Where Would Money Come from to Pay for the Increase?
Increased spending would need to be covered by free cash, property taxes or other new revenues
Increased spending has no impact on amount Hamilton has to contribute; one-time federal stimulus money and unspent funds from prior years are covering the increase.
How Will Increased Spending Impact My Taxes?
Based on 2010 assessed values, each $100,000 of increased spending not offset by free cash or other new revenues will increase the tax rate by approximately 6.6¢ ($26/year on a $400,000 home).
Increased spending has no impact on the tax rate, but Hamilton’s share of the school funding is up slightly from last year ($43,000) because of an enrollment shift.

Note: Hamilton spending increase only includes spending in Article 2-2.  It excludes proposed appropriations to the OPEB Trust Fund ($25,000), the land fill debt (approx. $130,000 annually if $2M, 20 year term at 3%), and stabilization fund ($100,000).

How Much is in Reserve Funds? Town of Hamilton(1) HW Schools (SC’s Budget)(2) HW Schools (FC/BOS Proposal)(2)
E&D
(“Free Cash”)
$880,000 $1,130,000 $630,000
Stabilization Fund $630,000 NA NA
Proposed Appropriation to Stabilization Fund $100,000 NA NA
Total Dollars $1,610,000 $1,130,000 $630,000
As a % of Proposed 2012 Budget (3) 6.4% 4.1% 2.3%

Notes: (1) Town of Hamilton reserve amounts from The Connection (2011/2012) and show amounts at the start of 2011. The town’s free cash may have increased to the extent 2011 revenues exceeded expenses and will decrease if used to offset FY 2012 tax increases.  (2) HW Schools E&D amounts are as of the end of FY 2011 as estimated by School Administration. (3) If Hamilton’s reserves are divided by the FY 2012 budget less the school appropriation (since the school has its own reserves), the town reserves are 16.8%.

ABOUT RESERVE FUNDS: Both towns and the school district have reserve accounts to provide flexibility for un-budgeted costs, to allow for payment of bills before receipt of tax dollars (cash flow), and (in the case of the town) to get lower interest rates on debt.  Excess and Deficiency (E&D) funds cannot be more than 5% of the budget and “auditors recommend that a minimum of 3% of the operating budget should be in the E&D at all times” (quoted from The Connection FY 2011/2012 issued by the Joint Budget Process Committee of the Towns and Schools).

Leave a Reply