Paul, you can read a proclamation. We also have a proclamation for Corey. I want a tiara. We forgot the tiara. That's coming next week. Sean was supposed to bring that. I don't know why in the car. The board of selectment adopted a proclamation. Whereas Corey Lincoln has been a resident of the town of Sherburn since 1976. Whereas Corey has served on countless boards and committees throughout her years such as the housing partnership committee, advisory committee, affordable housing study committee, and many more. Whereas most notable is Corey's commitment as the town moderator. She has graciously served since 2006 and has raised the bar for town moderators. Corey has done this job with efficiency, fairness, congeniality, and always with a smile. Corey, you will be missed by all. Now therefore, we, the selectmen of the town of Sherburn, on behalf of its citizens, extend their utmost appreciation and boundless gratitude to Corey Lincoln for her years of dedicated service to the town and its residents.
A witness whereof, we have caused the seal of the town to be affixed to this proclamation on this 25th day of April in the year 2017. Cy, thank you. [Applause] Um, I just want to say that it's been a huge honor for me to serve as your moderator and to have had your confidence to be reelected. Um, I'll have to say I've enjoyed almost all of it and um, I've tried really hard to encourage civility, uh, succinctness and to move things along in an effective but amiable way. And I think that we have an extraordinary town. We have intelligent, common sense, compassionate people here. And I'm sure that we'll continue to find our way. Um, and I I really appreciate once again everyone's support and comments and input. And I've had people ask me why I'm stepping down and I've given various answers, but basically I think I've hit my expiration date.
And I said that I would rather leave while there were still a few people who would say, "Oh dear," rather than, "Thank goodness. So once again, I thank you very much. And now George is going to talk. Good evening.
Good evening everyone and welcome to the 2017 annual town meeting. My name is George Moral and I'm chair of advisory committee. We're pleased to report that for the fourth year in a row, we propose a budget that avoids a Prop 2 and a half override and is balanced without using free cash to close a gap between revenues and expenses. Unfortunately, because of significant increases in departmental requests for spending above advisory guidance of level funding this year, we were not able to use general revenues to pay for some capital items as we have in the past two years. Nor will we able to provide tax relief through excess capacity in the budget. Rather, we were able to avoid some borrowing for capital items and continue to provide some of the tax relief through the application of free cash, which this year spiked to a record level.
But this spike resulting from large turnbacks by departments before the change to trend budgeting and some other unusual circumstances is unlikely to repeat. And without the unusually large amount of free cash, there would have have been no tax relief and all capital items would have been paid for through debt. The service costs for which would again raise our tax rate for fiscal year 2018 and for years to come. After multiple iterations of many departmental budgets, requests for increases over guidance came in at $843,540, more than twice the $410,000 we had in our departmental and guidance reserve to cover costs for these departments, unable to meet V advisories guidance of level funding. Moving forward, the town continues to face major financial challenges that we need to be aware of. Salary costs associated with collective bargaining agreements continue to rise. The school contracts are currently being negotiated with no settlement as of tonight's meeting, but the operating budget that advisory is recommending here supports more than $500,000 in increased salary compensation for school personnel at the region and at Pine Hill to cover the first year of a three-year contract.
This year, we saw a spike in out of district special education costs of approximately $325,000. These costs are statemandated and are out of our control. Currently, Sherburn's paying 44.4% 4% of the operating costs associated with the do sherburn regional school budget. Due to due to population trends in the two towns, this percentage is projected to increase to 45.8% by 2023 and of 46.8% by 2026. Based on today's operating budget level, this expected change in the ratio of Sherburn to do students at the region would equate to an approximate increase of over $300,000 in annual cost to the town of Sherburn over the next 5 years and an increase of more than 520,000 in annual cost to the town of Sherburn residents by fiscal year 2026. We as a town need to prepare and plan for this expected increased cost. It is important to note that these costs do not include any increased costs arising from the potential 40B developments that v that are in various stages in the pipeline.
We continue to address in a small way our obligation to provide other post-employment benefits otherwise known as OPE to our town employees. Again, this year we asked the town to appropriate $200,000 for OPEB, an increase of H 100,000 over what we have out allotted in recent years. Despite our continued contribution to the trust, however, the town's unfunded local OPED liability is estimated to be 9,613,010 and continues to grow. While we do cover on a pay pay as you go basis our yearly OPED health insurance obligations to current retirees of both the town and the regional schools, at the regional schools, we make no contribution toward our acred OPED liability. Sherburn Advisory and Dover Warren have stated a desire to begin the process of addressing this obligation. So further costs are likely to become part of the budget if not next year than sometime in the near future.
Housing prices remain stagnant in Sherburn. The slide on the slide on the screen over here shows how housing values are basically the same as they were in 2005. Yet the cost of operating the town keeps growing. The number of households supporting the town's operation hasn't changed much in over 10 years. Yet the cost of running the town has grown from approximately 18.8 million to 25.9 million, an increase of 38%. The current pace of growth in the operating budget far exceeds the rate of revenue growth and is not sustainable long term. So how do we manage our finances to keep pace with the increased costs we know we can expect? Since there are many things that we cannot control like the uh op like the out of district cost as I mentioned before it's important for us to manage well those things over which we do have some influence we need to be proactive rather than reactive for example last year the town of Sherburn switched health insurance providers health insurance was projected to increase by 15% this year due to the switch the town saw an increase of only 7.5% in its health insurance rates while at the region which did not switch the increase was 15%.
%. We call upon the regional schools to look seriously at their choice of health insurance provider as 15% increases in health insurance costs are simply not sustainable for the town. In another example, as Mike had mentioned before, the board of selectman and town administrator this year completed a review of the condition of town buildings which found that many of the buildings have deferred maintenance that need attention on an ongoing basis. We recommend over 500,000 this year to for addressing these needs sooner rather than later. will not only save the money save money in the long run but will maintain our town assets properly. Further going forward we need we must negotiate responsible collective bargaining agreements. The school contracts are currently being negotiated and as noted earlier we have included approximately half a million dollars for salary increases at both Pine Hill and the regional schools.
But once a contract is signed, the town loses flexibility in what it can do to cover the com competing needs of town operations. As union wages combined with benefits regularly outstrip guidance from advisory, department heads must contain costs elsewhere by curtailing services or the town will face even higher taxes, dips into free cash, andor overrides. After all we have done over the past four years to avoid such a situation and as we look to a future with the possibility of more tax relief to benefit the current residents and encourage new families to choose Sherburn at as their home, we cannot afford to have labor costs escalate disproportionately. We should also continue to use cash for capital expenditures wherever we can. As we have noted on multiple occasions, using cash where possible to pay for capital expenditures saves future debt service costs, contributing to a higher tax rate.
If the town votes to follow advisor's recommendations to pay cash for certain capital items proposed in this budget, it will have saved in fiscal year 18 future debt service costs on a total of over a million dollars. Going forward, continuing to make some capital purchases each year in cash will continue to have a positive effect on future tax rates. We must also continue level funding budget level funded budgeting advisory fields. We rightsize the budgets in fiscal year 2017 through trend budgeting. We now expect budget makers to justify every increase over previous years. After a after many meetings, we feel the proposed fiscal year 2018 omnibus budget as well as the accompanying capital budget have been reduced to a satisfactory level that meets the current needs of the town and avoids a prop 2 and a half% override 2 and a half override. But as noted earlier, the rate of growth represented by this budget is not sustainable long term.
Over the past 5 years, the town consistently improved its management of the operating budget through reductions and other savings. This year, that trend was has reversed. We're taxing up to the levy limit, and we are unable to purchase any capital items from revenue. Without this year's one-time spike in free cash, that is providing both tax relief and the ability to avoid significant debt for the purchase of capital items. We would be facing an additional 18 cents per thousand on whatever the final tax rate turns out to be and future debt service costs that would add to that increase. I would like to end it with I'd like to commend all the elected and appointed officials whose dedication and willingness to address difficult choices allowed us to recommend a non-override budget this year with limited borrowing and some measure of tax relief through free free cash to all of us.
Thank you. [Applause] Thank you gentlemen. If you were a first timer at a New England town meeting, a friendly welcome to Grassroots Democracy in Action. I hope you both read and brought with you the advisory committee's report that was mailed to every household in Sherburn. And new this year, we also have a citizens guide to Sherburn Town meeting posted on the town's website, and there are hard copies that were available at the check-in desks. Tonight, I ask you to please listen and watch, and you'll soon get the hang of how we conduct the legislative branch of town government. If you are from another community's town meeting, you should also listen and watch carefully because each town has its own set of local bylaws, customs, and best practices that shape its procedures. And if you're still a bit confounded, quietly ask your neighbor for help or ask me.
So, we're going to have a quick review of our rules. The agenda for tonight's meeting is the warrant that was prepared by the board of selectmen and printed in the advisory committee report. A motion must be made to bring an agenda item before the meeting. I will recognize a member of the advisory committee to make the initiating main motion on each article in the warrant. To speak on a motion, you must ask the moderator for permission. To save time, I ask that you already stand at one of the microphones. There's one in the back cross aisle and there's one down here in the front and wait ask before asking to be recognized. Once you are recognized, please state your name and address first and then make your comments. Your comments must be relevant to the motion. The traditional phrase is that they must be within the four corners and limited to two minutes.
I will not recognize the speaker a second time unless all others who wish to speak have had an opportunity to do so. If you do receive recognition to make a second comment, it must contain new information. If debate is running long, I may not allow second comments. So, make your best point first. My objective is always to move the proceedings along as efficiently as possible. And as my predecessor wisely counseledled a number of years ago, once something has been said, everyone else doesn't have to repeat it. Because thorough presentations can answer questions before they're asked and shorten debate, I will allow up to five minutes for presenters who have previously filed a request form. A timekeeper is sitting in the front row this evening. She's going to raise her red card. Who will raise a red card when your allotted time to speak is up?
I attend to be firm in observing time limits limits. I hope you will understand if I interrupt you when your time is up. Better yet, see the red card and stop yourself. All alternate main motions and amendments to a main motion must be submitted in writing to the town clerk. She has forms for that purpose. Um and their teapot tear apart form so that I get one copy and town clerk will get one copy. No more than two amendments can be on the floor at the same time. A vote is first taken on the amendments and then on the main motion. Sometimes the main motion made by advisory is a negative motion. That is a motion to quote take no action close quote. A negative motion must be defeated before an affirmative action can be put before the meeting. I will offer a full fuller explanation when the situation arises.
Our normal procedure is to use a voice vote on all motions. We will have a show of cards. You received one when you checked in and this year they are lime green. If any voice vote is not clear to me, if it's still not clear or if seven voters question the vote immediately after it is declared, we will have a count of hands by the teller. On motions requiring a twothirds majority, we will try for a unanimous voice vote. If the voice vote is not unanimous but is clearly twothirds to the moderator under a Sherburn bylaw, I may declare that the motion has been adopted by at least twothirds of those voting. At any time 50 voters may request a vote by secret ballot. And last procedural point, I will read only the titles of the articles as printed in your advisory committee report. Brief descriptions of each article and the complete text of the advisory main motion will be visible on the screen to your left as we proceed.
And finally, a reminder, political debate can be intense, but tonight in this place, we gather to promote the common good of all Sherburn citizens and not just our own self-interest. I remind you to speak with respect and civility. Personal remarks or speculation about others motives are always out of order, as is applause. And I'm experienced enough to know that repetition and escalating intensity often work against you, not for you. And this is my last opportunity to say tonight we may agree and disagree, but tomorrow we will still be friends and neighbors in one community. And let's begin with article one of the warrant. Madam moderator, Mr. Moral, I move that the reports of the town officers and committees as contained in the annual report be accepted. Second. It's been moved and seconded. It I will pause right here to tell you that we have an unusual event.
This is a one-time occurrence. This is simply to accept the reports of the various standing committees of the town. And the selectmen this year have made a special request that the town center study committee headed by Roger Demler be permitted. They were thinking of having a warrant article for tonight, but we're not prepared to do so. But they are going to make a status report of where their work is at this report at this point. So Mr. Demler, why don't you come down and make your report? Uh, good evening. Um, I've been asked to make a brief report on what this the town center water and wastewater options committee We have a override there that isn't very helpful. U the selectman charged us with trying to define [Laughter] Can you back up here? There we go. To identify the technical cost and legal options for alternative drinking water and septic systems principally in the town center.
Uh last year you voted to give us $20,000 to hire professional engineers to go through this and we're beginning to get some results from that that we'll talk about briefly. Uh this is largely in support of what the planning board is doing with the new general plan. If they have ambitions to make significant improvements to downtown, they probably have to deal with some of these issues and we're prepared to help them out. Next. So why are we here? This is a snapshot of most of downtown Sherborn. Here's the school. Here's the traffic light. Here's the split. In this picture you see here are uh 76 septic systems, uh 63 private wells and 12 public water supplies that are regulated by the state. You see the regulated wells is typical here. That circle if you were to build a new construction and wanted to put in a public water supply like that, that circle would have to be on undeveloped land.