Milton School Committee: Finance Subcommittee - February 4th, 2026

001Everybody, sorry for any confusion about in person versus remote. Um, I don't know. Uh, Nick, if you have a presentation or not, like kind of the last time we met, I think I just want to make sure we're on the same page. In my mind, it seems like there are three things we are needing to discuss. We want to make sure that it's a FY27 budget. Uh, and you know, updated revenue projections, expense projections, things, whatever that is. Uh, I I'm not sure if you all want to talk about the circuit breaker, but I think there have been questions uh from your end about the circuit breaker. So, if you want to talk about that. And then last one is kind of the longer term projections in terms of FY28, 29, etc. Does that sound

002right to y'all? does to me. >> Um Nick, yeah. Do you have any like I don't I didn't mean to say you should have a presentation. >> No, I um I can just provide the latest update in terms of where things stand. Um we shared some of this over the course of um late yesterday and last night uh with John and Katie and um others. So, if you could just um let me share I have um just kind of the rundown as to what the latest update is. >> Great. >> Okay. Try now. All right. So, um, I'll just run through a series of budget adjustments. Some of them, some of them we've talked about previously, or at least I've shared previously. Um, now we're, you know, kind of tracing back to where we were

003a few weeks ago. These are, uh, a summary of the changes that have happened in that time span. Uh, we've changed our forecast on debt service, which resulted in about a $230,000 reduction in expenses. um just updating our forecast for interest rates and our strategy around the Cunningham Collicott project to align that issuance with um our other long-term debt project which is the fire station project. So those have very long terms and we would issue those together and start paying those debt back together. So that resulted in a shift, a reduction in cost and a large portion of that is a shift of when we'll start paying the debt for that project into fiscal 28 rather than in fiscal 27. health insurance. Um we have approximately $274,000 reduction in expenses um by charging um health

004insurance costs for certain um employees out of the general shared budget and into specific budgets where those employees salaries are being paid out of um one on the town side and then and several on the school side out of the food service fund specifically. Uh state aid was uh updated with the governor's budget um that was announced uh last week. So, that was a net increase of $225,000 in revenue as both um our receipts went up, but our um anticipated assessments went up as well based on the data released by the governor's budget. Um this week, one of the things we had talked about that we were waiting on was our uh large commitment that happens this month for motor vehicle excise tax. um it is the biggest of the year and before we felt

005comfortable in adjusting any of our local receipt forecasts, we wanted to see where that commitment came in. And the good news is that um the commitment came again ahead of last year's commitments. Um so we feel comfortable with revising our motor vehicle excise tax forecast up um by a total of $440,000. Um so it' be an even forecast of $5 million for fiscal 27. We also feel comfortable increasing our um penalties and interest account by $60,000. Um and then on building department fee revenue, uh we actually feel like we should dial that back a little bit. Um fiscals 22, 23, 24, 25, and this year have all been dri um very healthy building department revenue years. Um the one change we're anticipating in 27 and beyond is that these large projects that have been permitted

006over the last several years have largely already come in and paid their fees. So we don't anticipate um a single large project in um unlike in the prior four years which really carried um that building department revenue significantly higher um just with the multif family projects that are going on. um one um one one of those large projects can be hundreds of thousand dollars in of fee revenue alone. We also revised our general insurance budget forecast. Um we don't have a our official renewal yet, but at this time of year we usually get a little bit of an adjustment and we feel comfortable reducing that budget by $80,000. Um and uh we'll have a final renewal not until March, but this is usually the number we run with. So, um this budget is actually decreasing

007year-over-year from fiscal 26 to 27 as we've um had um some savings on that front, which is good news. The operating budget stabilization fund, we did talk about increasing um our withdrawal from that. So, I I'm proposing that we put a million of free cash into that fund and then pull that out over the course of four years. So, that is a $235,000 increase in revenue. um in fiscal 27. And then lastly, this is, you know, one of the items of conversation that has consumed a little bit of time for everybody, but um I just want to kind of explain our perspective on this and and my view on this is that, you know, I propose that we'd also contribute half a million dollars from free cash to school reserves. And I leave that reserve

008to be determined. Um and you know our thinking was that the schools are you know approaching this year the 27 budget um trying to build reserves and you know the town can support in that effort and contribute free cash to build reserves just as we would contribute free cash to our general stabilization fund to build reserves. Um and especially thinking that if that would you know decrease the pressure on the school operating budget funds um in fiscal 27. So um you know if the schools wanted to increase usage of circuit breaker um we would be able to provide some free cash into a dedicated fund sped stabilization fund as an example um to to support that effort. Um the department of revenue I did check in with them at the Mass Municipal Association um conference

009a couple weeks ago and the the town can't appropriate money directly into circuit breaker and I know that's the primary reserve for the school department. um they immediately offered up the sped stabilization fund which we've previously talked about. But um that's the concept in terms of this additional half million appropriation and the purpose being you know let us help build reserves and maybe that allows you to um reduce some of your operating budget um expense or increase some of your operating budget expenses out of those other funds. The other thing I just wanted to flag here, and I don't I believe this information is still a little early to kind of figure out, but just make sure everybody's aware that the 27 um governor budget does include a significant increase in money into circuit breaker

010um almost 19% and there's supposed to be mean it's going to be fully funded at for transportation and out of district. So that would increase the um reimbursement. I don't think the district by district numbers come out for a while, but I just want to make sure folks are aware of that. So, um I've highlighted here just kind of what has been adjusted. Local receipts up um by $400,000. Our state aid is up. Our operating budget stabilization fund is up from a revenue expense perspective. And then um just to kind of summarize where that things that where that leaves the budget from my perspective um this is a kind of a messier chart, but I'll try to explain it. So, um, as I've kind of articulated prior, my view is that town and school departments

011should increase by a like percentage year-over-year. Um, and I'll I'll speak to that in more in a moment. Using that approach here, um, would mean that, you know, town and schools start at 0% and increase until the revenue is gone. That leaves, uh, Milton schools in this proposal for a balanced budget at a 3.76% year-over-year. Milton Town Departments at a 3.72% for town departments. To be clear, that means our level service request, which is at 3.72% would be fully met. Acknowledging um as you can see down below under fiscal 27 request and fiscal 27 town administrative balance budget that that leaves a gap in terms of what the school department did request. Getting back to the infusion of free cash into reserves, does that allow the schools some more wiggle room to use some of

012its other funds in fiscal 27? In my view, that brings the potential net reduction down by half a million to a um a net impact of or a net reduction of $550,000. um assuming that you are going to use additional other funds. If we provide additional funding for reserves that gets the school budget on a year-over-year basis to a four um 4.5%. If um that assumption is wrong, then again under this scenario, the increase year-over-year would be the 3.76% um number. So that's my view in terms of where the balance budget sits today. the remaining deficit that needs to be closed is the million48 a million49 um as represented here. Um so in in the way I've viewed this again that we would share the revenue in the way we have in recent years um

013that would shift the burden to the schools to to close that deficit um in order to maintain the split that has happened and I'll just speak to this in a few a bit more clearly. So the idea is that we put all the money together in a pot. We put all of our shared expenses in a pot. We reduce our shared expenses out. And then how do we split up the revenue that is left? Uh what has happened over the past 10 years or so is that um gradually that split has drifted more on the school side than to the town side. fiscal 17 we were at 6634 and over time as school budgets increased faster than town departments we're now at about a 69 to 31% share of that revenue. So um and just

014as it shows here the town departments increased 43% and in that duration where school departments increased 65%. So the approach and proposal in terms of revenue sharing was to to maintain that 6931 split that's currently in effect in fiscal 31 to not have that shift even further in one direction or the other. Um and there's been a lot of talk about town is taking no cuts and the schools are taking a greater cut. Um, I just want to be clear that, you know, when the town department submitted their budgets, they were doing so under instructions of coming in, you know, bare minimum increases and and they did that. They delivered on that and they came in at a 3.72. Um, so I don't know that a discussion around one group is taking more cuts than

015another is helpful because my departments will hear that and they'll think, well, I need to ask for more in future budget years if this is going to be the way the conversation goes. So, I just was trying to reframe um what where this came from. Um so, it wasn't um like I'm trying to target the schools and say you have to cut. It was more about saying we should continue to share the revenue the way we are in fiscal 26. We should do that in fiscal 27. Um so, that's that's really the summary. I'll flip back to this slide just to kind of recap again. Um, under this balanced budget scenario with the adjustments that we've made, we have a million48 uh dollar re uh deficit um if we share that revenue that gets town

016departments to full funding for level service. It does not um for a school department. However, in our view or in my view rather um by in injecting that half million into reserves, that gives the schools some greater flexibility to to think about how they approach um their offer operating budget offsets in 27. Um but that is the lay of the land as things stand today. Happy to take specific questions on any of the assumptions here or defer to discussion among um the committee members. Thank you. >> So a question on the two offsets you have represented here uh on the first the first one where it's the off funds offset of 500,000 against our reduction to 548,000. Is that 500,000 the town inputting into the special education um stabilization fund or is that the use

017of the circuit breaker? >> Sorry. So I didn't um so what this what this sheet is showing is that the school department in this scenario needs to cut a million48. >> That's our gap. school department could choose to inject half a million dollars under other funds offset to bring their net reduction to 548. >> So yes and no. So the the half million in in um you know stabilization or school reserves is is separate and apart um from that um we're just saying we would give you the half million schools. you can choose to inject other funds to offset um your operating budget as a as a result. >> So would so where would the schools be taking it directly from us? We'd be in inserting that to the schools or is that them taking

018it out of the circuit breaker and then we sort of reimburse that? >> Oh, sure. Sorry. I in my view I think the cleanest way to to do this um would be that a half million dollars would go into a sped stabilization fund. >> Okay. that money could be accessed um with the with the approval of the school select board and school committee in fiscal 27 if necessary and that could be the half million offset right there. Alternatively, that money could remain untouched in fiscal 27 to be a reserve in future years and the school department could offset its operating budget from circuit breaker or other revolving funds um accordingly. >> And the second 500,000 that gets essentially erases the gap that second 500,000 would come from the circuit breaker. No, there always remains this

019half million dollar deficit. Sorry, it we don't get to zero. We don't get to a 5.2% increase year-over-year at right now where things stand that the largest I think um increase potentially would be that net increase of 4.45%. >> Thank you. >> Sure. What's the >> I just can't see >> question. >> I'm just asking what that number is because I can't see it. >> 548622, >> right? It's the So the uh if in fact the $500,000 is used to offset the operating gap, then the the true gap would be 548623. >> Correct. Thank you. Sorry if that muddied the waters at all, but >> and I and I think what what uh we've talked about this before, the tech the technical piece of having that 500 go to uh special education costs and or

020be flexibly used if needed. Uh you know, we talked about the need for maybe another way to have that done other than going into the the town schools account. um would have would be a less flexible we would be less able to access that in a flexible way. So generally speaking we would prefer technical approach to that but we understand why you would want to separate it this way given that this tech you know we have to figure out a technical challenge of how we could incorporate that into the school budget. And my second comment asked question was um that 500 count is not onetime funding in the sense that it's uh is it does it add to our base moving forward? And no, my view would be the the appropriation at town meeting that

021serves as the school committee's base budget would be the the um 75613 which reflects the full million dollar reduction. >> Thank you. And to your point about, you know, the appropriate location for this half million dollars to be placed, I, you know, as we've discussed, I I'm a little agnostic to that. I don't know that I I personally have a strong feeling on on where and and how it it's managed. I think we just have the municipal finance structure that we have to work within. And if there are alternatives that work better for schools, you know, obviously we're we're open to hearing that. That's that's why I put the question to do in terms of a direct contribution into circuit breaker. >> Thank you, Nick. Um, and also on behalf of the work over the

022last month, I appreciate this number going from 21 to one, and I appreciate the $500,000 to support the evolving account, especially relating to special education. Uh, it's it's been less than a month than the last time we met, and I think we've made some good ground, and I appreciate that. >> No, thanks. And you know, I think we try to express that we had viewed that as the high water mark and we would hope to to reduce that. We weren't obviously sure what that might look like in a month's time. I would say we're probably at a place where it's going to be harder to move this number further um in in any direction hopefully. Um we're obviously and I didn't speak to it, but our you know the biggest concern in terms of our

023budget overall has been the health insurance costs. We still feel um comfortable that our forecast of 10% will be right. Um but that remains kind of the biggest threat of you know downward pressure on on the budget and and as a negative pressure in ter I don't know that there's a lot more room in the next month or so that would make the revenue forecast um rosier. I think we've kind of covered what we feel like is out there. Um but obviously we'll always continue to evaluate these assumptions and and provide updates if there are any >> questions. Um Nick, the town percent increase I'm can you confirm what it is because I've I felt like in a earlier presentation was 3.58 and then I'm pretty confident in a more recent presentation was 3.65 and

024then this one you're showing 3.72. Can you just confirm what is level service and why is that I mean you might be getting some updated kind of budget information so maybe that's why just obviously >> the primary change that happened was um we had received notification of employees retirements and then that incurs a cost for us into in the next fiscal year. So it the 3.72 is where we landed. >> Um great thank you. Uh I think in terms of the again I want to echo the statement that this is a million dollar gap is way better than $2.1 million gap. So really appreciate work uh yall looking at all these areas also the work of the school department for looking at the nutrition that on the state for increasing aid right lot a lot

025of different pieces here so thanks to all those folks. I think in terms of the the statement you made about you think the town the town percent increase the school percent increase should I saying like be closely aligned you can say they have to be equal so I get you prepared for that in that scenario if we had a revenue picture where we could get to 4% right for both the schools and the town and we obviously know the schools for a level service ask I know your departments gave you kind of a number that is I think what we also gave you right% we're not adding anything it's just roll over but in a scenario where we could get 4% for both are you saying the town's um strategy there would be to give

026four to both and to expand town services while also contracting services >> I'm saying for fiscal 27 where we sit Today I am comfortable with a 3.72% increase for fiscal 27. >> Yeah. I'm not talking about the fiscal 27. I'm talking about the the theory or the policy I guess that's kind of guiding the principle maybe is the word is guiding your budget planning in a scenario where you could get 4% to both that would be an increase to services to town departments and a cut to the school department. is is that but that would meet your goal of having kind of equal uh allocations and the only way to keep the 6931 split is to have equal percent allocations year-over-year, right? That's the only mathematically that's the only way. If schools ever increase at

027a rate that's greater than the town, then that will grow. >> Before we go into projecting 28, 29 or 30 and some of these hypothetical situations, can we deal with 27? I think any sort of exercise about what the rise in this department may mean for this other department is not really useful to conversation we're trying to deal with today. We have emails that have gone out to our parents telling them positions are going to be cut that we have a gap in our budget for 27. Let us finish that conversation then have a discussion about 28 29 30 and a potential override. We have not really mapped out the growth in town budgets. We've not mapped out the growth in the school budgets. So I think can we deal with the conversation at hand

028before we get into the hypotheticals of all the other pieces. I think we've gotten this has happened in so many of our other meetings. We start talking about this other hypothetical other things and we don't finish the thing at hand. So, I think there's a million dollar cut here or a gap that I'd really love for us to address and figure out how we're going to deal with that because that also informs what we will be doing in future years. >> I'm also going to concur with member daily. I think that going forward, yes, we're going to have to for a number of different reasons. I think we're going to have to evaluate the factors that are built into the townwide model. We're also going to have to understand what the model is for the

029schools and how that nests within the town model. But um speaking about the rest of the town budget at this point, I think we've answered some questions about how it's functioning right now and we can work on how it's going to be addressed in the future, but I'd rather us focus on the schools. >> Yeah. No, I I appreciate that. I guess my my push back on that is the it from what I'm hearing right and again it's positive information that the number is is shrinking the revenue gap is shrinking what town administrator is saying what I think I was trying to respond to is that this is about as good as we project it's going to be this is the number and so the only then I think further conversation is if the select

030board is saying take it or leave it then that ends the conversation we have work internally to do to talk about how do we fill that final million dollar, you know, operating deficit. Uh, and which we will do whatever that number is, right? It's what we've been doing. I think the only additional conversation within FY27 is on that town versus school split. And so, right now, there's a there is a million dollar remaining revenue gap between for the town as a whole. If we look at us as one budget, there is a million dollar revenue gap in level service across all departments. And the town administrator and select board proposal at this point is that the school department take a million dollars, the million dollars that is left. And again, you're looking to support part

031of that through a one-time kind of free cash allocation of 500,000, which again, I appreciate the flexibility and the the outside the box thinking, but in my mind, the only other conversation there is like, is that the right allocation, right? That the the entire remaining amount should hit the schools versus some other allocation, some other division of of the numbers. So your proposal is that we would cut further in town departments. Is that what you're saying? >> I'm saying the the revenue amount is the same. And if we look at this as a one budget, one town budget, >> then I would think as a town, what we're trying to do is minimize the impact to level service to all of our residents. Right? We want to provide an experience for our residents for next

032year that is as close to what they are experiencing currently, if not better, within a level service budget. And so I think this proposal is actually separating again the town and the schools more so than a holistic view of saying we have a million dollar revenue gap. How do we figure that across all departments, schools included? And again, if the court's decision is say like we we think the town departments really need this money, we don't want to cut them at all and we think the schools should take it. That is a that is a decision. That's a solution. But to me, that that's the only remaining conversation within the FY27 discussion is how how do we divide up this remaining revenue gap? >> Yeah, we don't believe that to be the only discussion left

033in FY27. um potentially pitching the schools against the rest of the town or your idea of oh another department should take should take a cut or the budget is like the schools have levers that they can pull. We've talked about that and in your conversation about the changing the 2.1 to where we are in a million dollars. We've done a lot of work in that space. I don't think we we've not tried to we we're not trying to put the schools into a box, but the reframing of this, which you're attempting right now about making this against the other town departments, I don't see how that's helpful. I'm not sure exactly where you would like us to cut in the town. I think Nick just shared on that on on his slides that there are

034times to your hypothetical situation, there were times when the schools grew and the town departments did not. We don't know what that's going to look like for 28, 29, and 30. We haven't discussed the circuit breaker yet, but I know we've had these discussions in in individual conversations that the schools have a lever that they can pull. The $500,000 that we are putting into the special education fund, we hopefully come with an offset of the use of those reserves of the circuit breaker reserves. The schools have not made have not told us if they're willing to do that or not. So, honestly, the ball is in your court. The situ the the the revenue is there for you to close the gap. you have a decision to make on if you are going to use

035the resources that you have. We can partner in that and knowing what will happen if you use those reserves, but that's the conversation we need to have. >> Yeah. Again, I I think you're right in that we need to have a conversation with school finance with this new information about how do we close the remaining million dollar gap if if that is the gap. >> That's all completely correct, Wson. I agree with that. I don't think my convers I don't think my statement was trying to pit schools against the town. I think it's again the town as a whole has a million dollar revenue gap to provide level service. And so I I thought our conversation was you know how are we addressing that collectively? I know y'all care about the schools. I know we

036care about the schools. I know we care about the town. >> What's the next move? What's the next move necessarily then? It's it's basically to go and and cut and and have layoffs in other departments >> because there's nothing there's nothing else for the town to cut. >> I have no visibility in the other departments, Megan. Like I I'm not trying to tell you all what to do. I can't tell you a good idea or not to to cut in other departments. I don't know. I'm asking if the select board has considered >> we're telling you that that's what it's going to result in. >> There's maybe there's maybe like you know a h 100,000 to 200,000 in non salary spending that has to go to things like snow and ice. >> Yeah. >> Is

037my understanding >> that that's very similar obviously as y'all know on on the school side. There are very few things that are non salary spending on the school side as well. And again, >> I could just I just kind of I feel like part of the problem is, you know, we're having a bit of a semantics conversation about level service. And you know, one example is DPW and this is a particularly bad winter with a particularly bad snow and ice deficit, but we have historically spent upwards half a million dollars in snow and ice. Our budget for snow and ice is $160,000. Now, we in we increased that in this year's budget by $90,000 to $250,000. But really, a level service budget would be taking that 160 to 500. We're not trying to do that

038in fiscal 27. If we did, my 3.72% request is going to be a a 4.8ish. So, like that, it's just an example of if we get too far down the road of what level service is or isn't, it becomes a challenge. I think it's it's better to have the conversation about what is the revenue split and is it from a policy perspective that we want to shift a little bit more to the schools in one year a little bit more to the town in another than you know these conversations about level service because I view it as we we we call it level service it's it's a mix between level service and a level dollar budget and we've left asks on the table trying to make this budget work and so I I just don't

039know that that's the most helpful way to approach the conversation. And I think flipping it the other way around to saying, you know, what should we dedicate our revenue to um as a community is probably a little bit more helpful because if we get into this game of whose level of service asks is greater, so therefore who's taking more of a cut, next year we will request that we bring Stone Ice up to the historic norm rather than where we actually budgeted. So, and that will look like a very significant increase that we can defend as a level of service increase. I just don't know that that's going to be a productive approach on the budget. So, um that's that from me is the push back on um this approach of sharing of cuts. They're

040not cuts. Nobody's budget is getting cut. Everybody's budget's going up. It's about a question of how much. And the how much is a metric that isn't a scientific number. Like when we appro the fire department budget is just about actually going down year-over-year because there are retirements. We take out those higher earners and we bring in lowering earnner firefighters as they then they progress up the chain. So that is reflected in the fire department budget this year. It's not going to be that case next year. So now automatically our level service budgets a little bit higher for fiscal 28. I just that moving target of what the defining level service is just an impossible answer that I I just that is just my concern with going down that road and I felt I was trying

041to reframe it a little bit to think about do we want to shift the revenue split in a given year have that policy discussion rather than kind of debating whose level service was higher and and is more accurate. Can I just jump in? Um I So Winston, you had said that this conversation about the budget split is really a question for future years. I I don't think I think it's okay to talk about it now because Nick like the examples you just listed um and you probably have 10 others in your back pocket that are that are real are helpful in contextualizing the decision for us so that we can talk about it all together and speak the same language to all the people who are asking us these questions like the town budget whatever

042all those things are Nick that you just listed for me at least is exists a little bit behind a curtain. I don't really know what what those are. And so the more that we know about them, the more you know and I don't I don't need to like go through the Excel file and like do my own calculations to understand if I agree with them. But like this sort of context you're providing, Nick, is really useful just so we all have the same information and can understand the decision in the same. >> Yeah. And yeah, I I don't think we're not I don't think we've ever asked a town to reduce its level service or do something to try and shrink it, right? That's not honest. We don't as Nick Nathan said, we don't have

043that visibility. I'd hope you all would have similar feelings of us that, you know, Katie the town, you know, John the school department is similarly not doing, you know, funny math to say this is our level number, service number to to jump it up. Again, I I think I've shared at school committee meetings historic like the historical school department increase which more predates John and Katie and all of that to say, you know, what has Milton just provided to the schools over time. As you said, that's obviously been higher than what the town has received and that's resulted in that revenue split changing over time. But that is what has been required to be provided to the town or I shouldn't say required but that's what has been provided to the schools over the last

04415 years which is an average of a 5.27%. So I I don't think the 5.2% level service increase to the schools is again surprising or outlandish. I I think that's pretty much in line with school what schools have done before. And I don't think the school department is jacking up that number in some way in order for some uh alternative motive of just trying to hoard revenue. Like we we're just trying to provide services to kids. I know y'all are just trying to provide services to all the other residents through all the other departments. And so I'm not not thinking y'all are again I'm not trying to pit us one versus the other. It is a hard conversation. is a hard math equation. As Nick, you and Amy know, and Joanna better than than I

045do. Certainly, it is a hard math equation. From the standpoint of the school committee, my perspective is all we can do is continue to ask you like we we have a million- dollar cut left over. If that is the number and we are kind of done talking about it, then we have work to do. We have work to do and we have, as Winston you've said, there are levers at our disposal even beyond staffing cuts. So our goal is not to just cut staff. Our goal is to meet the budget that is being provided by the town uh so we can have a a stable level service budget uh for at least next year. And then obviously we have concerns about like years down the road, but if we're talking just about next year. So

046what I I think I'm hearing what the school departments with the school committee and departments action we are being tasked with moving forward is that approximately $1 million uh level service reduction is what we'll work towards creating so that we have something for the town warrant and town meeting that aligns that overall town budget number. Is that correct? Yeah, >> I think it's more if you take what we've proposed today, see what you can come up with and we can have another conversation. Like I don't you know I I also feel like you know this is kind of getting a little bit rigid with um you know this is the best and final offer. I think what Nick is saying, there's probably not like a lot of room left. Like we're just going to be

047honest with it, but like let's keep still talking, but like let's work this problem here now and focus focus on this year, but we both have work to do with our forecasts for the next four years. I I don't know. I don't know. I don't know how member Daly feels or the town administrator feels, but that's my that's my opinion. >> I think we need >> We probably can't do much more, but would love to get your feedback after some thought. >> I would not want to leave uh this this call with only um this is the gap and we'll get back to you. I would love to hear have a little bit more of a robust discussion about what that all means. Um because get back to us. We've been we've been told that

048there is an urgency to get something done and settled before February break and we respect that urgency. So I would hope that we work with that urgency. Um my other point which is just more about maybe we're all learning how to work together a bit. There's a lot of new faces in different seats um over the last couple of years, but this idea of the understanding or going into every town department's budget um for different committees, I think is not a place that we want to be. We have a town administrator for that. We have a staff for that. We have the warrant committee for that. And then select board plays its role. It can't be that we have to look at in our in everything that our neighbors are doing to find out what

049we're going to get. So, I would hope that we don't move forward with that idea of looking at other departments and trying to pull things and say, "Oh, they got this, we got that, or I need to know what the other department is doing." Right? A town administrator comes to us with a budget for the town and it is our jobs to figure out how to make this work. Winston, my point was just that context is useful for the discussion. I don't I don't need to know the details of every single town budget, but just the context that has come up in this discussion is is useful. >> I do have um I have a question about the the free cash allocation to the special education reserve account. Could we talk on that for a

050minute? Um, Nick, I have a I have a basic question that I'm probably going to embarrass myself with and then I have a follow-up question. You said that the do rules are that free cash can't go into the circuit breaker account and I assume that also means free cash can't be channeled into the uh school's operating budget and then end up in the circuit breaker account. Is that right? >> No. From a purely financial municipal finance perspective, yes, free cash could be appropriated directly to the school budget or because the school budget warrant article will say the total and it'll tell the funding sources and it could be identified that a portion of is coming from free cash. Um, our financial policies do state that, you know, free cash won't be used directly for recurring

051operating expenses. So it that might just look a little bit of challenging and and I think the other concern would be it's not nec it it can't be town meeting can't then limit what that free cash can be used for. So once it would be appropriate at the school budget it would be kind of at the school committee's discretion how to use it. Um so that's just kind of the nuances of it. So procedurally yes that could happen. >> Okay that's really helpful. So maybe we can just spend a few minutes on this. I think um like I mean I I appreciate the free cash allocation of reserves and you all know we're trying to um build back the in all of all of our depleted revolving accounts but in particular the circuit breaker account.

052Um, I'm wondering I I guess uh I wonder if we should talk about whether that pre-cash allocation can actually go into our operating budget and allow us to then channel that into the circuit breaker fund. And I think I would like to understand the um just pros and cons of having uh having special education reserves in a in a town reserve account uh versus the circuit breaker account. The circuit breaker account is used to pay our bills. Um, and I'm I'm wondering what the mechanics might be if we need to access the the town special educ education account to pay for uh to pay for costs that come out of circuit breaker that would otherwise come out of circuit breaker. >> And correct me if I'm sort of misunderstanding anything here. >> I mean, from

053my perspective, I I'll just share that. think the you know the process is different for sped stabilization fund where it requires an official vote of the school committee and the select board and and there's you know I think there's narrower costs that are eligible for it and and there's a little bit of a analysis of whether those costs can be pulled out of there. Um so that I think that's the only that's the procedural difference. I think there's a you know an eligibility um analysis that has to happen as well. Um, but I I'm like I've said to to John previously, I I'm personally not um adamant about where that money goes or so I'm I'm open to kind of conversations about what makes the most sense to accomplish our I think our shared goal

054is to help to facilitate building up reserve. So what that exactly looks like, I don't know that I have any specific uh perspective on it and I'm happy to reach a solution that works for for everybody. So Nick, what you what you stated or what you've uh learned from the municipal finance is that we cannot send funds directly into the circuit breaker account. We can have it in our operating stabilization fund or we can have it in that special education um fund that we created last year. The special education fund means that the school committee and the select board would have to sign off on the funds being used. And if we put it in the operation stabilization fund, we cannot use it in repeated years due to our financial policies we just use to

055fund ongoing expenses. >> And on the operating budget stabilization fund, it requires a town meeting vote to withdraw. So it's it's a it's another level. Um so yeah so the options would be sped stabilization fund which would be um appropriation by town meeting and then withdrawals by school committee and select board appropriation to the operating budget stabilization fund which withdrawals have to come through town meeting appropriation to the town reserve fund which is under the control of the warrant committee. And now it's a warrant committee action rather than another board or committee. And then as as Nathan suggested here, a free cash appropriation directly into the school budget, which town meeting couldn't then limit it to say what it can be used for, but the school committee could express what the intention is. Um there

056wouldn't be like a legal limitation that the school the town meeting could set. Um I view those as kind of the the main options. And there might be others I'm not thinking of, but that's kind of the the variety of uh menu of options that you have. >> It could be um allocated to either FY26 or FY27. >> Yes. Yes. Correct. At the annual town meeting, uh there could be an article to amend fiscal 26 appropriations um as well. >> Thank you. We're talking a lot about the mechanics of how money might move from one account to another. But we're not, as far as I can tell, we're not yet agreed in principle of what do you think is going to happen. We're not agreed if the town is going to fund $500,000 in free

057cash. We're not agreed that if the town does that, do the schools reduce their buildup of the uh circuit breaker by 500,000. We're not agreed do they reduce the build up the circuit breaker by 700,000. Was discussed with the war committee. I haven't heard any agreement in principle of how things will work. So talking about the mechanics of what goes to what uh what account seems a little premature. Well, it's not premature for me because I I want to just before we talk about like before we talk about what our sort of revolving account or reserve account goals are, I just want to understand like what I saw in the presentation from Nick was there's a there there's a proposal on the table to send free cash, $500,000 of free cash into a special education

058reserve account of some kind. And so I just wanted to maybe first just understand that so we could limit our choices or expand our choices. And then I do think I mean we have a goal of for we have a goal of building up our revolving our circuit breaker account. I think um think we wanted to put um you know we had a we talked about putting like another $900,000 in it next year. I think we have to talk about how realistic that is given the budget situation obviously. I just I wanted to to >> Yeah. Um just on that in like the one concern I would have about so again the the need to replenish the funds the um the circuit breaker funds or the the kind of reserve funds. Nick, I appreciate you

059naming that kind of framing at the start that like we are all we're in agreement that that needs to happen, right? We've seen what happened to the schools in FY24, saw what happened in FY25. We saw the issues that that caused, not just to the schools, but to the town side. We got the um the message loud and clear from the school committee, from the the select board during those and the Warren Committee and the town meeting as a whole. um uh not to speak for 300 people there um but that the schools need to create systems to get their stuff under control and I think we've talked in the leadup to the override extensively on the things we felt we needed to do again significant appreciation to Katie on a lot of those things

060who identified the special ed reserve uh stabilization fund is one of the mechanisms we could put in place so like we we got the message loud and clear that we need to create systems where we can withstand uh unexpected um uh influxes in expenditures. Uh and again a significant area of that historically within the town and with all schools really is around special education expenses. So that was a goal we heard. We within the override process established this kind of portion of our operating budget to help kind of build up the circuit breaker because as the department of revenue states carrying forward funds u or trying to build up some reserves within that account that you can carry over from one year to the next is best practice. As Katie has stated, Masbo and other

061organizations think that actually carrying a full years in a rears is best practice. And so that's kind of the policy we've discussed internally. But I think and we can argue about whether or not I think Jay disagrees on like what what the number is appropriate number is that the school should be having in that account, right? We can disagree on that. But I think we all agree that we need something to address that. Um, just to like put that in perspective, if we had followed like as an example, because I I think we're talking about this kind of very theoretically, but in FY23, the school's circuit breaker funding was uh reimbured at $2.5 million. If at that point we had carried that 2.5, we had like had this practice in place. We carried that $2.5

062million into FY24, then what that would mean is at the end of the year when the schools had a $1.5 million deficit, we could have drawn that down. Instead of going to the town for $415,000 worth of ARPA funds, we could have just drawn that down to 1 million. And then FY25 when the school department had a $2 million operating deficit that through a lot of hard work and again hats off to Katie uh where we got that down to a million, we could have similarly closed that with the remaining funds within that revolving account without putting additional pressure on the town and needing that million dollar free cash allocation, which again otherwise could have been helpful in other ways to support the override, right? But schools needed it to close a deficit. So, like

063that that's just an example of like what we see when we think about the the issue we have where we started the year with $8,000 within that account and like real life scenarios that Milton experienced the last two years where these reserves are important. So, I I just wanted to give that as an example for the framing and again I think we can debate the exact number long term. We can debate the exact number we should carry over into next year and what the impacts on FY27 are. I certainly think if we get a free cash allocation of $500,000 that is helpful to our long-term goal and that might mean that we can reduce you know what we are hoping to carry into next year or increase our utilization circuit breaker. So that kind of

064long statement brings me I think my like question or concern which is free cash is a one-time allocation. We right now have an a operating amount that we are carrying in which our longer term plan is to that allows us to build that over time. If we just eliminated that and brought that to zero and utilize everything within free cash, we have no future ability to build up that account, right? Without the town continuing to give us free cash every year. Does that make sense? Can >> can I can I add something Nick before before you answer that? Um it's to the point you're making about um what happened with the override and the mechanisms we've kind of put in place to not avoid another override but be better prepared for the next override. It's

065really hard to go back to 23 and know what the conversations were or how that happened with the reserves. But I would challenge that if you didn't use that if you kept those reserves for 25, they would have helped you the next year. Those state funds are for your expenses. So those funds that were spent in 23 theoretically were for costs, right? For reimbursements. That's how they were supposed to be spent. You cannot choose just to not to not pay the bills you need to pay and just keep the money in the reserve account for when something else happens. Now, maybe what happened was the expenses rose so much in 23 they couldn't be covered and that's a different issue. What's happened is we've created a special education special um fund that we have not

066yet funded. This is the second year and I think what we're asking for is that that fund be viewed as your reserves because it is a fund that allows the town to have more flexibility. You are receiving the state funds. There are many districts that that have in their policies to exhaust all of those state funds every year because it it it alleviates pressure on their town operating budget. That is some that is the kind of partnership we're trying to work through with the schools that hopefully in exchange for us putting $500,000 into the special education stabilization fund which is town controlled and school committee and everyone else that you will use the state funding and you will have that reserve account because as it stands now if we put $500,000 into that stabilization fund

067and you do not use the million dollars you have in the circuit breaker you will now have $1.5 million in reserves and we would still have that million dollar gap and I don't think that's something that we would be comfortable with at the select portal. So that's the conversation we're trying to have is that those funds you get from the state are to be used. That is the goal. I've looked at the policies. is not going to go and you know fact checked everything that's happened but those policies and best practices there's also a practice where you exhaust those funds and in collaboration with the town you work out what backfills and what supports your special education costs and I think that's what we're trying to build and I thought that's why we created the

068special education stabilization fund so that we had that option >> okay >> um I'd like to I think I agree with what Winston said this math confused me a little bit, but I think I agree. But I want to get back to the last sentence you said, Mark. >> I agree with that sentence, but I'm looking at it from a glasses half full point of view. You said if we spend no returning funds on I'm going to use the wrong term, but building up the circuit breaker, then we'll be dependent on free cash every year. I agree with that, but again, I'm looking at it from classes half full point of view. So, we all agree onetime cash shouldn't be used for recurring expenses. I would say the opposite is also true. when you can

069recurring funding maybe shouldn't be used for onetime expenses and what you said about if we rely on free cash then next year we're hosed unless there's free cash I would say on the town side there are one two three some number two three some number of stabilization funds and those funds get money in years when we have free cash and they don't get money years when we don't have free cash and I would like to view this situation Whether we call it the circuit breaker account, whether we call it the special education account, this situation as a whole, in the same way in the years when we have free cash, I'd like to, you know, next year, the year after, the year after we have free cash, I'd like to put money towards that. We

070don't have free cash, we don't. I don't see that as a bad thing. That's exactly what you said, but it sounds like you see that as a bad thing, but I see it as a good thing. I think in so our other reserve accounts aren't so critically low, right? And so I think in if we were already in a place where the account was more robustly funded and we're just talking about like closing the remaining gap, I think I'd be with you. I think our we are so far away from the the practice we are trying to enact. Again, I disagree with some some points Winston's making there. There are lots of towns that do have policies where they roll over a year or almost a full year, right? You look at Westwood, you look

071at Newton, you look at Chsburg, you look at like there are lots of them. So, um, so again, towns do it different, but we have said this is again school committee decision. This is like what what we want to do. This is based upon John who's been a superintendent, been doing this longer than I think the rest of us today, John uh and uh Katie as well and that guidance. And again, that's a conversation I think we have internally with the school committee. I think it informs from my perspective, it informs our decision on what to do, right? If you if and I'm not hearing this necessarily from Nick in the board. I'm just really hearing it from you. And so I want to differentiate that. But what you seem to be saying is it's

072an ultimatum. You either do this or I give it to you with which I I have some some concerns about. Um, and if that's the case, then there are implications for saying, okay, but then again, what happens next year and what happens the following year? This $500,000 is not a million, right? It is not closing the gap. And so there there is still then that longer term gap that I am concerned about because I I think what I am concerned about coming out of the last two years and being in those conversations and meetings managed through that is creating systems that provide that long-term flexibility. And when we as the school committee pay proposed the special ed stabilization fund, that was our request to establish that. We did that as a belt and suspenders situation.

073That was not as a replacement for circuit breaker. We never expressed that in any way. It was here is another way in which we can as a town establish a process by which to help support a place that has been a historical pain point for both the schools and because it's affected the school so much it hit the the town which is not fair to the town not fair to other town departments that when the school department has an overage it somehow negatively affects them. We don't want that. And so we're we have tried to manage that internally. We we did that again as we said within the override and that was the decision of how we need to build up those funds. We did not ask the town for it. We're not asking for

074the town for it this year. We're but we're getting pressure from y'all to reduce this. And again in some fair and appreciation y'all are not just telling us to reduce it, but you're trying to all you know um counter that with some free cash. But I am concerned about the outy years. Maybe that's just me. Um I I think within our conversations in finance that's that is our concern around the out years and so >> maybe that's the issue but you are asking the town for it. We're not asking >> into a stabilization fund is town funds and >> sorry, say that again. >> $500,000 into the stabilization fund is town funds, right? Any >> discuss special ed stabilization fund. >> Any discussion around rebalancing with town department, whoever gets what, that is asking the

075town for the money. What we're asking you to do is use the state funds so the town does not have to go into its operating budget. I understand, especially coming off of the override, the hesitancy to use the funds, but saving now for some tragedy in the future only hurts us now. >> I think that's shortsighted when I just got I disagree. I think that short >> because we can collaborate and work on a way that the expenses to our to the best of our ability that we have funds that if things go wrong we can we can use them and back them but the state funds are are a lever that you all can pull at any moment. You can choose not to. We cannot force you to. So I think the idea of

076an ultimatum that we cannot force you to use those funds. If you as a school committee decide that you would rather keep the million dollars in reserves, we cannot force your hand to not do that. What we're laying out is the plan where you don't where you either where you spend more of it or you spend all of it and we collectively come up with a policy for this year and future years around how we handle that circuit breaker fund and a special education fund and the cost associated with it. I think that's the plan we've got to come up with. And if you all kind of want to have that in in your your own conversations, maybe a little too quick for you guys to decide now, but that's really the conversation where it

077stands. Nick shared that that circuit breaker is going to be funded a higher percentage next year. That's the governor's intent. So, you will be receiving even more money into that circuit breaker account. So, right now, we we feel we have a lever that can be pulled to close this gap. >> Yeah. No, Winston. I I agree with that that point on again these things all impact the conversation we had the projections we've had and we had a little bit of that at our last finance meeting of like okay well if we get this maybe we could reduce or increase our usage of the circuit breaker and what would that mean to meeting our policy again the circuit breaker policy itself is a school committee policy and so we've talked about that we are developing that

078that's that's internal the uh special ed stabilization fund is again a more of a joint one uh I just think to to say we need to focus on FY27 and fix FY27 and ignore the implications for FY2829 that that's just not how I >> maybe I'm just understanding you but that was Mark >> we we have all seen at least three presentations about about um potential ways to do uh 27 28 29 and 30 and what we're trying to do is finish 27 so that whatever dispatches need to happen to the schools happen. And then we collectively work on 28, 29, and 30 because in those years we're talking about what process we're going to put in place in terms of funding the schools and funding all the other asks and which of those years

079will be our override year because the pace at which we use our oper operation stabilization fund is key to that. But we can't get there until we finish this first thing. So that because if you decide today that you're never going to use the the circuit breaker, >> that changes what we do for 28, 29, and 30. >> But can I can I interject? I think the one thing we're trying to say is any decision that we make in 27 impacts 28. like we're trying to do. The goal that came, you know, that came out of all of the discussions last year was to have a stable but a stable school budget, a sustainable school budget. And so, and one of the things that the phrases that kept coming up last year was structural deficits.

080And that with the the I what we needed to do was address those structural deficits so that we weren't playing, you know, kind of whack-a-ole at the end of the year like that we have something set up so that we're the way we're planning for 27 begins, you know, begins to support us in 28 so that we are beginning to build those reserves. So, so I appreciate what you're saying that we have to focus on 27, but we can't focus on 27 and and and ignore 28. we need to be looking at 27 because it impacts 28. And so I think that we're just trying to look one, two, three years out because we have to. We can't continue to just look at this first year, cross our fingers, get through it, and then say

081we'll pick up our head when we're done and look at the next one. And and so that's that's what you're hearing from us. And so if you're not saying that, that's great. But that's the approach we're saying. So yes, we are focusing on 27, but we need to be focusing on the next year as we're focusing on this year. I I agree with a lot of what Amanda said, you know, and that's why the war committee I've talked about ways to do the operating budget stabilization fund so that you know you're not kept to two and a half% per year, you know. I know part of the underlying discussion is are we kept at two and a half% per year or four and a half% per year. >> Maybe that's getting off topic, but I

082>> Well, that gets into the third piece of DFY 28. Yeah, we're still on circuit. We might >> So that's where I agree with Amanda. What I think I disagree with is a light bulb went off in my head when you said we want to create a sustainable budget. We may disagree on this. I think I see a much more sustainable budget if you instead of putting 900,000 into I can't tell you what to do. We all agree on that. But if instead of putting $900,000 into this revolving fund for the next couple years, if instead you don't do that and let the town put half a million dollars into a stabilization fund for the next few years, that seems like a win-win. We're using one-time money to build up a reserve account, which is

083what is usually done, and then you got your ongoing money for your ongoing expenses. I see that as a win-win. I know people at this table don't agree with me. I feel like we're speaking different language because I don't know why we're not agreeing. Um but that's that that's for what I'm >> Is it okay if I ask a question? >> Yeah. >> Um thanks. So, I mean, I I hear the conversation going in circles because I do think there's a chicken egg dynamic to this conversation and I think that for the schools school committee point of view, uh, feeling a mandate to break the cycle of dysfunction, um, and to really achieve a next level of fiscal responsibility. That has been our stated commitment and I think that's part of that's an important dynamic

084here. I just want to Winston I just want they'll make sure I'm hearing what you're saying is you a few moments ago you spoke to the possibility if not the intent to create a select board policy that would address the town's goal if not a guarantee because we all know one year to the next free cash will fluctuate. But are you speaking about um an intent, a goal, a I mean commitment of creating a policy that would provide that stability for the schools going forward because if it's just I mean you are this is the members of the select board in February of 2026. you can't you can't decide what the select board is going to be doing next year, the year after that or the year after that. So, I think that's where it

085is a little bit tricky because you're asking I think the school committee to believe that you're giving us a half, you know, $500,000 right now and you're asking us to, you know, build the budget on essentially an if not an assumption at least a strong hope that we can build back reserves with the select board, the town's help in the future, but we have Do you understand how that feels a little bit challenging to like we can't count on that at all? Um, and so as we are trying to fulfill our commitment to take ourselves to a next level of fiscal responsibility, I'm just naming that I think I don't see us like going totally different directions here. I just think that there's a tension and I I don't I think there's like positive intent

086on both sides to to do what we think is the right thing. So, >> are you Lizzie, are you speaking of are you when I are you talking when I mentioned the a policy of not funding ongoing um from the operating stabilization fund or a policy of us continually funding the special education stabilization >> continually funding the special education stabilization fund? >> I don't think but I think that's something that we would all work out. I think the that's something for all of us to decide. I don't think it matters who would be in the select board seat or who'd be in the town administrators or even the school committee seat. If we all sat here with all of the relevant committees and said the plan that we're putting together is that the schools will

087spend XYZ from the um circuit breaker fund and it and it offset to that the town would put XYZ into the special education stabilization fund and then you'd put in you know parameters of things are going sideway. I think we'd all have to agree to that. I don't think anybody's trying to pull the pull the football off from Charlie Brown here. Like we're not this is not a space for any sort of tricks. This is for us to really create um a collaboration and real policies that go between all of us. It would have >> totally I'm not I'm not implying anything about tricks. I'm just saying like even with that statement you just made which sounds like a good thing to explore but you're you are talking about a different way of like contextualizing

088this year's decisions within future years. So even it's it's hard to like separate it out I guess in that sense too. Um and clearly anyway so I I'm just I appreciate that as an a concept that yeah would require further um collaboration across the two committees the town you know the town um and I think it would potentially provide more um >> I think there also there's a lot of proposals that we have on the table. I'm sorry, Megan. I say you have your handle. I've been talking way too much. >> No. So, I I think I just wanted to add I what I think I'm hearing the discussion move more toward now is a conversation on how quickly the reserves like what how can we collaborate to build the reserves at a sustainable pace

089for both the town and MPS. Um and on the one hand, um I hear concern from the school committee that if there aren't enough select board members, so say if the current select board makes a commitment to continue with um a regular um a regular commitment of funds to the to the um to the school's reserves. nerves. Um that that might not be there in a few years, but if you are able to hang on to more now, you're asking for it right now. The thinking is maybe ask for it now because you may not be able to do it in future years on like a regular cycle. And I think the challenge that um you know I don't I don't want to put any words in Winston's mouth like the the challenge that I

090have is how do you dig into other town departments and potentially ask them to lay off staff when the school has a big reserve or this the beginnings of a reserve um that you do need and that we do want to help you develop, but that is a that is a really difficult thing to ask us to do. >> So, I think if I could look at it differently, I don't know that we're saying that, I think the way we're the way we're originally talking about it is that it's built within the school's budget, >> ongoing budget to build up those reserves. We're not the the original way we're talking about it is it's within our operating but our operating budget is that we are then building up the reserves. So we're not asking for

091anything of the town. >> So that we're what we're saying is by doing this we're self self- sustaining for lack of a better word. >> And so we are we are building our budget in a way that is responsible and that will allow us to build up those reserves without asking the town for any funding. the the alternate scenario that's being shared with the special ed stabilization fund would then be money coming from the town or from the state, however you want to word it, which would be different. So then we're saying is that something that there is that we're talking about an ongoing policy by which the select board would agree to annually give x amount of money into that stabilization fund. So there are two different things. One is you funding it and

092us is saying the other way is saying we are building a budget that enables us to do this moving forward without any impact on the town or the town budgets are looking for any cuts from anybody. That's those are the two different scenarios. >> But but there's always an impact if you don't use the reserve funds. It's a direct impact to the town's operating budget. I think Katie had that on one of her slides in your meeting last week. She said, you know, for every dollar that's used in the circuit breaker, it's a relief to a local operating budget. So, there is an impact. The impact, we're talking about the impact right now if you, and this is again, this is not a mandate, but if you used if you said you were going to

093use the circuit breaker to fund the million-dollar gap, you wouldn't have a gap, >> right? Yes, but we also we also wouldn't have a reserve in our circuit breaker at a recommended level similar to reserves that are held in the town side at a recommended level that provide appropriate balance sheet. So what we're trying to provide is a balance sheet for the schools like the town has a balance sheet for the town that has an appropriate amount of reserves that they have in place that is always in healthy tension with how much of this should we put in reserve and how much should we spend in operating in order to make that year work. And what we're saying is the amount that's in that account right now started at $8,000 this year. We worked hard

094with the override funds to build it up so we will have a a positive number going into it next year. And we feel it's we feel very very responsible to create systems where we have appropriate balances in those accounts while we struggle with trying to also provide the level staffing that we're trying to provide as well. So, um, we just don't want to spend it in order to fund positions that we don't know if we if we don't have enough in that savings account, uh, or that that balance sheet that could result in us not having enough money next year, and then we just have to lay those people off. So this is this is a very similar balance between trying to keep your balance sheet sound fiscally, trying to create sustainability and predictability by

095building up those reserves to an appropriate point and funding your operating costs in a way that are good for kids in schools or town services on the town side. So I do not want to look into the town budgets. I don't want to ask the town for those dollars. That's not what I'm asking. I'm saying out loud that we are trying to do two things at once. support the students with the best staffing level we can with an operating budget that we can uh figure out with you all and continue to produce enough money incrementally over time to secure that balance sheet with those revolving accounts being at recommended levels that we feel comfortable with so we can move forward in a fiscally responsible way. That's what we've been asked to do and we did

096a very good job of it this year and we think we have two more years worth of work to do like that. Um, if we chose to have it all go into the other account that's at the select board school committee level, it has restrictions as to how you can access it. Not just the votes that have to take place, but the conditions under which you can access it, which makes it restrictive in nature. So, we're trying to do this in-house like a lot of districts do, have those levels be at appropriate levels and try to support our override our our operating budget in a sustainable way. This is a healthy tension that we'll figure out. I appreciate the $500,000. The number in that account should be somewhere between 2.7 and 3.1. We're building up

097to that point. And we will always struggle with the decision of whether we have to add funds to that account or add teachers or educators or actually lose teachers or educators. That's something that we're always going to struggle with because this will never be perfect. But we're we're willing to take the work on. we're willing to make these decisions and but you know unless we have a very completely changed philosophy and policy set in place that all that $2.7 or $3 million will sit in that town account and we expend every circuit breaker dollar for that existing year Winston that you have portrayed as one of the options that could be true that's the Welssley model right where the 3 million or the 5 million sits in an account and we expend our our circuit

098breaker every year in the year that we get Um, but that's given that there's a healthy account that's accessible by the schools that's always there. It can't be at the whim of if we have free cash, we'll put money in it and if we don't, we won't. That that's the worry about having that account being the sole anchor when when we have to do planning out for three years. So, my preference would be to have that account be incrementally supported over time and uh continue to do what we've been trying to do this year and next year in order to build that up. The $500,000 that's offered is genuinely appreciated and I think could end up in that account in a way that we continue to build it up a little faster. And when we

099get to that number and we can just then have that number in place, whatever that number is that we agree to 2.5, 2.7, 3.1, then we can begin to use our operating budget more flexibly. But we have to get those savings accounts, those balance sheets stable before we can actually do that. This is a three-year plan and we do always look three years ahead and I always look three years backwards because I'm learning from the three years that we just had and I'm trying to project that learning forward into the next three years of our budgeting. So I understand both options and both options have merit. But as the person in charge in with Katie to make sure that we end solvent every year, I would prefer that budget to be managed by the school

100department. >> Well, I would uh if that is going to be your decision and if that is going to be your policy, I would like you all to share that with everyone that that is a decision that you've made and that is how you'd like to go forward with the reserve funds. and the idea to build back the 3 million and the impact that that has and maybe we can map that out. But there is an impact to it and it's >> there absolutely is the impact moving forward is that continue to money on our operating budget without reserves then we will continue to push this ball down the road and never solve the issue of having a physical fiscal sustainable budget. That's all we all have the same goal intended. We might have different

101vehicles to get there. And I do believe that if we do finish 27 and come up to decisions about how we handle the the million deficit plus the 500, the absolute best conversation moving forward is what is the percentage increase? How do we keep the proportionality of 6931 and what do we do with revolving accounts or circuit breaker? How do we want to do that as a town? That's that's all appropriate conversation for the next six >> question. Um, you all have expressed the the goal of getting to 3.1 million, right? Because that's what matches your close to your onetime funds now, even though it's going to increase next year. When you get to the 3.1 million, what do you do with it? Do you just keep it there? And then you then you spend

102all the amount that year. >> When when you keep it when you get there, you say to yourself, now I'm all set for next year. I know exactly that I feel safe that I can budget the next fiscal year and not have to worry about this variability that will impact the school. So when we do that and just like when we sit at the OPED or with the insurance that the town has fully paid out the uh some of the accounts that they have, there were struggles probably in those years where you were trying to get to 100% of paying OPED or the insurance um I don't know what the account is called. Is it the OPED? Yep. Yep. >> There were years when the town was trying to get to 100% OPED >> pension

103fund paid off so then they could free up operating money later in the years and so they did that. That's a huge huge thing in a positive direction for the town. We're trying to get to about one years of worth of circuit breaker. That's like us fully fitting our rope in our school in our school world. That's all we're trying to do. Once we get there, then the other revenue will loosen up in our operating budget. then we'll be able to do more things uh with our operating budget. But we are only trying to if we can give an example that's not apples to apples pay our rope heaven in 100%. And we're trying to get circuit breaker to be that that healthy balance. So then we can work our operating budget differently after we

104sustain that for a certain period of time >> and you get to 3.1 in three years and then every year after that you spend all the circuit breaker money. you spent a prior year because again it's a again we're getting a little bit in the details Winston I'm happy to sit with you the details I know you're not supposed to keep the money longer than a year so >> no we don't we never would it's a it's a balance >> through to 3 million if you can't keep the money year overyear >> it's it's it's a it's a little bit more complex of an equation than that and we will gladly sit down and go through it and do the pros and cons of it no one's keeping any money against the rules we're keeping

105one year's worth of circuit breaker ideally as permitted by law to be expended in the next year because it has to be expended the next year. That's exactly what we're talking about. >> So that I just want to be mindful of time because I know it's 556. I'm sure a bunch of folks and we still haven't quite gotten to the FY28 and I don't know if maybe from some of the Tony I I just want to name like I again I think from our perspective what we want to say is we are really appreciative of the work the town select board has done to decrease the revenue gap to decrease the impact on our schools. I think Winston the like the feedback the thoughts on the usage of circuit breaker appreciate that. I think that

106is coming from a place where you are trying to mitigate the impact to the schools. You're trying to save jobs for the schools. I appreciate that greatly. I know you care about the schools. We all care about the schools and I really I appreciate the creative thinking. I think Jay's done something similar. So, appreciate it Jay. I think that the as John said, the tension here is the balance of uh of like what is too much risk, right? when how do we how do we uh you know hedge against risk within our own department budget versus the town as a whole and obviously there's been a lot of risk over the last two years that we've gone through that you and Megan haven't been around for and um you know so you might have a

107different perspective and I think that's fair and as John said I think that's an annual budget in any budget I deal with you're you are balancing those two things so I just I appreciate the the thought and the care that I know you are bringing to the conversation I think we are we are disagreeing on I don't even know if we're disagreeing because I don't think we have a decision from the school committee side on exactly what we're going to do based upon this new information. I just think we're getting a bit in the weeds. But again, I think at a high level, as we've said plenty of times, we agree we want to create a sustainable and excellent experience for our our kids and our staff and our families. And I think that's where

108this whole conversation is coming from. So, I just want to say that like I don't think we're on opposite sides. I think there's some tension here, but it's just about since we are ending and being mindful of time. I and we have this you we kind of have a decision to make here. I would like it to be made clear when the decision is made. This is a decision and a policy. I don't want this framed as we have some sort that we have a town deficit or that the town did not hit some sort of fiscal revenue goal which is what has been expressed own that this is a decision and a policy about how we about how we close the gap. Yeah, I'm not sure I understand, >> but I could refra I

109just I want to be a little bit mindful of time. I think we still haven't quite so I think that circuit breaker I I think our next step as I was saying on FY27 what our next step was which is moving forward on figuring out the million circuit breaker our next step is essentially connect to that FY27 which is again what that's a school committee decision of what we will do with the circuit breaker how that affects FY27 uh can I again just because Jay brought it up as kind of a an ultimatum here and I think that is important to know as it relates to The decision we make is the is the there some requirement that as the select board, y'all feel you would need to put on the $500,000 allocation to the

110circuit breaker uh funding that you would only do that if the schools did why right they'll only do that if we agreed to increase our circuit breaker utilization by a commensurate 500,000 or by more than that. I just want to >> we have a decision to make as well. I can only speak for myself personally. >> I would not >> Yeah, we have other members. >> I can myself personally. I would not be comfortable with the schools having a million in a circuit breaker, 500,000 in special education fund as we're talking about people not working here anymore. I would not be comfortable with that. But that's this conversation we have to have also with our other select board members because that's a million. You have a million in your circuit breaker reserve and you'd have

111a half million in the special education fund. It's 1.5 million that's not being used. >> Yes. Again, the town has reserve accounts, too. They have plenty of money that's not being used for rainy day things. And anyways, >> we'll disagree on that, but that's helpful. If you could get that clarity, >> that clarity again, I think is important to how we think about the decision. So, if you could get that clarity at the select board, I would appreciate it because that gives us a marching order or that that gives us information as we finalize our budget. That makes sense. >> Can I say one sentence? >> One person's ultimatum is another person's town and school working together for financial planning. >> I understand, but >> I guess the question is, is it conditional? Is is

112the is the $500,000 conditional ongoing to the special education? Yeah, relate to each other here. I >> I'm just I think it's just important to know that that's it's not >> I'm only 115th of I'm only 115th of the war committing you. I'm asking like that control like what controls that allocation. >> I think that was just the question. It's Nick had said he was agnostic about it and then we're hearing something. So, we just want to know like al if there is if as we are discussing this if it's the $500,000 is only in play if it's going to the special education reserve fund then that's important to know. I I think that's just the we're just asking for clarity around that. That's that's >> we only have we have two places that we

113can place it goes the special education fund or goes in the operation stabilization fund. The special education fund is only accessible by the schools. the operation stabilization fund is for the town >> the the account at the town level is only accessible by the select board vote and the school committee vote. So the the four pieces that um uh Nick laid out I think are really important. There were four options that he laid out today that I think we should revisit. Town uh a town account for special education that's accessible under certain conditions in a vote of select board and school committee that right now has no money in it that would only have 500 in it if we put it in operation stabilization which is town meeting or um warrant committee for town reserves

114and putting it into the school budget. uh that would be some sort of an arrangement that would be done through town meeting and that it needed to be conditional within that vote to be used for special education only. Uh some sort of a wordage like that that Nick outlined. So Nick's four options that he offered at the beginning of this meeting I think I think are the is the forum or the options that we need to consider and I would say that that that should be our focus. uh because it does make a difference if if if the select board say the 500 has to go in the uh select board school committee town special education uh stabilization fund that changes our dynamic of how we might need to approach the operating budget. >> Yeah.

115>> So I and I'm not looking to put anybody on the spot. I think those four options that Nick outlined are things that we should talk about and consider and then the school committee could give their preference and we can begin to have that conversation. But it does impact what we do or what we don't do with the million-doll uh reduction that we have to make to our staff. It does play into that equation at some point. And we are ready to make those reductions. We'll be presenting those reductions on Wednesday at finance next week. Um and we're very thankful that those reductions don't have to be 1.4. Uh the most they have to be right now is one 1 million. That's a huge uh step in the right direction. So we're thankful. And if

116we can get some insight into how the 500's going to be used or considered to be used, that will inform our decisions moving forward as well. >> Megan, >> so um just speaking as one of the select board, um you know, and we obviously have to go talk to our members. I can say I can say for myself that um you know I I would still be open to the to that 500,000 um you know going over to the school regardless of the account but I will not support reductions on the town side if funds are not exhausted from the reserves. just so you know what my what my boundary is. You can decide what to do with your with your staff and um your staffing levels, but I'm I'm not going to support moving

117to the to the town side of the ledger. >> Okay. Thank you. >> So, I think we're probably at people's available time. I know we have school committee here in an hour. Um, and people might want to get some dinner beforehand. Um, the piece we didn't get to really is the FY2829. I know we're talking about that a bit of budget coordination. I think I just want to name here for the the meeting the concern we've we've previously raised and raised again is just the long-term projection that um, Nick previously shared around the 3% and what that means. And we would continue to uh request that the select board and talent administrator as y'all are looking at those longer term um forecasts and again hopefully we're able to talk about the budget coordination you know

118consider a number different than 3%. consider a higher number because we we think 3% result in you know one and a half million dollars uh or kind of you know a significant number uh or revenue shortfall kind of on an annual basis and result in in cuts to the school department. Agree agree that that's that's a conversation we have to re-evaluate that that's a conversation that we have to have and you know in full transparency to everybody listening that probably means an override sooner than we planned but um I do I really am interested in understanding the forecast in the years out with that higher rate applied and actually also understanding what that means in terms of delivery of service. Um, you know, how that impacts students, not just the bottom line number. Um, you

119know, we we we need to have better illustration around that moving forward. And I think understanding that and also nesting it within the larger town forecast is critical for everybody to understand. Um, any other information y'all wanted to cover? >> I'm good here. Thank you. And I'll just we've you know we've had a first run at revising that forecast with um different assumptions and we'll continue to tweak that and be able to share um an initial run through uh with folks uh next week >> for longer for the longer term outer years. Uh to your point Mark >> Nick I just had one quick question and I know you said it would have minimal impact. Do you know when you get the final number or final percentage increase for health insurance? Is that because it's

120still a is that in >> No. So um we got our uh renewal proposals from the insurers the carriers this week. We're having a conversation about that and um we should be able to to finalize that. So hopefully in the near term, I would say within a week or two, we should be in able to say kind of what we're locked in at. Um, but nothing right now that says we should be a we should need to deviate from where we're at, which is positive. Um, unfortunately, it just means it's that 10% number that we've talked about. >> Thanks. >> Okay. Uh, appreciate everybody's time. Uh, we'll see you all at budget coordination or at least some of y'all. Uh, yeah, we're we need to adjourn. I don't know if you all do. Um, so

121>> thank you for the motion. Is there a second? Great. Um, in person, so all in favor at 609. >> All right. Thank you. >> We don't have to adjourn on our end because we're a guest at this. Yeah. Okay. All right. Thanks everyone. >> Thank you for your time. Hey. Hey.