It’s been said that the best way to understand a subject that is new to you is to break down the unique vocabulary associated with, say, a college course or new job. On September 12, the Mattapoisett Finance Committee heard from Town Administrator Mike Lorenco, who presented them (primarily new members) with an introductory, crash course in municipal finance, beginning with vocabulary.
Attending the meeting were longstanding members Paul Amoruso, Colby Rottler and Gary Johnson, along with newly appointed members Karen Keenan, Kathleen Costello, Aaron Goldberg and Brian Connelly.
Lorenco started with the General Fund, monies collected from the town’s financial resources. An “enterprise fund” is money collected for separate town services such as water and sewer, and “subsidy” is the action taken to assist funding enterprise-fund accounts such as the town’s transfer station.
The “levy” is the total property-tax collections for a fiscal year, and Proposition 2½ is a state law that limits the amount of revenue a municipality can raise from property taxes by establishing the levy limit. An “appropriation” is authorization to spend money as approved by Town Meeting.
“New growth” is additional tax revenue generated from construction projects. PILOT stands for “Payment in Lieu of Taxes,” a monetary agreement with the town and other entities not subject to taxation, such as solar arrays.
“Excess Capacity”is the amount of levy leftover after the budget is complete. OPEB stands for postemployment benefits for employees upon retirement (health insurance). A BAN or Bond Anticipation Note is generally used for short-term borrowing. “Free Cash”is revenue over estimates and any unspent expense appropriations.
DOR is the Massachusetts Department of Revenue, which oversees all things included in municipal finance and the Division of Local Services. DLS is part of DOR and provides valuable reporting to the public and municipal leaders. “Exclusion” and “overrides” are increases to the levy limit.
Lorenco went on to explain the roles of not only the Finance Committee but those of Capital Planning and the School Committee budget process.
The Mattapoisett Capital Planning Committee studies capital-expense requests over $10,000 and with at least a five-year lifespan, reviews capital requests from department heads, reports on recommendations and prepares a five-year plan (currently using a 10-year plan).
Lorenco explained that the Finance Committee acts as a financial advisor to the Select Board and Town Meeting, provides recommendation to Town Meeting for annual budget appropriations, manages the town’s Reserve Fund and votes to disburse money from the fund when requested by the town administrator, town accountant for unforeseeable or extraordinary expenses.
Regarding the financial role of the Mattapoisett School Committee, Lorenco stated the School Committee has budget authority over the schools and that the Select Board represents executive officers.
Lorenco did some deep diving into the budget process, property taxes, and a variety of matters related to revenue and expenses.
Earlier in the meeting he noted that unless the Planning Board brings new and/or updated Zoning bylaws to the voters for consideration, the town may not need to hold a Special (Fall) Town Meeting. That decision is being pondered by the Select Board.
The next meeting of the Mattapoisett Finance Committee is pending.
Mattapoisett Finance Committee
By Marilou Newell