Hear from Colette

on the Issues

 
 
 
 
 

Fiduciary Responsibilities

The Select Board is the Town’s executive body with significant fiduciary responsibilities.  By training, I am a Chartered Accountant (the UK equivalent of a CPA) and worked for twelve years as an auditor with PWC in the UK and USA.  I served on Wellesley’s Audit Committee and am a Town Meeting Member.  Running for election as a Town Meeting Member and seeking an appointment on the Audit Committee were purposeful steps I took in 2018 to gain a better understanding of Wellesley’s town government and its overall global financial picture before running for and being elected to the Select Board on September 1, 2020.

As I write this the Board has issued very tight budget guidelines for each department for operating and capital expenditures. The Board must now work through with each department what that means in terms of services cut and delayed capital spending, while working to close projected budget deficits. This is particularly challenging in an environment where there are many significant unknown factors such as:

  • future municipal COVID relief funds

  • the orderly and widespread roll out of a vaccine

  • future school structure (will school return fully in person in September 2021)

  • future state aid funding, and

  • what will life look like after a vaccination - will there be new commuting patterns or new ongoing costs? 

We just don’t know the answers to these questions yet, but we need to make a plan to get through the next few years. Closing budget deficits will take a combination of cuts to departmental capital requests and Inside The Levy borrowings, planned drawdowns of reserves, and tighter budgetary guidelines. 

 

Debt Policy

 

Overall I would be more comfortable with budgeted cash capital and Inside The Levy (ITL) borrowing at the lower end of the towns Debt Policy – 6.2% of recurring operating revenues.  The main reasons are: 

  • It leaves up to $1m more for operating budgets – which is a critical element of the defined purpose of the debt policy (predictable funding stream for capital without a negative impact on operating budgets) 

  • I feel we have more flexibility in managing cash capital and ITL projects as they are better suited to shopping around for alternative cheaper options 

  • If well chosen, deferred projects may be quicker to “re-start” than when you cut town services. Compare deferral of buying a piece of equipment to restarting a service program which necessitates hiring and training staff etc. Of course we need to take care here as some equipment purchases have extended lead times for ordering.

  • We could bundle some ITL projects as a debt exclusions, and may need plan on that as cutting capital spending is typically simply a deferral 

 

Financial Reserves Policy

 

With respect to reserves, our policy is to maintain reserves in the range of 8-12% of budgeted operating revenues. When determining the appropriate level of reserves, our policy states we must consider the town’s overall financial picture including Other Post Employment Benefits (OPEB) and Pension liabilities among other things. Despite significant market volatility early in the pandemic (and with a caution that we can expect ongoing volatility), markets have rebounded. Although there will not be another formal pension valuation until December 2020, we know markets have largely regained their valuation and we continue to be in a very strong position in terms of funding these liabilities. 

Our reserves policy specifically defines the reasons for building reserves including, among others 

  • "Ensure short term cash availability when revenue is unavailable, or there are unanticipated expenditures, or emergency cash needs "

 

As a town we did exactly as our reserves policy stated in terms of preparing for a situation like we have today.  Indeed our reserves - currently projected to be 15% - are over our upper policy range.  I would be comfortable bringing reserved down to the lower end of our reserve policy over the next couple of years to help close budget caps.  We saved for exactly this purpose and our residents would expect this of us in tandem with other measures. 

My background in finance, knowledge of Wellesley’s particular financial situation through recent work on the Select Board and the Audit Committee, and experience of Wellesley’s town government are a strong foundation to continue to serve the board.  

 

Elementary School Buildings

Following the  School Building Committee's recommendation of the Hardy site as the preferred site for building in partnership with the MSBA, the School Committee and the Select Board endorsed that decision paving the way forward to secure between $13-$15 million dollars in critical state funding for this project. I am fully supportive of the towns long and thoughtful plan to address significant elementary school capital rebuilding needs .

Campaign Team

Stacy Braatz - Co-chair

Wendy Paul - Co-chair
Matthew McKay

Christine Mizzi

Phyllis Theermann

Todd Himstead - Treasurer

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