Schools study on Capital Plan

The Norwood Capital Outlay Committee (COC) met last week and voted 5-4 to put the Schools Facilities Assessment Study on the fiscal year 2027 (FY27) Capital Plan.

That brings the total amount of free cash to be spent on capital projects to $851,000 for the FY27.

Norwood Public Schools (NPS) Superintendent Timothy Luff said the study would basically allow the schools to prioritize repairs to be able to keep the school buildings in a state of good repair. Without it, he said it would basically make maintenance a repair bill, which is usually more costly in the long run.

Better to get an oil change every so often then a new engine every other year.

The schools study has not been without controversy. The elephant in the room is the free cash fund. The Town has been spending free cash to balance the budget for the last three years, as costs and state mandates have gone up faster than the 2.5 percent levy increase of Prop 2.5 allows.

That’s been a growing problem since 1980, when the law was enacted, according to the Stoneham Civic Ledger’s history of Prop 2.5 – https://gvimes.link/prp2-5 – and this has led to operational overrides in many municipalities (though recent inflation instability has led to more than usual).

And so the Town recently came down to a target of $700,000 of free cash spending in the capital budget so that it can have enough saved to cover the estimated gap in next year’s budget and the following year’s budget. So the big opposition to the school facilities study was that it throws that off.

COC and Planning Board Member Ernie Paciorkowski asked if it would be beneficial for that target if the COC submitted the study for May Town Meeting in 2027. O’Neill said that it would.

“Yes, we would definitely have a better picture of where we’re at, because we’ll have all the new growth, we’ll have a new budget cycle and we’ll be able to forecast that two- and three-year budget out,” he said. “Adding that back in is going to take us down where we’re not comfortable in terms of our budget projection right now. The Town did take out $2 million in projects, and I would highlight that as well. If you’re adding something back in, look at what the Town took out. Is there something there that might be more important to the committee?”

O’Neill added that they’re looking at a 4 percent budget increase for the Town and the schools to get to the $10 million in free cash they’d need to plug the budget for FY28.

“That’s going to be tough,” he said. “Based on what’s happening right now, that’s going to be a challenge for us. So there will have to be other avenues looked at.”

Luff said he felt it was doable.

“We did less than three percent last year, on purpose,” he said. “I would share that the Town did 5.5 percent.”

“That doesn’t matter,” O’Neill said.

“Well, it does, because you’re asking if we can live with that, and I have shown that I can be financially taking recommendations,” Luff said.

“But it does... we cut half-a-million dollars,” said School Committee Chair David Hiltz. “I do take objection to that, because it does matter. The schools have done our due diligence where we’ve been told we have to make cuts, and the Town has not.”

“That’s not... that’s absolutely... I’m not going to get into a budget discussion,” said O’Neill.

“Well, it’s this, so I would like you to at least listen,” Hiltz said. “The second thing is that this is $150,000. We’ve done this three times, and I hear you, but going back in the spring would be the fourth time that the schools have been asked to put some level of this off. As I’ve always said, I think you (the COC) approve it and see what the Town (Meeting) does.”

Hiltz asked if there was a stabilization fund that would cover this, and O’Neill said there is $2 million in the Capital Stabilization Fund right now, but he was unsure if this is an allowed use for such funds.

Morrill Memorial Library Executive Director Clayton Cheever said there are deferrals for the library that are very much needed right now, and while he said he was very much in favor of the study, he wanted to make sure that needs right now were not being overshadowed by future maintenance and repairs.

“I know that the plan for the generators to be used in the library for $190,000 was recently deferred in consideration of our current needs to pay for projects like this right now,” he said. “I want to make sure we’re not sacrificing the need to invest in our buildings today for a plan – which is really valuable and important, I’m a big fan of plans – but the needs we have for this building right now, for the generator and that we know exist for other buildings in Town, aren’t being sacrificed in that planning process.”

COC Chair and Board of Selectmen Bob Donnelly, who voted against adding the study, said first off, budgeting is not a contest between the schools and the general government, though he did seem to indicate a different length of time for how long both entities have been practicing good financial policy.

“I think the Board of Selectmen has done a very good job for several years at managing our budgets and I think you’ve done an outstanding job as well recently, so I really want to put that discussion aside,” he said. “This has been my concern all along. This has been a different year we’ve had than in the past years. In past years we’ve been able to use free cash in the vicinity of $7.5 million to help balance our budget deficit. We had abundant free cash and we were able to do that, and we were able to fund many of our projects with that free cash and if this had been a plan we were looking at two years, we would be able to fund many of these projects.”

But as readers might be aware, it’s not two years ago right now, and FY28 is likely not looking better.

“Looking into FY 28, we might be looking at an $8-million-to-$10-million deficit,” he said. “That’s an unknown. What is also unknown at this point in time is our free cash certification, but we’ll know that at Town Meeting, but the best estimate right now is about $12 million. When you put those two numbers together, you really have a squeeze. That is one of the reasons why in discussions with the General Manager, he put forward a number of deferments of projects.”

Donnelly pointed out that the Board of Selectmen actually added the deferment of the sidewalk repair program for $700,000.

“To me, the financial situation is the most important in this right now,” he said. “I’m a little bit nervous about entertaining taking projects off the deferred list and putting them on the capital list. I could make an argument about your (Morrill Library) generator [that] has been on the plan for a number of years and it kills me that we’re going to be deferring it again… That’s the position I’m taking here.”

COC Vice Chair Kevin Connolly pointed out when it comes to maintenance and repairs, you pay some now, or you pay more later.

“It’s been my experience that when you defer capital projects, they come back and bite you worse than what it would have been if you were to fund the original request,” he said. “The perfect example of that would be the Savage Center Roof. At one time, the Savage Center Roof would have cost the Town $200,000 to repair. The Savage Center Roof cost the Town $1.2 million, because the Town and the School Committee at the time deferred maintenance to it. When we defer maintenance costs or projects, they don’t go away. They just come back and multiply it by 10 or 100. But there are still there.”