To all Acton Residents

By Bob Hertz

Acton Leadership Group (ALG) (1), our town’s power brokers or their emissaries, tell you how much money they want and how they will spend it. They are asking for an override of $6.6M, in the upcoming April 30 ballot vote.  That is on top of the normal 2 ½% property tax increase. ALG expects to budget $5.4M of the override in fiscal year 2025 (FY25) with the remainder saved for the future, although all could be requested for FY25 expenditure. Keep in mind that once voted, the $6.6M will become a part of our ongoing tax- levy base from which property tax is calculated, thus raising future taxes. This is our hard-earned money.

The average household property tax bill (now about $14K) will increase by around $1.2K or 8.6% to $15.2K for FY25 assuming passage of the override vote (your call) and town meeting budgets using the $5.4M (a safe assumption). The FY25 property tax increase beats my Social Security raise by 20%. Acton currently holds the unfavorable spot of being one of the loftiest communities when measuring tax burden to per capita income – 17+%. Add Community Preservation Act (CPA) and auto excise taxes and Acton will be snatching almost $16K from residents of an average valued home for FY25 (2).

Do we need the full $6.6M? The ALG says yes. I am not so sure. I believe the following areas are ripe for savings, if not for FY25, certainly for future years. I am sure there are many more areas where savings could be found if there was a willingness to do so. I will add context in footnotes following the article. Some things worth looking at for savings include:

Minuteman Tech at $38K per student (3).

Underutilized transportation system (4).

Abundant Consulting and attorney fees (5).

Overpriced electric vehicles (6).

Dual Human Resource functions (7).

A/B preschool program (8).

Costly employee contracts (9).

Capital additions (10).

Significant use of reserves (11).

Loose budgets (12).

Our town and school officials originally asked for roughly $12M. The Finance Committee (FinCom) (13) suggested the most they believed would result in a positive town vote was $4M ($1K tax increase on the average valued household). The number of $6.6M then took hold. The result had more to do with what ALG believed to be the largest increase acceptable by the taxpayer than what was needed.

The “ask” was, and is, much larger than the few issues claimed to be the reason for the override. The initial issues promoted by A/B were costs of Special Education (SE) and English language development (ELD). These costs have an ongoing effect, hopefully at a lessening rate of increase.  They were significantly, however not monumentally, increased for FY25.Another stated reason for the override, cited by both town and schools, was the collapse of the Acton Health Insurance Trust (HIT) (14). The true “ask” has more to do with A/B, Acton, and Minute Man living beyond their means for several years, while using reserves to cushion the results. After working reserves down, A/B and Acton had a choice of cutting expenses or raising taxes. Although there was some cutting around the edges, they picked tax increases.

Footnotes:

1. ALG is made up of several members each of the town administration, A/B administration and FinCom.
2. Add 7% to the property value on your last tax bill (based on budget information) and divide by 1000. Multiply the result by $16.90 for property tax and $.20 for CPA and you will have a close approximation of your new tax bill. Add to that your auto excise bills for the past year. That’s Acton’s tax take of your earnings. Renters will have the tax increases passed on through rent increases.
3. Minuteman Tech has been and remains expensive. Minuteman charges its participants 50% more per student than Nashoba Tech. Are our students getting 1 ½ times the education?
4. The Acton transportation scheme, excluding the COA van and school bus services, is underutilized (the town would argue otherwise) and the cost per trip is excessive. There is no real improvement in sight. The issue resides not in the clean vans, friendly drivers, or door-to-door service. The issue, instead, is an absence of need. Acton has recently doubled down, adding a taxi-like service and more cost.
5. Both A/B and town abundantly utilize services of consultants, advisors, trainers, lawyers, and the like. Is there a proposal to reduce any of these services. How much will A/B and the town pay in FY24, and how much will be cut for FY25. Thus far I see little action. As an example, A/B has used outside legal services to block dissemination of public information properly requested under freedom of information laws– as acknowledged by the Commonwealth. How much have they spent on such efforts, and was it necessary? Consultants and advisors seem to permeate every school and governmental department.
6. At a recent FinCom meeting, a member asked why we are starting to replace our fleet of town-owned vehicles with EV’s, at $70K each, and suggested there may not be a need to do so. Skipping need, The Select Board liaison suggested the vehicles “only cost $50K”, and after federal hand-outs a mere $27.5K each. Where does the feds get their money? Either from taxpayers (you and me) or from increased debt issuance for which our kids and grandkids will be responsible – long after the purchased vehicles are on the scrap heap. This is an example of the mindset which costs Acton taxpayers – a want, not a need. We are perpetuating the free-money environment.
7. The town and schools each have what amounts to a dual human resource function, an HR department and a DEI office. This while town and schools should be minimizing hires.  Are both needed? DEI is defined by some as “any policy or practice designed to make people of various backgrounds feel welcome and ensure they have support to perform to the fullest of their abilities in the workplace”. This mission should be included in any HR department. Foremost, however, Acton should be hiring the best qualified candidate for a given position, regardless race or gender. Many companies and some universities are closing shop on DEI for cost/benefit reasons.
8. A/B supports a pre-school program although there are other pre-school options throughout the towns. Does A/B do something others are unable to do, and does it justify the cost?
9. Employee contracts apparently result in 4+% increases per year while Acton gets a normal annual boost in property tax revenues of about 3%. Employee costs are, by far, our largest cost drivers. This formula won’t work without overrides. Heaven forbid we increase class sizes. Staff attrition and strategic layoffs have done little to close the gap as A/B student enrollment continues to decline. I am unaware of any discussion of salary reduction for non-union employees, or further lay-offs. Business-as-usual appears to be the approach with unions and elsewhere. Companies must meet disappointment with actual operating cuts, often including layoffs, salary reductions, and elimination of programs. To do otherwise is to perish.
10. The FY25 capital asset additions of the town budget include $1.025M of items which will be paid from within the operating budget. It also includes acquisition of $6.7M of capital items which will be included in a separate article. The overall capital increases for the town will be $7.7M. A/B also has increases. I do not know that number for FY25.The town is accelerating purchases which management previously said could be delayed to another year – the ladder truck at a cost of $2.1M being one. The Community Preservation Committee has decided to fund an additional $175K of capital projects for the town and will present those projects to town meeting for a likely positive vote.
11. The town and schools are heavily depending on reserves to reduce the impact of ongoing expenditures for the FY25 budget. These expenditures continue. What happens in FY26 and beyond? Are we back for another override? A/B E&D reserves are below the 3% floor and the town has significantly reduced free cash reserves. They and stabilization are our general operating reserves. Both A/B and town have effectively reduced payments to OPEB, a program to cover benefit costs to retired employees which should never have been deferred in the first place. We are, once again, resorting to deferring funding to future periods to keep favored spending going for FY25. The piper must be paid at some point. Why are we raiding funds wherever possible – to keep expenses we cannot afford?
12. Budgets for the town and schools are structured with a fair amount of wiggle room. No manager wants to come back to the voters with a request for more money, so they understate estimated revenue and overstate expected costs – not by much, but, they hope, by enough. As an example, the FY24 budgets for both town and A/B were loose enough to absorb the gratuitous gesture of picking up employee costs related to increased HIT premiums – about $400K for A/B and an unknown number for the town. The justification is that Acton will be better off during union negotiations. Good luck with that. The point is budgets should be tightened and abnormalities should be voted by those paying the bills.
13. Once the override was agreed, the town and schools, including Minuteman Tech, developed and/or presented their budgets to FinCom which is tasked with opining on the town meeting articles representing said budgets. Schools and town are staffed to build the budgets. FinCom is an unpaid group of nine volunteers who meet when not doing their day jobs, have no staff or money, and are under time constraints during budget season. They do not have an internal audit force to guide their views. They must rely heavily on school and town managers for justification of budget items. Given the restraints placed upon them, they do a yeoman’s job. Knowing considerably less than FinCom about the budgets or contractual obligations, I include the above listed bullets as a starting point. I assume there are many unseen projects and expenditures worthy of questioning. The pitch for the override has been to state that both schools and town have labored at 3% increases for years, and it has come home to roost. That may be, but cutting costs is prudent. I am sure many Acton residents will be doing just that to afford the tax increase. Not all operating costs are reflected in the various budgets – some expenses are offset by grants and the like. On the capital side, covid generated ARPA funds have been utilized. I am not critical of the approach but simply point out all costs are not reflected in the budgets.
14. The HIT (Acton Health Insurance Trust) issue was large and reflected a huge screw-up. HIT used an “expert” to measure risk, maintained reserves to absorb fluctuations, and purchased reinsurance contracts to control upside exposure. Even so, the crisis compares to a bankruptcy. As a result, Acton is transitioning from the HIT to an alternative health insurance product. This resulted in a windfall which will be realized in FY25, and a choice of spending for operations or reducing the override. Management of A/B and the town chose to spend. That fiscal mindset suggests additional override requests are on the horizon.

Residents of Acton can vote by mail in the April 30 election. The ballot will be sent by the Acton Clerk’s office to all that voted by mail in the primary. Those who want to vote by mail and did not elect to vote by mail in the recently held primary should contact the Acton Clerk phone 978-929-6620 or e-mail at clerk@actonma.gov to get on the mailing list. Anyone not receiving the ballot by April 15 should call the clerk’s office to make sure one is coming – ballots need to be mailed back by some date preceding the April 30 election.