By Allison Lenk and Robie White
Two years ago, the Belmont Citizens Forum Newsletter published the article, “Have You Read the Collins Center Report?”
The 2022 report, produced by the Edwards J. Collins, Jr. Center for Public Management, stresses the urgency of acting on their recommendations which were initially made in 2018. The earlier report included a warning that Belmont would be falling off a “fiscal cliff” in the future if changes weren’t pursued.
The Edward J. Collins, Jr. Center for Public Management is part of the McCormack Graduate School of Policy and Global Studies at the University of Massachusetts Boston.
This think tank is dedicated to improving efficiency, effectiveness, governance, and accountability at all levels of government, with a particular focus on state and local government and provides a comprehensive set of services to scores of the Commonwealth’s cities, towns, school districts, state agencies, and many municipalities in other states.
The report notes that, at the time, the average Belmont homeowner paid $15,568 annually in property taxes, or approximately 15.73% of Belmont’s per-capita income. Among 12 comparable towns, Belmont had the second-highest real estate tax bills (after Brookline) and more than double the tax rate (as a percentage of income) of Weston, Wellesley, Sherborn, and Dover.
The Collins Center report states:
When housing costs and property tax levels are considered in conjunction with Belmont’s per capita incomes, it becomes clearer that the town is asking far more of its residential taxpayers than its comparable peers.
The reports also recommended changes to Belmont’s governing structure and financial operations.
The town’s executive branch is not configured in a way that aligns authority, responsibility, and accountability. This structure is more common in towns with populations below 10,000 residents and much smaller budgets.
In June 2022, the Select Board issued its ranking of the urgency/importance and progress-to-date for each major recommendation of the Collins Center.
At that time, Select Board member Adam Dash stated, “I believe that we need to move quickly on implementing the bulk of the recommended changes so Belmont can fix its structural deficit.” The Structural Change Impact Group translated the recommendations into specific actions that should improve Belmont’s finances and operations and therefore should be pursued. The recent passage of the $8.4M override, plus the additional taxes stemming from two debt exclusions (new library and new rink) and the annual tax levy created a typical tax increase of 11% to 13%. This is an opportune time to revisit the Collins Center recommendations and update which of those have been completed, which are in process, and which have yet to be addressed.
Below are seven of those recommendations.
- Align the annual budget process with established best practices as set out by the MA Division of Local Services, including “reaching consensus on all financial forecasts.”
- Build a financial management team with an appointed finance director and more clearly define and strengthen the powers and duties of the Select Board and town administrator.
- Examine and develop all sources of revenue to reduce the structural deficit, including payment in lieu of taxes (PILOT agreements), municipal fees, and local receipts. Refocus planning and economic development to attract an appropriate level of commercial and/or industrial activity.
- Reduce or end reliance on free cash and other “one-time” revenues to balance the operating budget.
- Develop a comprehensive strategy for reducing overall expenses and prioritizing adequate cash reserves.
- Review the capital planning process and seek to conform it to best practices by “ensuring that current and future capital needs are addressed in a comprehensive and financially sound manner.”
- Repair or replace the antiquated and malfunctioning computer-assisted mass property appraisal system.
Several important changes have been implemented since the issuance of the Collins Report.
The town hired a finance director and changed the treasurer and Board of Assessors from elected to appointed positions. The Board of Assessors is newly configured with the assessing administrator joining two newly appointed members.
The Board of Assessors recently put out to bid a request for proposal (RFP) for a new real estate appraisal and tax software system called CAMA (computer-assisted mass appraisal system), an action that had been recommended for several years.
The Vision 21 Implementation Committee and Economic Development Committee are continuing their work to increase commercial tax revenue through zoning reforms and streamlining the process for permits. Town Meeting has already approved changes to attract restaurants. A consulting contract via RFP for a Comprehensive Plan is being finalized.
PILOT agreements with nonprofit organizations have been almost completely lacking. The Select Board recently asked the town administrator and finance director to work with the assessors to identify the 10 to 11 wealthiest nonprofits in town and send PILOT request letters to them during this calendar year. These letters will provide a record of requesting financial support for town-provided services, with summaries of the town services the nonprofits receive. Evidence of request letters has not been readily available from the assessors in the past. The Collins Center Report stresses the importance of taking time, making effort and commitment to build strong partnerships with the nonprofits, and developing guidelines for PILOT implementation that will ensure the process is equitable.
Belmont’s pension obligations have been a major factor in its financial challenges. The Retirement Board has finally agreed to move its remaining investments to the Massachusetts Pension Reserves Investment Trust, managed by Pension Reserves Investment Management. The Trust has consistently outperformed the prior investment strategies, and this change is expected to help fully fund the pension plan, according to at least one Warrant Committee member.
The Collins Center report states that “A critical step in maintaining a sound financial plan is the preparation of a multiyear revenue/expenditure forecast.” This lack of long-term forecasts has led to a void of information when large capital or infrastructure financial decisions need to be made. Too often, this has led to reliance on free cash or other one-time funds, without consideration of the long-term impact.
Long-term forecasting with a three-year budget model has been initiated during sequential Budget Summits involving members of the Financial Team, School, Warrant, Comprehensive Capital Budget Committees, and the Select Board in a unified process. A Warrant Committee member interviewed for this article expects that these forecasts will be extended to five- and 10-year budget models. There has been agreement on the need to build and maintain reserves to ensure Belmont will be financially secure if the unexpected occurs; this led to the establishment of an override mitigation fund to delay the need for another override.
Prior to the April 2024 override vote, Belmont municipal and school officials stated their intent to draw up a “fiscal compact,” promising to limit annual spending growth. Other towns have executed a similar agreement. Prior to their most recent override, Arlington officials committed to restraining annual municipal spending growth to 3.25% and school spending growth to 3.5%, which more closely aligns with the annual Proposition 2 ½ tax increase of 2.5%. This plan helps to curtail the need for frequent overrides.
In contrast, Belmont’s 2025 budget shows an overall increase of 5.7%; included in that total is a 6.4% increase in spending in the school department (Warrant Committee FY2024 Budget Presentation). Citing a lack of time to come to an agreement, town officials made no formal commitment to controlling spending growth before the April 2024 override vote. The town website indicates that the fiscal compact will be completed in advance of the fall FY26 Budget Summits.
The Collins Center report (Finding 2.2) states that the town lacks a comprehensive strategy for reducing overall expense.
Despite prior reports and significant evidence, the Town has not moved in the direction in any substantial way of controlling costs or the growth of future spending. Despite this, there are significant examples throughout operations of areas where costs could be controlled and, at the very least, future growth could be contained. For example, the Belmont School District offers a higher percentage for the employer share of health insurance costs than the Town of Belmont, at 80% (compared to the Town’s 75%/25% split between the municipality and employees). Energy consumption is another factor – despite significant efforts to “green” the Town’s energy consumption and reduce its carbon footprint, the footprint of newer, more energy-conscious buildings is larger and can not only increase energy expenses but can also increase carbon outputs due to the larger physical space which must be heated and cooled throughout the year. When the prospect of cost control measures are brought up—however mild—they are met with significant opposition.
The Collins Center observations are most recently evidenced by the current budget already nearly depleting the 2024 override dollars. Just $930K of the $8.4M override remains in reserve. Limiting future spending growth and establishing stronger financial stewardship are critical to Belmont’s long-term fiscal sustainability. The fiscal compact must reflect controlled spending growth more closely aligned with the state-authorized Proposition 2½ annual tax revenue increase, not unfulfilled promises for spending constraint and a plan for another override in three years or less.
Many of the Collins Center recommendations have been addressed, or are in the process of being addressed. However, as the Collins Center highlighted in its 2022 Transmittal Letter:
The Collins Center only rarely provides transmittal letters for our reports. When we do so, it is because we hope to bring extra focus from municipal leaders and residents to the issues we are raising. In this particular case, we are taking that step because we believe the challenges facing the town are significant and because they go beyond the nominal scope of our work and the report submitted by our Project Team.
Are municipal and school officials ready to act now to ensure that this is the beginning of a long-term fiscally prudent process to tackle our unsustainable spending? Residents have a right to have that question answered through regular updates from town and school officials on the progress of advancing these recommendations.
Allison Lenk is a retired literacy specialist and Precinct 8 Town Meeting member.
Robie White is a retired financial executive who served on the Belmont Warrant Committee for seven years.
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