Town Meeting does not often spend much time discussing revolving funds, but the budget-busting weight of the anticipated $300+ million Pollard Middle School project has some Town Meeting members and residents on high alert.
The town budget contains about a dozen revolving funds, self-sustaining accounts municipalities generally use to fund specific ongoing operations or services. Revolving funds are usually replenished by user fees or other revenue those operations or services generate, rather than by general tax funds.
Unspent monies remain in the revolving funds year over year rather than being transferred to the general fund as happens with other budget lines. Every year, Town Meeting votes to establish annual spending limits for each of the town’s revolving funds.
This year, Annual Town Meeting passed the article that approved annual revolving fund spending on its first night and did so “by consent” — that is, because not a single Town Meeting member felt there was a need for discussion.
In doing so, it approved $1.4 million in overall funding for 11 separate funds and set spending limits for each fund. These limits ranged from $819,000 for school transportation to $250,000 for work at DPW facilities to $3,000 for composting at the Recycling and Transfer Station.
Revolving funds are useful accounting tools and not often controversial, so it was a bit of an outlier when Article 10 at Special Town Meeting to create a new Energy Efficiency and Clean Energy Capital Program Revolving Fund generated a half-hour of discussion.
The new fund is related to budget activity generated by the town’s Climate Action Roadmap and its goals for the town to achieve net zero emissions by 2050. This will require investments in infrastructure that will result in energy and emissions reductions, while also likely to generate rebates and other incentive payments from federal, state and utility sources.
These funds would be allocated to the new revolving fund and become available to be used for future green initiatives, such as solar panels, EV chargers or LED lighting.
“Some have expressed concern that Article 10 would allow for an accumulation of $1 million or more that could be spent by the town manager without the vote of Town Meeting,” Select Board member Cathy Dowd said while speaking in support of the new revolving fund. “That fear is misplaced.”
Dowd said the total amount of similar rebates the town has received since 2014 has brought in less than $150,000, and claimed the article does nothing to limit Town Meeting’s authority.
When the article was up for discussion, Town Meeting members and members of the public criticized the fund and its potential for limiting the town’s discretion in how these future rebates and other revenues could be used.
“This article sets up a fund that segregates money that we can’t use for anything else,” said Holly Clarke of Precinct D.
“It would normally go into Free Cash and then we could use it for anything we needed to. And we have big capital projects coming forward,” Clarke added, a point amplified by others who made reference to the Pollard renovation.
Other speakers were concerned that Town Meeting would be losing its authority to direct how town funds would be spent, but Dowd pointed out that Town Meeting retains the authority to establish the annual spending limits of all the town’s revolving funds.
“Next year’s Town Meeting would vote the spending limit before any spending happens,” Dowd said.
The article eventually passed by a voice vote that attracted a substantial number of “nay” votes.
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