LONGMEADOW — The Select Board was given a financial forecast presentation by Ian Coddington, Longmeadow’s finance director, during a joint meeting with the School Committee on Dec. 1.
Coddington began work on the presentation back in March after receiving training from the Financial Management Resource Bureau to better understand and interpret the town’s financial information.
The focus of the presentation was to help members of the town understand past expenses and future budgetary plans in hopes to aid decision making as well as helping the community see the position the town is in financially.
Coddington’s model surrounded a five year projection and a five year historical look at revenue and expenses, such as pensions, employment benefits, school costs and debt.
“Health insurance, pension obligations, employee benefits in particular, costs are all rising unpredictably. We see this in the form of cost of living adjustments, both as the residents and as a commercial entity,” Coddington said. “With a multi-year plan, we’re able to link financial policies that are set by the Select Board to our long range goals. These are both sustainability driven, housing driven, service expansion, so that we have a bigger strategy rather than short term patching.”
The biggest piece of revenue over the past five years has been the tax levy, which makes up around 70% of total revenue coming in. Coddington said the town is over 90% residential funding and stagnates year to year, driven by people making additions to homes, other projects within homes and commercial entities buying new properties.
In terms of expenditures, the largest percentage of the town’s spending goes towards education, debt service, enterprise funds and public safety. According to Coddington and his model, debt service has become a larger part of the expenditures, but education remains the highest expense.
“Education is far and away the largest expense that the town generates on a year to year basis,” Coddington said. “This is both through the residents, as it is something they demand and expect, and as well it is the goal of the Select Board, and/or past select boards, to fund education as it is a hallmark of our town.”
The Massachusetts Department of Elementary and Secondary Education requires compliance with net school spending, setting a minimum budget that each Massachusetts school district is required to spend. Coddington’s presentation included a model comparing the required budget and the actual expenditure. He concluded that Longmeadow has historically spent $5-6 million more than net school spending. He then compared Longmeadow’s spending to Northampton and Amherst, who spend upwards of $10-20 million over net school spending.
“This $5 million to $6 million is something that we have voted on consistently and the trade off with that is there are other things that go unfunded,” Coddington said. “This is not an attempt to say that these are the wrong things that we are doing, I simply want to point out that this is an important distinction for the public to understand. By choosing to fund education at the levels that we are, we forego other things and if that is the goal of the public, then we will continue to do so.”
Coddington said that he sees the overspending, compared with Northampton and Amherst, as communities competitively investing in their education “despite challenges it might create.”
Coddington also showed the impact employee benefits have on the budget. Since 2020, employee benefits have grown from 14% of the budget to 17%. Coddington concluded health insurance alone among employees and retirees makes up about $8 million to $10 million of the budget. The cost to the town for health insurance is projected to increase 10% for retirees and 7.5% for town employees.
“These numbers here do not always equate to those exact amounts,” Coddington said. “I want you to understand that employee benefits are continuing to increase as we bring in better, more competitive wages for staff, which allows us to better have a long-term future when it comes to employee staffing.”
