RTM Passes Move That Could Lower Interest Rates, Salary Raises

Over the past few years, the town has faced a dilemma: It was forced to hold a large amount in reserve to preserve its bond rating, key considering it is in the process of borrowing $100 million. But that large reserve killed the town’s chances in union negotiations, as arbitrators would point to that savings account and determine the town could afford to give raises to employees.

Now, that problem should be gone. The Representative Town Meeting voted 12-1 Thursday to authorize a new fund balance policy, . The move allows the town to designate a large portion of the reserve in a “stabilization fund”, which both improves the bond rating and tells arbitrators that the money is set for bond rating, and not for union contracts.

“This seems like such a win-win to me,” RTM member Rodney Pinkham said. “I strongly support this.”

Finance Director Rudie Beers, flanked by members of the board of finance, gave a presentation of the benefits of the new plan. The policy had to be passed Thursday, the last day of the fiscal year, to get it set up for the upcoming fiscal year, starting today, Beers said.

“This is a crisis date for us,” Beers said.

The board of education is about to negotiate five of its six contracts this upcoming fiscal year, including the teachers union contract, the largest single union in town. This should help the board of education, and the rest of the town, negotiate those contracts, Beers said.

The only member to oppose the measure was Thomas Ammirati, who argued the money would be committed and the town would not be able to get to it.

Beers dispelled that, saying the RTM would set the amount in the stabilization fund each year. Additionally, in times of emergency, the town could access that money, Beers said.

How Much? What Now?

With the policy in place, the board of finance will now have to recommend how much money of the $9.6 million reserve the town will put in the stabilization fund, J.W. “Bill” Sheehan said. The board of finance will probably recommend around 75 percent in the fund, Sheehan said.

Then, the RTM will have to approve the board of finance’s recommendation. That will probably happen at the October RTM meeting, Sheehan said.

RTM Vote (12 to 1)

For: Andrea Kanfer, Brendan McGuirk, Rodney Pinkham, Gerard Gaynor, Michael Hannan, Kimberly Alfultis, Steven Garvin, Paul Goldstein, Richard Muckle, Teresa Wilensky, Robert Brule, Thomas Dembek

Against: Thomas Ammirati