The City Council, meeting as the Committee of the Whole, voted to approve the following requests (see Report and watch the NewTV video):
- Appropriate $10,000,000 from FY2022 Free Cash for the Lincoln-Eliot Elementary School construction project — Committee voted 5-0-10, Councilors Gentile, Grossman, Kalis, Krintzman, Laredo, Malakie, Markiewicz, Oliver, Wright and Albright abstaining and Councilors Baker, Downs, Kelley, Leary, Lipof, Lucas and Norton not voting)
- Appropriate $1,400,000 from FY22 Free Cash to provide a “bridge grant” to Newton Public Schools for expected cost increase for out-of-district students in FY24 — (16-0, Councilors Baker, Downs, Kelley, Leary, Lipof, and Norton not voting)
The Committee of the Whole voted to hold:
- Discussion regarding the use of non-recurring revenue in Newton (22-0)
Free cash items need to be spent before the end of the Fiscal Year (June). The City would like to increase the Rainy Day fund from 5% to 6% because Moody’s (credit rating agency) feels that reserves are low. Parking ticket and meter revenue are low, but interest income is close to $5 million. Interest income is high and will go into next year’s free cash and be available by September. The estimate is to have $3 million in overlay surplus.*
The City has potential outstanding tax abatements and liabilities from the Eversource case.
There was a heated discussion about $5 million held in Free Cash, the needed amount in the Rainy Day fund and overlay surplus, and whether it would not be better spent paying off Lincoln-Eliot bonding or for Horace Mann or kindergarten aides.
*Overlay: An account established annually to fund anticipated tax abatements, exemptions, and uncollected taxes. The overlay is not established by the normal appropriation process but rather is raised on the tax recap sheet.
Overlay Surplus: Any balance in the overlay account of a given year in excess of the amount remaining to be collected or abated can be transferred into this account. At the end of each fiscal year, unused overlay surplus is “closed” to surplus revenue, in other words, it becomes a part of free cash.
