Select Board's Statement

SELECT BOARD’S STATEMENT

For the past few years, the Select Board and the Advisory Committee have indicated that the Town of Bolton was heading toward an inevitable override to meet ongoing operating expenses. As we have been experiencing inflationary pressures, in recent fiscal years the Town has avoided an override by drawing down free cash and using other one-time funds to balance the operating budget. Absent major positive macroeconomic improvements , we anticipated that these stop-gap measures would eventually be depleted. We have now reached that point.

It has been over 20 years since the Town has been asked to authorize a Proposition 2½ override. The 2.5% of year-to-year tax revenue growth allowed by Proposition 2½ does not account for the fact that inflation in the U.S. sometimes vastly exceeds 2.5%. To give some historical perspective:

• from 2001-2010, the year with the highest inflation rate was 2007 (4.1%)

• from 2011-2020, the year with the highest inflation rate was 2011 (3%)

• in the last five years, we saw very high inflation for two consecutive years (7% in 2021 and 6.5% in 2022)

These recent inflationary trends have put financial pressures on cities and towns throughout the Commonwealth, and, because Proposition 2½ does not account for actual inflation in the broader economy, many communities are now in the position of seeking an override to fund operations.

As noted above, stop-gap solutions have been effective until now to prevent an override. From FY23 through FY25, the Town funded several important capital projects by using federal ARPA funds or by tapping into the Stabilization Fund, and this allowed free cash to offset operating expenses. During that same time, as inflationary pressures began to affect operating expenses and assessments, we had to reduce payments toward our long-term OPEB liability. We also anticipated that our “local receipts” revenues might increase via a new marijuana excise.

However, these stop-gap solutions have been exhausted, the macroeconomic dynamics have not shifted in our favor, and we now require a permanent resolution to put the Town back on a stable financial footing.

For this upcoming fiscal year (FY26), Town departments were again directed to keep their budgets level-funded (or less), and the non-union compensation schedule was not adjusted by a cost-of-living increase. All departmental fees have been reviewed and adjusted where appropriateto accurately reflect the cost of the service. Union negotiations are ongoing, with a focus on balancing the quality of public safety and public works services with the Town’s available financial resources.

In this Warrant, Article 4 proposes a total FY26 operating budget of $33,957,499.85. The funding for this proposed budget is contingent upon the voters’ approval of a $1.927 million override. The downsides of rejecting the override are numerous and significant:

• Bolton residents would experience major reductions in town services, and those services could not be restored without a future override.

• The Town would continue to rest on a very unstable financial footing, with little-to-no free cash to fund capital improvements, a depleted Stabilization Fund, and the possibility of having our bond rating downgraded (which could increase future borrowing costs significantly).

• The Town would face a high risk of key staff departures that would trigger recruitment and hiring costs and result in the loss of expertise and historical knowledge.

Although we are extremely reluctant to ask more of Bolton’s taxpayers, the Select Board firmly believes that an override is in the long-term best interests of the Town and therefore strongly recommends approval of Article 4.

In addition to the FY26 budget article, this Warrant includes a few other articles to strengthen our financial position (Article 5, Article 7, and Article 10). Additionally, Article 8 would authorize the creation of a Committee on Senior Tax Policy that could defray the impact of real estate taxes on low-income seniors and disabled residents.

There are two articles to update bylaws concerning licenses and fees (Article 9 and Article 12). There are also several planning and zoning articles being sponsored by the Town’s elected Planning Board (Articles 13-19).

Given our financial position, the Warrant contains only two articles to fund capital items in FY26, neither of which requiring new borrowing. These are Article 22 (for state-mandated upgrades to the Wastewater Treatment Plant) and Article 23 (for the replacement of the Florence Sawyer School boiler).

As always, the results of the Annual Town Meeting improve as more voters attend. The Select Board looks forward to your participation at 7:00 P.M. on Monday, May 5, at the auditorium of Nashoba Regional High School.

Respectfully submitted,

Bolton Select Board