Town Meeting top page 

Special Town Meeting # 2 - December 3, 2002

Finance Committee Recommendations

• Finance Committee Letter

• Summary Report on Free Cash

• Article List

  • Article 1                       Natick Mall Center Overlay District

  • Article 2                       Highway Overlay Districts – Lots in a Highway Corridor

  • Article 3                       Family Suite

  • Article 4                       Comprehensive Cluster Development Option

  • Article 5                       Citizen Petition:  Town Meeting Procedure – Moderator

  • Article 6                       Omnibus Budget FY03

  • Article 7                       Stabilization Fund

  • Article 8                       Capital Equipment

  • Article 9                       Capital Improvement

  • Article 10                     Lease/Repair

  • Article 11                     Morse Institute Library – Additional Personnel

  • Article 12                     Citizen Petition – Morse Institute Library – Additional Personnel

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LIST OF

FINANCE COMMITTEE

MEMBERS

FINANCE COMMITTEE

TOWN OF NATICK

MASSACHUSETTS 01760

November 22, 2002

Town Meeting Members and Citizens of Natick:

This report contains the Natick Finance Committee recommendations made to date for the 2002 Special Town Meeting #2 Warrant Articles, in accordance with the Natick Home Rule Charter and Natick By-laws regarding Finance Committee responsibilities.  In those instances where we provide recommendations, the Finance Committee conducted a public hearing – November 21, 2002.  During that hearing, we took into account comments and data gathered from Warrant Article sponsors, town department heads, the town administration and the public at-large.  The Finance Committee is scheduled to conduct the second of two hearings, on November 26, 2002, to hear articles pertaining to proposed Natick By-law amendments.  The Finance Committee will report its recommendations pertaining to those articles at Town Meeting – December 3, 2002.

In consideration of those warrant articles (Article 6 through Article 12) in which we provide recommendations, the Finance Committee discussed and reviewed the disposition of revenues and other fund balances for Fiscal Year 2003.  Specifically, our discussion and review focused on the fiscal year 2002 certified Free Cash, among other things.  To that end, we feel compelled to inform Town Meeting Members and the Citizens of Natick of some of the key findings from that review. 

The town administration presented detailed information, which is part of the detailed narrative for Article 6 herein.  In summary, the $4,337,157.00 certified Free Cash Balance was realized primarily from the following resources:

·        Increased estimated receipts in the amount of about $1,520,000;

·        Turn-backs from town budgets of more than $1,860,000; and,

·        Other sources such from outstanding balances collected from FY2001 and before equal to about $1,000.000.

The Finance Committee thought it appropriate to provide Town Meeting Members a detailed analysis of the Free Cash position, and expand upon more comprehensively a definitional overview of Free Cash, a historic comparison of Free Cash balances, an analysis of the 6/30/02 Free Cash Balance components, the effect of trash fees and educational transportation fees on the 6/30/02 Free Cash balance, a summary of appropriations from 6/30/02 Free Cash balance and preliminary FY 04 Budget outlook, and the town administration’s report on future reconciliation of balances procedures.  To that end, we urge Town Meeting Members to read our Summary Report of Free Cash – FY2002, which immediately follows this letter.

The town administration also discussed other budgetary forecasting issues such as a prospective ten percent (10%) decrease in State Aid for Fiscal Year 2004 (compared to Fiscal Year 2003 State Aid) and constraints of Proposition 2 ½ on future tax levy revenues, among other things. 

The Finance Committee would like to express its thanks and appreciation for the hard work, cooperation and dedication of all town officials, members of boards, committees, departments and citizens for their cooperation and participation, during the 2002 Special Town Meeting Warrant Article hearings. 

We respectfully submit our recommendations and commentary for your consideration. 

As always, we thank you for your support.

Respectfully Submitted,

Frank Foss, Chair

Finance Committee

Summary Report on Free Cash

The certified Free Cash balance for the period ending June 30, 2002 is $4,337,157. Given the difference between this actual certified Free Cash balance and the $1,400,000 to $1,600,000 estimate provided at Fall 2002 Town Meeting, the Town Administrator has re-presented the financial articles from 2002 Fall Annual Town Meeting for consideration at 2002 Special Town Meeting #2, as a courtesy to Town Meeting.  In addition, these articles are before Town Meeting again to allow a complete understanding and explanation of the town’s fiscal position.  Two other financial articles have also been filed. For reasons presented elsewhere, the Town Administrator is requesting no action under these articles.

This section of the Finance Committee’s report addresses several factors for Town Meeting’s consideration. These factors include:

v     Definitional Overview of Free Cash

v     Historical Comparison of Free Cash Amounts in the Town of Natick

v     Analysis of Components of 6/30/02 Free Cash

v     Effect of Trash and Transportation Fees on 6/30/02 Free Cash

v     Appropriations from  Free Cash and Preliminary FY 04 Budget Outlook

v     Town Administration’s Report on Future Free Cash Procedures

This report includes certain information from the Town Administrator, Finance Director and Town Comptroller and the results of the Finance Committee hearing review and discussion on November 21, 2002.

Definitional Overview of Free Cash

Free Cash has many components.  In non technical terms, Free Cash is the amount of money left over at the end of a fiscal year.  Free Cash is an annual concept.  Rules of thumb for good financial management suggest that Free Cash should be 1.5% to 2.5% of the total municipal budget.  Free Cash is an amount left over after the close of a fiscal year normally appropriated for non-recurring expenditures or stabilization funds as a safety margin in municipal budgets.  Positive Free Cash amounts are prudent.  Free Cash at the end of a fiscal year is not affected by revenue and expense derived from the following fiscal year.  Negative Free Cash amounts indicate an out of balance budget and deficit spending, which would require immediate cuts in budgets/services. 

In Natick it has been a sound municipal budgeting practice, for Free Cash amounts to be generated each fiscal year.  Free Cash has traditionally been used in Natick for capital items and certain debt service or other fund balances.  Historically in Natick, Free Cash has rarely been used for recurring operating expenses.

Available certified Free Cash after the close of a fiscal year is influenced by many factors.  Free Cash is positively affected by a) actual local receipts in excess of amounts estimated after Town Meeting approval of an annual budget, b) payments of past due or previous fiscal year’s taxes, c) turn-backs from various department budgets after the close of a fiscal year ( i.e. unspent or unencumbered amounts from department budgets), d) unused and released amounts from previous years’ overlay reserves (i.e. overlay surplus) e) sales of municipal property not otherwise spent by Town Meeting, and f) increases in State Aid over amounts budgeted.

Available Free Cash amounts are negatively affected by a) actual local receipts which are less than estimated, b) taxes owed but unpaid for the fiscal year ended June 30^th, c) actual State Aid less than estimated, d) increases in accounts receivable reserves and e) turn-backs from departmental budgets which are less than historical levels.

As the attached sheets from the Town Administrator depict, over 16 types of local receipts (technically called local receipts not allocated) and 15 types of State Aid affect Free Cash.  Each of these 31 types of receipts and State Aid amounts must be estimated during the annual budget process.  Each source is subject to fluctuation.  Free Cash is also subject to the amount of turn-backs from the 50 separate town budgets.

Historical Comparison of Free Cash Balances

As the attached schedule from the Town Administrator shows Free Cash balances have varied greatly from over $4,000,000 generated from FY 87 to less than $150,000 generated from FY 91.  Free Cash balances generated from FY 89 thorough FY 92 were at or under $500,000 per year, depicting a period of time when the Town and the State were in financial distress.  Free Cash amounts ranged from $800,000 to $1,700,000 generated from FY 93 to FY 95.

Free Cash balances generated from FY 98 through FY 01 ranged from $3,400,000 to $3,900,000. The Free Cash amount of $4,337,157 generated from the fiscal year ending on June 30, 2002 is comparable to the Free Cash from FY 00 and consistent with the past four fiscal years and FY 87.

Analysis of 6/30/02 Free Cash Balance Components

As the attached sheets from the Town Administration show, the FY 02 Free Cash balance was influenced by actual local receipts approximately $1,100,000 greater than estimated and by budget turn-backs approximately $650,000 higher than turn-backs in FY 01.

Analysis demonstrates that local receipts exceeded estimates due largely to two line items - motor vehicle excise and ambulance receipts.  All other local receipt line items largely offset.  Motor vehicle excise has ranged from $3.0 to $3.5 million annually in recent years but set a record level of $4.156 million in FY 02 or $656,000 more than estimated.  Concern exists that this increase was due to increased auto sales as a result of 0% interest auto manufacturer loans in October and November of 2001.  Thus, future year auto excise receipts could be depressed because of prior accelerated consumer purchases and economic conditions.  Ambulance receipts were approximately $353,000 higher than estimated, possibly due to an expanded service and more aggressive collection practices.  These two line items account for almost $1.0 million of the excess of actual over estimated local receipts.

Free Cash as of June 30, 2002 was also influenced by total departmental budget turn-backs of $1,863,955 in FY 02 compared to total turn-backs in FY 01 of $1,211,422. Careful analysis of these turn-backs at the department level indicates several unique factors at work.  First, FY 02 includes approximately $220,000 in turn-backs from capital projects compared to similar turn-back of $53.24 from FY 01.  Approximately $122,000 was turned back from the Selectmen’s budget reportedly as a result of not having a Town Administrator or Deputy Town Administrator for a long period during the fiscal year.   Over $100,000 was turned back from the DPW Building Maintenance budget due to anticipated energy increases budgeted for FY 02 that did not occur.  Turn-backs were also approximately $170,000 higher for Insurance and Fringe Benefits.  Except for these items, turn-backs generally tracked FY 2001 levels.

Effect of Trash Fees and Educational Transportation Fees on the 6/30/02 Free Cash Balance

The Finance Committee directly inquired whether the trash fees and educational transportation fees enacted this past Spring had any effect on the Free Cash balance of June 30, 2002.  The answer is no. The trash fees were enacted in the Spring, but were not first collected until July 2002 - not until FY 03. These collected fees cannot affect balances from the previous fiscal year and are not in the June 30, 2002 certified Free Cash balance.  Similarly, educational transportation fees are not part of the Free Cash balance of June 30, 2002.  Educational transportation fees were paid by some in May of this year and by others in July and August of this year.  Educational transportation fees paid, including those received prior to June 30, 2002, are placed in a revolving fund which is not included in Free Cash.

Appropriations from  6/30/02 Free Cash Balance and Preliminary FY 04 Budget Outlook

Approximately $500,000 was appropriated during the 2002 Fall Annual Town Meeting from the $4,335,157 leaving approximately $3,835,157 available.  However, no capital items were funded during the 2002 Fall Annual Town Meeting and few capital items were funded during the 2001 Fall Annual Town Meeting.

Furthermore, the Town normally funds some debt service with Free Cash.  Previous budget practices have been that the Town appropriates approximately $1,000,000 from Free Cash balances.  It is anticipated that the annual practice of appropriating Free Cash to fund debt service will continue in the compilation of the FY 04 town budget.

The Town Administrator has informed the Finance Committee that he intends to propose using some and perhaps all of the remaining Free Cash for FY 04 operating purposes to avoid significant service cuts.  For the FY 03 budget, the Town faced a deficit of approximately $2.3 million before trash fees and educational transportation fees were imposed - $1,575,000 and $350,000 respectively.  The FY 03  budget was also balanced by certain service and staffing cuts and /or leaving existing open positions unfilled.  The FY 03 budget also assumed level funding in State Aid.

The preliminary budget outlook for FY 04 assumes a minimum cut of 10% in State Aid or approximately $1,200,000.  Revenue from the Pay-as-you-throw trash plan for FY 04 is estimated to be $400,00 to $750,000 less than the estimated FY 03 trash fee total of $1,575,000. 

The Town Administrator will be available to answer questions concerning the June 30, 2002 Free Cash balance, the preliminary FY 04 outlook and plan, and other relevant matters.

Town Administration’s Report on Future Reconciliation of Balances Procedures

The Town Administration has also prepared a memo summarizing the commencement of certain accounting and reconciliation procedures to ensure that future Fall Annual Town Meetings receive more accurate Free Cash estimates.  Essentially, the procedures require monthly reconciliation of the various accounts that influence the Free Cash balance, among other things, allowing for timelier reporting to the State and to Town Meeting.  Previously, such reconciliations had not occurred on a regular basis.  In fact, such reconciliations occurred on an annual basis only.  The Town Administrator will be available to answer questions on these procedures.

INSERT

THE FOLLOWING DOCUMENTS

1)     Fiscal Year 1981 – 2002 Free Cash

2)     Local Receipts Not Allocated

3)     Appropriations Closed to Revenue At June 30^th

4)     Summary of Other Financing Sources For Fiscal Year 2002

5)     Free Cash Calculation Fiscal Year 2002

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FINANCE COMMITTEE

2002 SPECIAL TOWN MEETING #2

SUMMARY OF

RECOMMENDATIONS
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TOWN OF NATICK

FISCAL YEAR 2003

BUDGET SUMMARY

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BOARD OF SELECTMEN

DOCUMENT

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PLANNING BOARD

DOCUMENT

ARTICLE LIST

SPECIAL TOWN MEETING #2

DECEMBER 3, 2002

Article 1                       Natick Mall Center Overlay District

Article 2                       Highway Overlay Districts – Lots in a Highway Corridor

Article 3                       Family Suite

Article 4                       Comprehensive Cluster Development Option

Article 5                       Citizen Petition:  Town Meeting Procedure – Moderator

Article 6                       Omnibus Budget FY03

Article 7                       Stabilization Fund

Article 8                       Capital Equipment

Article 9                       Capital Improvement

Article 10                     Lease/Repair

Article 11                     Morse Institute Library – Additional Personnel

Article 12                     Citizen Petition – Morse Institute Library – Additional Personnel

ARTICLE 1

(Planning Board)

            To see if the Town will amend its zoning by-laws in the following respects, or otherwise act thereon:

Item 1:            The following shall be added as a definition, in alphabetical order, in Section 200: 

                        “Curb-Cut Closure:  the closing of a Curb-Cut onto a double lane public way.”

“Hotel :  any establishment used for the feeding and lodging of guests, whose occupancy is not to exceed ninety (90) consecutive days, which is licensed or required to be licensed as a common victualler and innholder under the provisions of M.G.L. c. 140, s. 6 and has upon its premises the necessary implements and facilities for cooking, preparing and serving food for strangers and travelers, and also has the rooms, beds and bedding required by law.

                        “Road Link:  a roadway connecting to a double lane public highway.”

“Shopping Mall Use:  as defined in Section 323.1.5.”

Item 2:            There shall be added at the end of Section II-A the following Use District:

                        “Mall Center Overlay District MC”

Item 3:            Insert a new Section II-B 7. c. to follow Section II-B 7. b., to read as follows:

“ 7. c.  There shall be a Mall Center Overlay District (MC) within the following described area:

            BEGINNING at a point on the Natick-Framingham town line at the intersection with the center line of Worcester St.;

            Thence continuing easterly on the centerline of Worcester St until reaching the point where it intersects with the centerline of Speen St. Southbound;

            Thence turning and continuing northwesterly along the centerline of Speen St. Southbound until it reaches a point where it intersects the Natick-Framingham town line;

            Thence turning and continuing southwesterly along the Natick-Framingham town line until reaching the Point of BEGINNING.”

Item 4:            In Section 321, cancel the second sentence and substitute the following:

“There are three such overlay districts: the Mall Center Overlay (MC) district, the Regional Center Overlay (RC) district and the Highway Corridor Overlay (HC) district.  The Mall Center Overlay (MC) district overlays a portion of the Regional Center Overlay (RC) district.

Item 5: At the end of the second sentence in Section 322.2, add the phrase “or Section 326.4.”

Item 6:            In Section 323. USE AND OTHER ZONING REGULATIONS, delete the first line following the title and substitute the following:

 “          323.0 Uses prohibited in the MC and RC districts:  “

Item 7:            Renumber Sections 323.11 and 323.12 as Sections 323.1.1 and 323.1.2 and insert the new Sections 323.1.3 and 323.1.4, to read as follows:

“ 323.1.3            The MC Overlay District is an overlay district established in that area of Town which is already substantially developed for commercial purposes, but which may be further intensively developed so as to foster the implementation of significant infrastructure improvements within the Town and improve the Town’s tax base.

323.1.4            To the extent there is inconsistency between provisions of this By-Law applicable to the MC Overlay District and underlying district (including the RC District), the provisions applicable to the MC Overlay District shall govern.

323.1.5            All uses permitted or allowed in the underlying zoning districts (including the RC District) shall still be permitted or allowed respectively on land in the MC Overlay District.  In addition, hotel and motel use (including serving of food and/or permitted beverages), as well as shopping mall use, shall be permitted in the MC Overlay District.  “Shopping mall use” shall include those uses customary in shopping malls, e.g., retail stores, service establishments, restaurants, and entertainment uses, in multiple stores in a building or group of buildings containing no less than two (2) levels (each of which levels is principally devoted to selling or providing service or entertainment to customers), and in which access to the majority of stores is via an enclosed pedestrian mall or malls, and in which no less than thirty-five (35%) percent of the gross floor area leased to tenants is devoted to individual stores having a floor area of less than 15,000 square feet.  Access drives and parking facilities serving such buildings, whether such facilities are below or above ground or below such buildings or in separate structures, located on the same lot or an abutting lot shall also be permitted as an accessory use to such shopping mall use ”

Item 8:            In Section 323.7 insert the words “or MC Overlay District” after the words “Regional Center District”

Item 9:            In Section 324.1, in the second line, cancel the phrase “RC and HC” and replace with “RC, HC and MC”. 

Item 10:            Section 324.11 is deleted.

Item 11:            In Section 324.6 cancel the phrase “HC or RC” and replace with “MC, HC or RC”.

Item 12:            Renumber Sections 324.61, 324.62, 324.63 and 324.64 as new Sections 324.6.1, 324.6.2, 324.6.3 and 324.6.4, and add a new Section 324.6.5 and a new Section 324.6.6 to read as follows:

“324.6.5.            All square footage contained in a hotel or motel shall not be included in the gross floor area.

“324.6.6            In the MC Overlay District the following shall not be included in gross floor area for computing the floor area ratio:

            324.6.6.1            Equipment rooms, including rooms containing heating, air conditioning or other mechanical equipment servicing a permitted or allowed use, and offices devoted to operational matters of a shopping mall, including rest rooms and waiting or rest areas.  

            324.6.6.2         Areas of a shopping mall building (including pedestrian bridges) not devoted to occupancy by a tenant or occupant, which are principally intended to provide access between stores, even though vendors may, from time to time, maintain kiosks or other portable displays therein shall not be included in the gross floor area, provided, however, that the floor area actually occupied by such kiosks or any display fixture shall be included in the gross floor area to the extent such occupied areas exceed 10% of such access areas.

Item 13:  In Section 324 , add the following as Section 324.10;

“Section 324.10   Increased FAR for Parcels in MC Overlay District

“324.10.1            In order to foster redevelopment of parcels in the MC Overlay District that will provide for substantial infrastructure improvements and significant additions to the Town’s tax base, the Planning Board may grant special permits to increase the FAR to .60 for one or more parcels (or portions thereof) concurrently which are in the MC Overlay District, containing not less than 40 contiguous acres (either as an individual parcel or in combination), when the requirements of Section  324.10.2 are met and the bonus requirements of Section I of Bonuses are satisfied.  Where such parcels (or portions thereof) are in separate ownership, the owners thereof shall join in the application for such special permit, but such parcels (or portions thereof) need not be combined under the Subdivision Control Law nor shall be treated as a single parcel for purpose of the application of the other requirements of this zoning by-law and may be used and further developed independently of each other except that the FAR of such parcels (or portions thereof) in the aggregate shall not exceed the FAR authorized under such special permits. 

For purposes of the application of the bonus requirements of Section 328.3 to developments in the MC Overlay District for which such special permits are requested, the bonus requirements shall be applicable only to the extent the proposed FAR on all parcels included in the applications for such special permits exceed the then existing FAR of such parcels.  If existing buildings are demolished, the bonus requirements shall not be applicable to the FAR for new construction to the extent of the floor area of the buildings so demolished.

The applicants under such a special permit may also elect, if the FAR of one of the parcels is less than .32, to allocate the excess floor area that could be developed on such parcel without exceeding FAR of .32 to the other parcels included within such application.  The allocation of such excess floor area shall be set forth in such special permit and no bonus requirement need be fulfilled in connection therewith; provided, however, that any further construction on the parcel whose excess floor area is allocated to such other parcel shall be treated as if such excess floor area had been constructed on the parcel from which it is allocated.

324.10.2            In granting a special permit for an increase in FAR under Section 324.10.1, the Planning Board shall make, in lieu of the finding required in Section 324.9, a specific finding, in writing, that the following conditions are met:

.1         the parcel (or if parcels, the parcels in the aggregate) included in such application have an existing FAR in excess of .32;

.2         that the increase in FAR shall not result in a development which is substantially more detrimental to the neighborhood than the use of the lots as then improved;

.3         the increase will achieve the goals, objectives and interests of the MC Overlay District regulations; and

.4         the project, with such increased FAR, shall satisfy all of the criteria and standards of Section VI-DD Site Plan Review. 

Item 12:            In Section 325.1, renumber existing subparagraphs 325.11 and 325.12 as paragraphs 325.1.1 and 325.1.2 and add a new paragraph 325.1.3, to read as follows:

“325.1.3            Notwithstanding any other provision in this Section 325, the minimum landscape surface ratio for projects in an MC Overlay District shall be 0.25, regardless of the FAR.  In calculating the LSR in an MC Overlay District, the numerator of the LSR shall include pervious and landscaped areas, including areas in a parking structure that are utilized for landscaped areas, such as planting structures containing plant material.  In calculating the LSR in an MC Overlay District, the denominator shall be the Gross Land Area and any portion of a parcel included in an application for a special permit under Section 324.10.1 of this By-Law.”

Item 13:            In Section 326, DIMENSIONAL REGULATIONS, add the following as Section 326.4:

“326.4  Dimensional Regulations in MC Overlay District

In issuing a special permit under Section 324.10.1, the Planning Board may also grant a special permit to permit a project authorized thereunder, in lieu of the dimensional requirements of the underlying zoning district (including the RC District as part of the HOD District), to be subject to the following dimensional requirements:

Frontage:            200 feet

Building Setback from a Public Way:            50 feet (provided, however, that in granting such special permit, the Planning Board may reduce this setback to accommodate circulation or road improvements)

Parking Structure Setback

from Public Ways:            for at grade or higher levels, 25 feet from  public ways; below grade levels do not require a setback

Maximum Height of Building

or Structure:            80 feet or 8 stories

Side and Rear Yard:            20 feet (providing, however, that in granting such special permit, the Planning Board may waive this requirement to permit connections between buildings on separate lots)

Item 14:            Revise Section 328.31 and Schedule I of Bonuses to read as follows:

328.3            Schedule of Bonuses:

328.31  FAR Increases above 0.32 up to 0.40 (and in the MC Overlay District up to .60) based on Schedule I of Bonuses.  An increase in allowable floor area for new construction resulting in a FAR for the entire development which does not exceed 0.40, as permitted in and subject to the requirements of Section 324.2, shall be available in accordance with Schedule I of Bonuses set forth hereafter, if the Planning Board deems that the amenity offered by the applicant accomplishes the purpose, intent and objectives of the Highway Overlay Districts regulations.  For development within an MC Overlay District for which a special permit is requested under Section 324.10.1, an increase in allowable floor area shall be permitted if the requirements of Schedule I are met through fulfillment of one or more Public Benefit Amenities.

The “bonus ratio” as used in Schedule I is the ratio of the unit of public benefit amenity provided, to the floor area permitted for bonus projects in excess of a FAR of 0.32.  For example, a bonus ratio of one to three (1:3) and an amenity unit of “Square Foot” means that for each square foot of the amenity the project shall be eligible for three (3) additional square feet of floor area for permitted uses.

SCHEDULE I OF BONUSES

*          Bonus Ratio = Amenity / Floor Area

**        Open Space shall be valued in accordance with Section 324.724 or a contribution made to the Town’s Conservation Open Space Fund.

***      Road Link shall include the cost of the acquisition of the land (or the rights therein) whether incurred directly or reimbursed to other parties required for the roadway and the design and construction of the elements thereof which form the intersections with public or private way to which it connects.

****    Traffic Management Project shall include the provision of land for, and/or the design and construction of roadway improvements, as well as the support of public transportation, within the Town.

Item 15:            Revise the Schedule II of Bonuses to read as follows:

SCHEDULE II OF BONUSES