FinCom approves capital stabilization policy

The Norwood Finance Commission (FinCom) met recently and voted unanimously to approve the current Capital Stabilization Policy designed to dictate how funds are dispersed.

The Capital Stabilization was established at the last Town Meeting in a very close vote – 84-80 – and this policy that the FinCom signed off on – the Selectmen and School Committee have already signed off – would dictate how and when the Town can use such funds.

The point of the reserve is not only to be a reserve, but to facilitate oversight as well. FinCom member Myev Bodenhofer said making sure that operational items weren’t going into the capital outlay budget was one of the reasons the reserve/stabilization fund was set up.

One point of contention came from the School Committee before approval, however, as the Stabilization Fund policy stated that a project must cost $100,000 or more to be a valid capital project for the stabilization fund. Finance Director Jeff O’Neill said the School Committee’s concern was that projects like tech upgrades and purchases that the Norwood Public School District (NPS) regularly requests would be ineligible. FinCom member Alan Slater pointed out that several Town purchases, like the $50,000 lease for tasers for the police, come into that issue.

FinCom member Eric Fleming said they could just nix the minimum and define capital projects as non-recurring expenses. “That’s just one way of doing it,” he said.

But Bodenhofer seemed to set everything straight.

“Reading this, it says specifically, ‘For the purposes of this policy,’” she said. “We’re not going to tap the stabilization fund just to pay for a $30,000 IT item. Just because this policy says that we define capital this way for this, does not mean that we can’t fund something through our capital improvement cycle out of free cash or whatever else we’re doing.”

However, FinCom Chair Sarah Sullivan said she had a conversation with Selectmen Bill Plasko and Bob Donnelly earlier that day and that they wanted to have each capital definition match, both in the Stabilization Fund and the general capital spending fund. However, Sullivan said there would be discretion. Bodenhofer countered that one of the reasons for the threshold was that there was a concern items that likely should be in the operational budget side of things – rather than on the capital side – since they recur on a regular if not annual basis.

“Like an ongoing lease for tasers,” she said. “I’m not opposed to that, but I don’t think it’s a capital item if it’s a lease every year. That’s an operating expense.”

Another point Fleming brought up was that the School Committee wanted to try to get the Board of Selectmen, the School Committee and the FinCom together to hash these policies out.

“Have you tried to get the three boards together?” said Sullivan, to laughter from the FinCom. “If we’re going to do a full review of all our major policies – and I think that that’s coming and something that should likely happen and this is my opinion not that of the Board – I think we did it back in 2018 the last time, and it was a Saturday that all three Boards got together and really plowed out the policies.”

Sullivan said she would prefer a representative meeting with one or two members of each board in a representative format rather than all members.

“But this was a policy that we would like to get complete by the end of the year,” she said.

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Bodenhofer pointed out that something similar was proposed in 2022 for the general capital project policy, but nothing happened even after representatives brought a policy together.

O’Neill suggested that he and Town Manager Tony Mazzucco review and rewrite the financial policies and send them to each Board for review.

“Because these policies, technically, should come from the executive, if you want to call it that, and then the drafts go out for reviews from all three boards,” he said. “And I have some suggestions for some of the other policies as well. If we can work with Tony, then we get the drafts out and if you’re trying to do a tri-board meeting or representatives, I think that’s a good next step.”

FinCom member Alan Slater said he had concerns about this approach and warned that speed is the operative word.

“Things may not move quickly, and then we’re going to have $2 million sitting in a fund and we’re not going to be able to use it,” he said.