An Appropriation in the amount of $348,948.80 for Other Funding Sources (OFS) for Fiscal Year 2027.

Transcript (~9 min @ 2:03:23)

Speakers identified by voice; unnamed voices are numbered within this recording. Auto-caption text — verify against the video.

▶ 2:03:16 Devin Romanul: Yes. All in favor. All right. We will move the bottom line. Thank you so much. Up next, appropriations for FY27, ID number 20261215, an appropriation in the amount of 348 million, nine hundred-- Excuse me. Oh, my goodness. Got my commas wrong. An appropriation in the amount of $348,948.80 for other funding sources for fiscal year 2027.

▶ 2:03:44 Speaker 4: Thank you. I'm not sure if some of the detail appeared in the order. It's in the Be It Ordered section of the order. But this is, as part of the budget, we have an other funding sources category revenue, and it's out of special revenue funds. So this just is an appropriation for those funds. So it would be $40,000 out of cemetery sale of lots and graves. Parking receipts, $75,000. The debt exclusion for the middle school, which was amortized over the life of the loan of $33,948.80. And the last one is an appropriation from the Public Safety, Health, and Education Fund for $200,000. And so this is just counted as a revenue source of the budget.

▶ 2:04:39 Speaker 1: Councilor Williams.

▶ 2:04:39 Ryan Williams: Why, thank you, Chair Romanul. Just to clarify, the Public Safety Fund, that's the marijuana fund, right? Yes.

▶ 2:04:46 Speaker 4: Okay. Cannabis. Yep.

▶ 2:04:47 Ryan Williams: Right. And so we are sweeping all of this money into the general fund?

▶ 2:04:52 Speaker 4: Yes. As a funding source for the budget- To offset the general- ... to offset cost of schools, public safety.

▶ 2:04:58 Ryan Williams: Yeah. And is there a rundown of that you just read in the agenda packet?

▶ 2:05:06 Speaker 4: It's in the Be It Ordered section. So I can add a memo or something, so it's more clearly out there. But it's also part of the revenue package under other revenue sources. Okay. So I can add it for clarity. I think it doesn't print in the agenda packet.

▶ 2:05:27 Speaker 1: Councilor Chen.

▶ 2:05:29 Jason Chen: How is the trend of this revenue? We're at $349 this year. How was it last year and the year before?

▶ 2:05:33 Speaker 4: So these are all pretty stable. The cannabis excise, it's 3% on recreational sales, and it's split 50% comes in directly through the general fund, and 50% goes to this fund. It is about $200,000 annually, or $400, because it's double that amount. Yeah. And the other ones, like the bond amortization, that was set way back in 2007. So that will just run off with the debt. It was divided by the life. Sale of lots and graves, we reduced that this year because the Cemetery Commission did reduce the breakout when you buy a grave between perpetual care and sale of lots and graves. I think it used to be 90/10, and now it might be 50/50.

▶ 2:06:26 Jason Chen: And how often do we evaluate if our cannabis tax is the market rate compared to other towns and cities?

▶ 2:06:35 Speaker 4: There's a lot of factors that go into that. It's market saturation, and just as we saw more places open up, and more options, then we did see the cannabis price go down, and therefore the tax go down as well.

▶ 2:06:59 Speaker 1: Councilor Williams.

▶ 2:07:01 Ryan Williams: Thank you. On the topic of the cannabis fund, so this fund used to be a little more remunerative when the community host agreements were a little more flush. And the state changed the rules somewhat, so we used to get a little bit more money in that fund. It's nice to see that we have $200,000 still annually in there. Is that around the amount of revenue that's been accumulated over the year, or does that include prior year revenues?

▶ 2:07:30 Speaker 4: This is an estimate of next year's revenues- ... of FY27. Yes. Okay, got it. So when the Cannabis Commission changed the host community agreements- Yeah ... that was a separate pot of money that we were getting- Right ... a percentage of the sales tax of-

▶ 2:07:44 Speaker 10: Also went into the fund.

▶ 2:07:46 Speaker 4: That went into the general fund. That was a local receipt. Yeah. Yeah. So that money is pretty restrictive- Yeah, and the- ... as far as getting reimbursement

▶ 2:07:55 Ryan Williams: ... and the state sets the tax rate, tooDoes it not?

▶ 2:07:58 Speaker 4: It's 3%. You can- Right ... yes. So the council- We don't do that ... adopted that back in 2019.

▶ 2:08:04 Ryan Williams: But we adopted it, but we adopted the state's- Exactly. Yes ... allowance for us to tax it. Yep. Yeah, so we don't get to change that tax rate. Right. Yeah. So we actually had a fun debate about this fund a couple of years ago, like maybe four years ago. And there was an appropriation request from this fund to fund a city program that we sort of shot down, and then it came back as a source for school funding because the ordinance that created the fund, specifically said that the fund was to be used for the administration of Melrose Public Schools, which is you guys. And then impacts, this theoretical impact- Mm-hmm ... that cannabis sales would have, that we all, at the time, some of the pearl clutchers felt that we were going to have police everywhere and all kinds of costs associated with this place. So my question is, do you think that this is a good practice to put this fund into sort of a lump other funding sources to appropriate, as opposed to the way that we would, say, pull money out of a stabilization fund, for a one-time need? It's a recurring thing because it's a tax base, so I see it as an operational- Yeah I've advocated for that before, but I just wonder if you could speak a little bit to your feelings on this.

▶ 2:09:25 Speaker 4: Yes. So that's kind of how I look at that money as well, that we should be spending what we're collecting- Mm ... each year. And even maybe not go as far as even separating it out, eliminating that public safety education fund, and just have it come in through the cherry sheet or through the quarterly- Mm ... Department of Revenue payments, and just have it be one line item similar to meals tax and- Sure ... yeah, hotel tax. I see. Mm-hmm. So that we're recognizing that cost, and it's not an accumulation of a bunch of money.

▶ 2:10:03 Ryan Williams: Which is what it had been for a couple of years, right? Exactly.

▶ 2:10:05 Speaker 4: Yeah. Okay. Yeah. We had not used it for- Right ... a number of years.

▶ 2:10:08 Speaker 10: Yeah. Okay. Thank you. Appreciate it. Yep.

▶ 2:10:11 Speaker 1: Vice Chair Vandiver.

▶ 2:10:12 Kimberly Vandiver: Thank you. I'm trying to understand overlay in this context because these are funding sources, but I thought the overlay was money that we set aside. Could you just explain the overlay line to me so I understand it better? Sure. So the overlay, the assessors vote to release that amount- This is from the prior year? ... during the year. Yes. Okay. Yes. Got it. Thank you.

▶ 2:10:35 Devin Romanul: I actually had a question. You mentioned that these are projections. I'm wondering if you could look at past years and past projections and how we end up relative to the money that comes in relative to what we projected for our budgeting purposes, and do we kind of purposely dip in under that, so then that way, we aren't surprised by any sort of shortfall down the road? I'm wondering if you might be able to speak to that.

▶ 2:10:55 Speaker 4: Sure. I think we've never run into a shortfall in the past couple of years. We've been mindful of the different changes in each thing. So say parking, that's reflective of the parking that we collect at our MBTA lots. And so during COVID, we did see a decrease in the revenues, and we adjusted accordingly and reduced that revenue source. But I'd be happy to provide some information on that- That's great ... some actual numbers.

▶ 2:11:28 Devin Romanul: Thank you very much. Yeah. Any other colleagues?

▶ 2:11:32 Speaker 1: What is the will of the committee?

▶ 2:11:37 Speaker 7: Make a motion to move the bottom line, or no, approve. Sorry.

▶ 2:11:40 Devin Romanul: Motion approved. Motion approved made by Councilor Finocchiaro. Second. Seconded by Councilor Chen. On discussion? Seeing none. Madam Clerk, will you please call the roll?

▶ 2:11:48 Speaker 2: Yes. Vice Chair Vandiver? Yes. Councilor Chen? Yes. Councilor Finocchiaro? Yes. Mm-hmm. Councilor Karamcheti? Yes. Councilor Kowal? Yes. Councilor Abramsky? Yes. Councilor Park? Yes. Councilor Williams? Yes. President Freeman? Yes. Chair Romanul? Yes.