Friday, March 12, 1999
Far from balanced initial budget over $500K in red
"Hello Houston, we have a problem!" exclaimed selectman Michael Fitzgerald at the joint finance committee-board of selectmen meeting on March 2. Seven FinCom members and five selectmen sat around the head table in the Clark Room like the twelve disciples at the Last Supper, staring at the numbers on the chart. Fitzgerald had just discovered $189,000 in Chapter 90 funds (roads) with no corresponding expenditures. Added to other imbalances discovered earlier, Fitzgerald calculated a town budget deficit of $225,000 "before we are even out of the gate."
FinCom chair Charles Parker opened the meeting by explaining that he hoped to cover three items of impact to the town: overrides, Warrant articles, and excluded debt. Member Nina Ostrom distributed a spread-sheet of revenues and expenditures that contained FinCom guidelines versus the expenditures estimated by each town department for the coming fiscal year (FY00).
The first unsettling figure that met everyone's eye was a deficit of $81,000 in the proposed FY00 budget. FinCom had met with various town committees and departments last fall and established a guideline spending increase of three percent, based on stated needs and availability of funds. A proposed budget is not expected to be perfectly balanced and variances of plus or minus a few thousand are commonplace. However, using a deficit of $81,000 as a guideline raised a few eyebrows around the table.
Then came the revelation of the $189,000. This was followed by the discovery that only $100,000 of free cash was available for transfer rather than the proposed $200,000. The cookie jar was not only empty, it was broken.
"Let's summarize the numbers," said Fitzgerald as he grabbed a magic marker and walked over to the easel in front of the room.
Programmed Deficit ($81,000)
Chapter 90 ($189,000)
Free Cash ($100,000)
Offsetting thes e numbers were a few sources of increased revenue.
Local Receipts $27,000
New Growth $43,000
article expenditures $75,000
The net result is an initial budget deficit of $225,000. "This is before we're even out of the gate," repeated Fitzgerald. He divided $11.2 million in operating expenditures by the latest tax base of $656 million ($641 million plus $14.8 million in new growth) and calculated a tax rate of $17.07 per thousand. "This alone will require a 9.2 percent increase in the town tax rate," stated Fitzgerald to his crestfallen audience.
Waving his magic marker once again, Fitzgerald added more pain to the proceedings. "Now let's add the overruns in education, general government, protection, and recreation commission," he continued. Members sharpened their pencils and decided that the education overrun of $235,000 could be reduced by $45,000 due to Minuteman Regional High School coming in under budget at $77,000 instead of the $122,000 guideline. Adjusting for a double entry and audit expense removed another $10K and lowered the final overrun to $180,000.
General government ($56,000)
(Includes add'l $20,000 in pensions and benefits)
Board of health ($6,000)
Recreation Commission ($40,000)
The total overruns equal an eye-popping $317,000. Adding this to the initial deficiency of $225,000 results in a total deficit in the FY00 town budget of $542,000. "This will require a tax rate of $17.61 per thousand," explained Fitzgerald. "That's a 13 percent increase over last year's rate of $15.62 per thousand. Slowly but surely we are entering an area where taxpayers will resist," he said.
Selectman Vivian Chaput was particularly upset by the $40,000 overrun in the RecCom budget. "Why isn't this covered by user fees?" she asked. Chaput did not object to the need for added maintenance or a paid recreation director. "But why should the town subsidize this?" she asked. "We should make certain that the programs pay for themselves."
A chagrined Parker once again observed, "This is the year where we're trying to solve everything." The assembled group mercifully avoided discussing the additional burdens of Gleason Library renovations, purchase of the Wang-Coombs Land, the White property, and serial bonding.
FinCom member Tom Bilotta had heard enough. "We have to go back and generate a balanced budget," he concluded. Selectmen recommended that the beleaguered FinCom revisit each of the offending departments and make whatever painful cuts are necessary until a balanced budget can be presented. Parker agreed and moved that the meeting be adjourned until new numbers are available.
© 1999 The Carlisle Mosquito