HARWICH — A freeze on non-essential spending has been put in place by selectmen in an effort to keep town costs down given the unknown financial impact the COVID-19 pandemic may have on the community.
Selectmen last week expressed concern that revenues could be lost if the pandemic keeps people away from the Cape this summer. Various taxes and fees, such as the meals and hotel taxes, would likely be lower than was projected when the FY21 budget was developed.
In a memo this week, Finance Director Carol Coppola said the town could also experience an additional $500,000 to $1 million in health-related expenses depending on the severity of the outbreak. By way of example, she said costs associated with Visiting Nurses Association assistance could rise, and along with a number of other potential health and safety costs.
Coppola also reminded selectmen that the town still has not received the $850,000 approved by the commonwealth to offset costs incurred by Harwich from the July 23 tornado. The town has some funds available, but she said she is not sure there is enough to cover all of those costs.
On Monday Coppola recommended selectmen institute a budget freeze for all non-essential spending, including non-payroll costs outside of public health and safety. Spending in excess of town appropriations will require permission from the director of accounts in the Division of Local Services in the state Department of Revenue, she added. The town would have to provide a spending estimate to address the emergency situation and those funds would be appropriated in the next fiscal year.
“As time moves forward and we have a better handle on the potential costs the town will incur, then we can either release the freeze or extend it further,” Coppola wrote.
There is approximately $20 million not expended in this year’s budget, she said, adding $3 million is required for debt, $4 million for salaries and wages and another $1.5 million for benefits that would be considered essential payments.
Finance Committee Chairman Dana DeCosta said he added up $11.8 million in town expenses and walked the board through commitments for those funds. There are $2 million to $3 million in accounts still outstanding, he said. There are people who are not working as much in some departments, he added.
“Personnel, we’re not in a position to go there yet,” Interim Town Administrator Joseph Powers responded.
“I’m not looking at salaries, it’s overtime,” DeCosta replied.
Powers said he put a hiring freeze in place on Feb. 26, and no position not previously advertised, including seasonal help would be filled. Regarding public safety hiring, Selectman Michael MacAskill said one patrolman has gone out on disability and a dispatchers has left. He said the absences put additional strain on an already stressed department. The question was whether those positions are considered essential; selectmen agreed to address that issue in their meeting Friday.
The board sought to address the term “non-essential.” Coppola said if a department seeks to replace a printer, and the one they are using is still working, that is a “no.”
DeCosta said a number of departments are now gearing up for the summer season and need funds for certain services. He recommended selectmen put in place an escape clause allowing an appeal from the freeze. He also reminded the board of the advice they gave the school administration last week about using more reserve funds.
“We have a stabilization fund with more than $4 million in it. We have a backstop,” DeCosta said.
Howell said “everybody needs to hear ‘no’ first” before there is an appeals process. It was agreed selectmen would be the final arbiter of such requests.
Selectmen unanimously approved a motion to implement an immediate freeze on all non-essential spending, excluding payroll and essential costs and areas of public health and safety.
“We’ll have a team in place to make the right decisions,” Powers said