A Projected Shortfall Of $4.1 Million In FY21
HARWICH — Selectmen warned department heads to expect revenue shortfalls going into FY21 and urged town departments to come together in creative ways to continue to provide services to the community.
Board of Selectmen Chairman Larry Ballantine said while this year has been difficult, next year will be even more difficult. Selectmen made it clear, however, that they are not looking at employee layoffs, which would only be considered as a last resort.
Interim Town Administrator Joseph Powers said selectmen wanted to give department heads a heads up about the headwinds they are facing with the FY21 budget. Finance Director Carol Coppola presented an overview of revenue generation, reporting that real estate taxes in the fourth quarter of this year were better than expected. She said selectmen extended the fourth quarter payments to June 1 and waived late fees for payment to June 30. At this time there are $2.7 million in payments still outstanding, but she expects $1.5 million to come in before the end of the fiscal year.
“This fiscal year I anticipate a surplus…but not as large as expected,” Coppola said.
She cautioned that the first two tax payment quarters of FY21 may be a lot more difficult for property owners and officials expect shortfalls, but just how much will depend when lodging facilities and restaurants are allowed to open, whether people will be buying new vehicles — which drives excise tax — and the number of people going to the beaches. She said she is projecting a $4.1 million shortfall in FY21 revenues.
In the next few weeks, Powers said he will be reaching out to department heads to start strategizing on the impacts of COVID-19 and how to move forward. Even though there has been a hiring freeze in place, the town will be hiring short-term help for the health department, beaches, golf course and custodial functions. He said officials hope to access federal CARES Act funding to cover those positions.
“One of the important things we want to convey is how important your role in the process is and the work you have done in this difficult time,” Selectman Stephen Ford said to department heads. “You’re part of this team and decision making process.”
Selectman Michael MacAskill apologized to department heads for not making clear enough the purpose of the meeting beforehand, saying he understood there was a lot of anxiety that people would be losing their jobs.
“The last thing I want to do is lay anyone off,” MacAskill said.
“We’re all in this together,” Ballantine added. Departments are not overstaffed and there is limited leeway for reducing staff, he said.
Fire Chief Norman Clarke, Jr. said the layoffs after the failure of the Proposition 2½ override in 2005 were devastating. He said the Cape’s economy was extremely strong before the virus and it will come back; any cuts will be temporary.
“This is not 2005, circumstances are different,” Selectman Donald Howell said. “We can’t go back and ask for an override if we’re in trouble.” While the virus is here now, “we don’t know how long it’s going to last. We can get through this together with cooperation. We’re looking for creativity. Doing things differently and saving money so it doesn’t effect jobs. We have a revenue problem and we have to address it.”
MacAskill said the board shouldn’t minimize the $4.1 million projected shortfall. The revenue losses could extend into FY2022 and 2023 if there are major impacts on businesses and jobs.
“This will go on for a while and the economy is going to suffer, not just our revenue,” MacAskill said.
Powers noted the board approved the one-twelfth budget procedure allowed by the commonwealth until the town’s FY21 budget is approved at the annual town meeting in September. The provisions allows the town to deficit spend one-twelfth of the FY2020 budget each month until the FY21 budget is approved.
Water Department Superintendent Dan Pelletier inquired about the spending procedure, pointing out a major portion of his annual budget is spent providing town water over the summer months. He wanted to know if they will be able to fund what they need to provide the water.
Coppola said officials have been meeting with the state department of revenue about the issue. DOR understands there are different types of expenditures on the Cape, she said, and if the town provides those explanations, she does not see such issues as “insurmountable.”
Ballantine said there is a lot of experience and talent in the town family and they will work together to improve efficiencies.
“Some things thought sacred may not be sacred, and we can do things in a better way,” Ballantine said.