Select Board Grapples With Reductions For Current Fiscal Year

By: Ed Maroney

Topics: Municipal Finance

This voter at the June annual town meeting held inside the Nauset Regional Middle School track could turn up at Nauset Beach and may be able to vote in the comfort of her vehicle if the fall town meeting is held at Nauset Beach. FILE PHOTO

ORLEANS — The winds have shifted for the town’s ship of state, and it’s time to trim the sails. Next month’s special town meeting is an opportunity for a mid-course correction that could help deal with even rougher seas ahead.

Voters will be asked to increase fees and, for the first time, institute a $25 residential beach parking sticker. That measure has been rejected by town meeting in the past, but the beaches operation has been running at a significant deficit for years, with the shortfalls subsidized through the operating budget.

One-time reductions in the town’s stabilization funds, which allow multi-year scheduling of motor vehicle and equipment replacement and maintenance of buildings and facilities, are under consideration, as are reductions in the operating budget.

What needs to be done next month hinges on what was done in July and August, the first two months of this fiscal year. Town officials were waiting for confirmed numbers on local receipts – motor vehicle excise tax payments, beach stickers and department fees, and other sources of revenue – before deciding what cuts to propose to ensure a funding cushion through June 30.

The numbers, which became available after last week’s meeting, showed that local receipts dropped from $1,192,477.41 in July and August of 2019 to $1,054,354.70 for the same period this year. That’s a reduction of $138,122.71. Discussion of the new information was on the board’s agenda last night (Sept. 16), as was a public hearing on the proposed fee increases for this fiscal year as well as another with the finance committee on budget priorities for the fiscal year beginning next July 1. Those priorities will have to address an anticipated $1 million shortfall in the operating budget for FY22.

The local receipts report “will determine to some extent how much we need to offset with reductions in the (current year’s) budget,” Town Administrator John Kelly told the board Sept. 9. He said those reductions, which include cutting back on the two stabilization funds and adjusting the amount reserved for health insurance due to reduced enrollment, along with other measures, could provide a “cushion” of $800,000 to get through the fiscal year. How that number can be adjusted based on the recently received local receipt numbers was up for discussion last night.

Last week, select board member Mark Mathison warned about delaying items scheduled in the stabilization funds. “I understand the reason why we’re going where we’re going,” he said, but then recalled “almost 50 years ago when I first joined the finance committee in Eastham when I got out of college. We would go through these exercises on a regular basis, cutting $20 here, $50 there… One thing that keeps coming back to haunt us is those short-sighted cut-a-nickel-here, cut-a-dime-there (decisions) and 10 years from now spending a million to do repairs on buildings or buying new fleets of vehicles because they’re beyond repair.”

“We tried to find things that will not impact services in FY 21,” Kelly said later. “We feel these are the reductions that can be made in October that protect our free cash and give us the best chance to start FY 22.” To maintain its top-flight bond rating, which allows favorable borrowing rates, the town has moved away from using free cash – funds left over at the end of the fiscal year – to balance the operating budget.

Select Board Chair Kevin Galligan said the town had asked whether the Nauset schools had any potential funds to turn back. “It is clear that they are dealing with significant deferred maintenance items,” he said. “Any ‘savings’ because of the schools being shut down, lower health care cost, they’ve put these savings back into their excess and deficiency (account). I’m not seeing any ability, willingness, or, frankly, desire to change their school allocations to the towns at this point.”

The date and venue of the fall special town meeting were likely to be set last night by the board. Plans to meet on the evening of Oct. 26 at the middle school, the traditional venue, have been abandoned given concerns about the number of people who would be allowed to meet in the building during the pandemic. Another outdoor weekend meeting is the latest option, either Oct. 31 or Nov. 1, possibly at Nauset Beach. Holding the June annual town meeting on a Saturday drew criticism from those who attend worship services that day, and the same would apply for meeting on a Sunday.

In an email to Kelly, Town Moderator David Lyttle wrote that, “Whether it is held on a Sabbath Day (Saturday) or a Day of Worship (Sunday) does not concern me given the extraordinary circumstances we have to work through with social distancing.” He recommended scheduling the meeting at the beach for 11 a.m. on Oct. 31, with Nov. 1 as a backup date.

Kelly told the board last week that 200 vehicles could be accommodated at Nauset Beach in the space between the entrance and the food truck courtyard, with a head table facing the parking lot for the moderator, select board, and finance committee. Voters would remain in their cars to listen to the meeting and would have clickers for voting electronically. Microphones would be brought to vehicles to allow voters to speak. Also, a tented seating area for citizens who are being dropped off could be set up.