If Town & Schools Stay Nimble, We Can Dodge Budget Override
Thu, 10/17/2019 - 5:16pm Heraldgroton
By 2022 An Override Is Possible Because School Union Contracts Expire 2021 And Town Union Contracts Expire 2022
by Connie Sartini
In a joint meeting with the Select Board for the purpose of providing guidance to the Town Manager for the 2021 budget, Finance Committee Chairman Bud Robertson advised that the FinCom is recommending one budget for the town for 2021 that reflects no override. He was emphatic that it be one budget, noting that in preparation for this 2021 budget there is a potential shortfall of $500K based on preliminary projections.
“If we have a shortfall, we need to split it with the Groton Dunstable Regional School District,” Robertson said.
He stressed, “$500K on the municipal side is too much to get to. We need to share the shortfall in 2021. In 2022 we may need an override but in 2021, the school union contracts are up and in 2022, the town union contracts are up. The run rate for these could be reduced which will help out the 2022 budget.” Robertson also said that 75 to 80 percent of the spending is on wages and benefits for both the town and the School District.
Robertson recommended that Town Manager Mark Haddad work out the details, but said there should be a balanced budget in 2021 with no added positions, and if the school shares this shortfall, there should be no employee cuts.
Select Board member John Giger said, “From my perspective, the data is not complete enough to understand what is going on.”
Robertson said that a no override is realistic. “We need to look at the cash flow to see if $250K will come from revenue increase, expense reductions, or a combination of both. It’s a roll of the dice, but I believe it is a reasonable risk to take in 2021 to avoid an override or a reduction in service levels.”
He cautioned that there may be less free cash at the end of the year, that could affect capital spending in 2022.
FinCom colleague Gary Green agreed, saying, “This is the year that we may have to get more aggressive. I think we are rolling the dice. Maybe the contracts will be more favorable. There are so many assumptions. Looking at the historical trends, we should be okay for one more year.”
Following the 2019 Spring Town Meeting, a Tri-Board was established that is made up of members of the Groton Select Board, the Groton-Dunstable Regional School Committee and the Groton Finance Committee and Town Manager Mark Haddad who met to begin to look at the 2021 budgets.
Both the school and the town developed a preliminary budget for 2021, reflecting expected increases in health care, union contracts and pensions and this is where it became evident that, as it stands, the result would be the $500K shortfall.
Groton-Dunstable Regional School Board Chairman Marlena Gilbert advised, “Our budget is larger than in the past. I believe that we are looking at reserves, if it’s possible. The School did follow budget guidance. Last year’s budget was balanced. If we look at reserves and possibly transfer from the E&D (Free Cash) account to stabilization so we don’t have to generate as much free cash.”
Robertson commented, regarding the Schools, “It’s not capital. The school assessment for 2021 has to come down by $250K.”
Green added, “Are we at risk next year with not enough free cash? Yes, and it’s getting tighter and tighter every year.”
As the Select Board moved to adopt the position of the Finance Committee, Selectman Josh Degen – attending via phone – objected, saying he couldn’t support the guidance from the Finance Committee because he wants to have two budgets: one with level services adding in the snow and ice removal and one with a no override budget.
He said that by doing these two budgets, officials would be
able to see where cuts could be made. “We get to zero by making cuts,” he said. Degen pegged the shortfall of the level services budget at $700K.
Haddad suggested that he prepare two budgets, one with a preliminary 5.8 percent increase, and one that eliminated the 5.8 percent increase. The Finance Committee agreed to Haddad’s suggestion.
He will prepare one budget reflecting an override, and a second no override budget that reflects a reduction in spending, also looking into a change in assumptions on revenue such as excise tax, room tax and meals tax.
After the meeting, Haddad stressed that by law, the final budget has to be balanced.
Following Fall Town Meeting Oct. 21, Haddad said that he would be meeting with the Dunstable Town Manager and School
Superintendent to work on ensuring a balanced budget.
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