SHIRLEY -- When Town Meeting on Monday night approved the Omnibus Budget -- Article 6 on the 21-item warrant -- it was $28,503 higher than the original recommended figure of $11,499,950, with the added amount made contingent on a Proposition 2 1/2 tax override.
The added-in amounts, $8,500 to restore previously cut hours for the tax collector's assistant and $20,000 for seasonal DPW employees, respectively, were added to the bottom line via two separate amendments, both of which passed, but with each one contingent on later passage of an override.
Either way, at this point in time, the budget is unbalanced, but not because of the two amendments that upped the total. It was unbalanced to begin with.
"Is this a balanced budget?" Town Moderator George Knittel asked Finance Committee Chairman Frank Kolarik when the article was introduced. Kolarik said it was not and in a short presentation, he explained why.
The presentation posed the question: "Why are we in financial difficulty?" then answered it by sketching the evolution of the situation and positing a solution.
It's a persistent trend that didn't happen overnight, Kolarik began.
Bad news in a nutshell
It all began with the Proposition 2 1/2 law enacted in 1992, according to Kolarik. From then on, a limit was set on the tax levy, restricting the town's ability to fund services. Adding to the problem, there's been a decline in new growth, which would have upped the total levy.
Meanwhile, costs continued to rise. "Expenses go up by at least 3 percent each year due to salary increases, insurance costs and other items, Kolarik said. "Typically, an override must be passed every five to seven years to keep pace." Shirley has not done that, he said.
Kolarik has preached this sermon throughout his tenure on the Finance Committee. The town faces a structural deficit that grows each year, he said. Simply put, there are insufficient funds in the town's bank account to balance the budget.
Now comes the Ayer-Shirley Regional School District assessment, which went up by 11 percent this year, adding $550,000 to Shirley's share of the bill. The uptick was due, in part, to unexpected special education costs, which went up by a half-million dollars.
In addition, the town had a bad habit of dipping into one-time revenue sources to pay recurring expenses, he said, citing the now-depleted MCI fund, which was prison mitigation money awarded by the state when it built a maximum security prison here.
It's not a good idea to use the Stabilization Fund to balance the budget, either, Kolarik continued, at least not until the balance equals five percent of the total budget, per DOR guidelines.
"We went into Fiscal 2014 with a $451,000 deficit," Kolarik said. It was whittled down to a lower number by the time Town Meeting rolled around. First, some departmental requests that were above level-funded were cut, such as hiring a new police officer and increasing the Council on Aging budget. Then, most of the remaining gap was addressed with a hefty infusion of Free Cash and by downsizing the recommended amount for the school assessment from $550,000 to $350,000.
When all was said and done, the deficit figure was $206,000 coming out of Town Meeting, but that amount could change, depending on the new assessment, if any, that the School Committee sets later on.
The selectmen and Finance Committee hashed most of this out beforehand, agreeing to present an unbalanced budget at Annual Town Meeting but fairly confident it would be balanced by the end of the Fiscal Year in July.
By then, the House and Senate will have voted on their budgets, both of which are expected to cancel out the Governor's earlier, less municipally friendly version and to restore his "9-C" cuts, made earlier this year. If so, the town anticipates receiving an influx of state money that will set things right. At least for the time being.
Looking ahead to Fiscal 2015 and beyond, however, given the iffy economy, rising school assessments and diminished financial reserves, the only way to achieve economic sustainability is to bring in more revenue, Kolarik concluded. And in his view, that means raising the tax levy, in combination with "good planning" to use that money wisely.
Town Clerk Amy McDougall said that's a given. From her seat on stage, she stood up to speak in support of an amendment made by Town Collector Holly Haase to up her budget from the recommended to the requested amount and thus restore her assistant's hours and salary, which were cut a couple of years ago, with the difference tied to a tax override.
She explained that the town has reached the "uncle" point where people must recognize the increasing workloads town employees must handle without assistance or adequate funds to solve the problem. Basically, she said it's time to take action. "We're spending your money wisely, but we need more," McDougall said.
Former selectman Enrico Cappucci backed up the statement and the cause. "It's refreshing to hear that ... " he said and he pledged to vote for the amendment in question.