PEPPERELL — The inevitability of a $1 million override question, expected to come before Annual Town Meeting voters on May 5, took on increased importance as Finance Committee Chairman Diane Gaspar and town accountant Theresa Walsh briefed selectmen on the status of the proposed 2009 operating budget.
Revenue amounts fluctuate; however, as of April 7 the anticipated shortfall is $171,890 even after $1.3 million is taken from the Stabilization Fund (current value $1.8 million) to cover the operating budget.
With town meeting and ballot approval of a $1 million override, some $800,000 of that figure would be put back into the fund in order to keep the town fiscally sound, Gaspar said.
A million dollar override permanently increases the municipal budget, which is transferred to property tax payers (about $.80 per $1,000 in valuation), representing a tax increase of between $270 and $330 for an average-value home.
“It’s forever, and next year (fiscal 2010) there’ll be a $632,000 deficit even with the override,” Gaspar said when seeking selectmen’s support for the warrant article.
“Revenues are flat,” Walsh added.
Gaspar reported that the Finance Committee has completed its 2009 budget review, going “line by line” and “cutting as much as we could or moving money around.
A few budgets were underfunded and increases were recommended, she noted, but they were rare.
“We don’t want to hear (about reserve fund transfers next year),” she said. “It got vicious. It got to cutting expenses we felt were not mandatory (and that’s) not to say there won’t be challenges at town meeting.”
For example, she said, the committee did not get a lot of response from the Water Division of the DPW. Even though rate payers fund the Enterprise Fund that provides its working capital, “we found no cooperation,” she said.
“The library wants the book fine money (and) we want to keep it in the general fund. They have state aid and a trust fund that other departments don’t have,” she continued. “One department shouldn’t be allowed to hoard funds.”
Selectman Chairman Darrell Gilmore asked what happens if an override fails.
“I haven’t worked out the details but I suspect say the school budget passes. We’d be $171,000 in the hole,” Walsh said. “We could apply more free cash to balance this year but (we’d be) $2.2 million in the red the following year. Or we could go back to town meeting and cut the budget.”
“A lot of townspeople don’t know what an override means,” Selectman Lyndon Johnson noted.
“Last year the (town’s school contribution) was up. It’s increased $1.5 million over two years, a million last year and $500,000 this year,” Walsh said.
“Schools are not budging,” Gaspar added. “We met with (school officials from the member communities) and the superintendent and her staff. She basically said ‘I feel your pain, there’s nothing I can do.'”
“She’s not feeling our pain, she’s causing our pain,” Johnson said.
Walsh said Ashby and Townsend are not supporting their respective 3 percent and 2.45 percent school budget increases. Pepperell’s share is increasing by 6.27 percent.
“So we’re talking staff cuts. I know departments have slashed budgets. All that’s left is people. There’s no money,” Gilmore said.
“This year an override and next year an override. If we wait until next year the cuts would be catastrophic?” Johnson asked.
“Yes,” Walsh confirmed. “Debt service is increased $200,000 just this year. Our (municipal) budget is up $463,000.”
Gaspar said the FinCom wants to make a presentation before town meeting. Town administrator Robert Hanson advised it would be best to conduct a public hearing because the eyes of voters at town meeting would “glaze over.”
“If we don’t get the information out we may be worrying for nothing. People may not mind (voting tax increases),” said Selectman Joseph Sergi.
“There’s plenty of towns with new equipment and no staff and overrides go down,” Gaspar said. “There’s always been a shortfall. The mission of the Finance Committee is to look at the budget.”
“This town has been frugal. I can see the override passing,” Johnson said.
“Schools don’t even seem to be held in check,” Gaspar continued.
“The three towns need to get real tough this year. They’re (schools) going to have to come out with a budget we can agree with.” Johnson stated.