PEPPERELL — Board of Selectmen vice chairman Patrick McNabb has recommended each board member work on a budget contingency plan just in case all carefully thought out strategies fail. A fail safe would be adopted by consensus.
Meeting Monday night without the presence of chairman Joseph Sergi or administrative secretary Peggy Mazzola, McNabb, selectman Joseph Hallisey and town administrator John Moak discussed year-end financial projections and the 2011 budget in a non-televised session.
Although figures are very “fluid,” Moak put the projected 2011 budget deficit at $300,000 to a maximum of $400,000 which could be trimmed by $150,000 to $200,000 if the North Middlesex Regional School District budget is level-funded. A letter from selectmen has been sent to school district committee members and the press asking for that.
According to the latest working figures from the school committee’s financial subcommittee, Pepperell’s assessment is expected to increase by about .4 percent ($40,000) not including a 120 percent increase in transportation costs.
State transportation reimbursement only covers about 59 percent of that cost, leaving the town with about a $150,000 bill. Moak, one of the town’s four-member financial team that is focusing on increasing revenues, said increased school debt payments made this year might reduce the transportation hike by some $40,000.
Another chunk of the projected deficit could be chipped away if talks in Boston of a three percent increase in state aid hold up. That seems unlikely.
“I have not heard anything about a joint resolution on aid from the House and Senate,” Moak said. “We can assume there will be some kind of Chapter 70 cut. I have heard state revenues in February were lower than what was wanted.”
Meanwhile, McNabb pointed out, Pepperell’s assessment for its students who attend Nashoba Valley Technical High School is increasing by $69,000 next year.
“The question is do we need a contingency plan if the budget numbers get whacked,” McNabb said.
Selectmen have asked each department to submit two budget proposals, one at level funding and a second showing a five percent cutback. The latter, McNabb said, would equal $280,000 plus or minus. It is not a preferred approach.
“It seems we need to strategize about closing the gap, and we’re losing time. If we have to come up with $50,000 or $200,000 how will it happen?” McNabb asked. “I don’t want to be rushing through that.”
While Moak’s financial team focuses on revenue protection and generation, the Finance Committee is focusing on fine-tuning budget trim backs for a second year. It has, Moak said, found about $40,000 to $50,000 thus far.
Last year, faced with a $1.9 million shortfall in the current budget, about $500,000 was trimmed from the town budget, creating layoffs, part time work weeks and shorter business hours in Town Hall.
Moak will have better figures for the selectmen’s March 29 meeting although he said more firm revenue figures won’t be available until the end of April.
One overarching goal this budget-setting season is a resolve to leave available cash in the Stabilization Fund and Free Cash accounts alone. What was once $2.5 million in free cash was raided, dropping the figure to below $500,000. Moak wants to build it back to $500,000.
“That’s out goal. We need to stop the dependency on free cash. We have to live within the 2.5 percent (Proposition 2 1/2) increase in tax revenue,” he said.