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PEPPERELL — “Cost containment” was a recurring phrase Saturday morning, when town and school officials presented a united front on the budget that will go before Town Meeting voters on Monday, May 3.

Speaking to roughly a dozen residents who attended the special budget hearing, board Chairman Joe Sergi noted that the Police Department, senior center, and library are all expected to absorb cuts in the coming year. However, he added town staff, the schools and local officials should be applauded for balancing the budget amid difficult times.

“I think everyone is working together,” he said. ” We need to continue working together, and not be afraid of the future.”

The hearing was held to let residents ask questions prior to town meeting, but only a couple of clarification queries were fielded during the 45-minute session.

The budget presented on April 24 proposes $22,443,891 of total expenditures for Pepperell in fiscal 2011, down $429,621 from this year.

Those figures include an increase of $17,410 to the town’s assessment for the North Middlesex Regional School District, which raises that expense to $10,216,118.

Speaking from the floor, North Middlesex Superintendent Maureen Marshall said that essentially level-funded assessment is coming in a year where the district is losing $824,000 from its operating budget. The move is expected to result in the loss of 10 teachers and 1.5 administrators. As a whole, she said the district is down $1.2 million since 2009, saying they’re trying to absorb those losses with minimal impact on their educational mission

“We’re working very hard to make adjustments in our budget that will not impact the classroom,” she said.

On the town side, total proposed expenditures are $10,934,168, a reduction of $456,919 from this year.

In terms of cost containment, the town is leaving vacant a police lieutenant position opened by the recent promotion of David Scott to police chief, along with another $118,830 of reductions found by the Finance Committee. Impact of those cuts include a one-week furlough for the senior center and loss of up to eight weekly operating hours for the library.

Even so, Town Administrator John Moak said the town is still facing a structural deficit, after losing $325,000 of state aid over the past couple of years and seeing new growth revue shrink from over $200,000 to roughly $75,000.

As a result, Moak said various one-time revenues were used to balance the budget, including $125,000 of federal reimbursements from the ’09 Ice Storm, $250,000 from an old retirement trust, $75,000 of overlay surplus accumulated over the past few years, along with another $72,000 of free cash.

In the big picture, Moak said Pepperell has used reserves extensively to balance the budget in recent years, though he expected that couldn’t continue, noting the rainy days funds have shrunk from $5.3 million in 2007 to a current balance of roughly $1.6 million.

In general, Moak said a 10 percent reserve — about $2 million — would be advisable, saying the town should really consider rebuilding those reserves at this point

That sentiment was echoed by Sergi and Selectman Patrick McNabb, who said the board will build multiple budgets this summer, which will give residents information about everything from maintaining services through another Proposition 2 1/2 override to outline where further cuts would be made.

“The truth of the matter is we’ve been using a lot of our reserves and they’re depleted and the preliminary estimate for the 2012 budget is a shortfall of $600,000 to 650,000,” said McNabb. “Everyone should realize it’s going to be challenging year next year.”

“We’re going to have to come together as a community and say what kinds of services we want as a community, relative to the tax base,” said Sergi.