Published May 21, 2020
By MAUREEN DOHERTY
NORTH READING — The potential for making people deathly ill is not the only casualty of COVID-19 in 2020. The rapid swing nationwide from one of the historically lowest unemployment rates (3.5% in February) to one of the highest (14.7% in April) attributed to the shutdown of the nation has sent shockwaves into every city and town attempting to draft budgets for FY21.
With nowhere to go to spend their money even if they had it, must households have severely cut back their spending habits which has resulted in a shortage of revenues for the state to share through local aid coupled with the fact that FY19 income taxes are not due until July 15 to coincide with the IRS change to help struggling tax filers it is no surprise that state revenues have taken a dive.
The Select Board got its share of the bad news Monday night during another virtual number crunching session when it was learned that after trimming $897,317 from the FY21 budgets drafted and recommended by the town’s department heads that a budget gap of $279,723 still remains.
The School Department was given the same advice and has gone from needing to close a budget gap of $138,000 back on May 4 to $280,000 on May 18. (see related story).
Working in the town’s favor is the fact that Town Meeting has been pushed back to Monday, June 29, rather than June 8, therefore, both the Select Board and the School Committee have extra time to consider the cuts being recommended to their respective budgets by the town’s Financial Planning Team, Finance Committee and the administration.
Most years the town would recommend level-funding state aid to be conservative. But according to Town Administrator Michael Gilleberto, the town has been advised by state Rep. Brad Jones to anticipate significant cuts to local aid, in the range of 10% for both Chapter 70 and unrestricted general government aid. This would reduce anticipated revenues by $903,939.
Finance Director Liz Rourke added that the town will have a one-time $250,000 increase from cell tower revenue to work with and she is recommending that the town increase the Debt Capital Stabilization Fund transfer by $149,025 to include short term interest and the Little School roof debt payment.
Other recommendations include using $200,000 from Free Cash to fund both school and municipal retirements, and to also fund the town’s snow and ice deficit with Free Cash, which would reduce the FY21 revenue plan by $315,000. The current deficit in snow and ice is about $220,000. (The state allows the snow and ice budget to be underfunded due to the unpredictability of such weather events so that towns do not have to tie up funds that might not be needed.)
How did the town reduce its budget gap by nearly $900,000 already? By not funding budget requests across the board.
They plan to leave six current positions vacant (part-time veterans’ services, $22,418; part-time building inspector, $24,178; part-time electrical inspector, $20,000; treasury position $40,510; a DPW position, $55,000; and a grant writer position in the TA’s office that was never filled, $75,000.
They will also eliminate six new positions that were recommended by department heads in their budget presentations for FY21. They are a fire prevention captain ($147,323,000); DPW tree positions ($109,041); information technology ($58,000); a DPW mechanic ($52,956); a library position ($52,000); and part-time youth services ($25,000).
Also eliminated from the FY21 budget were additional hours requested for a current Elder Services position ($18,857), $9,000 for a DPW engineering co-op student, $20,000 in accounting professional services; one new police cruiser, $53,000; $80,000 in small capital for the DPW department and a $35,000 increase in DPW repairs and maintenance.
The board will be presented with additional cuts or options to absorb the remaining $279,723 deficit at its next meeting on June 1.