Town could hit budget surplus for current fiscal year
The town appears headed for a budget surplus in the current fiscal year, based on information released Wednesday night at the Board of Finance's quarterly budget meeting and comments made by Chief Fiscal Officer Paul Hiller.
The report tracked the performance of key accounts in the town's operating budget since last July, when the fiscal year began. During that span, revenues in those accounts fell $296,000, or 0.16 percent, short of expectations, while expenditures came in $561,000, or 2.6 percent, more than was planned.
But Hiller expects those numbers will soon become surpluses, as they exclude the roughly $2 million the town should bring in come June, when it holds a tax-lien sale, as well as a few other jolts, like building permits due from Whole Foods, CVS and Sacred Heart.
"What a difference a year makes," Hiller said at the onset of his presentation.
He later said, "We haven't had to go to the departments and tell them to stop anything. I'm very, very confident that we'll end up with a surplus compared to last year."
Board of Finance Chairman Tom Flynn pointed to four poorly performing components in the report as proof that recent Board of Finance decisions -- to add cushioning to those accounts for next year's budget -- were correct.
On the expenditures side, he pointed to the "health insurance for active employees," "fire department overtime" and "heart and hypertension" accounts, which totaled nearly $1.1 million in budget shortfall at the end of March. On the revenue side, he pointed to the "interest on investments" account, which was running $739,000 below target at the end of March.
Last month, while tweaking the proposed budget for next year, the board decided to increase the expected costs for those expenditure accounts and decrease expected revenue from interest on investments.
"Some of our adjustments were justified tonight based on the trending we're seeing this year," Flynn said afterwards.
Earlier proposals for next year's budget predicted, for example, that interest on investments next year would amount to $1.4 million, which is similar to what was expected in this year's budget. But this year's actual revenue from that account thus far is running $739,000 behind schedule. That trend prompted the board to reduce expectations for that account by about 10 percent heading into next year, Flynn said.
Hiller, while agreeing with that move on Tuesday, cited the Federal Reserve's decision on Tuesday to hold interest rates very low for an "extended period."
According to the report, the following expenditure accounts are running over-budget as of March 30: Fire Department Overtime by $147,000; Police Department Overtime by $361,000 (which Chief Peck said was "underfunded" in the report); "Heart and Hypertension" by $116,000; health insurance for active employees by $828,000 (Hiller said that number should drop to around $100,000 by the end of June); and worker's compensation by $156,000.
The report lists "town dump scale fees" as the largest revenue shortfall, running $810,000 below expectations. Also lagging: building permits by $216,000; PILOT by $259,000; and the interest on investment account.
On Monday night, the proposed budget for the next fiscal year will go before the Representative Town Meeting (RTM) for final approval. RTM Republicans this week expressed interest in scaling back the proposed $86.3 million town-operating budget. Flynn was asked whether -- based on this most recent report -- he felt there remained room to reduce that portion of the proposed budget.
"I stand behind actions of our board from last month," he said. It would be wonderful, he added, if the RTM Republicans can find ways to trim the budget even more. "But I'm very comfortable with our decisions."