Selectmen OK $1M in cuts to next year’s town spending proposal

May 14, 2020 by

Published May 13, 2020

By DAN TOMASELLO

LYNNFIELD — The Board of Selectmen on May 6 unanimously approved revised spending plans for fiscal year 2021.

Due to the economic crisis caused by the COVID-19 virus pandemic, Town Administrator Rob Dolan developed new operating and capital budgets for FY21. He said the two budgets were cut by $1,023,861.

Dolan said the operating budget for the next fiscal year totals $58,174,347, which he said is a 2.6 percent increase over FY20’s $57,199,707 appropriation. The revised spending proposal is less than the $58,959,164 budget Dolan originally proposed for FY21.

“A lot has changed since the original budget was passed,” said Dolan. “The economy has changed and we have to adjust to it. It’s not an easy task. We feel this budget will meet the needs of the community and will position us as we move forward.”

Dolan cut $289,035 in operating expenses for the next fiscal year, which he said, “will not impact direct services.” He was able to make reductions in health insurance costs that will not affect employee benefits, and also reduced the town’s property and casualty insurance line item. He said the assessment for Essex Tech was lower than previously budgeted.

“We will not be hurting any of our students who attend the vocational school,” said Dolan.

Dolan has budgeted a 3 percent increase for the School Department in FY21.

“That is by far the largest of any department,” said Dolan. “They have been held harmless to the $1 million in reductions that we are proposing.”

Dolan reduced the proposed allocation for the Stabilization Fund by $50,000, totaling $150,000. He said the town’s Capital Facilities Stabilization Fund has been reduced by $50,000, equaling $50,000. He said the proposed appropriation for the Other Post-Employment Benefits (OPEB) Trust has been reduced from $200,000 to $100,000.

In the wake of the state facing a $4 billion to $6 billion budget shortfall, Dolan reduced projected state aid by $189,035.

“That is a 10 percent reduction,” said Dolan. “I believe the very progressive new formula for Chapter 70 education aid presented in the governor’s budget before COVID-19 is going to be retracted, and they are going to go back to the old formula. Lynnfield didn’t do very well in either formula, so it won’t have dramatic effects like it will in other communities. We are projecting a significant decrease in the other assistance we get, unrestricted government aid.”

Dolan said town officials are concerned about the pandemic’s impact on local receipts such as meals’ taxes, fees, licenses, permits, rentals and motor vehicle excise taxes.

“Meals’ taxes are going to take a massive hit,” said Dolan. “We get about $150,000 per quarter from meals’ taxes. If we get a third of that, that would be a positive. We feel very strong about our excise tax collections because people cannot renew their license or registration without paying it. The good news is our Building Department has been working through this crisis, and they have been very busy. We hope people will still invest in their homes and building permits will not lag.”

Dolan said the town’s capital budget for FY21 was cut by $635,826, totaling $1,936,900. He originally proposed a $2,571,726 capital budget for the next fiscal year. He noted one-time revenues are used to fund capital budgets.

“We wanted to carry over as much money for next year to protect us as much as possible as revenues could be severely limited in the future,” said Dolan. “We reduced a number of items that I do not think will have a significant, long-term effect on the community.”

Dolan said some of the items that were cut from the capital budget were a new bell system for Lynnfield High School, a new phone system for Summer Street School and a microfilm scanner for the library. He also nixed a proposal to purchase a new cruiser for the Police Department, and hopes the vehicle can be purchased in FY22. He also said one dump truck will be purchased for the DPW instead of two.

“One dump truck can be repaired, so that should be able to get us through another year,” said Dolan. “If we don’t buy one dump truck, we are going to have to increase our reliance on contractors, which are more expensive.”

Dolan said the town will be holding off on spending $300,000 for engineering costs associated with the Summer Street Transportation Improvement Plan (TIP) project.

“We will be able to continue on in smaller steps to get that project done,” said Dolan. “We are not going to get taken off the list. I thought that would be a prudent reduction considering the crisis the country, state and localities are dealing with.”

While Dolan said $45,000 for a new irrigation system for the King Rail Reserve Golf Course is still in the capital budget, he said two mowers will not be purchased in FY21. He said capital items for the two golf courses are purchased with revenue generated from the courses.

Dolan said the personal-protective equipment for the Fire Department, totaling $488,000, is still in the capital budget. However, he said bonding will not fund the equipment.

“There is no borrowing this year,” said Dolan. “The fire equipment is being paid for with the reductions we have made.”

The revised capital budget still includes $97,000 for the last phase of the Police Department and Fire Department’s joint radio site replacement project. The School Department’s annual $250,000 request for technology expenses remains in the capital budget as well.

Dolan hopes Town Meeting will be held later this spring so that the town will not have to utilize a month-to-month budget as an interim solution in addition to the capital budget being delayed. He also said he and the selectmen will need to closely examine the FY21 budget each month going forward.

Financial challenges loom

Selectmen Chairman Phil Crawford thanked Dolan, Town Accountant/Assistant Finance Director Julie McCarthy and Assistant Town Administrator Bob Curtin for diligently working to overhaul the revised spending plans for the next fiscal year. He was pleased they made “significant cuts” without reducing staff or cutting services.

“I know that is not easy and this is an evolving issue,” said Crawford. “The prudent thing to do is to be proactive, be conservative and reduce the budget to one that we can live with.”

Selectman Dick Dalton said it’s critically important for the board and Dolan to constantly review the FY21 budget each month.

“We don’t have a crystal ball and we are going to have to stay nimble on our feet to react to different circumstances,” said Dalton. “I am sure we are going to be presented with some real challenges in the year ahead.”

Selectman Chris Barrett said FY21 and FY22 are going to be challenging fiscal years. He said it’s important for all boards, committees and departments to understand “it’s new territory they are entering together.” He said it’s important to keep residents informed about the town’s financial challenges.

Dolan reiterated that the town’s various departments collaborate frequently. He is hoping the state will not have to make any mid-year cuts sometime this fall.

“We are expecting departments to be run as tight as possible, which is what we have always done,” said Dolan.

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