Troubled waters still ahead for town
Published on August 18th, 2004
STONEHAM, MA - With an August Special Town Meeting within the town’s sights, several town officials warn that Stoneham has not escaped the financial tornado that resulted in scores of municipal and school layoffs in the aftermath of June’s failed override initiative.
According to Town Administrator Ron Florino, despite the emergence of unanticipated funds that could climb to a total in excess of $1 million, the FY05 budget already stands $700,000 out of whack. And while the town administrator will advocate for filling that substantial gap, he warns that every dollar spent in FY05 from one-time funding sources will result in a mirroring deficit in FY06.
“I think it’s my job to make clear to the town’s citizens that that’s going to be the case [that Stoneham will face a substantial deficit in FY06]. I’m not trying to put a damper on what they want to spend, I’m just presenting the facts,” said Florino.
“We’re already short $700,000 this year. We need to fund the emergency reserve and the capital budgets. And some of this money needs to be put aside for next year,” the new Town Administrator added.
According to Florino, the FY05 budget stands nearly $400,000 out of balance due to two errors on the part of town officials. The first error, made by his predecessor David Berry, left the fire department’s personnel budget $146,000 short of what it should have been in FY05. The second error, made by the town’s Finance and Advisory Board during this May’s Town Meeting, left the FY05 budget an additional $285,000 short due to an erroneous withdrawal from the stabilization account.
In addition to those errors, Florino also believes the town’s capital and reserve accounts need to be funded at October’s Town Meeting. Having already short-changed those accounts over the past few years, Florino warned that several emergency capital building repairs must take place this year.
“We have a whole slew of capital requests from departments. Some of those might not be a priority, but that’s something I’ll have to figure out by October’s Town Meeting,” Florino explained.
According to Finance and Advisory Board Chairman Richard Gregorio, who puts together financial forecasts for the ensuing year, he shows Stoneham facing a $700,000 deficit in FY06. But with $920,000 sitting in the stabilization account, Gregorio believes that shortfall can be absorbed next year by the savings account.
“Let’s just say for a moment that we forget about Thursday night’s Town Meeting. I’m showing a deficit of $600,000 to $700,000 in FY06. And that should be able to be handled by the stabilization account, but that would be dwindling it down to a couple-hundred thousand dollars,” Gregorio said.
However, Gregorio warned that his FY06 deficit predictions do not include the $700,000 shortfall Florino identified for this year’s budget. With only one-time funding sources such as free cash, the recently received $300,000 in MBTA monies, and the predicted $287,000 in additional state lottery aid able to pay for such a debt, Gregorio warned his FY06 deficit projections will quickly jump to $1.4 million. In other words, although the revenue sources available in FY05 will cover the costs for the services this year, the windfalls will not be available next year, creating a deficit before the budgeting process even begins.
“It’s one-time revenue sources that will hurt us in the next fiscal year. I can’t speak for the [Finance] Board as a whole, but my advice to the board was not to spend money in August or October. We need to build the stabilization account back up,” Gregorio argued.
Exacerbating the financial outlook for FY06, the town’s Selectmen have in effect earmarked an additional $250,000 in funds for the police and fire departments’ overtime budgets - bringing the potential FY06 deficit to a total of $1.65 million.
According to Selectman Cosmo Ciccarello, while he realizes that funding such a need will only dig a deeper hole for Stoneham come next year, he doesn’t see how the two safety departments could function without the monies.
“We have to have the overtime for the police and fire. I don’t think they can operate the way they are now,” said Ciccarello. “But for anything else, I’m going to have to take a close look. We might find ourselves in a situation where we might have to lay more people off next year otherwise.”
According to Florino, while State Senator Richard Tisei and State Representative Paul Casey have announced that the town could receive over $500,000 in additional Chapter 70 aid and more state funding should the Gutierrez project go through at the Boston Regional Medical Center, both of those funding sources remain up in the air.
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