Town looking at $3.7 million deficit
Published on February 14th, 2007
STONEHAM, MA - Town Administrator David Ragucci proposed plugging an estimated $3.7 million deficit next year with widesweeping municipal cuts, including the reduction of police and fire department forces by eight more people.
The rookie town official, who inherited the budget from his predecessor, current Town Accountant Ron Florino, warned the Selectmen this Monday that Stoneham could not count on any major additions of revenue sources, such as a jump in state aid, local receipts, or tax dollars from several planned developments across town.
"Fiscal year 2008 is going to be another challenging year for the Town of Stoneham. As it stands right now, we have a $3.7 million shortfall, if we were to meet the level of services that are presently provided," Ragucci said.
"People will get hurt. People's lives will be impacted by this, not only employees, but citizens who get services in Stoneham," the new hire cautioned.
According to Town Administrator Ron Florino, while the town is expected to generate approximately $1.1 million in additional taxes this year - through both new growth and by raising the tax levy by the maximum allowed 2.5 percent - that source is completely consumed by eliminating the current $160 rubbish fee.
The Selectmen, who were criticized considerably by the public after reinstituting the garbage charge after last year's override question failed, directed that this year's expense plan be put together without that estimated $1 million in revenue.
"The bottom line is that total estimated revenues for FY08 compared to FY07 are expected to decline by about $470,000, if the trash fee is eliminated," Ragguci informed the Selectmen.
"On the expense side, it will cost the town about $3.2 million more in FY08 to provide the same level of services," the Town Administrator added. "Health insurance costs are expected to raise by 11.9 percent, which translates into a total dollar increase of about $845,000."
To offset the estimated $3.7 million funding gap, Ragucci suggested that $300,000 be withdrawn from the stabilization account. Leaving a $3.4 million hole, the Town Administrator further advised that $370,000 set aside for employee raises also be slashed.
The rest of the deficit would be offset by budget cuts across the town. Some of the most severe reductions would include:
• Reducing the police department budget by $302,535, meaning a lieutenant, sergeant and patrolman would be slashed;
• Cutting the fire department budget by $257,971, stripping the force of an additional five firefighters;
• Slashing the Public Works budget by $269,000;
• Mandating that the School Committee cut its spending proposal by over $1.5 million;
• Reducing the library budget by $176,578, targeting the book budget, eight part-time employees, and hours of operation.
Although Ragucci and Florino claimed that they put together a level-funded budget, one that provides the same level of services as the this year, the deficit is partially driven by several new positions, programs, and funds that either currently don't exist or were paid for through outside sources.
To plug next year's forecasted deficit, virtually all of those new items were eliminated by the Town Administrator in his balanced budget.
In total, these restored positions, programs, and line-items account for over $350,000 of the predicted funding gap in FY08.
Coupled with plans to slate another $370,000 for still un-negotiated employee raises, these new funds constitute approximately 20 percent of Stoneham's entire $3.7 million deficit.
For example, included in that $3.7 million deficit are two new positions, a $70,000 a year MIS post and a $65,000 Town Planner. Both of those jobs were already cut during budget deliberations in years prior.
In addition the deficit also includes nearly $70,000 to restore the recreation department, which has been funded over the past few fiscal years by outside sources.
Lastly, the deficit is also partially swollen by funding capital line-items with over $240,000, an appropriation that is 16 times higher than the figure that was funded by Town Meeting last year.
And although the Town Administrator's budget recommends that capital be slashed by $144,645 to offset the $3.7 million deficit, the $98,000 figure that remains is still over 600 percent greater than last year's appropriation.
"I do have some questions," admitted Selectman John DePinto, when asked how he felt about those new positions and funding sources. "If you don't put four positions back, why do you lose that money. It's perception, so to speak."
"What the deficit shows now does include positions that are either vacant or unfilled. But part of that is trying to get back where we were," commented Selectman Paul Rotondi in a separate interview. "In my opinion [not having these jobs] hurts our effectiveness and ability to run this town."
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