By Beth David, Editor
The Acushnet Selectboard discussed revenue projections and budget expenses at its meeting on 1/9/23, and came to the conclusion that the town is facing a structural deficit for FY25.
Town Administrator James Kelley told the board that the governor issued “9C cuts,” which are mid-year cuts to balance the current fiscal year (FY24).
According to the Mass. Municipal Association, tax collections have fallen short for the past six months. Section 9C of Chapter 29 gives the governor the authority to cut state budgets. The cuts will not affect municipal core budgets and school aid. At least not yet.
Mr. Kelley said it does not affect this year’s state aid.
“But that doesn’t bode well for next year,” he said.
Mr. Kelley told the board that new growth, which allows for the town to collect more in property taxes above the 2 1/2 limit, is down from previous years. He said there are not a lot of projects in the works that might be used for next year.
“It’s mainly driven by the economy, and that’s a problem,” said Mr. Kelley.
He estimated a 3% increase in state aid for next year, a number that SB Chairperson Kevin Gaspar called “very ambitious.”
Mr. Kelley countered that in administrative hearings so far, the state has been citing the 3% figure. The governor should have a proposed budget by January 20.
Mr. Gaspar said it still seemed ambitious compared to past increases.
“This is a moving target as you know,” said Mr. Kelley.
Local receipts are also down, said Mr. Kelley, with excise taxes on vehicles down.
On the spending side, everything is up starting with Cost of Living Allowance increases across for all employees.
Mr. Kelley said they can save some money on health insurance by putting more money in their reserve account with the insurance group.
There is also an increase in projected tuition to Old Colony Regional Vocational Technical High School because of the increase in the number of students from Acushnet opting to go there. Acushnet students can go to Fairhaven High School, New Bedford High School, or Old Colony.
More students are opting to go to Old Colony.
“It is becoming the town’s high school,” said Mr. Kelley.
The cost to send students to Fairhaven High School is part of the regular school budget. Mr. Kelley said that, after they get the figure from Old Colory, he will meet with the school department about decreasing that item in their budget.
The COLA increases are a “budget buster,” said Mr. Kelley.
But, the “real budget buster” is the schools. They are renegotiating the bus contract and the increase could be as high as $400,000
“That’s a killer,” said Mr. Gaspar, adding for the public that the utilities costs, with heat up about $100,000, are because of higher rates, not higher usage.
The town is not using any more, he stressed, it is the rate increases that they cannot control.
“That’s why they’re budget busters,” said Mr. Kelley.
Elections are also up because it is a presidential election year.
The bottom line, he said, is that the town has a structural deficit of more than $800,000.
Mr. Gaspar said that is only with the “ambitious” state aid figure. Otherwise, it is more than $1 million.
“And that’s before we start to work on the budget,” said Mr. Kelley, adding that he found between $300,000 and $400,000 in cuts on the town side, and $500,000 to $600,000 on the school side.
“It’s not a rosy year,” said Mr. Kelley.
“It never is,” said Mr. Gaspar. “But this year is a pretty bad one….We’ll figure it out some way, somehow. We always manage to figure it out.”
SB member David Wojnar said it was an opportunity to “examine our current practices.”
He said maybe the town should look at using PILOTs more (Payment in Lieu of Taxes) for some of the solar projects coming up. Instead of higher taxes at the start of the project that lower with depreciation, the PILOT program allows the owner to spread out the taxes in equal payments for 20 or 30 years, the life of the project. It is a more reliable revenue stream.
Mr. Wojnar said it might also be time for Acushnet to institute a meals tax, although he said it would not be a popular decision.
“If it’s an issue of maintaining core services, I’ll take the heat for those political decisions,” he said.
Mr. Gaspar said it might be time for a meals tax, although he had been against it when it was proposed years ago.
“I think you’re right,” Mr. Gaspar told Mr. Wojnar. “Anywhere else I go, I’m paying a meals tax.”
“We’re at a point where we just don’t have the revenue to keep business as usual,” said Mr. Gaspar, saying they should get “creative with PILOTs, and there might “be an appetite” for a meals tax now.
The board also discussed the disposition of the Russell Memorial Library building.
Mr. Kelley told the board that the town was able to secure a $25,000 earmarked grant from the state, with a $10,000 match from the town. The grant will be paid to Mass. Development to help with the Request for Proposals and other costs associated with selling the building. He said ARPA (American Rescue Plan Act) funds could be used for the match.
The $10,000 will be used to fill in the gaps, said Mr. Kelley, because the town cannot find a lot of the records required by Mass. Development to prepare the RFP. He said they have a deed, but no plans on the original building and no site plan.
Board member Robert Hinckley said he was not comfortable using ARPA funds for the process.
Board member David Wojnar said he understood the hesitation with depleting the funds that are supposed to be used for Slocum Street, but selling the old library building “takes a level of expertise to get it right.”
SB Chairperson Kevin Gaspar said he thought it would be simpler, that they would get the building appraised and sell it. He said the ARPA funds were getting “racheted down,” and that money is supposed to be for infrastructure.
He asked if the $10,000 could be put back into the ARPA account after the building sells.
Mr. Wojnar seemed to like that idea and added that any proceeds from the sale could go to the Slocum Street project.
The board did not vote on the measure, but directed Mr. Kelley to get a quote from Town Counsel for handling the sale, to find out if the $10,000 could be put back into the ARPA account, and to find out if they can still get the $25,000 without the match.
In another matter, the board announced and accepted the resignation Patrick Hannon, the town’s part time conservation agent, part time health agent, and part time soil agent. The resignation was effective 12/29/23 and the letter was dated 12/29/23.
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