With Annual Town Meeting set for May 1, 2010, the Finance Committee (FinCom) is scrutinizing several factors to arrive at a balanced budget for the town. The most recent budget recap, the running projection of fiscal 2011 revenues and expenses provided by Finance Director Lorraine Leonard, shows a $162,000 deficit, although FinCom Chairman Bob Thurston says that, with budget decisions already made, the deficit is closer to $90,000.
To balance the budget, a significant amount must either be cut from department budgets or taken from other sources such as free cash or the stabilization fund. If the local aid “cherry sheet” (detail of income and charges from the state) comes in at a more favorable level, with local aid reduced by less than the 10 percent reduction assumed in the latest recap, the deficit could be significantly less, or even nonexistent.
The deadline is April 1 for sending to the printer the warrant and FinCom report, the document mailed to voters to explain budget and other warrant articles to be voted at Town Meeting. Several items that are not yet finalized―contract negotiations, school budget, library budget, capital requests, and the potential use of town “savings” funds―will be factored into how the committee will set the final department budgets. Salary negotiations with both town and teacher bargaining units are not settled and add uncertainty to budget numbers in the current recap.
The School Committee has voted to request $107,000 in the form of an override to support the reduction of user fees for athletic programs, contingent upon the School Committee finding $31,000 in the schools budget to complete the funding of a $138,000 user fees reduction proposal. Schools Superintendent Thomas Jefferson has stated that the reductions in the schools budget to date derived from replacing retiring, long-experienced teachers with less experienced teachers, and by applying nearly all of the more than $700,000 of funding anticipated from MassDevelopment for Devens students attending Harvard schools. Without the Devens money, significant program reductions and teacher layoffs would have been needed to meet the budget target.
At a Feb. 24 meeting of the FinCom, the Board of Selectmen, and the School Committee, Capital Planning and Investment Committee member George McKenna, who is also a member of the FinCom, distributed a draft of capital requests that have been received. This list includes a new fire truck ($550,000), and a new vehicle for the Department of Public Works ($160,000), and repairs and improvements to assets such as the town water system, Bare Hill dam, and other repairs and improvements that could reach a total of $1,065,600. This estimate did not include improvements or repairs to municipal buildings such as Town Hall or the old library.
At the March 4 FinCom meeting, McKenna reported that the Capital Planning and Investment Committee is considering recommending a new town position, Director of Facilities and Maintenance, which would also require funding.
Also at the March 4 meeting, the committee discussed use of free cash and the stabilization fund as a tactic to reduce the deficit. At present, Harvard has $422,845 in free cash and $1,636,037 in the stabilization fund. Free cash is the balance from fiscal 2009 that is available for appropriation. The Massachusetts Department of Revenue (DOR) advises that “as a nonrecurring revenue source, a prudent use of free cash would be to fund one-time expenditures, a capital purpose, or to replenish other reserves.” The stabilization fund is designed to accumulate amounts for capital and other future spending purposes, although it may be appropriated for any lawful purpose (MGL Ch. 40 §5B) by a two-thirds vote at Town Meeting.
FinCom is expected to complete budget deliberations within the next week or so, and to call for a joint meeting of the Finance Committee, School Committee, and Board of Selectmen for final review, before sending their report to the printer.