Other Lynnfield News:
Residential tax bills going up 10%
"Thoroughly Modern Millie" opens at LHS
Further budget cuts needed as state aid reductions anticipated
by Robert Curtin
LYNNFIELD — Town Administrator William Gustus warned that more cuts
to the current fiscal year budget will likely be required, as continued financial
and budgetary woes at the national and state level take their toll at the
municipal level.
While Gustus said that reducing the budget by about $250,000 at the October
town meeting represented “some progress,” he warned that an expected
reduction in state aid would require some even tougher decisions.
The town is already projecting reduced revenues due to the economic climate. “The
national financial situation continues to erode,” he told the Board
of Selectmen on Monday night. As a result, reductions in spending by residents
will likely result in decreased motor vehicle excise tax revenues, and lowered
interest rates will result in less investment income for the town. The economic
situation is also resulting in lowered revenue projections related to building
permits and development.
Despite cutbacks at the state level, a proposal to consolidate several
state agencies and the use of “rainy day” funds, state officials
see the need for further spending cuts in order to reduce a sizeable budget
deficit, which will be compounded by what Gustus referred to as a “dramatic
decline in capital gains” tax revenue, which he estimated could be as
high as 70 percent due to the weakened economy.
After conferring with members of the town’s legislative delegation,
Gustus is predicting that the state will attempt to right its own fiscal woes
in part by eliminating the “additional; assistance” portion of
state aid, as not all municipalities receive it (Lynnfield received $460,000
for the last fiscal year), will cease subsidizing Lottery distributions to
cities and towns to maintain current aid levels, and cut some funds from Chapter
70 school aid to those town, like Lynnfield, which are exceeding the foundation
level of spending required by law.
Gustus estimates that this package of cuts in local aid will reduce Lynnfield’s
funds from the state by 10 to 20 percent, or $500,000 to $1 million,
“My guess is that we should be prepared to cut an additional $500,000
if and when the actual number becomes available,” said Gustus.
He said that while the loss of capital gains revenue will be apparent in
January, it is difficult to predict how quickly the state will act to reduce
its spending.
Gustus said it would be a mistake for the town to use its reserves to make
up the $500,000 loss in state aid, as it will leave spending at current levels
and wipe out any reserves available to help the town survive the following
fiscal year, which he believes will be even more difficult, as further state
aid reductions are possible and the town must absorb increases to fixed costs
such as insurance and pension contributions and pay raised already committed
through union contracts.
But the alternative course is hardly inviting.
“Half a million dollars is a lot of money to cut out of this year’s
budget,” he admitted. These further cuts, he said, are likely to have
a direct impact on the level of services provided by the town.
Gustus has prepared for the Board of Selectmen a list of 37 possible cost-cutting
measures.
“Some of these are clearly onerous; some of them are likely unacceptable
to this board or the community at large,” he said.
In the spirit of leaving no stone unturned, Gustus submitted the list to
allow the selectmen time to review them, and hopes that the board will give
him direction in the coming weeks.
Gustus said that some spending cuts would be made as the town projects
surpluses in some line items.
But other cuts are certain to be felt by residents and town employees.
Gusts said one area where the town could cut is overtime. In some departments,
including police and fire, workers absent due to illness, injury or vacation
are replaced by another worker at overtime. In the Department of Public Works,
custodians are paid overtime to clean up during after-hours events and functions
in school buildings.
Cutbacks to overtime, however, will likely require the town to bargain
with employee unions, as the town has maintained a practice of minimum staffing
on police shifts as part of a years-old agreement reached with the police
union when the ambulance service was first shifted to a private company, then
the Fire Department, and providing custodians overtime for after-hours events
is an established practice. Gustus said the town might also have to stop “subsidizing
certain activities beyond our core business” that serve only a small
portion of the population. Changes could include reductions to certain programs
or charging additional fees to groups using town and school buildings.
Residents could be asked to provide services that have in the past been
provided by the town, including clearing of sidewalks. Gustus noted that the
town spends a significant amount of money in this effort, which other communities
require of the abutting property owner.
Gustus said that a cutback in the level of snowplowing might also be necessary. “We’re
out there at the first snowflake,” he said, adding that a more limited
response prioritizing streets may be required.
Programs to increase recycling in order to cut trash-tipping costs may
be considered, as will attempts to increase revenues from payments in lieu
of taxes from utilities and other entities. Gustus said he expects to approach
both electric light services serving the town on this issue, and noted the
town is providing both with significant assistance in the areas of snow removal
and tree trimming.
Other measures that would have little impact on residents include use of
electronic messaging instead of creating paper documents.
But this type of change will not be enough to allow a half-million dollars
to be cut from the budget. Others are much harder choices,” said Gustus,
and will require the participation of departments, he said.
“The School Department, I think, needs to participate in a meaningful
way,” he said.
Gustus will be working with department heads to identify cost-cutting measures
in the next couple of weeks. After cutting the budget to a “bare bones” approach
this year, Gustus said, the town should be able to sustain that same level
of service through Fiscal Year 2010.
In order to increase revenues, Gustus said, the town should look at ways
to assist developers.
One way would be to amend the town’s purchase-and-sales agreement on
the land in the rear of the Senior Center to allow the successful bidder,
a local developer who plans to build an age-restricted residential development,
to stagger payments over time in a manner that will allow the town to fully
secure the full purchase price.
Without such an accommodation, town officials fear, the developer – who
is still committed to moving forward – may have difficulty.
Gustus said some changes to the elderly housing zoning bylaw might be needed
to allow this developer and LIFE, Inc. to receive necessary financing for
their projects.
Reducing the minimum age fro residents in an elderly housing zone development
from 60 to 55 would help with the economic viability of these projects, said
Gustus. Voters have rejected two bids to do so at previous town meetings,
despite the addition of language that would bar families with school-aged
children from living there.
Town officials may also seek to eliminate the language in the bylaw that
requires elderly housing zone developments to be administered by nonprofit
entities after they are built. Gustus said this provision has caused concern
from banks that would finance these projects in Lynnfield, as it could prevent
a bank from operating the development should the developer to default.
Gustus also warned that in the wake of town meeting’s defeat of a measure
that would have allowed the leasing of space at the Meadow Walk development
to a boutique restaurant-cinema, there is still “no definitive answer
on whether they will be moving forward” with construction in the spring.
Property owner National Development argued that the restaurant-theater
would help attract other potential business to allow the project to achieve
the 70 percent lease rate necessary to seek project financing.
Gustus said that the failure of the Meadow Walk development to move forward
in the spring could jeopardize tax money the town is expecting from the development
next fiscal year.
Still, Gustus said he believes Lynnfield, by taking quick action, is in
better shape than many surrounding communities to withstand the fiscal fallout
resulting from national and state issues.
“I think getting started early is a key thing,” agreed Selectman
Al Merritt. “Each thing you mentioned is a project.”
Selectman Robert MacKendrick said the effort will require “the cooperation
of everyone: citizens, employees, and the town government, to get through
this.” He said that some of the extra services offered by the town will
in the future “need to be self-supporting.”
Chairman Arthur Bourque thanked Gustus for his efforts, and agreed that
based on his conversations with officials from other towns that Lynnfield
is well ahead of them in responding to the fiscal crisis at the state level.
Bourque said he is willing to work on a staggered payment schedule on the
purchase of land in the rear of the Senior Center, and said he remains puzzled
why voters have rejected the lowering of the minimum age for elderly housing
from 60 to 55, given that safeguards to prevent families with young children
from living there are in place.
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