HANSON – The town’s plan for a level-service municipal budget, with 2-percent increases for some expense lines in fiscal 2025 is a “huge first step,” consultant John Madden told the Select Board on Tuesday, Dec. 12.
He said he would not rule out an override as a means to solve the ongoing deficit problem, but added that is something to be decided in the future.
“You saw the increases … on the expense side,” he siad. “They’re unsustainable – I don’t think that’s a bone of contention.”
Hanson’s average annual budget increase is 6.23 percent. A halt to using free cash to bolster the operating budget and the town must use disciplined and realistic budget requests and approvals, which are already being used, must continue, as well.
Madden, contracted to do a financial analysis of the town and its spending habits, a few months ago, returned to brief the board about his findings. Vice Chair Joe Weeks was absent from the meeting.
Madden conducted a similar analysis for Whitman, producing a report they’ve been following in their financial planning.
“The town of Hanson is going to have its own Madden report when he presents his final report with recommendations and suggestions on how we can do things better financially,” said Town Administrator Lisa Green.
Madden said he was presenting an interim report.
“We’ve reviewed a lot of information,” he said. “We’ll bury you in a lot of financial information right now.”
Based on his findings so far and town officials’ input on them, an final report is planned for release in early January. While his review was geared to fiscal years 2025-29, the first year he would recommend putting any recommendations into action would be fiscal 2026.
Town Accountant Eric Kinsherf suggested working up a budget to determine what would need to be cut without an override to help decide if there should be one and how much would be needed.
Select Board Chair Laura FitzGerald-Kemmett said one point that keeps cropping up in discussions about the Whitman-Hanson Regional School District is that Whitman “has a number they are sticking with.”
“We don’t have that tool in our toolbox right now,” she said.
Madden said that would be one of the recommendations.
“We need to look at this as what can you sustain?” he said. “The difference between Whitman and here is we weren’t looking at an override situation there – we are now.”
But, while an override is not off the table, Madden said if the towns are to pull in the reins of each department, they also need to the schools to understand the town departments have needs, too.
He said Green has already taken steps to close the revenue gap. The next step is to determine if the town’s other financing sources are being used as they should and if there is room for growth there.
“Ultimately, this is your report,” Madded said. “One of the main reasons I’m here tonight is to not only present you with this information, but to give the board and others an opportunity to assist in its development.”
Madden’s process involved reviewing financial trends over the past five years, reviewing “various documents” including documents and official statements to the state Department of Revenue, meetings with Green and other officials, projections of budgets five years forward, and consideration of a future Proposition 2 ½ override.
In addition to taxation, state aid and local tax recipts, Madded noted that Hanson has a series of renewable other financing sources, including fund that helps take care of a Title 5 septic upgrades and a fire apparatus fund that is fed by ambulance reciepts.
“These are ongoing renewable revenues,” Madded said. “When you look at something like that in a community, it’s usually one-time revenue.”
The FY 2024 levy limit of $26,891,943 is reached by adding the 2023 levy limit of $25,405,077 to the 2.5 percent increase of $635,127 and the $316,309 in new growth and $535,430 between two debt exclusions.
Local aid for 2024 is $1,761,054 – a four-year average of 4 percent.
“It’s minimal growtth,” Madden said. “The Water Enterprise Fund – at $3,078,478 – is not considered in any of this because it’s an enterprise self-balancing fund.”
Of the town’s $563,889 in local receipts, $82,399 is in meals taxes, approved in 2013, and $227,237 is investment income.
The motor vehicle excise is 58 percent of local receipts, which is actually down over fiscal 2022.
The town used $357,000 in free cash in fiscal 2024 to balance the budget.
“It’s an indication – a clear indication – of ongoing expenses outdistancing renewable revenue,” he said. “That’s not a value judgment of how the revenues coming in or the importance of the expeses that are being appropriated. It’s just the fact that there is a gap.”
The Division of Local Services’ best practices recommendation to use free cash – as a non-renewable revenue sourse – be restricted to paying only one-time expenses.
“In addition to that, bond rating agences are going to look at something like this,” Madden cautioned. “It won’t be the end of the world, but, obviously, ideally they’re looking to invest in communities with their revenues matching their expenditures. The use of free cash doesn’t help.”
Hanson’s fiscal 2024 operating budget was $32,241,150 – an increase of 4.5 percent over fiscal 2023. Vocational education was up 7.03 percent, W-H regional education budget was up 4.8 percent and the town’s increase was 2.5 percent.
The town’s expense for the regional 911 call center, paid for by state 911 funds for the first three years, will increase from $200,000 in fiscal 2024 to $400,000 in fiscal 2026, with budgets after that subject to the same inflationary effects as any other department. Plymouth County Retirement pension assessments also increase every year.
While the purposes behind the increases were reasonable, he said that Hanson had, perhaps fallen behind in its ability to compete with other communities in keeping qualified, talented people.
“Once you get them here, you’ve got to give them an environment that works,” he said. “You’re not alone in trying to make this work.”