HANSON — The town is close to $1 million in the red going into the fiscal 2023 budget season, according to Town Accountant Todd Hassett.
“We’re not in the position to present you with a balanced budget, like we typically attempt to do,” he said. “We’ve got a bit of work to do over the next few weeks.”
He and Finance Committee Chairman Kevin Sullivan and made their initial budget presentation to the Board of Selectmen on Tuesday, Feb. 22. “Where we’re at right now, based on the requests, is that we have about a $966,000 shortfall,” he said, adding that he and Sullivan would be working closely together in an effort to close the budget gap in the town’s best interest. “We’ve got a number of decisions that we’ve got to really grapple with over the next few weeks.” He indicated the town would require “some partnership and cooperation” from the regional school district, or “we’re not in a position to fund the budget as initially requested.”
The $300,000 snow budget is already in a deficit position, as well, with more snow forecast on Friday, Feb. 26, Hassett said.
“We’re starting behind where we normally are,” Sullivan agreed, noting that he had little to add to Hassett’s report. “Even though the town came together last year with some heroic efforts, we still have a deficit to overcome — a fairly significant deficit — and I think we need to look at the individual departments.”
He said that, as personnel is a huge cost, he questions whether this is the right time to add new personnel and pointed to the subsidies provided to both the Transfer Station and Recreation Commission as the usual questions to be considered because the retained earnings “just aren’t there anymore.”
The school assessment is less of a gap than the town has had to cover in previous years, but is still a concern. [See related story, page 1].
Hassett indicated Hanson would not be able to afford much more than a 3.5 percent increase in the school assessment.
“We are a little behind schedule, as you know, in terms of pushing forward the FY ’23 operating budget,” Hassett said, noting that they have developed a sense of the town’s recurring and nonrecurring funding sources available to support that spending plan.
The town’s primary source of revenue is property taxes, Hassett noted, followed by local receipts and, to a lesser extent, state aid, with the governor’s budget showing about a $41,000 increase in revenue — about 2.5 percent higher than current state aid.
Hassett said he anticipates a 5 percent increase in local receipts, related to motor vehicle excise taxes, permits, licenses and other departmental fees.
Property taxes in total are projected to go up about 3.4 percent — a combination of the statutory 2 ½ percent available, which represents about $613,000 — and estimated new growth estimated at about $250,000 — or about 1 percent. Hassett noted that figure is lower than in recent years as there has been a slow-down in construction related to the pandemic and subsequent supply chain issues. There has also been a reduction in permit revenue.
Recurring revenue is projected to increase about 3.5 percent, Hassett said.
There are also debt exclusions still on the books from the police station and the regional high school.
“The state aid is more of a factor for the regional school district that it is in the town,” he said.
“We have a healthy free cash [fund], the two enterprise funds have retained earnings — or their free cash — both of which are on the low side compared to prior years,” he said of funds available for one-time expenses.
Free cash is just over $1.7 million right now, but Hassett said he could foresee that being reduced to around $100,000 by the time Town Meeting is concluded.
Departmental requests include a second of a three-year collective bargaining agreement for all town unions except the water union, which is on a different cycle; 2-percent non-union cost of living adjustments; a few reclassified positions at the Library; the IT director being increased to a full-time position; and a change to full-time status for the building inspector and a request for another police officer. The Highway Department also filled a position and a part-time outreach position for the Council on Aging has been added.
A $5,000 audit bill for required oversight of federal grant programs, including the CARES Act and ARPA is also included in the budget. Every other year an actuarial review of OPEB is required, costing about $7,000 this year. A $20,000 increase has been requested for legal services.
There are also more expenses around elections for the year as 2022 is a midterm election year.
Projected subsidies for the Recreation and Transfer Station accounts were also included in Hassett’s presentation — about $300,000 from the general fund breaking out as $135,000 for Recreation and $165,000 for thee Transfer Station. The latter, a recurring cost, came from free cash this year. There was no subsidy in FY ’22 for Recreation.
They propose to use $35,000 of about $36,000 in Transfer Station retained earnings to support the operating budget.
Hassett said the town’s five-year plan — which must be voted in May — will also depend on some input from Recreation, the Board of Selectmen and more than $13 million in system improvements from the Water Department.
In other business, Selectmen voted to refer a citizen’s petition to the Town Meeting Warrant to the Planning Board to ensure the proper language is included.
The petition had been brought before the October special Town Meeting, but the petitioner agreed to table it so the language could be refined for the annual Town Meeting on May 2. Town Counsel Kate Feodoroff will be attending the Monday, Feb. 28 Planning Board meeting remotely to discuss the article, indicating it may be split into two articles.
“The good news for Hanson is that we’ve had a couple of runs at this so we have some templates to go off of,” Feodoroff said. “With all the iterations that went back and forth through various town meetings, etc., there needs to be a cleanup of that particular bylaw, regardless of whether the town wants retail marijuana or not.”
The first article would incorporate that overhaul and the second would involve a potential retail facility and where locations might be permitted.
Selectmen Chairman Matt Dyer asked if the article was limited to retail or if it included all the new business opportunities, including cafés.
Feodoroff said no one need worry about cafés, as the Cannabis Control Commission (CCC) still has not “gotten its arms around cafés. A pilot program is still underway and Hanson would not even be eligible because the 12 communities selected for it has led to a need to tweak the regulations.
“I just want to make sure we don’t unwittingly cut our legs off for what has already been permitted,” Selectman Laura FitzGerald-Kemmett said. “A grow facility, delivery, those are already kind of there and have gotten support.”
Feodoroff said that was a good point.
“That’s where I thought it was good to do two separate articles because retail is the one that’s going to generate discussion at Town Meeting,” she said, stressing the first article is purely to clean up legal language. If it were to fail, the old bylaw would remain in force.
“It’s just a messy old bylaw,” she said.
Selectman Joe Weeks wanted to be certain there is enough time to do all that work before Town Meeting.
“One of the things I don’t want to do is try and give too much of an expedient timeline on this and then have that be the reason for debate on Town Meeting floor vs the merits of the actual article,” he said.
Feodoroff said there is enough time, especially if the Planning Board submits a report.
“Because we have such a long history here in Hanson of various iterations of marijuana, it’s not going to be so big of a haul,” she said.
Frank Milisi, who brought the citizen’s petition to the October special Town Meeting, thanked Feodoroff and the board for working on it.
“I don’t think there’s any more of a clear indication for what Todd and Kevin just said, that we need some revenue in this town, how ever we get it,” he said. “Three percent [tax] on any [marijuana] business that’s in here could fund a new police car or fund things like that.”