'Costs are going up.' Cape budget managers look ahead to avoid overrides, protect services

Annual budget-balancing winters have been kind to Bourne for nearly a decade, but now Town Administrator Marlene McCollem is trying to eliminate a projected $1.8 million shortfall for fiscal 2025.

McCollem says the shortfall in the early going is a significant challenge to produce a level-serviced $77 million budget. She initially projected a 4.1% cut for school spending and a 3.78% general government reduction.

This initially means the school district would cut its next spending plan by $154,000, she said.

“We’re definitely in an era where things are costing more,” McCollem told the Select Board and Finance Committee in initial budget talks. “Our contracts are going up. Our services are going up. Our costs are going up. I hope we can cut without impacting a level-serviced budget.”

What shortfall or surpluses are other Cape towns facing?

Across the Cape, town are looking at their finances closely in anticipation of the start for the new fiscal year on July 1.

In Barnstable, the Cape's largest town, a level service budget is planned for fiscal 2025 for the general fund and enterprise fund operations. No significant program enhancements or service cuts are foreseen for the operating budgets, said Barnstable Finance Director Mark Milne.

So too in Provincetown. For fiscal 2025 "a balanced budget with a slight surplus" is expected, according to Provincetown Assistant Town Manager Dan Riviello. The proposed fiscal 2025 operating budget is $38 million, Riviello said.

In Wellfleet, no Proposition 2 1/2 operating override is expected for fiscal 2025 but the municipal and school budgets are still being finalized, said Town Administrator Rich Waldo. Likewise, in Eastham, no override is expected, Town Manager Jacqueline Beebe said.

The draft fiscal 2025 budget in Eastham of $37.2 million will be presented to the Finance Committee and Select Board on Monday. "It is still a work in progress," with many numbers such as school costs and employee health insurance outstanding, Beebe said. The operating budget that is balanced but has minimal excess levy capacity, she said.

In Chatham, Town Manager Jill Goldsmith said she is still working on the fiscal 2025 operating and capital budget recommendations, with a plan to present the information to the Select Board on Jan. 23. The budget will be available on the town website by Jan. 19, she said.

The Select Board in Sandwich will also hear in late January about the town's fiscal 2025 budget, according to Town Manager George "Bud" Dunham. "What’s difficult at this early stage is so many of the budget accounts we need to plan for have not received any direction from the State in terms of local aid & assessments," Dunham said. "The same is true of our larger insurance accounts like health insurance and property & liability insurance. We won’t be receiving this information for at least another month, if not longer.

So far, a level service budget should be paid for with expected revenues, Dunham said.

"The larger policy decisions for the Select Board to make will be what additional services we might be able to fund and how longer term capital items can be addressed," he said.

How is Bourne planning to close their budget gap?

A reduction is something Bourne Public Schools Superintendent Kerri Anne Quinlan-Zhou says can be avoided, telling the Select Board and Finance Committee she thinks closely-watched enrollment totals will help the district with its next school aid packages.

Quinlan-Zhou predicts the state “cherry sheets” for fiscal 2025 will produce a $100,000 increase over this year and Chapter 70 funds may balance what is needed. The Chapter 70 program is the major program of state aid to public elementary and secondary schools.

McCollem plans to not tap the town’s reserve fund. She wants to avoid new hiring and hopes state aid remains at last year’s level.

Foregoing next year’s payment on the long-term other post-employment benefits liability could help reduce the shortfall, along with revising initial revenue estimates, Bourne Finance Director Erica Flemming told the Select Board.

Select Board Chair Mary Jane Mastrangelo, the former finance board chair, awaits what Bourne schools and Upper Cape Tech may not be able to fund.

“This is going to be a really difficult year," Mastrangelo said. "I haven’t seen this since fiscal 2016 when we were losing a lot of our free cash for the budget. And all of a sudden, we didn’t have a lot of free cash. And we were in a hole and then we had a bad winter. And so now, we’re trying to be forward thinking about what to do.

Mastrangelo said she'd prefer not to go for a Proposition 2 1/2 override.

Bourne budget message is due Tuesday

McCollem is to deliver a “State of the Budget” report Tuesday.

Fiscal 2025 spending will frame a revamped facilities department, an evolving sewer division, new public works leadership and McCollem’s decision not to cut the winter sanding/icing account.

The operating budget for fiscal 2023 totaled $74.1 million, which excludes the enterprise fund spending plans for the landfill ($11.4 million) and sewer ($1.6 million) departments. The budget for the current year, fiscal 2024, totaled $77.2 million at the May 2023 town meeting, plus supplemental funding approved by voters in October.

Capital outlay requests for fiscal 2025 total $2.7 million. They include an all-terrain vehicle for police, $2.1 million worth of waste treatment upgrades at the middle school, dredging and ramp repairs, and trash/recycling carts.

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This article originally appeared on Cape Cod Times: Cape towns cite tight budgets with uncertain insurance cost, state aid