Town plugs $1.7M budget shortfall

Posted on Wednesday, April 2, 2014 at 4:49 pm

The Ashland Town Manager’s proposed $8.26 million budget, presented to town council Tuesday, doesn’t raise taxes but borrows heavily from the town’s savings account to offset rising expenditures and flat revenue sources.

Hartgrove

Hartgrove

In a memorandum released with town council’s agenda Friday, Town Manager Charles Hartgrove referred to his now-prophetic statement during last year’s budget cycle: “As the economy slowly recovers local governments will not feel the benefit of that increased revenue for another one to three years. The FY 2014 and FY 2015 budgets will likely be the two most difficult financially the town has faced in recent memory.”

That’s is holding true. In order to balance the budget, Hartgrove is recommending a $768,662 transfer from the town’s general fund reserve, a move that would drop that account to its lowest level in 10 years. The transfer was combined with $182,000 of cuts from the requested general fund budget and the town also adjusted its revenue estimate upward by $48,000 to help plug the initial $1.7 million gap between revenues and expenditures.

Overall, the proposed budget is a 2.4 percent increase over last year’s adopted plan and a .7 percent decrease below the amended budget.

Calling the budget a “stop-gap measure,” Hartgrove recommended that town staff and council hold several work sessions in the future to come up with a long-term funding plan, which he said would likely rise if the town maintains the same level of services.

The budget adds one new police officer position, which had been funded on a temporary basis in the current spending plan, and also raises pay for command ranks in the police department.

Hartgrove’s recommended plan transfers $930,400 to the capital projects fund and reassigns approximately $150,000 already in the fund to cover a handful of priority projects, including road improvements and renovations to the Ashland Theater. It also cut more than $500,000 in capital requests for next fiscal year. Still, Hartgrove said that flat revenues paired with a number of unexpected, big-ticket items have resulted in inadequate funding for capital projects.

Even though the town is not increasing its real estate tax rate, they will be advertising for a tax increase because of a rise in assessed value, as required by state code.

Members of town council did not recommend any changes to the budget plan Tuesday night and opted not to hold any further work sessions on the plan.

“Staff has done a fine job of making some tough choices,” said Vice mayor George Spagna, noting that any further changes by town council would likely only be “minor tweaks.”

Spagna also noted that this year’s budget wouldn’t be as problematic if town council wasn’t trying to accomplish a number of projects to improve Ashland.

“It wouldn’t be an issue if weren’t doing anything,” Spagna said. “We’re trying to do a lot of good things for the town.”

The town is expected to set a date for the public hearing soon. Town council is expected to take final action when they meet May 20.

 

 

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