Published in the May 12, 2020 edition.
By MARK SARDELLA
WAKEFIELD – With the town now facing an expected FY 2021 budget deficit of $2.6 million due to a loss of revenue as a result of the COVID-19 shutdown, the Town Council last night voted reductions in a number of previously approved departmental spending plans.
However, in a 4-3 vote, the Town Council declined to cut its own budget, rejecting Town Administrator Stephen P. Maio’s recommendation to remove the new $95,000 Economic Development Director position from the FY 2021 budget.
At last night’s meeting, Maio reviewed the financial situation before and after the COVID-19 shutdown, noting that the goal was to address the shortfall in revenue while maintaining programs and positioning the town for the long term. He explained that some of the deficit could be addressed by postponing some capital spending and hiring until the fall Town Meeting, when the financial picture may be clearer.
Maio noted that projected loss of revenue from local receipts like the excise tax, the hotel tax and the local option meals tax, coupled with expected losses in state aid means that the town’s total revenues are expected to drop from a pre-shutdown $99.5 million to a post-shutdown $97.3 million.
Maio also noted that the FY 2021 departmental budgets voted prior to the shutdown totaled $99,955,550, leaving a deficit of $2,655,550.
Maio proposed covering the deficit through $793,500 in budget cuts along with splitting the capital budget by funding only about one-half ($1,009,059) now and deferring the remainder until the fall Town Meeting, depending on the financial picture at the time. That still leaves a deficit of $852,991, which Maio said could be addressed at the Fall Town Meeting through a combination of reduction in the town’s OPEB contribution, extending the funding schedule for retirement, use of Free Cash and reduction of services.
Maio proposed achieving the $793,500 in budget cuts by reducing the Town Council budget by $95,000, reducing the Police Department budget by $38,000, decreasing the DPW Budget by $110,500, reducing the Health Insurance Budget by $100,000 and decreasing the Library budget by $50,000. (In addition, the School Committee will be asked to cut its FY 2021 budget by $400,000.)
The Town Council voted unanimously for all of the budget cuts under their control – except for the $95,000 cut in their own budget.
Maio had recommended temporarily deferring the creation of the position of Economic Development Director in the Town Council’s budget — for a savings of $95,000.
But several councilors argued that under the current economic circumstances having an Economic Development Director to assist and guide businesses during the recovery would be even more important than in normal times.
Ultimately, the vote was 4-3 to keep the $95,000 in the Town Council budget for the Economic Development Director.
Voting to keep the $95,000 in the budget were Town Councilors Jonathan Chines, Julie Smith-Galvin, Mehreen Butt and Paul DiNocco. Voting to cut that amount from the budget were Councilors Ann Santos, Peter May and Edward Dombroski.
Maio confirmed today that the decision to keep the Economic Development Director position in the budget leaves two options: either that $95,000 will have to be cut from elsewhere in the town budget or reserve funds will have to be used.
