Fiscal year 2009 budget picture not a pretty one
By Ken Powers Community Reporter

Northborough - Sluggish revenue streams will cause lots of belt tightening throughout town offices and the School Department during upcoming discussions regarding the town's fiscal year (FY) 2009 budget.

Town Administrator Barry Brenner told the selectmen at their Dec. 10 meeting that budgets for town departments, the School Department and Northborough's assessment for Algonquin Regional High School (ARHS) can only increase 2.5 percent to stay within Proposition 2-1/2 guidelines.

What that translates into, for the municipal budget, Brenner said, is an increase of $360,000 over the current fiscal year, from about $14.5 million to $14.8 million. The total projected budget would be $46.7 million, an increase of less than $1 million from FY 2008.

For the School Department's K-8 budget, the increase could be no more than $413,000, while the assessment for ARHS would increase by less than $200,000.

Brenner said the combination of the lack of increased revenue, an increase in health insurance costs, and an increased assessment from the Worcester Country Retirement System were the major reasons for his grim announcement. Other contributing factors, Brenner said, were cost increases for gas, diesel fuel, heating oil and electricity.

Unless other revenues are discovered, Brenner said, the town would not be able to add any full-time staff and that there would be signifi- cant reductions in current program services and operations.

"Unfortunately we continue to be challenged by the lack of revenues generated in town," Brenner said. "We hoped it would improve, but it has not."

Brenner said the two major sources of revenue from the state are Chapter 70 state aid and lottery revenues. He said he expects the total increase from those two resources to be about $300,000. Brenner said the majority of the revenue increase for FY 2009 will come from the 2.5 percent property tax increase allowed under Proposition 2-1/2 guidelines.

"This is a pretty unique situation," Brenner said. "We haven't been in this situation in quite some time. I'm always up for a challenge, but this is a challenge and a half."

Further aff ecting Northborough's budget woes is the fact that the town's available free cash is $471,0000. This is the first time in several years that the free cash balance has dipped below $1 million.

The fact that the town's free cash account is below $1 million and that there was discussion among the selectmen about using it to help fund the budget distressed Selectman Fran Bakstran.

"I don't like the idea of using the $471,000," Bakstran said. "That's like using the last dollar in the savings account."

Selectman Dawn Rand suggested that this might be the year for the town not to pay into the stabilization and reserve accounts.

"Is this the year we look at not putting money in the reserves?" Rand said. "I don't see how we can put money into savings if we don't have money."

The selectmen asked Brenner to prepare two budgets for their review. One would show the cost to maintain the current level of services off ered by the town, the other would limit the overall budget to a 2.5 percent increase.