Task Force Presents Key Points of Sustainable Budget Report

Photo by Zerber on Unsplash

February 2, 2022 By Carol Britton Meyer

The Sustainable Budget Task Force presented highlights of their recently-completed report to the Select Board Tuesday night, with more than 100 participants observing, listening, and answering questions during the remote meeting.

"This is the way town government should work," Chair Joseph Fisher said. The meeting was joint with the Advisory Committee, School Committee, and members of the Capital Outlay Committee.

The task force was charged with developing a five-year "sustainable forecast" that will allow the town to provide services that meet residents’ expectations as well as ongoing expenditure obligations that are in line with projected revenue.

Even before the pandemic, Hingham town departments were experiencing an increased demand for services that was difficult to address with available revenue.

The town currently lacks the means to fully fund the budget beyond Fiscal 2022.  The FY22 budget was balanced by using approximately $5 million in one-time funds, including COVID-related federal money that will not be available to the town in the long term.

Throughout the process leading to the report, task force members met 26 times since mid-September, collected and analyzed data, gathered insight from town employees, volunteers, other municipalities, and state and private resources in addition to modeling financial scenarios and soliciting public feedback.

As background, for Fiscal 2021-2022 the Advisory Committee and Selectmen unanimously voted to support the proposed $61.8 million school budget for the coming year, which included 32 new positions in the School Department budget to help address the learning gap experienced by students as a result of the pandemic and associated social-emotional issues.

In addition, AdCom and the Selectmen supported an overall fiscal 2022 $132 million town budget -- including the schools, municipal departments, capital outlay, and shared expenses. Four new positions were included on the municipal side.

Short- and long-term challenges
In the short-term, there is inadequate revenue to pay for services added in Fiscal 2022. In the long-term, expenses are growing faster than revenue.

Potential non-tax revenue sources include increasing economic development, with a focus on South Hingham by working with developers; further study of potentially imposing a one-time real estate transfer fee on buyers of Hingham property based on a percentage of the sale price, to be used for capital projects or other purposes -- with potential exemptions; and exploring the possibility of increasing the town's ability to attract private funding and donations to help defray tax impacts of certain capital projects, working with the naming by-law committee and seeking public input.

Asst. Town Administrator for Finance Michelle Monsegur explained three different budget scenarios -- reduction of services based on current revenue; maintaining existing services; and the other involving additional services. The details will be available on the town website starting Wednesday.

Scenarios two and three involve potential $5.5 million and $7.8 million overrides, respectively, for Fiscal 2024 unless additional sources of revenue can be found.

This is on top of the tax impacts that would result from five potential capital projects that are in the pipeline -- Foster Elementary School renovation or rebuild; a new public safety facility at 335 Lincoln St.; Senior Center expansion at Town Hall; town pool at South Shore Country Club; and the next phase of harborfront wharf walls as part of planned resiliency improvements.  All are subject to Town Meeting approval.

"This is the beginning of the town [including the schools] budget process [over the next five years]," Task Force Chair Liz Klein said.  Budget discussions are already underway for Fiscal 2023. Voters have the final say at the Annual Town Meeting.

'"Override is not a dirty word'
Some meeting participants wondered why the task force isn't recommending an override for Fiscal 2023.

Advisory Committee member Evan Sheehan said that "'override' is not a dirty word. It's an instrument for asking people in town to pay for the services they are requesting. We're done kicking the can. It's like a hamster on a wheel running around in a circle [if we continue to delay an override]."

Andrew McElaney, also a member of the Advisory Committee, suggested, "Maybe we ought to start looking at overrides as being a more normal way for the town to function."
Capital Outlay Committee member Eric Valentine suggested that any such override be associated with specific costs.

Klein explained that while recommending an override for Fiscal 2023 was considered by the task force, the rationale behind not doing so includes that the COVID-19 pandemic is continuing; significant federal COVID-19 funds remain available; the updated financial policy allows the use of unassigned fund balance under emergency circumstances "to protect and stabilize town resources and operations" (the current excess unassigned fund balance is about $12 million); significant leadership changes in the Hingham Public Schools; and inadequate time for the community to consider and assess the implications of an override, which would require voter approval.

Task force member Nes Correnti explained that an override involves a permanent tax increase.

Other participants, including Advisory Committee member Sarah Melia, expressed concern about some taxpayers' ability to absorb additional tax increases.

"Does the town have any idea how many people would have to choose between heat and food and paying their taxes?" asked John Borger.

Monsegur explained that there are a number of tax relief programs in Hingham -- including for "seniors who are house poor, struggling to keep up with increasing property tax bills," who might otherwise need to sell their homes and leave town.

Interim Supt. of Schools Gary Maestas, a member of the task force, called its work "a real through process. It's a challenge to determine the future needs of the community while trying to set forth a somewhat predictable budget," he said.

Strategic plan for schools a key component
Maestas further noted that the expectations of school districts have grown. "A key component is the strategic plan for the schools [in the works], which will help set the direction of the school district for the next three years and budget expectations going forward. I will also be performing an audit of our [HPS] staff to get a sense of exactly what the duties are, and the scope of, every position to determine if we are 'right-sized.'"

Task force member HPS Director of Business and Support Services John Ferris said its members have "laid some good groundwork for the future of Hingham, but this work can't be stopped. It needs to go on forever, with thoughtful planning and [action] all along the way.  New residents will have to pick up the ball and keep the town moving forward."

School Committee Chair Kerry Ni called the task force "a really good partnership between the schools and municipal departments that hasn't always existed in the past."

With regard to statistics presented in the report about the increasing amount of wealth in Hingham, she said, "That increase in wealth in the community comes with growing expectations."

That said, former Advisory Committee member Donna Smallwood, who also sits on the task force, said it's important "to get our arms around the potential tax impacts on everyone in Hingham. I was surprised to learn that about one-third of household incomes in town are less than $75,000."

Parent Priya Howell said she feels strongly that the town has a "moral obligation to educate our kids" and that to go with the reduction of services scenario "would be unthinkable for most parents with kids in the public schools, who I believe would support scenario three. I encourage the town to work toward that."

Ray Estes noted that taxes are not the only costs that impact Hingham families, many of whom are facing college and other expenses "that go way beyond our control as a municipality."

23 recommendations to be considered
The report outlines 23 recommendations by the task force, including closing the Fiscal 2023 budget deficit using one-time COVID relief funds or excess unassigned fund balance; maintaining Hingham's single tax rate for residential and commercial properties; pursuing grant opportunities to augment the town's revenue; enhancing economic development efforts; finalizing a real estate analysis for potential disposition of certain town-owned properties; further study of other non-override revenue sources; seeking public-private partnerships "as a strategic component to support future large capital projects"; controlling expenditures; aligning collective bargaining strategies; considering school contract negotiation; and investigating cost-saving solar measures.

Now that the report is finished, Town Administrator Tom Mayo said, he will make budget recommendations based on recent department budget hearings. "This report will inform those decisions," he said. " I see this report as a tool for our office to work with the Select Board to facilitate a more sustainable budget process."

Mayo also said there's no "magic solution for what we're dealing with, as are many communities in other states. We will work through the process and spend the time and effort to get it right. That's what this town does better than any other community."

The task force intends to continue its work and the municipal/school partnership.

The report will be posted on the town website, hingham-ma.gov, in full detail on Wednesday, Feb. 2, along with an online tool to determine individual tax impacts. Office hours will be held Feb. 9 at noon to answer questions about the report, with more to come. Watch the town website under the calendar section for details.

Select Board Chair Joseph Fisher referred to the task force's work as "monumental" -- you can't absorb all in one night," he said.

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