Extra aid choice: Save or spend?
Pepperell residents didn’t waste any time before spending an extra $90,000 in local aid distributed by the state last month.
Less than a week after receiving the money, Town Meeting approved using it to buy a new police cruiser, radios, Tasers, and sanding equipment.
“It was timely for us,’’ said Town Administrator John Moak. “I don’t think the ink is even dry yet on the check.’’
Governor Deval Patrick recently signed a supplemental state budget with $65 million in additional local aid for this fiscal year. The funds were distributed Oct. 31; according to the state Department of Revenue, cities and towns can use the money this year or roll it over into free cash for the 2013 fiscal year, which starts July 1.
Among area communities, Framingham received the most, $608,442, while Dover was on the low end at $11,764. The money was distributed based on the state’s local aid formula.
While Pepperell was quick to spend its share, other communities, such as Brookline and Concord, are saving it for next year. Newton and others will reassess their needs as the year goes on.
Municipal leaders were told that this is a one-time boost in funds, and that they should not expect it next year, said Geoffrey Beckwith, executive director of the Massachusetts Municipal Association. Beckwith said communities should be spending the extra aid on specific projects, rather than salaries or other expenses that will need to be covered again next fiscal year.
“There are a lot of options communities will have for the use of this money,’’ he said.
He said most communities will use the money for new equipment, fixing roads and bridges, or beefing up depleted reserve accounts. Cities and towns have had years of cuts in local aid, so many have deferred road maintenance and capital expenditures, he said. In addition, the state has already been hit hard this fall by difficult weather requiring expensive cleanup operations.
“With winter starting two months early there are a lot of needs in terms of clearing the roads and other unexpected costs,’’ Beckwith said.
Several municipal leaders said budgets for the current fiscal year have already been set, so they don’t have specific plans for the money.
“We are not going to program it into our fiscal year 2012 budget,’’ said Brookline Town Administrator Melvin Kleckner. “One of the things we were cautioned on is this is not recurring revenue, so the last thing we want to do is build that into recurring expenses as part of the budget.’’
Kleckner said Brookline will put its $388,275 in additional local aid into the general fund, and let whatever remains carry over into next year’s budget.
Maureen Lemieux, Newton’s chief financial officer, said the city is thrilled to be receiving $359,397 in additional aid but does not have immediate plans to spend it. She said the money will go into the general fund and could stay there until next year.
“We will reassess the needs of the city and determine what the most appropriate use will be,’’ she said. “It may be that we’d identify a need or it could drop to free cash at the end of the year.’’
The city may need to use some of the money for snow removal and damage from Tropical Storm Irene, she said. “The winter hasn’t even begun yet and communities are grappling with Irene and the Halloween storm,’’ Lemieux said.
Harvard Town Administrator Timothy Bragen said the cost of cleaning up after the Oct. 29-30 snowstorm will put a dent in the $90,568 in additional local aid his community received.
“Depending on the cost of this storm, it could wipe that $90,000 out,’’ he said.
But he said the town also will take a look at its needs and see whether the aid should be spent this year or held in reserve. “We’d look to see where we could best utilize those funds.’’
Concord also doesn’t have plans to spend the money any time soon, though weather could change that, said Town Manager Chris Whelan. Concord received $70,948.
“We’re pleased the Legislature is doing this,’’ Whelan said. “It’s coming at a good time. We’re going to plan its future use rather than use it right now.’’
In Medfield, town officials will be using the money to balance this year’s budget, according to Town Administrator Michael Sullivan. He said the $88,651 will be used as a safety net in case local revenues, such as excise taxes and building permits, do not come in as estimated.
“We don’t know what we’re going to collect this year in local receipts,’’ Sullivan said. “This allows us to be conservative for fiscal year 2012 so we don’t run short.’’
Municipal officials said they are grateful for the additional funding, but wish it had been more and could be counted on again next year.
Moak, the town administrator in Pepperell, said local receipts are starting to build up again but aid from the state hasn’t bounced back. Even with the additional funds this year, Moak said, Pepperell’s local aid is down $324,000 from three years ago. The town is already looking at a deficit of $260,000 next fiscal year, he said.
“Our revenue stream is hurting,’’ he said.