During the recent Board of Finance meeting on May 23, the newly appointed Finance Director, Glenys Salas, revealed findings indicating potential shortfalls in the town and school budgets, casting a shadow over the projected insurance premium increase for 2025.
Salas cautioned that the estimated $2.6 million deficit in the self-insurance line items for town and school funds represented a worst-case scenario, suggesting the actual figure might be lesser.
The principal component contributing to the shortfall is the absence of accounting for $1 million in revenue from the town’s fund balance, a discrepancy brought to light by Salas. She clarified that this deficit is expected to materialize by June 30, 2024.
Salas attributed the discrepancy partly to an overestimation of unassigned fund balance revenues, which she anticipates to be closer to $200,000 rather than the budgeted $1 million. Additionally, she identified a revenue shortfall of $500,000 and a $100,000 deficit resulting from an expired school grant.
Further exacerbating the financial strain are projections indicating that expenses will surpass the self-insurance line item by $1 million, based on claims made to the town’s self-insurance for 2024.
Barney Molloy, a member of the Board of Finance, cautioned that such deficits could necessitate a substantial increase in the insurance line item in future budgets.
Despite the looming financial challenges, Salas assured stakeholders that the town’s overall budget remains resilient due to its strong cash position, affirming that the ability to meet financial obligations remains intact.
She underscored the potential need for a multi-year effort to realign the budget and recommended cost-sharing initiatives between town and school employees to mitigate the impact of the insurance increase, proposing an adjustment to employee contributions to align with the town’s share.
The Board of Finance, alongside the Board of Selectmen and Legislative Council, is slated to deliberate on potential remedies for the shortfall in forthcoming meetings, signaling a collaborative effort to navigate the fiscal challenges ahead.
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