Eastham Is ‘Well Positioned Going Into This’
By Ryan Fitzgerald
EASTHAM — The town’s finance director, Rich Bienvenue, presented a revised fiscal year 2021 budget proposal to the select board on July 27. The original budget proposal, developed in January, was revised in June to reflect the impact of the Covid-19 pandemic so far.
The revised budget shows that expected local receipts have been lowered from $4,241,000 in the original budget to $3,250,500 in the revised one, with state receipts decreasing from $557,370 to $500,945.
Bienvenue said that property tax rates would remain about the same. The total budget is proposed at $30,422,389.
New funding proposals include $429,406 for a water enterprise fund for the town water project, $490,500 for a family support package, and $400,000 for new police radios.
The good news is that the town’s stabilization fund has about $700,000 in it and the town has $1 million in free cash. That’s a total of $1.7 million in reserves going forward.
“I’m happy to see that we have that cushion in free cash and the stabilization fund,” select board member Aimée Eckman said.
Bienvenue said the main issue the town faces is unpaid taxes. He said right now there are roughly $400,000 in uncollected property taxes as of June 30, which is higher than normal. That amount could go down if payments come in as July comes to a close.
But the town might have to deal with the fact that people aren’t able to make their payments during this time.
“What could happen, if people just can’t pay?” Bienvenue said. “It turns into a revenue deficit. The way you get through that circumstance is with your reserves.”
He said the town would likely bring an article to the May 2021 town meeting to fund that shortfall.
“I do think we’re well positioned going into this,” said Town Administrator Jacqui Beebe.
“We’ve been conservative about estimating revenue,” she said. “We’ve also reduced the budget by two and a half percent.”
The select board will vote on the budget at an upcoming meeting.
Covid Effects Not Yet Accounted For
By Devin Sean Martin
WELLFLEET — The reality of the financial impact of Covid-19 on the town budget is only just coming into view.
“We’re in unprecedented territory here and we can guess where some of the effects might be seen, but in reality it’s just a guess,” Town Administrator Dan Hoort said by email.
The current proposed town budget does not account for any Covid-related losses.
In a letter he wrote to the select board, Hoort said that the board might direct him to adjust the budget as the picture of the town’s losses became clearer.
Hoort has laid out a process where, starting at the end of July, every month the town accountant and town administrator will compare receipts from the current month to the same month last year.
Hoort hopes the July receipt comparison will give the first insight into the areas that he thinks the Covid-19 crisis might affect the most. Those are, currently, the beach fund, ambulance fund, recreation fund, shellfish fund, and the Southeastern Mass. Resource Recovery Facility (SEMASS) fund.
Hoort, who was head of the municipal finance dept. in Provincetown, has some experience dealing with dipping town revenue.
“I remember in Provincetown during the last downturn, we saw motor vehicle excise taxes drop,” he wrote. “It turns out people were concerned with their finances, and as a result fewer new cars were purchased.”
Finance committee chair Fred Magee, who said he was not speaking for the committee, echoed Hoort’s uncertainty about the future of the budget.
“Covid is a future event in a way,” he said. “So much of the impact of the virus has yet to be seen.”
The finance committee might be more prepared to deal with budget issues since incorporating a more future-oriented thought process, according to Magee. They discuss both current purchases and large future purchases to ensure better long-term spending habits.
Meanwhile, until the budget is approved at town meeting in September, the select board will vote on an operating budget on a monthly basis. The select board approved the July budget of $3,518,822 on June 23.
Short-term Rental Tax to the Rescue
By K.C. Myers
PROVINCETOWN — Everyone predicted gloom and doom for town revenues in 2020, with parking fees and other golden geese expected to be way down due to the coronavirus and fewer visitors.
But an influx of short-term rental taxes rescued Provincetown’s fiscal 2020 municipal budget, which closed on June 30. Cape legislators and town meeting voters tried for years to get a short-term rental tax approved on Beacon Hill. The final passage last year of a 12- to 14-percent tax (depending on optional add-ons by towns) on Airbnb and other short-term rentals turned out to be really good timing for communities otherwise ravaged by Covid-19.
Provincetown projected $597,400 in room tax revenue (for both motel and short-term rentals) in fiscal year 2020. In fact, the town took in $838,437.
The extra $241,037 helped with Covid-19 losses, such as a $276,000 decline in parking revenue, from $2 million to $1.72 million.
Fiscal year 2020 ended on June 30 with a $2.5 million budget surplus, according to the budget prepared by Josee Cardinal Young, the town’s finance director.
“Certainly, things could have been worse, considering the circumstances,” said Acting Town Manager David Gardner. “It would be misleading to read too much into the surplus number, because, one, it is not really final — some expenses have been encumbered and just haven’t come in yet. Also, the area where we saw increased revenue was a one-time bump, because of the timing of the short-term rental tax.”
Yet even meals tax revenue exceeded expectations: it was projected to be $628,300 but came in at $671,252, a $42,952 surplus.
There are clearly fewer restaurants open and less seating, but the meals tax is a strange funding source — it’s sent to the town via state coffers, and payments aren’t reflective of the most current time, Gardner said.
The town also spent less than usual in the latter part of the 2020 fiscal year, from March through June, when the entire region was shut down.
Several positions were not filled in the parking and highway depts. and DPW, due to temporary moratoriums on seasonal hires from March to June 1. Nonessential job openings were not filled, and the town implemented a spending freeze on May 22.
A mild winter didn’t hurt, either. No snow saved Provincetown $147,643.
Though this is good news, it remains to be seen how Covid-19 will affect fiscal year 2021, which began July 1. July and August are when Provincetown usually earns the largest chunks of taxes and fees for parking, meals, and room rentals. These figures are still unknown.
On Monday, Aug. 10, Cardinal Young will present a proposed budget for 2021 to the select board. It will be voted on at the Sept. 21 town meeting.