WELLFLEET — Town meeting voters will be asked to approve at least $1.3 million in Proposition 2½ overrides to fund last year’s budget shortfalls, maintain town services at their current levels, and fund capital projects, interim Town Administrator Charles Sumner announced during his “State of the Town” presentation on Feb. 16.
The annual event is sponsored by the independent Wellfleet Community Forum.
An override raises the town’s property tax levy — that is, the total amount the town can collect. Overrides must be approved by a two-thirds vote at town meeting and by a majority vote at the annual town election. In 2021, Wellfleet’s override amounted to $168,000.
Sumner told the online forum, which about 110 people attended, that in the past, instead of asking town meeting voters for an operational override, the town has relied on “one-time revenues” to finance the operating budget. This practice has led to instability in the town’s finances, Sumner said. In the last few years, the stabilization fund and the accumulated reserves in the ambulance fund and beach fund have been used.
Funding the budget that way has been going on for at least three years, Sumner told the Independent, and it might go back further than that. “Our records are not the best in the world at the moment, until we get everything reconciled,” he explained.
Town officials also aggravated the problem by habitually funding capital projects, like new equipment purchases or building repairs, with Proposition 2½ overrides at town meeting, Sumner said.
There are predictable expenses for maintaining and replacing municipal buildings, infrastructure, and equipment, but no money reserved to pay for them, said Sumner. “So, if you need police cruisers, you have to get an override,” he said. “If you need to replace a fire truck, you have to get an override. If the dump truck can’t be repaired any longer and you need a new one, you need to get an override.”
Last year alone there were 12 items on the warrant for trucks, equipment repairs, and special projects. “Most communities would not consider that the best basis of operation,” he said.
$1.9 Million Deficit
The draft operating budget for fiscal 2023 currently shows a $1,946,000 deficit. That includes $1,360,000 in requests for special projects and $586,000 to finance day-to-day municipal operations, including wage adjustments and health insurance.
The only way to cure an operating budget deficit is ask for an override, cut spending, or both. For the fiscal path to be stabilized, Sumner suggested both a general operating override of at least $586,000 and a special purpose override of between $750,000 and $900,000 for capital expenses.
With those two overrides, he told the Zoom audience, “you’re back on track. You’ve got an operation that can be supported by your plan.” To make up the gap between current spending requests and the special purpose override, some purchases and acquisitions will need to be delayed or trimmed.
While revenues go up by 2.5 to 3 percent each year, municipal costs rise by 3 to 4 percent. A modest override every few years allows the town to maintain operations “so you don’t have these big fluctuations,” Sumner said.
The $1.3 million or more in overrides to cure the deficit will not be the only ones at this year’s town meeting. Already in the works were a $187,000 override for two new police officers, a $207,000 override for two new firefighter paramedics, a debt exclusion of $745,000 for a new fire engine, and a debt exclusion of $200,000 for a fire suppression system at Wellfleet Elementary School.
Oversight of Town Projects
Despite financial hurdles, town projects continue to move ahead, Sumner said at the forum. The second phase of the harbor dredging project was completed, the town is dealing with its wastewater issues, and it’s also gearing up for phase one of the long-awaited Herring River Restoration Project. The first phase of that project is expected to cost $50 million, but it will likely be funded by money from the $1.2 trillion federal infrastructure bill, Sumner said.
During the forum, resident David Mangs asked whether the town would be able to responsibly manage that large infusion of money from the government and if the town would even be qualified to apply for the funding. “I worry we may miss our opportunity there,” he said.
The town will most likely be the fiscal agent for the restoration, with incoming funds going through the town’s treasury, but there’s no capacity to manage the project internally, Sumner responded. Each week, he sits down with the nonprofit Friends of Herring River, he said, who have been working on the project since 2008.
“One of our conversation points is that Wellfleet doesn’t have a lot of bench strength to take on that responsibility without some assistance,” Sumner said. As with any construction project, the town plans to hire a private contractor, an engineer, and a project manager.
“We’ll have to bring in resources within the project budget to handle all those matters,” he told the Independent.
