WELLFLEET — The town’s continuing financial fiasco has now prompted the select board to postpone the annual town meeting until Saturday, June 11. The town charter requires that the annual meeting be held on the fourth Monday of April, “unless otherwise provided by Bylaw.”
Town staff are still deep into untangling accounting records from 2020 and 2021, preventing the state from certifying the town’s free cash account. Going to town meeting without free cash certification would stall replenishment of the stabilization fund, jeopardizing the town’s AAA bond rating.
“I had hoped to be further along in the process relative to closing out fiscal ’20 and ’21, but here we are,” interim Town Administrator Charles Sumner said during the March 8 select board meeting.
Interim accountants Mary McIsaac and Lisa Souve came out of retirement last summer to straighten out the books by December. Three months later, they still are not done, partly because the accounting department is so understaffed, Sumner said.
There has been no town accountant for a year, though the town just hired Nick Robertson, who will start in April. Assistant Town Accountant Jane Tesson took a leave of absence from Oct. 1 to the end of January, and former Town Treasurer Miriam Spencer resigned Nov. 30. A new treasurer started work March 7.
“You have to pay bills; you have to do payroll; you’ve got to do all your banking,” Sumner said. “Those were a higher priority.”
Last month, the state Dept. of Revenue (DOR) notified Sumner it could not certify the town’s free cash account until an audit is done on the fiscal 2021 books. But the audit can’t be done until the books for the last two fiscal years are closed. Sumner had predicted the audit could happen in time for an April 25 town meeting. But he revised that completion date to mid-April, he told the Independent last week.
Free cash, which is unspent, unrestricted funds from the previous fiscal year, cannot be used until it’s certified by the DOR. The last date for which Wellfleet’s free cash has been certified was June 30, 2019, according to DOR spokeswoman Naysa Woomer.
Taxes Will Jump
Given all of that, the select board voted on March 8 to delay the annual town meeting until June 11. That leaves just 19 days before the fiscal year closes on June 30. The warrant for the meeting will now close on April 12, according to Executive Assistant Rebekah Eldridge.
A special town election has been scheduled for June 21 for the required approval by ballot of budget overrides and debt exclusions voted at the town meeting. The regular annual town election to fill vacancies on the select board, school committee, and other boards will be held as planned on May 2.
Sumner expects that voters will be asked to approve a Proposition 2½ override of $1.3 million, though he is still working to trim that down, he said. He will present a memo to the select board on March 22 with a recommendation for a possible delay of some expenditures.
“I’m trying to find solutions that are not shortsighted and going to boomerang in a negative way next year,” Sumner said.
With the current projected override amount, property taxes would rise by more than 15 percent — an estimated increase of $719 for a median-priced home, according to Sumner’s financial forecast.
That estimate includes the general override as well as debt exclusions (temporary tax increases for expenditures like a fire engine replacement or the sprinkler system at the Wellfleet Elementary School).
For year-round residents, some part of the tax increase can be offset by the residential tax exemption, which the select board raised from 20 percent to 25 percent in November. The exemption shifts the property tax burden marginally from “domiciled” residents to part-time and nonresidents.
“Out of 4,251 parcels, there are 754 owners who asked for exemptions,” said Ryan Curley, chair of the select board. In other words, about 18 percent of Wellfleet property owners have applied for the residential exemption.
The select board also voted on March 8 to divide the annual town meeting into two sessions because there are 65 articles on the warrant, including several bylaw changes and enabling legislation that could be postponed until the fall, Sumner said.
Last year’s annual town meeting lasted six and a half hours. With 65 articles, “We’re looking at maybe an 8-to-10-hour town meeting,” said Curley. “That’s unsustainable.”
Only board member Helen Miranda Wilson argued against having two meetings. She said special town meetings are more sparsely attended and come with added costs for advertising, printing the warrant, and staff time.
Select board member Mike DeVasto countered, “I don’t think we wind up with representative democracy in these marathon town meetings that go on forever.”
Meanwhile, there is still a pending financial management review from the DOR to shed light on the severe accounting errors that first became public in 2020. These reports are prepared when towns run into financial troubles. They explain what went wrong and recommend ways to prevent history from repeating itself.
Wellfleet’s report was due months ago, but Sumner said it is still not ready. “I have asked, and they’re just so far behind,” Sumner said.
