WELLFLEET — Town officials are now backing away from their previous assurances that municipal accounts would be balanced, an audit completed, and free cash certified by the state in time for the June 11 annual town meeting, already delayed by seven weeks. And voters will be asked to approve five separate Proposition 2½ budget overrides totaling $1.77 million.
As of Tuesday, interim Town Administrator Charles Sumner said he remained hopeful but could not promise that free cash certification would happen in time. “It’s always been our goal to get the audit done and free cash certified prior to town meeting,” he said. “This has been a marathon, but we can see the finish line.”
With no free cash, Article 14 on the town meeting warrant, to replenish the stabilization fund with $639,000, would be pushed back to a September town meeting. Some capital projects would also need to wait until September: the recreation dept. bandstand repair project ($50,000), water refill station replacements ($20,000), culvert replacement on Briar Lane ($75,000), harbor flora and fauna study ($60,000), and revetment engineering at Keller’s Corner ($50,000).
“It’s not ideal but it’s not the end of the world, because we’re planning to have that town meeting in September,” Sumner said. The June 11 warrant includes 55 articles.
The overrides include one for the town’s operating budget of $518,820; it will determine if major services cuts have to be made.
If that override doesn’t pass, “The pain would be shared across all departments in town,” said select board chair Ryan Curley. “It might mean the library is closed an additional day a week, or there’s fewer programs from the recreation dept., cutbacks in coaching, and the amnesty day would go away.” It could also mean cuts to town staff, he said.
Voters will also be asked to approve a $672,700 override for the capital budget, along with smaller overrides to hire two new police officers and two new firefighters, paramedics, or EMTs. The fifth override would be to pay for a $2.2 million fire suppression system at the Wellfleet Elementary School.
If all five overrides pass, the median property tax bill would increase by $392 next year.
The capital budget override would pay for 10 projects, including repair and resurfacing of the basketball courts at Mayo Beach, bulletproof vests for police officers, replacement of portable radios for the fire dept., DPW dump truck replacement, and technology upgrades at the library.
The last day to register to vote on June 11 is May 30. Each of the overrides must pass by a two-thirds majority at town meeting and as ballot questions at the town election on Tuesday, June 21.
Two Operating Budgets
The $22.9 million operating budget in Article 1 of the warrant did not change much from last year, “other than the staff for increased financial oversight,” Curley said. “It’s not a new position. Basically, it’s to retain the services of Mary McIsaac and Lisa Souve, to make sure Wellfleet’s new financial team does a thorough job keeping the books in order so we don’t go through another period like this again.”
If voters do not approve the operating budget override, “then we don’t have a budget,” Sumner said at the April 26 select board meeting. “Without an approved town budget, we can only operate emergency services, essentially fire, police and water.”
It would be similar to a “government shutdown,” Curley noted.
To prevent this from happening, the state Dept. of Revenue has suggested presenting a plan B to voters, Sumner said. Therefore, town meeting voters will see two budgets, one assuming that the override passes. Sumner referred to the second as an “austerity budget: a budget that cuts approximately half a million dollars out of the spending plan we have been discussing all winter long.”
Town Moderator Dan Silverman suggested voting on both budgets at town meeting, so that if the override fails at the town election there will still be a budget in place.
“We have a structural problem, which is we don’t collect enough property tax revenue to fund our operating budget,” the select board’s Michael DeVasto said. “We’re taking in about $4 million less than it costs to run the town.”
“Passing this override isn’t going to be a walk in the park, and it’s not a done deal by any stretch of the imagination,” said select board member John Wolf. “There’s a lot of people who have a lot of questions they feel aren’t being answered about the current status of our finances. This is what we will be confronting at town meeting.”
One question is about the 2020 town audit done by Powers & Sullivan, which uncovered an “unknown variance” of $765,000.
“That’s not missing money, but very poor recordkeeping,” said Sumner. “We corrected well over 1,000 accounting journal entries and data points.”
On April 26, Sumner promised to have a report on the status of those accounts within two weeks. As of May 10, there was no report.
A Narrowing Window
Replenishing the stabilization fund, which has been drained of $639,000 since last June to fund this year’s operating budget, will happen only with money from the town’s free cash account. The window of time for state certification of that account is rapidly closing. Wellfleet’s free cash has not been certified since June 2019.
“This was not a preferred approach, but due to the severity of the town’s fiscal conditions we had few alternatives at that moment,” reads the explanation of Article 14 in the warrant. “This action will reestablish the stabilization fund to prior financial status and is important to maintain the town’s bond rating.”