New expenses prove a hurdle for Athol’s town budget

Athol Town Hall

Athol Town Hall FILE PHOTO

By GREG VINE

For the Athol Daily News

Published: 04-09-2024 5:00 PM

ATHOL – Town Manager Shaun Suhoski told last week’s meeting of the Selectboard that he, his financial team and town department heads continue their efforts to craft a balanced budget for the upcoming fiscal year.

Members of the Finance and Warrant Advisory Committee were also in attendance at the April 2 meeting. Suhoski said several factors, including the passage of a $286,000 Proposition 2 ½ override at the Town Election, will affect the FY25 budget.

“The finance team and I have been meeting regularly,” said Suhoski, “including 90 minutes today, to digest not only the election results but to look again at our revenue projections and to come up with a game plan as to how to proceed.”

Suhoski repeated that Athol, along with most communities in the state, is suffering from “sort of a financial long COVID.” He explained that funding provided to support municipal and school department services during the pandemic have either ended or will soon.

Inflation, increases in health insurance premiums, a nearly 12% jump in Athol’s retirement assessment, and changing demographics limiting Chapter 70 school aid are all impacting efforts to maintain services at current levels, said the town manager.

“Athol has persevered through challenges much greater that those we face today,” said Suhoski, “and I have no doubt we will collectively bring a balanced budget to Town Meeting voters that will sustain our current level of services and also strengthen the fire and EMS department.”

The town manager outlined the anticipated new revenues, which total $860,000. According to Suhoski, property tax levies are estimated to provide $390,000 in new revenue and new growth will add another $125,000. Based on the governor’s proposed FY25 budget, the town stands to gain $140,000 in state aid. Ambulance revenue is estimated to provide $115,000 over the current fiscal year, with another $60,000 coming from investment income and $30,000 from sources such as meals and excise tax revenues.

Those anticipated new revenues, however, are juxtaposed by new expenses estimated at nearly $1.1 million. These include a $337,000 hike in Athol’s assessment for the Athol Royalston Regional School District, and an increase of $272,000 in payroll costs – resulting mainly from step increases and cost of living adjustments. The town’s retirement assessment is anticipated to rise by $247,000 and health insurance premiums by another $147,000. Another $95,000 will be added to new expenses with the Selectboard’s commitment to fund a new firefighter position.

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When the new revenues are compared to the anticipated expenses, the result is a shortfall of $238,000, Suhoski explained, not including the department requests and impact of inflation.

“It hits all the people at home – the price of fuel goes up at home, oil, gas, supplies – it goes up for the town. It’s no different,” he said. “So, departments have requested increases to line items and we’re going through them in great detail to see where we can just hold on, really tighten the reins. So, that could increase the shortfall.”

To close the difference between revenues and expenses, Suhoski told the board, he and his finance team are looking at several options. These include the use of reserve and stabilization funds, as well as free cash. Though, Suhoski cautioned that he was not suggesting that all these sources be used to erase the shortfall.

“I’m just suggesting we have some tools available,” he said.

Suhoski said he plans to have the proposed FY25 budget ready later this month. The Finance and Warrant Advisory Committee will complete its review of the spending package sometime in May, and voters will get their opportunity to weigh in at the June 10 Town Meeting.

Greg Vine can be reached at gvineadn@gmail.com.