Town budget may be off by millions, Interim Town Manager says

MIDDLEBORO -- Discrepancies in the budget for next year could leave the town facing a shortfall of millions of dollars, Interim Town Manager Joseph Perkins said.

Select Board members asked Perkins at their March 16  meeting to reconstruct the budget to find out the town’s exact financial status. They agreed to ask town counsel whether they can postpone Town Meeting, now scheduled for April 27, until a new budget can be completed.

Perkins reviewed the budget closely in an effort to find potential savings for the school department’s $2.2 million shortfall. But when he did, he said, he found the town budget faced a potential shortfall of its own.

“I am not comfortable with the budget as presented,’’ Perkins said. “I believe it is out of balance and I believe it’s out of balance significantly and there is a deficit.’’

There is no money to give the schools, he said, because of the shortfall.

He questioned several aspects  of the original budget of about $112 million. The budget was prepared by Jay McGrail, the former town manager, who recently left his position for a town administrator job in Harwich.

One of the issues Perkins questioned involved state aid. The budget listed the figure coming to the town as $28,586,292. This is $533,466 more than the amount allocated to the town in the governor’s budget, according to Perkins.

The state assessment, which is the figure the town owes to the state, was also off, he said. The budget listed the amount at $2 million, while the governor’s estimated figure was $2,791,917, which means the town owes nearly $800,000 more than budgeted.

Perkins also questioned the town’s assessment to Bristol-Plymouth Regional Technical School. The budget seeks one-time funds of $800,000 from free cash to cover the cost. Perkins said this would cause a shortfall for the next year’s budget because of the use of one-time revenue for an ongoing expense.

Health insurance costs were also an issue, he said. These costs, he acknowledged, can vary.

But based on his projection of a seven percent increase, which he said was about midway between projections of 4 and 10 percent hikes, could cost the town nearly a million dollars more than budgeted.

Local receipts, which is the money taken in from sources such as building permits and excise taxes, were budgeted at an estimated $13 million. But the state estimates the figure will be lower.

McGrail had explained that receipts had increased at a significant rate, with new growth such as the Rexa project and other developments. But Perkins urged caution when developing this figure.

“Right now because of all the development we have, yes, we are in a very fertile time, but that will end,’’ he said. “That’s why you don’t overestimate, you stay conservative.’’

He expressed concern about using projections rather than actual figures. “You don’t base a budget on dreams, wishes and unicorns,’’ he said. “You build it on numbers.’’

Select board members asked Perkins to create a new budget to determine where the town actually stands financially.

Perkins said he reviewed the budget with a financial manager who he did not name and is “confidently unconfident’’ about the budget.

McGrail did not immediately respond to a request for comment.