Spring Forum Highlights Town’s Budget Challenges

Winthrop Town Manager James McKenna and a parade of town department heads took turns briefing the Town Council, and the public, on the budget challenges that lie ahead in the fiscal 2013 budget, but little of substance about the budget was really discussed.

McKenna opened the meeting with a brief presentation highlighting some of the factors that will impact the budget process over the next two months, and again noted that the “discretionary” part of the budget – that part of the budget that was not impacted by factor’s outside of the town’s control – amounts to about 10 percent or less of the entire budget package.

One bit of good news that was highlighted by McKenna was that the town’s decision to enter into the statewide government insurance program, the GIC, continues to pay dividends for the town. The town’s portion of insurance costs for municipal employees is only forecast to grow by about 1.8 percent in the coming fiscal year, compared to 8.3 percent in the FY 2012 budget and 22 percent in the FY 2011 budget.

McKenna also informed the Council that the town’s overall fiscal position is improving, by highlighting the fact that as recently as 2009, the town was facing a deficit of $444,000 in its free cash estimate and town reserves had been virtually depleted. In the coming year, the town is predicting a positive free cash estimate of $200,000 and the town has built up a reserve account of approximately $950,000, while local receipts – money raised locally by the town through licensing and other fees, is set to rise to about $2.47 million in FY 2013, as well.

Other than that bit of good news, the most significant part of the nearly two hour Spring Finance Forum was what did not happen. Winthrop Chief Financial Officer/Town Accountant Michael Bertino, had no role in the budget forum and in fact was not even present.

Neither McKenna, nor any member of the Council addressed Bertino’s absence at the Forum, which in the past has been an opportunity for the accountant to explain the town’s financial position and answer questions about the proposed budget strategy for the coming year.

In his place, assistant CFO Michelle Karas offered a brief presentation on financial department goals for the upcoming budget. That presentation seemed to set the tone for all departmental budget presentations, as each department head took the podium and explained their budget goals for the coming year and occasionally included a short list of programs or equipment that they hoped will be included in the Town Manager’s proposed budget, when it is unveiled later this spring.