By BOB HOLMES
READING – The Covid-19 toll on Reading residents is a painful number that’s updated on the town website daily. But there's another cost to the health pandemic, a financial cost that is almost as painful and hitting Reading and towns across the state.
Tuesday night's Finance Committee meeting was filled with big numbers that are often difficult to understand. The nine-member Finance Committee was meeting for the first time since approving the FY 2021 budget in March and included two new members participating in their first meeting, Nick Boivin and Jeanne Borawski.
The goal of the near four-hour meeting was to make revisions to the FY 2021 budget to reflect the dramatic changes that have occurred since March because of the pandemic. For the town, the timing couldn’t be worse. From state aid to meal tax revenues to potential future covid-19 costs, so much is unknown. But with Reading Town Meeting set for June 15, the Finance Committee needs to make revisions by next week in order to get a hard copy of the budget into Town Meeting member’s hands by May 29.
“There’s no playbook for this,” said Finance Committee chairman Eric Burkhart.
Now for the numbers.
Town Manager Bob LeLachuer told FinCom members that he projects a budget gap of $2.6 million. That number is a result of $2.4 million in revenue decreases along with $225,000 in Covid-19 costs. Of the $2.4 million figure, $1.5 million is a decrease in state aid. Committee members focused on two main topics.
The first centered around the use of free cash to make up the deficit rather than make cuts. The town has roughly $14 million in free cash and many in the zoom meeting that included the School Committee and Select Board felt that was worth considering.
“I use the term rainy day fund, and it is raining,” said School Committee chair Chuck Robinson.
LeLachuer’s plan to close the $2.6 million gap includes $500,000 in free cash but he was concerned about the future and cautioned against using free cash on a regular basis. He also urged committee members to think beyond 2021.
“I just want to remind everyone in the room that the financial situation we're in is not a one-year problem as far as any of us can tell. If I'm wrong, I'd be thrilled. We have a one-year serious problem to dig ourselves out of and then we have something that appears to be going to last a long time. If state aid does get cut 1.5 million next year and then magically goes up 1.5 million plus, I'd be shocked that the state would be able to rebuild its revenue and its budget that fast. I don't see how the state can repair damage that's being done now.
“That's why I say I think we're in this for the long term. I just want to caution everyone, that's why we made budget cuts. The outlook for next year is what it is. But the outlook for the years after that are not good. Not to be too gloomy but we have to take a responsible look ahead, beyond next year."
A second discussion centered on the actual proposed cuts. Closing the $2.6 million gap included reducing capital spending by $925,000, adding $500,00 of free cash, reducing shared costs like health insurance by $708,580, and cutting the town and school budgets by a combined $450,000.
LeLacheur and School Superintendent John Doherty each explained their proposed cuts, which starts with a one percent pay cut for all non-union employees. There would be no layoffs but a number of vacant positions on both the school and town side would be left open. The goal with all the proposed cuts was to pick items that would be easy to restore should revenues increase. With so many unknowns, LeLachuer and Doherty each said budget flexibility was crucial.
“We can’t tell you what next year is going to look like,” said Gail Dowd, the school department’s Chief Financial Officer. While awaiting guidance from the state, the school department is looking at multiple scenarios for the fall including remote learning and double sessions should social distancing be enforced.
During the discussion, one PowerPoint slide seemed to sum up the meeting.
“Nothing said here will be exactly right.”
With 27 pages of facts and figures in the meeting packet to ponder, the Finance Committee delayed a vote on the revisions until Monday at 7 p.m.