PEPPERELL -- A change in Pepperell's school assessment pushed the prospect of a balanced budget into the future.
"We have had to use reserves for the last four years," said Town Administrator John Moak, who said the town has been working on the structural deficit since 2010. If things had gone as projected in the fall of 2012, the 2014 operating budget could have been balanced without the use of the town's reserve funds.
The town was hit by an unexpectedly high assessment for the North Middlesex Regional School District, with an increase of $472,000, more than $200,000 over what was expected. Pepperell is the wealthiest of the three towns in the district.
"The school did a really good job for two of the last three years in keeping the assessment down," said Moak. Last year, the town passed a $375,000 override for the schools.
The large increase in the assessment was announced in March, mid-way through the town's budget hearings. "We agreed we couldn't take that $200,000 cut" from the operating budget, Moak said. Staffing is already thin and cuts have already been made in an effort to balance the budget.
In 2010, the town faced a $1.5 million deficit. Major adjustments were made to the budget. Layoffs, reductions in staff hours and union negotiations helped lower some of the operating expenses. A $650,000 override helped bridge the gap.
In 2012 and 2013, changes were made to insurance plans to decrease costs. "We've really cut back on education and training for staff," Moak said.
"We've been working on this really hard," he said. "We had all intentions to be balanced this year."
The town has been working to build up the free cash and stabilization funds. Last year, there was over $1.7M in the two accounts. This year, there will be about $1.3M. The goal is to increase the reserves to $2M.
In 2007, the town had $5.5M in reserves. Instead of increasing the tax levy, the town used its reserves for the operating budget, Moak said, leading to the current structural deficit.
Town meeting passed a budget that draws $343,909 from free cash. The operating budget will account for $213,534 and capital expenses for the remaining $130,375.
The stabilization fund has around $620,000 remaining and the free cash fund has $700,000.
It is possible the school assessment increase will be less than planned. The town used figures from the governor's budget. The house budget is different.
If the house budget were adopted today, it would reduce the assessment by about $150,000 bringing the town closer to a balanced budget, Moak said. "We're just sitting here in limbo."