Shrewsbury's finances are strained, study committee reports

Shrewsbury's finances are strained, study committee reports

By Elaine Thompson TELEGRAM & GAZETTE STAFF

SHREWSBURY — Budgets and resources for virtually all town departments are strained and there is little expectation of an increase in state aid or other revenues to help sustain the level of services residents are accustomed to, according to the 2013 Fiscal Study Committee.

The 32-member committee, consisting mainly of selectmen, members of the Finance and School committees, and town meeting members, was formed in the summer. Over a four-month period, members divided into subcommittees met with all department heads to better understand the town's fiscal condition and to determine if there are any significant changes since a report from the previous Fiscal Study Committee, in 2007. That report, released after nine months of meetings, gave a detailed review of the municipal and school budgets, but failed to find major opportunities to increase revenues or cut spending.


The latest 80-plus page report, released Nov. 27, similarly does not specify any major new revenue sources or areas where more spending can be cut.

The report said departments have achieved every level of efficiency that is feasible. Costs that can be controlled have been reduced or the rate of growth moderated. Any further reductions would cause severe degradation of services.

"We have reached a critical period whereby it is not obvious how we can continue to provide the services that the town residents have come to expect within the current budget parameters. The key question going forward is what kind of community do we wish to be and what are our priorities?" committee members wrote in the report.

Real estate taxes, which account for half of the town's revenue, have grown by an average of 2 percent per year in the last two decades.

Because the town has a single tax rate for all property classes, 87 percent of the revenue come from residential property owners. Some additional revenue could possibly be gained if the town were to hire a second contracted part-time lister to reduce the backlog of assessments and find significant improvements and renovations not captured in the current assessed values, the report said. Committee members also note that the town has consistently had one of the lowest tax rates in the area.

"We recommend that the voters seriously consider whether we have reached the limits of prudent expense management, whether our current tax revenue will be enough to cover the core expenses required to provide acceptable levels of safety and service to the people of Shrewsbury, and whether it would be affordable and desirable to increase our tax revenue by more than 2½ percent, while remaining more fiscally conservative than other local communities," the committee wrote.

Net state aid, which represents approximately 20 percent of the town's operating budget, has decreased by $1.5 million since fiscal 2009 and has been slightly under $20 million for fiscal years 2011 through 2014

The School Department, which received $18.7 million in state Chapter 70 funding, can also expect that to be reduced over the next several years. Because the Chapter 70 school funding formula takes into account a community's overall income and property wealth, Shrewsbury, the wealth of which has increased, is below its required share of funding an adequate education. Consequently the state reduces the amount of annual state aid the town is eligible to receive as the town moves closer to its required share.

Because of a lack of adequate funding, the School Department is unable to deal adequately with its higher student population and steadily rising classroom sizes, the report said.

The committee asked that a group be formed to look at ways to reduce the skyrocketing education costs by serving students who are currently receiving tuition aid for in-house programs in other communities. Special education expenses have increased by 75.4 percent in the past seven years, going from $9.1 million in 2007 to $16 million in the current fiscal year.

The police, fire and public works departments are also hurting from reduced staffing levels and revenues, the report highlighted.

The Police Department has been forced to become "reactive rather than proactive." Because of a shortage of staff, it's difficult to rely on any kind of consistent revenue stream through citations, the report said. For instance, since 2009, the department has lost $68,162 in motor vehicle violation revenue and $10,344 in handicapped parking violations revenue.

The Public Works Department "has been cut to the bone .... Rates, manpower and contracting services will need to be increased to help maintain services," the report said. The department is losing some of its most experienced employees to retirement. The committee recommended consideration for hiring several junior deputies (to the department head) as a way to retain the leadership and experience needed.

The public safety subcommittee also recommended the town consider hiring a deputy fire chief who can also serve as the fire prevention officer, increasing staff through internal promotions (eight lieutenants), adding firefighters at entry-level positions, and aggressively pursuing the Assistance to Firefighters Grant and other grants, possibly through the use of a professional grant writer.

Selectmen and members of the 2013 Fiscal Study Committee will discuss the report at the selectmen's meeting Dec. 10.

Contact Elaine Thompson at ethompson@telegram.com.