Winchendon plan to address deficit includes override

Winchendon plan to address deficit includes override
By Paula Owen TELEGRAM & GAZETTE STAFF
paula.owen@telegram.com

  WINCHENDON — Recommendations made by Town Manager James M. Kreidler Jr. Monday night to help fill a deficit he says is about $3.857 million included $250,000 in cuts to the schools, reductions in some town employees' hours, using around $1.6 million in stabilization money that would completely deplete that account and a $800,000 Proposition 2½ override.

At a joint meeting with the School and Finance committees and Board of Selectmen, Mr. Kreidler said auditors are close to finalizing an audit for fiscal 2014 and estimate the cumulative deficit from fiscal 2013 through the end of fiscal 2015 at $3.8 million.

However, he said he could not guarantee that number won't change again in the next few weeks or before a vote at special town meeting.

The Department of Revenue is also reviewing the town's finances and previously estimated the deficit at $5.7 million through the end of this budget cycle. The DOR has asked the town to come up with a plan by Nov. 7.

The town's recommendations are subject to DOR approval, Mr. Kreidler said.

Auditors first uncovered a deficit in fiscal 2013 in the millions of dollars, much of it attributed to annual underfunding of the town's health insurance trust fund. The town is self-insured, but is switching to premium-based in January.

Mr. Kreidler also recommended hiring a finance director who would oversee the town and School Department budgets, and getting rid of the town's financial software MUNIS in favor of a simpler system. MUNIS contributed to the shortfalls in accounting practices across all departments, he said, that contributed to the town's financial breakdown.

At one point, auditors said the system crashed and all data was permanently damaged.

School Superintendent Salah E. Khelfaoui said he was happy to see that the School Department was right about the deficit in the school budget being significantly lower than the $2 million reported by Mr. Kreidler.

The School Department maintained that Mr. Kreidler had given the DOR inaccurate figures on which to base that estimate. The total deficit for the school is estimated at around $700,000, he said.

"It is not just the system we need to fix," the superintendent said. "It is communication."

Additionally, he said it is highly unlikely the School Committee would be able to cut its budget mid-year without disrupting classrooms. He said it would require the schools to cut staff.

"If we say, 'No. We can't do that,' it is not because we don't want to. It is because we can't," he said.

He implored selectmen not to take the route of placing a town meeting article on the warrant in December to cut the schools by $250,000.

Mr. Kreidler said the School Department was partly responsible for the deficit in the health insurance trust and it was better for town and school officials to agree on cuts rather than act as adversaries. He said the issue could be forced by a town meeting vote.

Mr. Kreidler also called the new figure of a $3.8 million deficit a "panacea" that he hoped would help officials put everything behind them.

The news of the deficit bred distrust, he said, and divisive behavior.

If the override passes, it would increase taxes $1.29 per $1,000 home valuation, Mr. Kreidler said — around $258 a year on a $200,000 home. If it fails, Mr. Kreidler said the town will need to go to the state for a bailout that would require approval of special legislation.

Contact Paula Owen at paula.owen@telegram.com