FinCom: What's up with the deficit?

The Norwood Finance Commission (FinCom) met last week and discussed the Town’s structural deficit and the associated Budget Deficit Working Group, more specifically its lack of progress.

The Budget Deficit Working Group was formed earlier this summer to figure out what the Town would need to cut in order to plug the $7 million-plus hole in the operating budget. Schools and general government representatives have said in the past that salaries make up the vast majority of spending in both of those departments, and cuts would mean losing a good number of employees.

FinCom member and representative to the Working Group Myev Bodenhofer said that Town Manager Tony Mazzucco has canceled several meetings because of a lack of information on the schools side of the budget. She said she’s disappointed with the lack of progress.

“We’ve met a total of twice,” she said. “We were planning to meet weekly. Mr. Mazzucco had reached out to us one week and said the schools needed a bit more time so he was canceling that meeting, and then the following meeting I asked if there was going to be a meeting, and Mr. Mazzucco said he was canceling the next meeting. He said the schools are not ready to work, and I asked if we could do a meeting with general government stuff to discuss, and he said he didn’t feel it would be productive if it was just general government.”

Bodenhofer said there appear to be good reasons for the delay and that members want to get going, but it just isn’t happening.

“I thought this was a good idea and an opportunity for us to talk,” she said. “In conversations with the Schools’ Superintendent and other staff, I do think that they are interested in having discussions on how we should handle finances, and I also think there were concerns about establishing appropriate ground rules about how this committee should operate; is this working group subject to open meeting law because it was formed by an order of the Board of Selectmen, and basically just how should this be happening.”

Bodenhofer said she didn’t feel it was the FinCom’s responsibility to dictate what should and shouldn’t be cut. But she did say she felt Town Meeting members need to see a budget that is balanced and how many municipal employees would be lost under that budget – like the one Mazzucco presented in February this year for the General Government side https://tinyurl.com/25rh7xr8

“We are spending a lot of one-time money to prop up our budget every year,” she said. “I still think it might be a good idea to ask everyone to come up with a budget that can be supported by our recurring revenues. Ask Town Meeting to approve that budget and then possibly present supplemental budgets that would be supported by free cash and see what we can afford without the free cash. What would that look like if we have to add the free cash? I feel like that would give Town Meeting a chance to have a debate on how much free cash we should be using.”

Bodenhofer said the current system where the Town and Schools come with free cash already plugged into their budgets without any cuts and then trying to have Town Meeting come up with what needs to be cut doesn’t really work.

“You can’t really tear it apart,” she said.

FinCom member Alan Slater said the Town just needs to rip that Band-Aid off sooner rather than later, as it will get more difficult as the years go on.

“We’re really just kicking the can further down the road,” he said. “We’re spending so much free cash that we could use for other things number one, and number two, it’s going to reach a time when we’re not going to have enough free cash. To be blunt, I don’t think either side is really planning for that. It’s just, ‘Oh we have free cash, let’s use it and worry about the ramifications down the road.’ I think that’s not a good strategy. I agree with you, I’d like to know what we can fund without using free cash and I think Town Meeting members would like to know so they can make a decision.”

Finance Director Jeff O’Neill said the process of selecting what could be cut on both sides is happening, but with employees watching closely the idea of discussing those cuts in public before they are actually planned could fuel rumors and fear among employees.

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“We’re trying to be careful,” he said. “We don’t want it out there because it’s not set in stone. I don’t want so spread rumors.”

O’Neill said some areas have been identified during the working group, but they are still waiting on schools.

“This is an informal working group and I think there are a lot of conversations but nothing is formalized yet,” he said. “Mr. Mazzucco is waiting for the schools to come back with some information. I can tell you from the Town side, we’re looking at exactly what you’re asking. We’re not kicking the can down the road.”

O’Neill said they are forecasting a good number for free cash this year, as revenues are up and expected expenses are down. He said free cash hasn’t been certified yet, but at the very least,he said there will be $3 million more on top of the $11 million leftover from last year.

“So we’re in good shape on that front, but it still doesn’t mean the deficit is not significant,” he said, “but the work is being done and we will bring that forward. And Mr. Mazzucco did mention in one of those meetings possible areas of, I mean I don’t want to say ‘cuts’ because I don’t want to scare anybody, but a couple of areas of concern we have to look at.”