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On Tuesday, Sudbury Town Manager Andy Sheehan presented the financial condition of the Town. The short version is that forecasts aren’t perfect, but the Town is forecasting some possible challenges in the coming fiscal years. You can jump to page 36 here to review the slides. (1:12:50)
Sheehan noted that budget guidance in future fiscal years is forecasted to decline from the guidance departments received in the current fiscal year, FY24. If they keep same guidance (approximately 3%) for cost center budget increases, there would be a deficit in future fiscal years.
One of the more alarming aspects of the forecast, which was discussed at length, was that it didn’t even include meeting any identified needs across cost centers, and it didn’t include funding capital at the level the Town’s Financial Policies require. Capital is typically maintenance projects like replacing roofs. Identified needs are often new staff positions that departments request, or funding for new programs/services to be offered by various departments.
To put the situation in simple terms: the money they expect to come into the Town isn’t forecast to be enough to maintain the budget growth cost centers received this year, let alone cover increased needs. Unfortunately, the Town can’t just max out 11 credits cards, cut them up when they hit the limit, and pretend it didn’t get the bills in the mail like the rest of us do.
There were also some concerns raised around succession planning. (2:30:00) The Town has a few unique staff positions that Sheehan didn’t feel could be replicated once the incumbent moves on or retires. He gave the example of the Assistant Town Manager/Human Resources Director position. Those are two very distinct positions that have been combined into one in Sudbury.
Sheehan juxtaposed that with comparable Towns that have up to six staffers in human resources. He felt there were around three such positions in the Town that would require more than one hire/role to replace the incumbent. The odds of finding someone who can effectively fill both roles are slim, and the odds of finding someone who wants to do the work of two senior-level jobs for the pay of one in a competitive labor market are probably even slimmer.
Again, that’s in addition to a laundry list of identified new needs across the Town:
Members of the Select Board asked a variety of questions about the forecast, mostly trying to gauge what the real-world implications of this news might be, and to understand what options the Town might have available. Questions ran the gamut from the revenue side to the expense side. It was clear in the discussion that Sheehan felt there were limited options for increasing revenue.
“The Lieutenant Governor has been doing a listening tour recently and I think what she is hearing, and what she’s going to hear from me when I submit some comments this week, is that we need flexibility on the revenue side of things. Massachusetts has very strict limits on what communities can do in terms of raising revenue. And I’m not talking necessarily about Proposition 2 1/2. Proposition 2 1/2 has been the law of the land since 1981. So, that’s not going away. But it’s other areas where we might be able to tap into revenue sources that we currently don’t have available, but some of which are available in other communities.” (2:01:20)
Sheehan and Town staff are working on an FY25 budget that could begin to address some of the budget pressures the Town is experiencing. On issues like funding capital, Sheehan noted that it will take more than one year to build up to the level of capital spending called for in Sudbury’s financial policies. Similarly, any efforts to diversify the tax base or generate new revenue would likely take a sustained effort over many years. The presentation on Tuesday focused on the current financial condition of the Town, but future budget conversations will likely start to lay out recommended paths forward.