Local Government and Politics, News

Nahant town administrator: ‘We are just balancing our budget’

A crowded room of Nahant residents looks on as Town Administrator Tony Barletta speaks about the town’s budget concerns during the monthly community breakfast at Nahant Village Church Friday. (Spenser R. Hasak)

NAHANT — Over eggs and toast Friday morning, Town Administrator Tony Barletta described the town’s financial situation to include a $13 million budget, $1.2 million structural deficit, $11 million in debt, and no savings.

The town will likely eliminate the position of a full-time fire chief as a result of budget limitations, Barletta announced last week. Fire Chief Michael Feinberg, whose contract is set to expire on June 30, will “likely be departing his position” this summer because of the budget constraints, said Barletta.

“We are just balancing our budget,” said Barletta at the town’s community breakfast at the Nahant Village Church. “We don’t have any money in savings, we have a ton of outstanding debt, and we have known capital needs that we are going to borrow for if we don’t make some changes.”

Barletta, who became the town’s administrator in August 2018, is proposing a Proposition 2 ½ override to close the gap. The override would raise the tax rate 67 cents per $1,000 in home value from $11.12 to $11.79.

The average home in Nahant, valued at $647,034, would see a tax bill increase of $433.51.

The town has been balancing its operational budget with free cash each year and hasn’t been putting money into its stabilization fund, said Barletta.

“Continuing this practice, you’re continuously kicking the can down the road,” said Barletta. “You’re going to add more debt and more payments and eventually you’re not going to be able to sustain it.”

Free cash is a revenue source that results from the calculation, as of July 1, of a community’s remaining unrestricted funds from its operations of the previous fiscal year based on the balance sheet as of June 30, according to the state Department of Revenue.

“It’s an unknown revenue source,” said Barletta. “It’s like if you were balancing your budget based on your Christmas bonus that you don’t know if you’re going to get or not.”

The funds should be used for one-time expenditures, funding capital projects, or replenishing reserves, said Barletta.

The Division of Local Services told the town’s administration in a report four years ago that they were misusing free cash, said Barletta. This year, the town received $740,000 in free cash. The year before, it received $1 million.

“We expect free cash to go down again next year,” said Barletta, who added that even if the town wanted to continue the practice of using the money to balance the budget, it won’t be able to.

“We have been reliant on free cash for quite some time now to balance our operating budget,” said Barletta. “Our capital projects, which are necessary, basically because we are balancing our budget with free cash, we’ve had to borrow for them, which adds to our outstanding debt.”

For example, the town borrows about $80,000 a year to pave roads, he said.

The town has $11 million in debt and a $13 million budget with no savings.

This year, revenue projections are just over $12 million but department requests total $13,400, said Barletta.

The override is expected to pay off $412,000 in storm damage, establish $2,000 in civil defense for storm preparedness, and pay for projects the town otherwise wouldn’t be able to afford, like replacing a fire truck pump and upgrading IT systems.

“I can present something and tell you until I’m blue in the face what I think is the best way to go, but at the end of the day, it’s the voters in town that make these decisions,” said Barletta. “The best I can do is explain to you where I think we need to be and hopefully gain your support.”

 

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