Oak Bluffs finances have been trending upward in recent years, with the general fund balance going from $116,000 in the red in 2012 to $1.6 million in the black in 2017, and the town’s Standard and Poor’s bond rating going up to AA+ two years ago.
But slow revenue growth and the increasing cost of big-ticket items like education, health insurance, and cost-of-living increases have combined to create a projected $500,000 budget shortfall for fiscal year 2019, according to town administrator Robert Whritenour.
At Tuesday night’s selectmen’s meeting, Mr. Whritenour presented the board with his recommended FY19 budget of $30.7 million, with a projected increase of over $1.3 million, due in large part to a 12 percent increase in health insurance for town and school employees, which will total at least $346,000, as well as a $467,000 increase for the high school assessment, and $302,000 for the Oak Bluffs School. Cost-of-living increases for town employees will rise $147,000 next fiscal year.
Proposition 2½ limits property tax increases by municipalities to 2.5 percent annually. The 4.5 percent increase for FY19 means two-thirds of Oak Bluffs voters will have to approve the funds to cover the shortfall at the ballot box in April. A townwide election is also required to approve an override.
The $1.3 million increase exceeds the projected $800,000 of new revenue by $500,000. Mr. Whritenour said a $500,000 override will cost $88 per year to the owners of a $536,000 home, the median price of a house in Oak Bluffs. He recommended adding $250,000 to the levy limit as a contingency for FY20, which would add another $43 per year.
The town last approved a Prop. 2½ override in 2015.
Mr. Whritenour stressed the need for the Prop. 2½ override was not a reflection on the town’s financial stability, but the result of downward pressure on slow upward growth.
“We’ve got a solid debt structure, and overall, the community is very stable financially, so I don’t want you to get the sense the town is lacking in that department,” he said. “We will continue to make progress. But every year we have some very serious challenges that require our attention.”
Mr. Whritenour said a “totally ridiculous” state revenue-sharing formula contributes only about $70,000 to the $31 million budget. Slow-growing non–property tax revenues have also led to the FY19 shortfall.
“A big problem is a regional educational system, both the spending and the formula, can be very volatile from year to year,” he said. “Also health insurance and labor costs continue to grow. It seems every four years, these all hit at once, and that’s what’s happening in FY19.”
Increased enrollment at the Oak Bluffs School has required increased expenditures of 13.5 percent over the past three years.
The 7.3 percent increase in the high school assessment actually translates to a 10 percent increase, because overall, enrollment is down at MVRHS. “That’s the expenditure that’s really killing us,” he said.
Mr. Whritenour said increases in the budgets of town departments were kept to a minimum, to keep the shortfall to $500,000.
There were a few exceptions. The expenditure for the Center for Living was increased $25,000. “That puts us at $123,000. We spend as much on the Center for Living as we do on the entire Council on Aging,” he said. “In addition, there’s another $40,000 of debt service on the new [Center for Living] building.”
There was $25,000 added for town building maintenance, including the new town hall and improvements to the weary public restrooms, and $35,000 was added to the fire department budget for increased stipends for captains and command staff who are on call on the overnight shift.
The financial and advisory committee will examine the town budget over the coming weeks, and make its recommendations to the selectmen.
Speaking to The Times on Wednesday, Mr. Whritenour said the new $9.9 million town hall is separate from the FY19 budget, and is being paid for by a onetime debt exclusion as part of the town’s capital improvement program.
“Any projects that size have to be exempted from the restrictions of Prop. 2½,” he said. “As the bonds are retired, they will be removed from the tax rate.”
In other business, members of the shellfish committee expressed deep concern to selectmen about the proposal from Dukes County and the Friends of Sengekontacket to close the pond side of Sengekontacket to vehicle traffic, except for shellfish department vehicles, for the months of July and August. The proposal is a response to the growing recreational use of the delicate Sengie shore, which some say last summer began to resemble a smaller version of Norton Point Beach, with people camping out with four-wheelers, pitching tents, using Jet Skis, and playing loud music.
“That pond has always been accessible for the commercial fishermen, for the family [shellfish] permit holders, and for the people who come all summer long,” shellfish committee chairman Mark Landers said. “To us, that’s like saying they’re going to close [State Beach] to the summer swimmers. All of a sudden the only way for a senior citizen to get his limit off the beach would be to walk it? It makes it sound like we as fishermen can’t access the beach. For the county to close that beach would be a travesty.”
“They came to us for suggestions, we sent emails back, and they totally dismissed us,” shellfish committee member Bill Alwardt said. “Our impression is that they totally want to close it, and our fishermen are going to have to carry their catch on their backs.”
“Our suggestions have fallen on totally deaf ears,” shellfish committee member Rick Huss said.
Selectman Brian Packish said he agreed with Mr. Landers, and that the wording of the letter was probably more the issue than the intent of it.
Selectmen were unanimous that commercial and recreational shellfishing should not be compromised by the county’s effort to curtail traffic on Sengie shores.
“We’re on the same page as the fishermen,” selectman Gail Barmakian said. “We can find middle ground.”
“We support the access as it stands for fishermen, but we don’t support trucks parked in dunes,” Mr. Packish said.
“We should send a letter stating we strongly object to this change,” selectman Greg Coogan said. “We have to take care of the fishermen and the recreational fishermen. Because of a few people who party on the beach, we’re depriving people who make a living and also people who have permits to shellfish.”
“I beg you, don’t let this happen,” Mr. Landers said.
“It’s not going to happen,” Ms. Barmakian said.