In order to build reserves in the town’s budget, West Tisbury selectmen are considering a $300,000 Proposition 2½ override.
At a meeting of the West Tisbury board of selectmen Wednesday, town accountant Bruce Stone said the financial management team recently conducted a review on the projection for the tax levy next year.
He said that at that point in time, the town was looking at an approximately $300,000 override. Since that time, Stone said, selectmen agreed to reduce several warrant articles through the use of stabilization funds for a total of $100,000. Additionally, altered premiums from the Cape Cod Municipal Health Group allowed the town and the schools to drop their budgets by a total of $155,000, Stone said.
“The combination of those two items, plus tweaking what might be more realistic estimates for town revenue and cherry sheet, made it so we are almost at a breakeven point, but with no flexibility,” Stone said.
The cherry sheet, which gets its name for the color of paper it used to be sent out on, is described by the Massachusetts Department of Revenue as “the official notification from the Commissioner of Revenue of the upcoming fiscal year’s state aid and assessments to cities, towns, and regional school districts.”
With all those assumptions, Stone said, the town is looking at being $17,000 over the maximum levy limit.
But the town would be using all its free cash to achieve that amount, and Stone stressed that several of those assumptions could change, putting the town in a tough spot if they need to make alterations to their request to the town and set the tax rate at the eleventh hour.
“Something I don’t want to see is discovering, when we go to set the tax rate in November, that some of the assumptions were wrong, and we have to take action at the last minute to be able to get a tax rate approved,” Stone said.
The only definites in the town’s financials currently are the budget and the warrant articles, although Stone said he can make “very good estimates” for town revenue, and use the existing estimate for the cherry sheet.
He said the town would need at least a $100,000 override to comfortably set the tax rate, but using the entire amount of free cash available is not a fiscally responsible practice.
Historically, the town has sometimes used half of the total free cash amount, and let the rest roll over to build a reserve.
“It might be prudent and responsible to have that override for a higher amount to give the flexibility to not have to use all that free cash next year,” Stone said. “We could do a $100,000 override this year, but we would almost definitely have to come back next year for another couple hundred thousand.”
Town administrator Jennifer Rand agreed that keeping the override amount at $300,000 would provide a financial base for the town in coming years.
The financial team will finalize the $300,000 override, and return to selectmen with an official recommendation.
