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DRAFT REPORT <br /> SUMMARY REPORT - DEFICITS FY91' <br /> The Finance Committee has identified a number of budget deficits . <br /> At this time it is projected that eight accounts may be in deficit J <br /> and could require transfers of as mu.ch .a.s $280.,000 from "free cash" <br /> at the May Special Town Meeting. We are concerned about these <br /> deficits which essentially mean that more money is being spent in <br /> some accounts than was approved by Town Meeting. This is a <br /> potentially dangerous practice which needs to be addressed. <br /> It should be noted that six of the eight accounts in deficit involve <br /> _departmen-ts -over whi-ch .the -Board of Selectmen does n-ot -have ­di-r-e-c-t <br /> authority. This may be symptomatic of a larger problem which would <br /> need to be addressed through by-law or charter changes . <br /> The Finance Committee has reviewed these accounts to determine how <br /> the deficits came about. Such a description accompanied by our <br /> recommendations follows . We would ask that the Board of Selectmen <br /> review the following and provide input and suggestions . <br /> Short-Term Interest Account: <br /> There is an anticipated deficit estimated at $50,000 in this <br /> account. The Treasurer borrowed funds to cover operating expenses <br /> in anticipation of taxes . Three factors compoun this situation . . (I ) <br /> delays in sending out tax bills ; (2) slo collection of taxes ; and <br /> (3) non-payment of taxes . - v <br /> RECOMMENDATION: The Board of Assessors should expedite the process <br /> of setting the tax rate and/or obtaining approval of a preliminary <br /> tax bill to improve the cash flow problem. The Tax Collector's <br /> office should make an attempt to identify the correct addresses for <br /> the considerable number of property and excise tax bills returned by <br /> the Post Office as undeliverable . <br /> It is important to note that every percent of uncollected taxes <br /> requires the Town to put aside $120, 000 from surplus to cover <br /> accounts receivable. Thus the Town not only loses out on taxes due <br /> but this is compounded by having to hold aside funds to cover <br /> receivables . <br /> Medical Insurance Account: <br /> There is an anticipated deficit estimated at $60 ,000 in this <br /> account. A net of eleven additional employees began participation <br /> in the Town' s health insurance program (20 additional employees <br /> joined , but nine replaced a resigned or retired employee) . These <br /> employees were not budgeted for. Records from the Treasurer' s office <br /> indicate the additional employees are from the following <br /> departments: <br /> Police 1 <br /> Fire 1 <br /> Harbormaster 1 <br /> Board of Selectmen 1 r ,_ <br /> Schools 7 <br /> I <br />