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Difficult Budget Process Begins: Structural Deficit Big and Getting Bigger

by Robert Falcione

October 27, 2010 — The upcoming budget season is about to be in full swing, and the bottom line is that the imbedded structural deficit in Hopkinton’s operational budget is not getting any better. Even with Hopkinton’s current debt obligations being reduced over the next five years, the structural deficit is projected to be ever widening. Selectman Ben Palleiko pointed out that “the structural deficit is getting worse going forward even as debt is coming off; the gap is increasing even as debt is reduced.” Currently the projected budget deficit for FY12 is $1,920,842.


Hopkinton’s Finance Director, Heidi Kriger, briefed the Board of Selectmen, the School Committee and the Appropriation Committee representative on the financial forecast for the next five years as well as specifics for the near term in FY12. Basic assumptions for the forecast assume a reduction in State Aid of 5% for FY12, new growth remaining steady at $550,000 to $600,000 going forward, a level overlay surplus at $100,000 as well as bringing the tax levy up to the allowable limits in 5 years. For the last two years, Hopkinton residents have not been taxed at the maximum levy limit the law allows; the budget process for this upcoming budget cycle and the five year forecast assume gradually increasing the actual tax levy to the allowable maximum over the next five years.


Palleiko asked about the assumption that taxes would be raised to reach the maximum levy over the next five years; “I don’t think this should be built in as an assumption because it disguises the structural deficit.”


Joe Karner from Appropriation Committee also questioned the assumption that the levy would be brought up the maximum allowed by law over the next few years. “How did that strategy evolve?”


Kriger responded that they had looked at various options and this looked to be the best approach. She also acknowledged that it was probable that the assumptions would change in the ensuing months.


School Committee Chairman, Rebecca Robak, acknowledging the tight budgets of the last two years, commented, “We’ve done our best to keep spending down. There has been some pain and decline in services. We are beginning to suffer because we have had to be so fiscally conservative these last two years.”


The discussion also included the additional tax impact that future projects currently under consideration would have on the taxpayer; those projects include a new elementary school at Fruit Street (estimated borrowing of $16 million), a new library (estimated borrowing of $2.5 million) and a new DPW facility (estimates range from $6 to $12 million). These projects and the increased taxes to reach the maximum allowable levy would add approximately $400 and $800 per year to the average home tax bill over the five year forecast period; the average home value is approximately $480,000.


The formal kick-off to the budget season will be at the Nov 9th meeting when the Board of Selectmen and Town Manager issue a policy statement that establishes guidelines for the FY12 budget at a meeting with all boards and departments. Chairman RJ Dourney encouraged all stake holders to get as much information and feedback to the Town Manager as soon as possible before the Nov 9th kick off meeting.


The Board of Selectmen will meet for a work session next week to discuss betterments for the Milford Sewer Connection Project and the Wastewater Treatment Plant on Fruit Street; the November 3rd meeting will also include a short update on budget discussions.


Additional News:

Pastor Mike Laurence from the First Congregational Church in Hopkinton (FCCH) announced a blanket drive that is underway to support Project Just Because. Pastor Laurence encouraged community support for the drive that hopes to collect and donate 3,500 blankets by November 7th. The church has reached nearly half their goal.

The Board voted to lift the hiring freeze to hire a call firefighter that is well trained and able to contribute significantly to the department’s efficiency while not adding greatly to expenses.


The Public Library Building Committee will have a public meeting Thursday October 28th at 7PM at the Fire Station to invite public input on the schematic design for the new building. Selectman Todd Cestari encouraged attendance and participation in the process. “The public has a role and responsibility to be constructive in the process; there will be several opportunities to influence the process.”


Brothers Tom and Dan McIntyre presented a gift to the town for the intersection at Winter and Pond Streets; a beautiful stone marker will be placed In the right of way and indicates clearly the street names.

Veteran’s Day, November 11, 2010: all Hopkinton Veterans are invited to dinner at the senior Center; doors open at 5:30 and dinner is served at 6PM. Dinner is free to all Hopkinton Veterans. Call the Senior Center (508)497-9730 to RSVP.


"The News Starts Here!"

24 Main Street, Hopkinton, MA 01748  508.435.5534


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