Budget Coordinating Committee: Amherst Has Maintained Fiscal Health; The Coming Year Remains Uncertain

The November 9 meeting of the Town Council began with an hour-long special meeting of the Budget Coordinating Committee. This was attended by members of the School Committee, Jones Library Trustees, and nonvoting members of the Finance Committee. The Finance Department presented the state of the Town finances.

Town Manager Paul Bockelman began the presentation with a summary of the challenges of the coming years, with the current COVID pandemic and its resulting loss of enterprise funds, the looming needs for major capital projects, and the increasing pressure on taxpayers, especially those whose incomes have suffered under the pandemic. Despite these challenges, Amherst has developed a budget for fiscal year 2021, forged an agreement with UMass to support K-12 education, focused on reducing its current debts, and stabilized health insurance costs.

Property tax revenue has increased from 67 percent to 70 percent of the budget due to decreases in other local revenue. State aid is expected to be level funded. The per capita operating funds of Amherst are well below similar communities, he said, and about half of the state average. Reserves are now 21 percent of the operating budget. The result is that the Town has a AA+ bond rating, which should put it in good stead for future borrowing.

Additional state and federal money obtained through the CARES Act can only be used for non-budgeted expenses stemming from the pandemic, such as cleaning supplies, personal protective equipment, and improved ventilation systems.

In the discussion section of the meeting, Library Trustee Austin Sarat stated that the Town may be too fixated on low debt service, and should consider borrowing more money in order to do some “really important things.”

Finance Director Sean Mangano replied that he is happy to have low debt service, so that the Town can afford to do some of the critical projects and not spend a great deal of funds on repaying debt. The Finance Department is currently working on what the optimal debt level is, given current low interest rates.

Councilor Darcy DuMont (District 5) remarked that we need to look for new ways to look at policing, a new climate action plan, and “a new normal” when we formulate our long-term financial plan. Councilor Mandi Jo Hanneke (At large) called attention to the substantial decrease in school enrollment, which could lead to changes in use for recreation and libraries, as well as decreaseS in state aid.

School Finance Director Doug Slaughter noted that with the increase in students who are now being homeschooled or have enrolled in nonpublic options, we have to plan for different contingencies. State Chapter 7 money is based on enrollment for this past October, so the enrollment decrease might substantially affect next year’s funding. Superintendent Mike Morris pointed out that Amherst is not alone in this situation, and the Department of Elementary and Secondary Education is well aware of this issue. The School Department recently sent a survey to families who have left the district system, asking why they left and what their plans are for the next school year.