The Bourne Finance Committee has adopted a different position on Article 3 on the Annual Town Meeting warrant. The article calls for approval of the Bourne Board of Sewer Commissioners’ recommended Fiscal Year 2022 Sewer Budget, which has been hotly contested between the finance committee and the commissioners in recent weeks. The finance committee has switched its position on recommendation of the commissioners’ proposed budget from no to yes.
The change in posture came following the finance committee’s joint meeting on Monday, April 26, with the Bourne Board of Selectmen, who double as the sewer commissioners. Following a nearly hour-and-a-half discussion, members of the finance committee voted four in favor of the proposed budget, three opposed and two abstaining.
Finance committee members who voted in favor of the commissioners’ budget were Renee A. Gratis, James D. Sullivan, Katharine C. Jones and A. Wayne Sampson. Members who voted no to the recommended budget were Aaron R. Tobey Jr., Parker O. Freedman and Richard A. Lavoie. Committee chairwoman Mary Jane Mastrangelo and member Amanda Bongiovanni abstained from voting.
Article 3 asks for resident approval of the sewer department budget. The article recommends $1,357,223 be spent by the sewer commissioners to operate the sewer department. That includes the use of $50,000 in sewer retained earnings to offset an increase to sewer users’ rates.
The finance committee and the sewer commissioners have disagreed over the amount of sewer retained earnings in the proposed budget. The finance committee has recommended $135,000 to subsidize sewer rates, while the sewer commissioners have recommended $50,000.
Sewer commission chairman James L. Potter has maintained that the money should be used to pay the expense of sewer system infrastructure repairs, such as broken pipelines. Finance committee chairwoman Mary Jane Mastrangelo has argued that subsidizing rates is an approved use of retained earnings.
On Monday night, Ms. Mastrangelo pointed out that the finance committee and the commissioners were in agreement on most of the big issues confronting the town relative to the sewer system. The one sticking point, she said, was the use of retained earnings for the coming fiscal year.
She suggested using an incremental approach, reducing the use of retained earnings by $50,000 each year beginning with FY22. The current budget uses $185,000, she noted, so next year it would be reduced to $135,000. By FY25, there would be no use of retained earnings to supplement user rates, she said.
“It would accomplish reducing the use of retained earnings to zero, which is a goal, but it would do it incrementally without having as drastic an impact on the rates,” she said.
Bourne Town Administrator Anthony E. Schiavi was adamantly opposed to any additional use of retained earnings for the purpose of subsidizing sewer rates. He pointed out that approximately $1 million in sewer retained earnings has been used over the past 10 years to lessen the impact of rising user rates. During that time, Mr. Schiavi said, the average rate increase came to $19 each year.
Mr. Schiavi argued that the primary reason he was opposed to increasing the amount of retained earnings in the proposed budget was “we don’t need to do it now.” He said there are too many unknowns and “caution flags” relative to grant money, needed infrastructure repairs and emergence of new users to make a major change with the sewer budget.
“We have some major decisions to make,” he told the two groups, “and to take any more money from the town’s savings in retained earnings is putting us down a path that we don’t want to go down.”
Mr. Schiavi’s position was echoed by Mr. Potter, who concurred with the town administrator that a substantial amount of money has been spent in the past to subsidize user rates to the detriment of the retained earnings account.
Mr. Potter added that he has spoken with residents who are tied into the sewer system. He said people he spoke with understand it is not in the town’s best interest “to raid the piggy bank”—that being the retained earnings account. People he spoke with, he said, recognize that retained earnings are used to pay for repairs to the system’s infrastructure.
“How embarrassing would it be,” he said, “if we took money that should be set aside for that purpose, and we gave it to the rate, and then if something breaks, we don’t have the money to fix it?”
Finance committee member Parker O. Freedman acknowledged that past overuse of retained earnings was a case of mismanagement of town funds. Mr. Freedman added, however, that he was not in favor of punishing the 1,069 sewer users for the town’s poor management choices.
“I am all for saving up for the future and making sure we have that reserve if something bad happens; that’s obviously good fiscal policy,” he said. “My problem is we are now punishing a small minority group of residents in Bourne for our mismanagement.”
The joint session ended and the finance committee voted. Ms. Mastrangelo, who was one of the members abstaining, said in an emailed response that if members were to vote against the proposed budget, “there should be a strong majority of the finance committee against the proposal.”
Ms. Mastrangelo added it is important that a sewer budget be approved at Town Meeting, allowing the sewer system to operate. She said the discussion about the sewer budget has been useful for highlighting areas of policy and planning that require attention “for the sewer system to be on solid financial footing.”
“I am still concerned with the increasing rates that are being paid by the sewer ratepayers, and I will continue to work to reduce the rates,” she said. “There will be more discussion on this issue prior to the board of sewer commissioners’ vote on the sewer rates this summer.”