HATFIELD — Quarterly tax bills are expected to go out in early February after voters at a special Town Meeting Wednesday overwhelmingly agreed to plug a $315,000 gap in the town’s 2018 and 2017 budgets.
Voters who packed the Smith Academy cafeteria approved the transfer of $265,876 from the town and Town Hall stabilization accounts to cover operating deficits in the fiscal 2017 budget that were identified by the Department of Revenue. They also voted to cut $49,630 from the current budget to stay within the limits of the town’s revenues.
The actions eliminate deficits in the last two budgets and bring the town’s financial books into compliance with state DOR requirements.
Assessors now can move forward in setting a tax rate and the delayed quarterly bills, normally sent in December and due Feb. 1 and May 1, can go out to property owners.
Brian Moriarty, chairman of the Select Board, said he anticipates that residents should get their tax bills in the first week or two of February.
Even as Hatfield continues to have problems with its financial practices, including reporting and bookkeeping errors identified in a recent audit, the town will avoid drastic actions by state officials that could include being placed into receivership.
“I don’t think we want our town taken over by the state,” Moriarty said.
A receivership, he said, would likely mean stringent day-to-day oversight.
While the transfers cause significant reductions in what are known as “rainy day” accounts, which together contained approximately $407,000, Moriarty said the town should be able to build them up again soon when the state certifies Hatfield’s free cash.
Michael Cahill, a former Select Board member, asked for a commitment to restoration of the stabilization accounts at annual Town Meeting in May, noting that he was going along with the recommendations because he supports a plan to fix the systemic issues at Town Hall.
Finance Committee Chairman Darryl Williams pledged that such replenishments would occur.
Transfers from the accounts were the best option at this time, Moriarty said, because a short-term loan was not legally possible, and a 3 percent cut across all departments would be detrimental to municipal services.
At least one resident, though, objected to what was being proposed on principle.
Lary Grossman of King Street said residents should focus less on the large amounts of money being transferred and pay more attention to how Hatfield got into the situation.
“We should be looking at major changes to how we do business here,” Grossman said.
He said he would welcome the DOR playing a more active role in town finances. “I’m voting against every article tonight,” he said. “I want DOR to come in here and fix it.”
Moriarty warned that if the articles were defeated, the town would have to borrow money, at a high interest rate, to continue town operations, because no tax bills would be sent out and no taxes would be collected.
Moriarty added that DOR officials have assured town leaders of their assistance going forward, and have outlined a series of recommendations and goals related to financial practices. Town officials on Tuesday met with state revenue officials in Worcester to discuss these measures. Moriarty wouldn’t elaborate on those objectives yet, saying they need to be discussed with staff first, but promised that the town will do better and meet the high expectations.
“Change is coming,” Moriarty said.
The transfers for the fiscal 2017 budget covered deficits of $107,351 in snow and ice expenses and $37,551 in snow and ice wages.
Williams said it appeared that those items were never included in the budget. “That was a mistake,” Williams said.
The cuts in the current budget include $31,826 from the school department, $5,000 from an unemployment account, and $2,120 related to a Department of Public Works vehicle lease.
In other action, voters dissolved revolving funds for building, electrical, plumbing and gas inspections, which had $70,000 combined, and transferred the money to the town’s general fund.
The rationale, Moriarty said, is that it would be easier for the accounting department to have one account, rather than multiple accounts, to track.
Hatfield’s challenges in accounting and bookkeeping have been called out repeatedly in audits in recent years. The most recent audit report, from certified public accountants Roselli, Clark & Associates, of Woburn, in August, cites pre-existing problems that were included in reports issued in 2013 and 2015.
An overview in its nine-page management letter begins: “The town continues to struggle to address the issues that have plagued it for at least the last decade as many aspects of the financial operations continue to operate at an unacceptable level.”
Among the problems are that bank reconciliations between the collector’s office and accountant’s office are not being done in a timely fashion, ledgers are being misbooked, cash books do not have proper entries and both offices are overwhelmed by their workloads.
Troubles are continuing even though fiscal 2017 was the beginning of the second year with a new financial team in place, with Laura Lee Bertram serving as the elected collector and treasurer, and Derek Geser the appointed accountant.
The collector and treasurer’s office already have gotten extra help, including working with a private consultant, Baystate Municipal Accounting Group of Maynard, with the aim of catching up on records from previous fiscal years.
Scott Merzbach can be reached at smerzbach@gazettenet.com.
