HATFIELD — A significant miscalculation of the revenues available to support this year’s $15.87 million budget is prompting Hatfield officials to call a special Town Meeting, where residents will be asked to balance the budget by removing more than $300,000 in spending.
The special session, set for Dec. 2 at 6 p.m. at Hatfield Elementary School, will include a series of cuts, transfers and repurposing of other funds to ensure the town is only spending money it has available within the limits of the state’s Proposition 2½ tax-cap law.
“The best way to deal with this is through a supplemental budget,” Town Administrator Andrew Levine said.
Levine explained to the Select Board at its Nov. 12 meeting that the budget shortfall, at that time close to $465,000, was discovered by town officials while they were working through the year-end closing of accounts necessary to set the tax rate for fiscal year 2026.
“It’s a terrible position to be in,” Levine said. “It’s reflective of a lot of financial issues a lot of other towns are having, except this one snuck up on us.”
Levine said there were issues and inconsistencies in the budget workbook used in preparing the town budget and calculating state aid, leading to many areas of the budget approved by voters now being overspent.
The blame is on changes to the final amounts the town received in state aid, inconsistencies with how it was recording offset costs with the water and sewer enterprise accounts, and an error in accounting for state Chapter 90 highway grants.
Town Accountant Elizabeth Braccia said that some final state numbers came out after the budget was adopted, and Chapter 90 revenues were in places where they didn’t belong.
“That made it look like there was more available revenue than there should have been,” Braccia said.
The base budget for fiscal year 2026 was up 6.4%, or $959,030, from last year’s $14.91 million budget.
Levine said next year the budget will be developed from scratch and restructuring will take place across departments to address the issues. The town will be revising its accounting and budgeting processes to avoid this kind of situation moving forward, he said.
The discussion about the problems came the same night the Select Board was holding a tax classification hearing with the Board of Assessors.
At the special Town Meeting, the budget amendments will include close to $175,000 in budget cuts, such as $50,000 in savings from the tax collector position, which is vacant following a retirement, and reductions in accounts expected to come in under budget, such as $50,000 for vocational school tuition and $15,000 related to property insurance.
Levine said there are no cuts happening to public safety or public services.
Voters will also be asked to transfer $63,000 from the overlay surplus, an account the Board of Assessors manages, and to close various project accounts no longer in use.
Additional funds from the water and sewer enterprise fund will replace general fund dollars that otherwise would have paid for project debt this year.
The town also has more than $1 million in free cash and $636,000 in the stabilization account and can use $100,000 from each account to balance the budget.
Select Board members appeared to be puzzled by how this situation could have occurred, especially after the fiscal year 2025 budget was found to be below the levy limit, meaning the town didn’t spend as much as it could have without triggering a Proposition 2½ tax-cap override.
Board member Luke Longtsreeth said the problem appears to be that a good part of the budget has been “grossly miscalculated,” leading to the significant overspending.
“We have to know where overspending is happening, absolutely, from the budget lines that were submitted to what the receipts are, we have to know,” Longstreeth said.
Chairman Ed Jaworski reflected on being on the board in the years after an auditor found that many aspects of the town’s financial operations were unacceptable. In early 2018, this led to a special Town Meeting to wipe out a $305,000 deficit so the tax rate could be set and tax bills could go out. That also led to efforts to professionalize staff at Town Hall.
“I’m still concerned about how this happened, so it doesn’t happen again,” Jaworski said. “It’s just confusing to me.”
“We’ll get through this somehow, but it’s shocking,” Jaworski said.
Even after Town Meeting, Levine said going forward more cuts and restructuring will need to happen. The special Town Meeting, though, isn’t going to affect property taxes.
“We recognize the inconvenience for residents in requiring this additional meeting,” Levine said in a statement announcing the special Town Meeting. “We appreciate voters helping to resolve this budget issue and look forward to taking care of it quickly. We will publish as much information as we can in advance so that the meeting can be brief.”
To achieve a quorum and action, 75 voters need to attend. A lack of quorum or a vote against the plan would mean the town couldn’t set its tax rate or send quarterly property tax bills on time, which may lead to a revenue shortage and disruption in town services.
Residents not yet registered to vote have until Friday to do so to participate in the Town Meeting.