Days before Town Meeting, projected $2.5 million free cash shortfall complicates planning

A projected $2.5 million shortfall in a free cash estimate, just revealed, is forcing the Finance Committee to revisit some of its warrant article recommendations, less than a week before Town Meeting begins May 5. The shortfall may lead to cuts in school and library capital projects.

The new free cash estimate, approximately $9.5 million, still needs to be certified by the state Department of Revenue. That could happen by the end of day Tuesday, according to FinCom Chair Alec Goolsby. 

No firm decisions have been made, but it appears that the shortfall may lead to $1 million in cuts to school and library capital projects, according to Goolsby. The schools had requested money for a new HVAC system in the Glover School cafeteria, upgrades to Glover playgrounds, a new special education van and reupholstering and painting in the Veterans School Performing Arts Center.

Contacted by the Current, interim Superintendent John Robidoux said, “We are working to determine what reductions from our capital requests are feasible. That has not been fully vetted at this juncture.”

Approximately $1.5 million will likely be reduced from the town’s free cash not appropriated and stabilization funding request, Goolsby said. 

‘Not ideal’

“This is not ideal. The process by which our town receives its annual certification of free cash needs to be corrected to avoid having to rely on estimates so close to Town Meeting,” Goolsby said. He added that he’d like that certification to happen every year by Dec. 31.

Why the shortfall?

So what’s the reason for the $2.5 million drop in the free cash estimate?

“My understanding is that the finance department identified discrepancies between the preliminary figure and the final amount submitted to the Massachusetts DOR for certification through their final detailed reconciliations, which were part of the annual financial statement audit,” Goolsby said.

Town Finance Director Aleesha Benjamin blamed outdated and fragmented financial systems in Marblehead for the certification delay. The town has been using separate software programs — AssessPro for assessments, CollectPro for collections and Excel spreadsheets for reconciliation — that don’t integrate with the Munis accounting platform.

“We used three different systems to reconcile,” Benjamin said, noting that a new integrated financial system with a dedicated cash module is being implemented to prevent future delays.

Benjamin defended her decision to self-report reconciliation issues identified during the audit to the Department of Revenue rather than certify potentially inaccurate figures — a move that ultimately led to the reduced projection but avoids potential complications down the road.

No recommendation yet for Mary Alley debt exclusion override

FinCom also delayed making a recommendation on Article 33, a $5.8 million debt exclusion override for renovations to the Mary Alley Municipal Building. Goolsby said he wanted to hear from the town’s Capital Committee.

FinCom did recommend a $8.6 million debt exclusion override to replace the high school roof. 

Next steps

The FinCom plans to meet at 6 p.m. next Monday, one hour before Town Meeting, to finalize its recommendations on several articles and municipal contracts that remain unsettled.

Town Moderator Jack Attridge attended the April 29 meeting and expressed concern about the situation’s potential impact on Town Meeting decisions.

“I hope that you take great care in resolving this issue, because the process that leads up to your recommendations starts at the beginning of the year,” Attridge said. “We’ve been lucky for the past couple of years that we haven’t had a problem at town meeting when a recommendation is made on a budget that we need to be able to fund.”

Benjamin insisted that, moving forward, free cash will be certified each fall.

“I have been implementing new policies and procedures to improve our financial operations. A new financial management system MUNIS is scheduled to take effect on July 1, 2025. This transition is expected to significantly enhance our fiscal planning and reporting capabilities,” she said.

***This story was updated at 4 p.m. with additional quotes by FinCom Chair Alec Goolsby.