WEST SPRINGFIELD – The West Springfield Town Council approved a request by Mayor William Reichelt and Town Accountant/Chief Financial Officer Sharon Wilcox on April 23 to extend the deadline for submission of the Fiscal Year 2021 (FY21) budget to May 15.

Although the town’s charter requires the mayor to submit a budget to the council by May 1, the current state and local states-of-emergency allow for more flexibility in the timing. After the budget is submitted, the council will have until June 30 to approve it.

Due to the COVID-19 pandemic, the state is facing a projected 14 percent decrease in revenue, Reichelt said, which will almost certainly translate to cuts in aid.

“I can’t build a budget based on non-existent aid,” Reichelt said.

Currently, Reichelt and Wilcox are using the numbers from the FY20 budget to structure that of FY21, but stated those numbers will be cut drastically.

Reichelt said the majority of the state funding West Springfield received comes through chapter 70 and that if local aid and chapter 70 is cut they will need more than $1 million to make up the loss.

Reichelt noted a statement from United States Senate leader Mitch McConnell in which he said he “would certainly be in favor of allowing states to use the bankruptcy route,” instead of a bailout from the federal government.

The mayor added that it “doesn't leave a good taste in my mouth for what's going to happen for local aid.” Reichelt has reached out to United States Representative Richard Neal and Massachusetts’ senators to make a case for limiting the cut to aid.

The town is taking steps to mitigate the economic impact of the COVID-19 pandemic. A hiring freeze and a spending freeze have been implemented with no new capital spending projects receiving approval for FY21. The usual 5 percent cuts to department budgets will be deeper this year and “layoffs are a reality,” but not the first course of action.

“We’re trying to do this without increasing taxes. We don’t want to put another burden on taxpayers that are already struggling across the entire community,” Reichelt said.

 The town currently has a “free cash” balance of $6,350,051, although up to $200,000 of it is earmarked to cover the snow and ice removal deficit and up to $200,000 was recently approved for COVID-19-related expenses. The nearly $6 million remaining will act as a buffer for shortages in the budget.

A back-up plan, Reichelt said, is to use a 1/12 budget, which would partially fund the government and buy one month during which the city hopes to learn more.

“We’d rather get it right and we need more information to get it right,” Reichelt said.

Wilcox added that the $10 million in the stabilization fund could be tapped into but explained that the town’s bond rating would decrease as a consequence. A lower bond rating would increase the amount of interest on projects for which the town must borrow money, such as the upcoming Coburn School project.

After Wilcox provided Councilor Dan O'Brien with a breakdown of West Springfield's revenue sources, it was determined that in a worst-case scenario the town would receive $4.3 million less than in FY20. The town will also need to fund contractually-obligated salary increases.

“To find that $4.3 million. That’s going to be the challenge for all of us,” O’Brien stated.