TEWKSBURY – The Board of Selectmen met for a virtual meeting via WebEx on Tuesday, January 19, to review the proposed budget for Fiscal Year 22.
Before the start of the regular meeting, the board went to the board meeting to discuss collective bargaining.
The board then heard the annual budget presentation from City Administrator Richard Montuori.
Montuori explained that the process began on November 15, 2020 when department heads sent him their operating budgets, which were financed on an equal footing and adjusted to the contractual salary obligations. Montuori asked the department heads to identify their top three funding priorities for the new fiscal year.
The budget review and development took place through December and January and the Finance Committee will meet on January 27 to carry out the budget review.
"We're a few weeks behind schedule compared to last year but really on schedule compared to previous years so we're doing well," said Montuori.
Montuori reviewed household expenses, including local expenses, as well as state and regional fees, which include not only household items but also external costs such as mosquito repairs, regional transit, and choice of charter school and school.
He also explained his revenue assumptions, most of which come from the property tax. Montuori said the levy is capped by Proposition 2½, which means the maximum levy that can be levied in any given year is 2.5 percent from the prior year limit plus certain allowable increases such as new growth, overwriting, and debt and Capital exclusions.
Montuori said the new growth (additional tax revenue from new construction, renovation, and other property tax base increases) recorded from January 1, 2020 through December 2020 is a full calendar year behind the new budget.
"We have seen decent growth over the past 10 or 11 years," he said, noting that the construction of National Grid was a significant part of that new growth.
He went on to explain that the city is paying back debt on projects like the new elementary school on Pleasant Street and the new central fire station.
Montuori predicted that (depending on the forecasted conditions) the average single-family home will pay an increase of $ 196, the average condominium will pay an increase of $ 147, and commercial businesses an increase of $ 638.
In order not to achieve an increase in property tax, the contribution limit must remain at USD 2,662,665 and the city and school budget must be reduced. Montuori noted that cutting the budget by $ 2 million would lead to a reduction in services and layoffs, which would affect "education, public safety and the general provision of services to residents."
Montuori said the proposed budget was "very solid" and noted that the city ranks in the middle of single-family taxes compared to the surrounding communities.
Montuori forecast that state aid will be funded at the same level and said the budget will be adjusted if the aid is cut. He assumed a small increase in local revenues.
Most of it is expected to come from motor vehicle excise tax, although the number is expected to be below FY20. The meal tax should also be lower due to the coronavirus pandemic.
Montuori said he was most concerned about the hotel / motel tax and expected it to hang around at least until fiscal 22nd. Montuori reviewed other local revenues, including boat tax, penalties and interest on taxes and excise duties, payment in lieu of tax (PILOT), fees for services including ambulance, fees for police details and inspections, and cellular carrier rental.
Member Mark Kratman inquired about late fees from companies that were not charged this year because of the coronavirus. Montuori said the fee waiver is not expected to affect FY22, but could affect the rest of FY21.
Kratman also asked about the possibility of refinancing some of the city's debt. Montuori said the city borrowed some money last fall and received a good interest rate that allowed some debt to be refinanced and saved a few hundred thousand dollars. Montuori will try to go through the same process again next year if interest rates are promising.
He noted that the new DPW school maintenance system project had been suspended, which allowed for some flexibility in the budget. Montuori also mentioned that the Stabilization Fund includes $ 8.5 million in emergency cash to keep the services going when the budget is heavily strained.
At the moment, Tewksbury has a balanced budget. Member Brian Dick noted that big city projects are approved by residents along with the price tag.
When summarizing the budget, Montuori found that the operating budget did not contain any significant increases, but costs for financial software, utilities for the new fire station, and forest leases and contracts. The largest increase in costs was the collection and disposal of solid waste. FY22 recommended a total annual budget for the community meeting of $ 122,863,932
Montuori previewed a five-year budget projection that forecast slow growth and revenue, resulting in constrained budgets. He projected a deficit for the fifth year budget but hopes the numbers will adjust in time.
He outlined the financial items to monitor, including state aid, federal budget changes and requirements, capital improvements (including roads, sidewalks and drainage), and the use and replenishment of stabilization funds. He also highlighted the board's financial policy.
Members thanked Montuori for his hard work and praised his budgetary skills. Dick mentioned that residents had raised concerns about the maintenance of city projects and asked for funds to be allocated for maintenance.
He asked Montuori about his main budget problems and Montuori replied that state aid was a problem and that local revenues would be repaid. He also hopes to invest more in streets and sidewalks.
Member Jayne Wellman asked for a real-time evaluation of earnings. Montuori said the third quarter will be the most telling for the excise duty task. Wellman added that she was disappointed that there is no money in the budget to run a third ambulance and discussed asking the city's state delegation for assistance.
She also mentioned that no administrators from Shawsheen Tech had come to discuss the school's budget in a while, and suggested that the superintendent be invited to come before the board of directors.
The board voted to open the annual arrest warrant for the city assembly on January 20th and close it on February 19th.
"We're not expecting much, but a big article this year will be the constitution review," said Montuori.
The city meeting will take place on May 3rd, and a special city meeting will be held on May 5th.
The next meeting is planned for January 26, 2021. Residents who wish to comment may find the convocation number on their screen and on the meeting agenda on the city's website. The meeting can be viewed on Comcast Channel 99 and Verizon Channel 33.