SWAMPSCOTT — Town Administrator Sean Fitzgerald attributes a modest increase in the preliminary town budget to an effort toward building a tighter and more financially sustainable spending plan.
Fitzgerald recently presented his recommended $67.62 million Fiscal Year (FY)19 budget – a 1.58 percent increase, or $1.05 million increase over last year’s budget- to the Board of Selectmen.
“As the new town administrator, it was really important that we build this budget up from scratch,” Fitzgerald said. “We really brought a zero-based budget in to review the past five years of expenditures with every line.”
He said switching to zero-based budgeting, which is a method of budgeting in which all expenses must be justified for each new period, was a request by the Board of Selectmen and the Finance Committee.
He said he worked closely with his financial team, which includes Ronald Mendes, assistant town administrator and town treasurer; Gino Cresta, assistant town administrator and department of public works director; and Cheryl Herrick-Stella, town accountant, to look at ways to consolidate and change certain budget functions.
Fitzgerald said an effort was made to budget more carefully and identify lines where there was more than needed. The financial team also worked to expand and contract various lines in the budget to work towards building a tighter more financially sustainable budget.
But he said there are lines he continues to be concerned about, including a significant increase in solid waste/recycling expenses.
At a recent Board of Selectmen meeting, he said solid waste is one of the largest contracts in the town budget, and that the town is seeing costs for both tipping fees and recycling rise significantly this year.
He told the board his recommended budget does not contain sufficient funding for solid waste services provided by the town’s firms. The total budgeted solid waste cost for FY19 is $1.25 million. The town is currently in negotiations with its solid waste providers.
Fitzgerald said there are also a number of collective bargaining agreements the town has to negotiate, including police, fire, clerical, DPW and library. Of those unions, all but police and DPW have a current FY18 contract.
Selectman Peter Spellios said the budget increase is on par with budgets the town has seen in the past.
“What’s different about this budget is the new town administrator and new financial team going through a different process (with) greater clarity about the necessity of each dollar in the budget and ways we can gain better efficiencies to achieve more reductions in the budget or achieve better efficiencies in services,” Spellios said.
Spellios said the methodology of zero-based budgeting is new for the town, but that the town also has a new financial team, adding that the process matters but the people really matter.
He said the budget is being delineated in much better detail so Town Meeting members and elected officials can better understand what the town is spending and for what purpose. Spellios said the budget also reflects the town’s emphasis on revenue and the importance of revenue on crafting a budget.
Regarding impact on the tax rate, Spellios said the 1.98 percent tax levy increase is significant because in previous years, the town has maxed out at a 2.5 percent levy increase.
“There’s still a lot of review that has to happen before the finance committee and selectmen review the budget,” he said. “We’re starting the budget (process) thanks to the effort of the financial team with so much better financial information and better prepared than I can ever remember.”
Long-term budget challenges Fitzgerald highlighted include the eroding commercial base in town, which has been the result of many commercial parcels giving way to residential development. This has resulted in a smaller commercial tax base that will affect the town’s ability to shift the tax burden to the commercial tax base.
Fitzgerald said the high tax burden in town may have an impact on the ability and willingness of taxpayers to fund important local services and make capital investments in the town. He said the town’s residential property values are 11 to 12 percent higher than the rest of Essex County, but residential tax bills are 35 to 40 percent higher. Commercial tax bills can be as much as twice as high as comparable properties in Essex County.
Proposed capital expenses for FY19 are estimated at $2.408 million, which includes $750,000 for a feasibility study for the replacement of Hadley Elementary School; $295,000 for life/safety upgrades to Clarke Elementary School, HVAC upgrades to Stanley Elementary School and a sprinkler system upgrade to the town’s high school; $223,000 for school technology upgrades; and $125,000 for new light poles for Humphrey Street from the Lynn line to Fisherman’s Beach, including the Monument.
Swampscott could spend 57 percent of its budget on public schools as part of a fiscal year 2019 proposal. The town would spend $29,383,816 on education in fiscal 2019, a 3 percent increase over the current year’s budget.
Fitzgerald said the FY19 education investment is one of the more fiscally prudent budgets in recent years and is a reflection of the leadership and partnership between the town and schools.
“I think Swampscott takes great pride in supporting educational excellence, but we have to balance that educational excellence with our ability to stabilize the tax rate,” Fitzgerald said. “I think the work the superintendent (Pamela Angelakis) and school committee has engaged in the past few months has focused on striking the balance with educational excellence and our ability to afford all the other capital and operational needs of the town.”
The town budget is subject to change before it is voted on by Town Meeting in May. The selectmen also have to vote to accept the budget prior to Town Meeting.
“Ultimately, this is the beginning of a process and (I’m) looking forward to working with the selectmen and finance committee to vet every one of the lines and make sure we put together the best budget we can as we move towards Town Meeting,” Fitzgerald said.
