SAUGUS — The Board of Selectmen met to discuss the $120 million preliminary operating budget for fiscal year 2023 at Town Hall on Monday.
Town Manager Scott Crabtree presented a budget that was $3 million higher than the FY22 budget.
Property taxes, which remain the major source of funding for the town, rose by $2.6 million, reaching $82.77 million for the upcoming year’s budget in comparison to $80.17 million in 2022.
The cherry sheet estimate previews a slight increase in state aid, which is going to increase from $11.33 million last year to $12.02 million in FY23.
Local receipts should account for about the same amount as last year, which is slightly more than $9 million, while water, sewer, and other revenues exhibit a slight decrease from $2.71 million last year to the $2.3 million planned for FY23.
Water and sewer enterprise funds, as well as their retained earnings increased by approximately half a million dollars from $13.73 million in FY22 to $14.26 million now.
A $3-million expenditure increase for the general-operating and school-operating budgets was previewed, and the total amount will reach $100.22 million in comparison to $97.42 million in 2022.
Some of the various expenditures include the state and country cherry-sheets charges, overlay and other deficits, which will increase from $5.9 million last year to $6.47 million in the upcoming fiscal year. Water and sewer enterprises funds increased from $13.73 million to $14.26 million.
The total expenditure cost for FY23 is estimated at $120.42 million as opposed to $117.59 million in FY22. The town officials highlighted that this was a preliminary budget and some of the items were still under consideration.
“This is obviously a fluent document that changes,” said Crabtree at the Board of Selectmen meeting.
Some of the challenges the board faced while preparing this budget concerned health-insurance rates that were not yet finalized by the provider, and the costs of trash hauling and incineration, as well as the disposal of recyclable materials that exhibited the tendency to increase over the last couple of fiscal years, making them hard to predict for the next fiscal period.
The pension appropriation planned increase for a total payment of $8.06 million in FY23 is based on the funding schedule developed by the Public Employee Retirement Administration Commission (PERAC). This previews the increase by 5.2 percent per year until FY26 when the final payments will start to decrease.
“The state required all the retirement systems to be fully funded by a certain date,” said Crabtree.
Capital needs that are among the town obligations include facility needs and public-safety equipment such as fire apparatus.
The items that are subject to change are the costs of building maintenance, utilities, motor fuel, waste collection and recycling, vehicle maintenance, and health insurance. The snow and ice expenditures are not reflected on the budget, and they continue to be a concern.
The total FY23 budget for the town’s public schools exceeds $3.78 million based on estimated enrollment numbers provided by the Massachusetts Department of Elementary and Secondary Education (DESE). And the enrollment rate decreased, if compared to the previous fiscal year.
“That’s a little concerning,” said Crabtree.
However, DESE does not confirm the enrollment for 2023 prior to April 2022, and some adjustments might be required with this regard.
Additional amendments to the school budget might be necessary if Northeast Metropolitan Regional Vocational High School, which should reimburse its first debt payment of $250,000 to the town in 2023 after starting a new $318-million construction project with the Massachusetts School Building Authority, amends its funding schedule.
The FY23 budget shares the same concerns with the previous period. The estimated revenues have not returned to the prior pandemic levels as the economy continues to recover.
The town approved the use of $1.18 million from the American Rescue Plan Act (ARPA) federal grant, which is approved for revenue replacement to balance a possible deficit, prevent reductions, and maintain the current services for the residents.
