Published in the January 17, 2018 edition


LYNNFIELD — The Board of Selectmen took an in-depth look at the town’s finances during last week’s meeting.

Interim Town Administrator Bob Curtin noted local officials began working on the fiscal year 2019 budget late last year, which is earlier than other communities in the area. He noted the town is still waiting to see how much it will be receiving in state aid.

“We should be hearing about state aid towards the end of this month,” said Curtin. “I expect we would have something from the governor on his proposed budget around Jan. 20. Right now, we are not projecting a great deal of additional state aid.”

Curtin also said the Essex Regional Retirement System gave the town recent figures for FY’19, which is similar to what local officials projected.

“We still need to hear from our insurance company and the GIC (Group Insurance Commission) on health and other insurance costs,” said Curtin.

Curtin said the new growth generated from MarketStreet is “ramping down” in FY’19.

“This is a more typical budget season in terms of revenue not increasing by greater magnitudes,” said Curtin.

According to Curtin, the town’s FY’15 operating budget totaled $48.9 million. In FY’17, Curtin said the revenue figures increased to $55 million.

“That was a ramp up of $7 million in two years,” said Curtin. “The projection for FY’19 is $57 million, so it is only $2 million in growth.”

Curtin noted the last time Lynnfield approved an override was FY’12, which took place in the spring of 2011. He said new growth for FY’12 totaled $178,000, which grew to $493,000 in FY’13, $918,00 in FY’14 and $2.5 million in FY’15. He said new growth declined to $1.1 million in FY’16, $600,000 in FY’17 and $436,000 in FY’18.

“The estimate from our Assessing Department for FY’19 is $325,000,” said Curtin. “That will be the lowest new growth figure since FY’12.”

Curtin said the town has been using Free Cash to purchase items on the capital budget priority list, which is a shift from when the town used Free Cash to balance the operating budgeting in the aftermath of the Great Recession.

“In recent years, we have been using Free Cash sparingly for the (operating) budget,” said Curtin. “We have been mostly using Free Cash to fund our capital budget.”

Curtin said the town used $150,000 in Free Cash in FY’12, which increased to $630,000 in FY’14. He said the town had $1.8 million in Free Cash in both FY’17 and FY’18.

“Coincidentally, that was the amount of capital spending we had those years,” said Curtin.

Curtin said local officials anticipate receiving $1.45 million in local receipts in FY’19, representing an additional $100,000.

The interim TA said the town’s pension contributions are “increasing at a rate of 8.2 percent because pensions have been historically underfunded for decades.”

“The forecasts were too rosy in terms of the return on investment, so now all of the pension systems in the state are trying to get onto full funding,” said Curtin. “They are on schedule to do so. Essex County is meeting its schedule, but it is a schedule that requires increases. Our pension contribution is going up 8.2 percent a year, which represents $218,000.”

Curtin said the town’s health, life, disability and other insurance policies are increasing by 5 percent.

“That is a very low rate compared to what we were facing 10 to 15 years ago,” said Curtin. “Our move to the GIC helped alleviate those rising health insurance costs. But even 5 percent represents an increase of about $154,000 a year.”

Curtin noted a lot of people in town have inquired what programs the additional revenue from MarketStreet Lynnfield has funded. He said revenue from the outdoor mall, which is included in the General Fund, has helped fund a number of different initiatives including the School Department’s tuition-free full-day kindergarten program.

“That was an equity issue,” said Curtin. “We were offering a two-tiered education system at the kindergarten level, and school officials felt that was not sustainable going forward.”

Curtin said the various fields projects in town were partially funded by revenue generated from MarketStreet. He said the town has allocated funds for OPEB (other post-employment benefits) spending.

“We have to put money aside for retiree health insurance and other benefits,” said Curtin.

Curtin said the town purchased Centre Farm for $1.55 million in 2014, which included $1.4 million to purchase the property as well as an additional $825,000 for repairs. Nearly three years after the town purchased Centre Farm, Lynnfield residents Steven and Kelly Migliero submitted a bid last year to purchase Centre Farm for $935,000.

“We took a loss on that as we expected to because we put restrictions on it,” said Curtin.

Curtin said the town has accelerated its capital program the past couple of years.

“We are addressing all of the equipment we put off on purchasing for years,” said Curtin. “We are trying to catch up on a lot of things. Over the past two years, we have had a much more aggressive capital program than we have had at any time.”

Curtin said the town has added more police officers and implemented a new staffing model for the Fire Department. He also said the town has “increased balances on our stabilization and capital facilities funds.”

Additionally, Curtin said the DPW has “a much more robust road and sidewalks program.” Curtin said the town hired a full-time health director and recreation director in the last seven to eight years.

Curtin said the third phase of MarketStreet will generate some revenue in FY’19, but “not much.”

“There will be 22,000 square feet in retail and 40,000 square feet of office/retail,” said Curtin. “Depending on how that goes forward, we will be seeing some of that money in FY’19, but most of it will be in FY’20.”