Published in the March 16, 2016 edition


LYNNFIELD — Town Administrator Jim Boudreau presented a balanced budget of $50,405,204 for FY’17 to the selectmen March 7. It represents an overall increase of 4.89 percent over the current fiscal year budget.

Boudreau said his recommended operating budget remains balanced without using funds from either Free Cash or the Stabilization Fund. It is the second year in a row that Boudreau has proposed a balanced budget to the selectmen.

The T.A.’s budget includes a recommended increase in capital expenditures for FY’17 of $1,539,908, which is a 17 percent increase over his recommendation for FY’16.

Capital budget increases

The town currently has $2,984,998 in certified Free Cash and Boudreau recommends that $1.1M from the Free Cash account be used “to support the capital budget.” Doing so would leave the town with a balance of $1,884,998 in that fund.

No funds from the town’s Stabilization Fund, which has a balance of $1,321,321 or the Capital Facilities Fund, which has a balance of $916,575, are being used as part of the T.A.’s recommended budget for the next fiscal year.

Under a separate warrant article, Boudreau is recommending that the town borrow $849,000 to invest in four large capital expenditures – $489,000 to replace a 30-year-old fire truck with the remaining balance used to replace several aging DPW trucks.

In addition to being balanced, Boudreau said his budget “makes a significant investment in capital and infrastructure” and it does not “rely on non-recurring revenue.”

The FY’17 capital budget recommended by Boudreau totals $3,391,087, of which $849,000 would be bonded to purchase the trucks and $1,100,000 would be paid from Free Cash, leaving a balance of $419,908 to be paid out of the FY’17 budget.

Boudreau’s budget also supports the School Department recommendations for tuition free full-day kindergarten, plus a new part-time elementary music teacher, additional SPED staff and a new administrative position, Director of Teaching and Learning.

Additionally, his budget fully funds the recommendations of Fire Chief Mark Tetreault to change that department’s staffing from 8.5 hours per day, five days per week to 12 hours per day, seven days per week. This will require hiring two additional full-time firefighters plus provide funding to cover two 12-hour per day call firefighter positions.

Tetreault previously presented his staffing recommendations to the board and believes it is best option available to preserve the town’s call firefighter program, noting it would be much more expensive to disband it and move to an all-career firefighter model.

The budget also moves funds for the town’s road paving program from the DPW’s operating budget to the town’s capital budget.

81 percent of revenues from taxes

Like most bedroom communities of its size, Boudreau said more than 81 percent of the town’s revenues continue to come from taxation. These taxes are based on the FY’16 levy limit multiplied by 2.5 percent plus the new growth figures certified by the state to arrive at a base levy.

The FY’17 budget raises taxes by $954,988, which is the statutory limit set by Proposition 2 1/2 based on this formula, he said. The FY’17 levy limit is $42,359,211 compared to the FY’16 limit of $40,922,209.

New growth dips again

Boudreau estimated new growth at a conservative $500,000, which is 55 percent less than the certified new growth of $1.1M in FY’16 and significantly less than the certified new growth in FY’15 when it peaked at $2.5M. However, this drop in new growth was anticipated due to the near-build out of MarketStreet. New growth trends indicate that this figure will hover around $500,000 in future years, generated mainly by the residential market.

“Based on conversations I’ve had with the assessing office, we don’t have anything large right now being constructed that will hit our new growth,” Boudreau said. He added that the third phase of MarketStreet, a combination office/retail building, is “not on the drawing board” yet. Selectmen Chairman Phil Crawford asked if the building of the new Apple store at MarketStreet would bring in some additional new growth. Boudreau said new revenue would mainly come from the permitting process. “It’s not a lot of new growth,” he said.

With the state budget deficit estimated to be $750 million for FY’17, Boudreau conservatively increased the state aid line item by 1.17 percent ($60,847) over the FY’16 aid received by the town to $5,268,806. He noted that Gov. Baker’s budget recommendation reflects a 2.2 percent increase in spending and the legislature historically “does not go below the governor’s recommendation.”

Last year, when the state was facing a significant budget deficit and Baker had not yet gone through a budget cycle with the Legislature, Boudreau level-funded the town’s state aid figure. State aid to the town peaked in 2009, he said.

Upward trend in meals tax revenues

One trend that continues its upward climb is revenue tied to the meals tax due to the number of restaurants in both phases of MarketStreet, he said. The town captures three quarters of 1 percent in meals taxes, as allowed by state law after adoption of the local tax by Town Meeting voters several years ago. This raises the total taxes charged on meals served at the town’s restaurants from 6.25 percent to 7 percent.

Operational budget increases

Increases in the town’s operational budgets proposed by the T.A. for FY’17 include a 20 percent growth in general government expenditures ($2,654,769), an 11 percent increase in employee benefits ($6,303,959), a 6.89 percent increase in public safety ($4,549,728) and a 4.75 percent increase in education ($25,741,596).

The public works budget has seen a decrease of 3.32 percent ($6,555,786), which can be attributed to shifting the paving expenses to the capital budget given the significant investment the town has proposed to make in its roadway improvement projects in the coming years.

The budget also reflects modest increases in proposed expenditures for culture and recreation at 1.91 percent ($862,261), human services at 1.26 percent ($438,964) and debt and interest at 0.55 percent ($3,298,159).

Selectmen due to vote Monday

The Town Meeting warrant for the April 25 Town Meeting will be closed at the next selectmen’s meeting on Monday, March 21 in the board’s hearing room at Town Hall at 7 p.m. At this meeting, the board will make its recommendations on the T.A.’s budget proposal.

In addition, the Finance Committee will hold a public hearing on the FY’17 budget recommendations in a joint meeting held with the selectmen on Wednesday, March 23. This joint meeting will be held at the Al Merritt Center at MarketStreet at 7 p.m.