Published May 12, 2021
By DAN TOMASELLO
LYNNFIELD — The town’s fiscal year 2022 budget is balanced despite the financial challenges created by the COVID-19 pandemic and declining new growth.
Town Administrator Rob Dolan unveiled the proposed $60,843,604.35 operating budget for FY22 to the Select Board during a May 3 meeting. He noted that the proposed spending plan represents a 2.37 percent increase over FY21’s $58,328,599 budget.
“Town Accountant/Assistant Finance Director Julie McCarthy and I are very proud of this budget,” said Dolan. “I have been working on budgets for a long time. I worked through the post 9/11 budget and the budget after the financial crash of 2008. The last two years have been incredibly challenging. It is a testament to the department heads and the leadership of the Select Board that we have a budget we can be proud of.”
Dolan said the proposed FY22 spending plan includes no new full-time positions in the town’s portion of the budget.
Dolan said he, McCarthy and the town’s department heads worked together to create a spending plan for FY22 that “speaks to the community’s core values and choices.” He said the proposed budget invests in “education, proper planning, community health and public safety.”
“We are promoting a budget where public education is at the forefront,” said Dolan. “We have made a strong financial commitment.”
Dolan said the town’s proposed FY22 budget continues to invest in the town’s infrastructure and technology.
“We want to create a vibrant economic climate that attracts and supports a wide diversity of businesses, cultural, historical and recreational opportunities for all citizens and all age groups,” said Dolan. “We promote balanced and responsible suburban design with expert land use support and outstanding citizen volunteers.”
Dolan noted that local officials were able to balance the FY22 operating budget without using Free Cash.
“Even with the loss of several fronts of revenue, we are balancing this budget without using Free Cash,” said Dolan. “As COVID became a very real reality during the final stages of last year’s budget process, we cut over $1 million two months before Town Meeting to get us through that period of time.”
Dolan recalled that property taxes, local receipts, enterprise accounts and state aid fund the town’s operating budget.
“We have excellent collection rates and strong home values,” said Dolan. “That continues even in these times. The commonwealth’s revenues remain strong after a slow first quarter. That means a recovery is happening. Gov. Charlie Baker is committed to tying increases in local aid to state economic growth. Lynnfield is meeting and exceeding local receipts with conservative estimates. We have seen an incredible increase in golf revenues and our ambulance resolving fund is holding steady.”
Dolan is projecting that the town will be receiving $350,000 in new growth in FY22.
“New growth continues to trend downward after a high in 2015,” said Dolan. “It is getting back to a range that Lynnfield was historically before the MarketStreet bump. The town relies on property taxes to fund our operating budget. Nineteen percent of the operating budget comes from the commercial tax base.”
While Dolan said building permit requests have been high, he said local officials currently don’t anticipate any “big chunks of new growth” taking place in FY22.
“That has to be considered when we look at contracts with employees, when we look at spending and when we look at long-term investment,” said Dolan.
Dolan said the town has received between 1 and 2 percent increases in state aid over the last six years.
“That is about $90,000 a year,” said Dolan. “To put that into perspective, that is about the cost of one teacher. If new growth is going down, property taxes are kept at 2 ½ percent and state aid is consistent regardless of the economy because of our demographics and qualifications, we are looking at lean increases in revenue in lean times.”
Dolan is projecting local receipts will decrease by $25,000 in FY22. He noted that local receipts include fees, permits, licenses, motor vehicle excise taxes and the meals’ tax.
“The meals tax took the biggest hit this year,” said Dolan. “Motor vehicle excise taxes make up more than 50 percent of local receipts’ estimates. Payments in lieu of taxes for the LIFE properties represent 12 percent of local receipts’ estimates. Licenses and permits accounts for 11 percent of local receipts’ estimates. We are seeing a gradual increase in local receipts. The restaurants at MarketStreet are reporting steady income and, in some cases, are beating last year’s numbers. We are also seeing new restaurants come into town at MarketStreet. MarketStreet is feeling really good about where they are at as we approach the end of the pandemic.”
Dolan recalled that the town waived excise tax penalties due to the pandemic.
“That allowed people to catch up on paying their excise taxes, which allowed us to collect what we needed,” said Dolan.
Dolan is projecting a 5 percent increase in health insurance, totaling $160,866. He noted that the School Department will be receiving a 3.38 percent budget increase in FY22, equaling $27,551,605.
“We are making a significant investment in our schools,” said Dolan. “If you look at our new taxes of $1.2 million, we are investing $900,000 of that into our public schools. That is a priority for the community.”
Dolan said eight more students will be enrolling at Essex Tech this fall, which represents an increase of $160,894. He said a state formula is used to determine assessments for students attending technical high schools in the commonwealth.
The TA is also projecting pension costs will increase by 5.4 percent in the next fiscal year.
Dolan said the proposed FY22 operating budget allocates $150,000 to the town’s Stabilization Fund and $50,000 to the Capital Facilities Maintenance Fund as part of an effort to stay ahead of future economic downturns. He also said the budget appropriates $100,000 for the Other Post-Employment Benefits (OPEB) Trust.
“The current Stabilization Fund balance is $2,376,436, which is 3.1 percent of the operating budget,” said Dolan. “The policy of the town is between 3 and 5 percent of the operating budget. An additional $150,000 will bring the fund’s balance to 4.15 percent, which is within the policy guidelines. The Capital Facilities Maintenance Fund has a balance of $1,523,799 or 2.5 percent of the operating budget. The town’s policy is 1 to 3 percent, and the additional $50,000 would round it up to 2.6 percent.”
McCarthy stressed that it is important for the town’s reserve accounts to be properly funded.
“That will be favorable to our bond rating,” said McCarthy.
Dolan said Town Meeting will be asked to approve the FY22 operating budget on Saturday, June 12, taking place at Lynnfield High School’s Pioneer Stadium.
“We promote and involve an active citizenry that works in partnership with a responsive government to manage the town of Lynnfield in a thoughtful, honest and accountable manner,” said Dolan. “I believe this budget reflects the priorities of the community.”
Dolan also noted that the $17 elementary schools’ additions project will begin being incorporated onto property tax bills in FY22.
While Dolan said the FY22 operating budget is “lean,” he said the spending plan is “going to be aggressive in improving Lynnfield.”
Select Board member Phil Crawford expressed his support for the proposed FY22 spending plan.
“This is a wonderful budget that is sustainable for the town,” said Crawford. “We can’t have the budget be at unsustainable levels every year.”
Select Board member Joe Connell thanked Dolan, McCarthy and Assistant Town Administrator Bob Curtin for working collaboratively in order to develop the FY22 budget.
“It is no easy task,” said Connell. “I can’t thank you enough for all of the hard work you did.”
Select Board Chairman Dick Dalton thanked all of the department heads for “doing a great job managing their budgets.”
“The department heads understand what a need is and what a want is,” said Dalton. “It really is a team effort. It is great all of you were able to work with the new superintendent to come up with a fiscally responsible budget. That is what we all want. We want to serve the town the best we can whether its public safety, education or capital improvements. They are all important, but we have to find a balance. This budget does that very well. It accomplishes a lot while living within our means.”
