Council Passes Fiscal 2020 Budget, Town Pays off Retirement Debt

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Town Manager Michael Driscoll’s plan to pay off Watertown’s retirement benefits deficit will come to fruition on July 1, 2019.

Tuesday night the Town Council approved Watertown’s Fiscal Year 2020 budget, but it also marked the paying off of the town’s unpaid Retirement Benefits deficit and frees up millions to be spent in other areas, such as the school building projects..

On July 1, 2019, a payment of $13.18 million will be made, which will not only cover this year’s Retirement Benefits for town employees, but also the shortfall. Since Fiscal Year 2009, the Town has funded retirement at a rate of 152 percent to pay off the deficit faster.

The total Fiscal Year 2020 budget of $147.76 million is 3.89 percent higher or $5.53 million more than Fiscal 2019, the current budget year. It includes an additional police officer, more staffing in the Fire Department to run a second ambulance, additional teachers, an assistant at the Hatch Makerspace, and additional funding for the Department of Public Works.

Town Council Vice President Vincent Piccirilli said Tuesday’s vote was important for the town.

“With this vote, the Town of Watertown crosses a threshold in the budget,” Piccirilli said. “It began about 12 years ago, right before the Recession. It was a plan to take control of our financial future.”

The Fiscal 2020 budget was Michael Driscoll’s 27th as Watertown’s Town Manager. He said the extra payments to the retirement fund were not popular will all people. A few years after they started the Town faced the recession and some called for the payments to be cut, but Driscoll said he said he never had any doubts. With the payments done, the Town now has money free to do other big projects, he added.

“I think there were some folks who looked at the $12.1 million (going to retirement) and felt we did not need to be as aggressive,” Driscoll said. “People wanted it to be designated to other parts of municipal services.”

Particularly, Driscoll remembers, some people wanted the money to be spent on the schools.

“Ultimately, the administration and the Council prevailed,” Driscoll said. “That allowed the building of two new schools and the renovation and expansion of a third without a Proposition 2 1/2 debt exclusion.”

In Fiscal Year 2021, the Retirement benefits payment will drop to $827,670. Some of the money that had been going to Retirement Benefits will be used to pay down the town’s deficit in the Other Post Employment Benefits (OPEB) fund. In a similar plan, the Town will pay down the OPEB deficit of $87.1 million over the next 10 years, starting with $8 million in Fiscal 2020.

Other dollars will be devoted to the construction of two new schools at Cunniff and Hosmer elementary schools and to thoroughly renovate and add on to Lowell Elementary School – a project that is projected to cost $170 million. On May 15, the Town Council made the first major investment in these project by approving $12.4 million for the design of the three buildings.

10 thoughts on “Council Passes Fiscal 2020 Budget, Town Pays off Retirement Debt

  1. “It began about 12 years ago, right before the Recession. It was a plan to take control of our financial future.”

    “Ultimately, the administration and the Council prevailed,” Driscoll said. “That allowed the building of two new schools and the renovation and expansion of a third without a Proposition 2 1/2 debt exclusion.”

    “Other dollars will be devoted to the construction of two new schools at Cunniff and Hosmer elementary schools and to thoroughly renovate and add on to Lowell Elementary School – ”

    So, two new schools were built, and two more new schools at Cuniff and Hosmer will be constructed, along with an “add on to Lowell Elementary”….where are those “two new schools” that were apparently built located?

  2. This fiscal accomplishment by our Town Manager Mike Driscoll and our Town Council – President Mark Sideris, VP & District C Councilor Vinnie Piccirilli, and Councilors Angie Kounelis – District A, Lisa Feltner – District B , Ken Woodland – District D, and At Large Councilors Susan Falkoff, Tony Palomba, Anthony Donato, and Caroline Bays should be on the front page of the Boston Globe. Bravo and Thank You!

  3. Congratulations to Michael Driscoll and the Town Council on
    accomplishing control of our financial future.
    Every town in the state should take our example.
    Mike Driscoll is head and shoulders above all others
    in managing a municipality!!
    Nice going.
    Elodia is right it should be on the front page of the
    Boston Globe!

  4. This article misses the mark for me. It simply reports the a version of our finances that the Town Manager, the Town Council and others want us believe. Yet, the truth is a bit different. The town has simply retired one debt so it can absorb an even bigger one for our schools. The $12.4m mentioned above does not come from free cash, but is a loan – as will most of the $170m for the elementary schools be. This is debt – plain and simple. The article also doesn’t mention that the voters will be asked to pass a debt exclusion / proposition 2 1/2 override to fund a new High School. We don’t have enough money and can’t take out loans without it. Watertown has not had a debt exclusion/overide on the ballot in over 25 years. Does this sound like a town that’s “in control” of it’s financial future if it has to ask it taxpayers for even more money? Who wants and need this huge increase in their tax bill?

  5. Thank you Scott. I agree with you and don’t feel anyone should be patting themselves on the back for this.

    You mention the schools and the need to vote in an override. It is my understanding that had we planned better for school renovations than we could have gone through the MSBA for the elementary schools as well. Instead we neglected one of the biggest parts of a towns infrastructure, its schools. We are now faced with renovating/rebuilding multiple schools at once and causing quite a bit of disruption to the kids in the meantime. Had we planned better we could have tackled the schools one at a time and got some of it paid for by the MSBA. Instead the town is left paying for the renovations on all three elementary schools and a tax override is needed to build the high school. I don’t see many voting YES on another tax increase especially after the CPA tax just passed.

    I can think of no other town that has left their schools untouched as we have.

    • Thanks for your comment, Watertown Parent. As an FYI the high school is in the MSBA program. There will be an override needed to cover the town’s portion of the cost, which will be a bit over 50 percent.

      • Yes, the MSBA is assisting with the high school but not the elementary schools. My understanding is you can only apply for one school at a time. Had we started the discussion/planning for rebuilding schools a lot sooner, years ago, we could have worked on one school at a time with the help of funds through the MSBA. Our problem is we are now having to fix 4 of our 5 schools virtually at the same time but can only get money for one.

        My info could be wrong but the point is we never should have let the school buildings fall into such disrepair. A tax override might not work in a town like Watertown.

        • I will make an exception for the one comment for an anonymous commenter rule. Yes, you are right, in theory they could have started with the elementary schools. The district put highest priority on the high school because a study said it was in the worst shape. Plus it gives the most bang for the buck. Also, it took four attempts, I believe, to get the high school into the MSBA, so it is not an automatic thing.

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