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.