Town Manager Michael Driscoll presented his 29th, and final, preliminary budget to the Town Council on Tuesday night. The Town’s financial outlook is positive, with significant increases in property taxes and from inspection fees.
The current fiscal year, FY2022, came in nearly $7 million above the budget approved in the spring of 2021. The majority of the increase, Driscoll said, came from inspection fees, which were $5 million more than projected. Real estate and personal property taxes were $1.89 million above the budgeted amount.
Most of the additional revenue, $5 million, is going into the Unfunded Pension Liability Stabilization Fund, and $1.7 million is going into the Town Council Reserve.
The Fiscal Year 2023 budget, which will be approved by the Council in spring 2022, is forecast to be $173.6 million, and revenues are expected to be about $1 million below that, Driscoll said. The shortfall is about $500,000 less than anticipated in April.
“The submitted preliminary budget has a challenge of little more than $1 million,” Driscoll said. “Either revenue needs to go up, expenditures need to go down, or a combination thereof.”
The FY2023 budget will provide a 2.5 percent increase for municipal departments, and a 3.5 percent increase for education, Driscoll said. Also in the budget is the money to construct the new high school. That project would be the fourth school building project taken on by the Town in recent years.
“We are looking at doing something that represents a huge accomplishment for the community, building three elementary schools — two new and renovating and expanding a third — and building the high school,” Driscoll said. “The cost (for the four schools) is now $370 million, and the estimate right now from (Massachusetts School Building Association) is $50 million. We will finance $320 million all within the confines of Proposition 2-1/2, all without need to request debt exclusion financing.”
The cash to pay for the high school and elementary schools came from funds freed up after the Town paid off its pension shortfall in Fiscal Year 2022, Driscoll said. In FY2023, $13.2 million will be spent on the three elementary school projects, and $783,333 will go to the high school project. In coming years the high school funding will rise to $3.1 million in FY2024 and $7.75 million in FY2025. The payments for the elementary school projects will be $12.9 million in FY24 and $12.3 million in FY25.
The high school project will be paid with 30-year bonds, Driscoll said, because paying over 20 years would impact the budget too much.
A project that Driscoll recommends undertaking, but for which funding has not been allocated, is reusing the former Police Station on Whooley Way. He said the Town added 10 employees in FY22, but Town Hall does not have room for them. It could also provide a home for the Watertown Library’s makerspace.
“I respectfully urge the Council that we need to look at that because (Town Hall) is bursting at the seams and we need to do something,” Driscoll said. “The library director (Leone Cole), seeks a permanent home for the Hatch program. I would be putting my oar in the water for that.”
The cost of renovating the former Police Station is estimated at $4.8 million. Another recommended but unfunded rehabilitation project is the former North Branch Library, which would cost an estimated $1.1 million.
The financial forecast in upcoming years looks even more positive, Driscoll said. Revenues are projected to be ahead of expenditures in Fiscal Year 2024 by $1.2 million and by $1.7 million in Fiscal Year 2025.
School Committee Chair John Portz thanked Driscoll and the Town Council for their continued support for education in Watertown, and this year especially for the funding for the construction of the new Watertown High School.
“Special thanks for the manager’s financial leadership and financial stewardship. You have provided the community for quite a few years — 45 years — and as Town Manager a little less,” Portz said. “Thank you for that leadership as Town Manager.”
Driscoll, who will retire at the end of January, said that his final budget is quite a bit higher than his first one. The total expenditures in the FY22 budget, including the $19.7 million for water and sewer, is $196.2 million.
“In the first budget I submitted in Fiscal Year 1994 the dollar amount was $52 million, so things have grown significantly,” Driscoll said.
He said that his goal, and the goal of all the departments in Town, is to provide the highest level of services to the citizens while using the taxpayers’ dollars as efficiently as possible.
“I believe the 29 budgets I submitted, beginning in FY94 and through FY22, are consistent with this goal, and are focused on achieving the long term goal of sound financial management and fiscal stability in accordance with the honorable Town Council’s ongoing budget policy guidelines,” Driscoll said. “In closing I want to thank all the members of our community for their support throughout the years. It has been and is a privilege to serve as Town Manager for the Town of Watertown.”
See the Fiscal Year 2023 Preliminary Budget presentation slides by clicking here.