By DAN TOMASELLO
LYNNFIELD — The fiscal year 2024 operating budget is going to be tight once again, Town Administrator Rob Dolan said during the Finance Committee’s budget kickoff meeting on Dec. 14.
Dolan noted that December is almost the halfway point of each fiscal year and is the time when local officials begin thinking about the town’s next spending plan.
“The town of Lynnfield’s finances are strong with adequate reserves that meet our financial policies,” said Dolan. “We are on target with revenues and expenditures for FY23, and have no unforeseen significant revenue shortfalls or deficits as we enter the second half of the fiscal year.”
Dolan recalled that property taxes fund the majority of the town’s operating budget, and FY24 will be no exception.
“Lynnfield is primarily a residential community with a limited commercial tax base,” said Dolan. “We have property tax collections at over 98 percent, and the amount of revenue of we collect for our operating budget is capped by Proposition 2 ½.”
Dolan said local receipts also help fund the town’s operating budget.
“These revenues consist of excise taxes, building permits, fees and business licensures,” said Dolan. “In an economy where consumer spending remains strong, we can estimate a modest 1 to 2 percent increase in local receipt revenue at this time.”
Dolan said the third source of revenue that helps fund the town’s operating budget is state aid, which consists of Chapter 70 education aid and Unrestricted General Government Aid.
“State aid is mainly funded by the Lottery in Massachusetts,” said Dolan. “The aid is formula-based, and we can usually count on a modest 1 to 2 percent increase in local aid.”
Dolan said the final component that funds the operating budget is new growth.
“New growth is development in the town that comes in the form of housing or business property expansion,” said Dolan. “This is where we continue to have challenges. This revenue source has continued to decline in Lynnfield since the MarketStreet development led to unprecedented new growth. The passage of the Sagamore development will help us in this area in the future, but not in FY24. Our goal in FY24 is to level fund the new growth revenue that was predicted this current fiscal year. That will be a challenge.”
While Dolan said the town has incredibly strong home values, exemplary collections and high average household incomes, the “town has limited options to increase revenue amounts to meet the many needs” that department heads request yearly.
“This year will be no different,” said Dolan. “The reason for that is the fact that local government is the only level of government in the United States that must present and pass a balanced budget that is audited independently by a private public accounting firm and then again by the Massachusetts Department of Revenue before we can set our tax rate. Along with these revenue challenges, we must never overestimate revenues to ensure there are no shortfalls. We must also ensure that the town has Free Cash the following year, which is the only revenue we can use for our capital budget.”
Dolan noted that each department will be making requests for FY24 and those requests will be reviewed by him, the Select Board and the Finance Committee.
“All of them are very legitimate, and our department heads are always sensitive and prudent with these requests,” said Dolan. “But like any budget, some of these requests and needs will be budgeted and some will not. That will be based on available revenue and priorities that are often incredibly difficult to rank since all of the needs are legitimate.”
Dolan said fixed costs will serve as “the foundation” of the FY24 budget.
“Those fixed costs are increases in contracted union and non-union salaries, health insurance, pension liability assessments, vocational school assessments, property and casualty insurances, mandatory debt payments and other state assessments,” said Dolan. “Those obligations often take a large portion of the new available revenue. From there, all department requests are evaluated, with our School Department in particular focus as our largest municipal department. I must be clear that every department’s request, large and small, will be looked at carefully and with the full respect that is owed to our incredible department heads and staff.”
Outside of the FY24 operating budget, Dolan said the town has begun undertaking a seven-year capital investment plan that will be “the largest in the town’s history.” He recalled that the $18 million elementary schools’ expansion project has been completed this year.
“The King Rail Golf Reserve clubhouse will be completed in 2023,” said Dolan. “The new War Memorial, which is being led by Select Board member Joe Connell, will be completed in 2024. Construction of the Sagamore development will be underway in 2024, and the Lynnfield High School football field’s turf will be replaced in 2024.”
Dolan also noted that the $63.5 million public safety buildings and Town Hall project that voters approved earlier this month will be completed in late 2025 or early 2026.
“If passed by the citizens of Lynnfield, a new library will be completed in 2026,” said Dolan. “We anticipate that the Wakefield-Lynnfield Rail Trail will be completed in 2027.”
Dolan said the town has “a lot” on its plate in “rather uncertain times.”
“I must tell you that, as we begin the budget process, I am very confident in the management team that we have in place to lead our municipal departments,” said Dolan.
Dolan also thanked all of the volunteers who serve on the town’s various boards and committees.
“I thank you for your important volunteer service to Lynnfield that benefits the town and all of our important work,” said Dolan.