20 Takeaways From the FY 2025 Budget Presentation

Share of budget for schools ticks up slightly; more details will be presented tonight

On Thursday, the Select Board heard a FY2025 budget update from Town Manager Richard Montuori. All members were in attendance, with Mark Kratman and James Mackey appearing virtually.

After discussing the overall budget process, Montuori broke the discussion down into revenues and expenditures, town and school budgets, projections, future areas to watch and the Select Board’s financial policy. Here are 20 key takeaways from his presentation, which you can watch on Tewksbury TV’s YouTube channel.

You can find the full presentation and other budget documents on the Town Manager’s 2025 Budget page.

Those interested in deeper dives into departmental budgets can attend the Finance Committee meeting tonight at 7 p.m. at Town Hall.

1. There are no cost of living or other contractual salary adjustments reflected. The School Committee is currently in negotiations with the Tewksbury Teachers Association, which has requested 8% annual increases for the next three years.

The Tewksbury DPW, Police and Fire unions are also still in negotiations. There is $581,558 set aside for contractual obligations, not including the schools. Any increases on the school side will come out of the School Department budget.

2. All departmental operating budgets represent level services delivery; that is, department heads were to request increases sufficient to deliver the same services to residents in FY25 as they delivered in FY24. Montuori also asked each department head for three priorities should funding be available.

3. The FY25 appropriations proposal is $138,014,110, an increase of $2,698,322 over FY24. Add in that $581,558 for contractual obligations, and that adds up to $138,595,668, a 3.4% increase. That is $30,779,357 below the FY24 budget of $169,375,024. Note that the FY25 budget doesn’t include enterprise and select other funds.

4. All in, the FY25 budget and revenues are balanced at $141,012,356. That includes a 2.5% increase on real property in the community as allowed by law, plus FY25 new growth, which is projected at $1,050,000. Total revenues are reached by adding up the previous year’s levy limit plus 2.5% plus new growth and adding debt exclusions, such as for the Center Elementary School and Center Fire Station. 

5. The property tax levy is $112,983,742, a $3,248,896 increase over FY24. Tewksbury historically has taxed up to the levy limit. Montuori said Billerica has excess levy capacity of $29 million, Burlington is $13 million under its levy limit, Andover is $1.5 under its limit and Wilmington is about $1 million under. 

6. The average single-family home in Tewksbury is valued at $602,548, an increase of 9% over FY24. Condos average $443,094, up 11%. The average tax bill for a single-family home is projected at $8,069.10, a $239.09 increase. Condo owners will see a typical bill of $6,109.43, an increase of $175.68. That’s a 3% bump for both. This is predicated on the Commercial, Industrial and Personal Property split remaining at 1.66.

Here is a comparison with surrounding communities. Tewksbury remains in the middle of the pack in terms of property taxes, said Montuori. 

7. Big-ticket items for the town include $14.7 million for staff health insurance, $12 million for town and school debt service, and $11 million for retirement assessments. 

“There’s not a lot of discretionary spending in this budget,” said Montuori. “It’s a very tight budget. There are no what I would call luxuries.”

8. State aid is projected to be level funded at $18,210,972. Given that state revenues are coming in lower than projected, it’s unlikely this number goes up. Montuori tends to be conservative in his revenue estimates, including for state aid. That allows for the possibility of the unexpected. One year, for example, there was a low inventory of new vehicles, which impacted our excise tax unexpectedly.

9. Local receipts are projected at $9,817,643. That includes motor vehicle excise taxes, hotel and motel taxes, fees including for ambulances and interest earnings. The Healey administration has proposed to allow cities and towns to increase the local meals tax to 1%, up from 0.75%. The proposal would also allow towns to raise the lodging tax by 1% and add a 5% surcharge on top of the existing motor vehicle excise tax. 

In response to a question by member Pat Holland, Montuori said the adaptive reuse conversion of the Residence Inn extended stay hotel at 1775 Andover St. to 130 apartments may be a wash in terms of revenue, but it’s difficult to say for sure.

10. A variety of other available, yet less predictable, funding sources, such as dog licenses, free cash and enterprise funds, that added up to $34 million in FY24 are not yet reflected in the budget. Many sources of income are restricted, meaning they can be spent only on related expenses and don’t go into the general fund.

11. The assessment for Shawsheen Tech is projected to rise by 6%, to a projected $8.5 million. The town also expects to pay $118,000 to Essex Aggie. As of Jan. 23, 134 Tewksbury eighth graders had applied to attend Shawsheen Tech, second only to Billerica’s 174.

12. Sixty percent of taxpayer dollars go to the schools, including tech schools, versus 40% to the town side for functions including police, fire, the library and the DPW. That’s been the case for a number of years, despite shrinking enrollment in the district. The school budget minus exempt debt will increase by $2,429,456, with most of that salaries, said Montuori. The Shawsheen Tech budgeted amount for FY25 is $8,499,639, up from $8,018,527 in the FY24 budget.

13. The town side general fund summary includes a significant amount of detail on spending for various departments; that info is available in the Town Manager’s presentation on Slides 33 to 45.

14. There are a number of priorities for department managers that are not included in the budget. These include overtime and training for TPD and TFD, including to run a third ambulance more often; operating funds to maintain roads, sidewalks, trees, drainage, buildings and grounds; additional funding for the Council on Aging; and more.

15. One notable unfunded priority is an Events Activities and Program Coordinator as requested by the Tewksbury Families for Recreation in a call for action. 

“An activities and programs coordinator was something that we’re hoping to fund,” said Montuori. “I know this has been a large, big topic of discussion, and people seem to think we just flat out don’t want to fund it. The problem is we don’t have the funds this year to do it.”

He added that much will depend on the results of the RFP that the town has issued for providers to supply year-round recreation programs and activities for children and adults. Those are due Feb. 15.

“Depending on how those look, we may be able to fund an activities and program coordinator — we may even be able to fund one part-time if we wanted to,” he said. The hope is that a contract yields enough revenue to hire, and that the department eventually becomes self-funding via fees.

16. Member Jayne Wellman asked Montuori about a new company to accept our solid waste. The current provider, Covanta, often has long lines, such that Republic’s trucks can wait up to three hours to drop loads, and in some cases charge the town for those delays. Montuori is considering joining Burlington in moving to Republic, the current hauler, to also do disposal.

He also said we spend more on recycling than solid waste.

17. The current stabilization fund balance is $18,249,550, which based on FY25 projections would be 13.2% of the total budget, before funds are transferred for capital projects or one-time expenditures, as typically happens in July. If the town can sustain a fund balance of 10% as a percent of budget, there’s a chance our bond rating would be increased from AA+ to AAA. Increased contributions to retirement and OPEB would also help.

He projected out through 2030, and there is a potential to see deficits.

“What’s important to know is, things aren’t looking good on the state level,” said Montuori, in terms of revenues. “Everyone, I think, believes we’re flush with cash. We are not. We need to still be smart in the way we approach our budget.”

He called out suggestions that new staff positions could be funded from free cash or stabilization funds. 

“Although $18.2 million looks like a lot, it needs to fund that five year capital project so we can avoid borrowing money when debt exclusions are impacting other town budgets and other town services,” he said. “That $18 million can be spent very quickly over a five- to 10-year period. And we also want to keep money in there in case we do have a year that we have a crisis.”

18. Other areas to watch include federal requirement changes that could affect revenue such as Medicaid reimbursements, solid waste and recycling costs, the impact of the State Hospital on public safety services and the Shawsheen Tech assessment given that the school is looking to issue a statement of intent to the Mass. School Building Association for a new facility.

19. He outlined the policy of the Select Board when it comes to budgeting. In part, that includes that finances will be managed to maintain financial stability over the long term, avoiding budgetary procedures that balance current expenditures at the expense of meeting future years’ expenses, and not using free cash or stabilization or retained earnings funds for routine and recurring operating expenses.

“There’s been talk within town about using free cash to fund operating expenses,” he said. “There has been talk about using stabilization funds to fund operating expenses, using both to fund even salary increases … that’s not a good business practice, not a good financial practice.”

20. Finally, he thanked all department heads and the school department for doing an excellent job preparing detailed budgets in accordance with guidelines. He pledged full transparency on budgets.

“This is the beginning of a process,” said Chair Todd Johnson. “This is a long process. But I think there’s some clear messaging within the context of what we just witnessed and listened to. I want to note two things. One is, over the last five or six years, I’ve had numerous peers from other communities reach out and compliment the town of Tewksbury for the depth of information and transparency of information within our budgets. And that’s because all the information that we just listened to, and then the substantive detail behind each departmental budget, will be put up on our website. There’s nothing to hide. It is all there.”

He encouraged residents to attend tonight’s Finance Committee meeting and believes residents will come to the conclusion that Montuori has presented a lean, level budget.

“It’s easy for any of us to go up to the mountaintop and look down and say taxes are too high, or you’re spending too much money or I don’t agree with the way that you did the allocation on local receipts,” he said. “But there are communities, not too far from the border of our community, that are struggling with the whole concept of needing overrides or dramatic cuts to services and personnel.” 

Before adjourning, the Select Board voted unanimously to open the Town Common to a Pride Picnic on Sunday, June 2. According to Wellman, food trucks and music are planned.

The Select Board meets next on Feb. 13 and will include a session to review enterprise funds.