NORTHBOROUGH – Northborough town officials are anticipating that the average single family tax bill will increase by $513 for the 2023 fiscal year.
Though higher than a typical increase, that projection is down from a $561 forecasted increase that officials shared back in December.
These latest numbers were part of a presentation to the Board of Selectmen and the Appropriations Committee on March 28 on Northborough’s budget for the 2023 fiscal year.
Town Administrator John Coderre credited the change in the tax projection to a shift in enrollment at Algonquin Regional High School, though he said a “majority” of the increase was still due to rising single-family home values.
He described the 2023 fiscal year budget as a “rebuilding year.”
“We’re still trying to restore some of the budgetary impacts of the pandemic on our operations,” Coderre said.
General fund budget
In total, Northborough officials are proposing a 5.28% increase in the town’s general fund budget for a total of $71,242,642.
This fund includes the general government and school budgets, as well as Town Meeting warrant articles, debt service and other adjustments. It does not include funds for water, sewer and solid waste enterprises.
Specifically, the budget would restore reductions made during the pandemic, which Coderre said were never meant to be permanent.
During the 2021 fiscal year, increases to the operating budgets were cut down to 1%. The 2022 fiscal year saw increases “heavily” constrained, Coderre said.
Coderre walked through a number of the cuts, which included decreased contributions to both the town’s stabilization fund and its post-employment benefits (OPEB) trust fund, which pays for certain benefits that retirees receive.
A “significant” amount of capital was postponed in the 2021 fiscal year.
Because budgets were tight when Northborough closed out the year, there was then little free cash to do payas- you-go projects in the 2022 fiscal year, Coderre said.
“On the surface, that seems like a pretty healthy increase,” Coderre said of the 5.28% increase in this budget cycle. “But it’s really not.”
The budget calls for allocating $2.024 million in pay-as-you-go capital projects and $200,000 from free cash into the stabilization fund.
The budget increase would be 3.22% without those allocations.
General government budget
Seperate from the general fund budget, Northborough’s general government budget is projected to increase by 3.65% to a total of $24.5 million in the 2023 fiscal year.
Northborough plans to restore a Department of Public Works light equipment operator position, which had been vacant when it was cut during the pandemic.
Additionally, the town is adding a part-time cable access position for remote meeting coverage, which will be paid through cable access fees.
According to Coderre, all of the collective bargaining agreements with the town’s five unions are unsettled. A classification compensation study for employees is also wrapping up. But Coderre said most of the impacts of that process will still need to be negotiated.
Northborough has set aside over $350,000 to handle the personnel costs from these negotiations and studies, Coderre said.
Northborough’s health insurance budget is, likewise, anticipated to increase by 1% next year after the town formed a joint procurement association with Southborough and Algonquin Regional High School.
This comes after the town’s provider, Fallon, decided to exit the commercial market.
“That could have just as easily come in at a 7 or 8 or a 9% [increase],” Coderre said. “We would have been having a very different budget discussion if that was the case.”
Selectman Scott Rogers noted that Coderre’s past presentation anticipated an approximately 3% increase for health insurance.
“To drive that down to 1% is just phenomenal,” Rogers said.
Home values increase
Coderre said that it seems that there is an event or issue that impacts the town’s finances every year.
“This year, it’s home values,” Coderre said.
Like other communities in the region, the values of homes in Northborough have increased, placing pressure on the tax bills for single-family homes.
In Westborough, for example, town staff have anticipated the average single family tax bill to increase by $1,087, with about $515 of that being due to spikes in home values.
Coderre said that, if the single-family home values in Northborough weren’t moving, the increase on this year’s tax bills would be a more typical value of between $260 and $280.
Northborough’s budget process is ongoing.
The budget will eventually go before Town Meeting for final approval.