Five-year financial forecast presented to City Council, School Committee

  Everett’s Chief Financial Officer, Eric Demas, presented a five-year financial forecast during Wednesday’s joint meeting between the City Council and School Committee at City Hall. Standard & Poor’s, which had assigned an AA+ rating, has given the city a stable outlook on its financial future. “There is prudent management with the well-embedded financial management policies, despite recent turnover,” Demas said.

  Available stabilization funds are $7,700,361 and the Capital Improvement Stabilization Fund is $7,406,984, according to Demas. He advised everyone to follow best practices for budgeted documents, as every city is different in terms of its formal structure.

  The city received the Certificate of Annual Comprehensive Financial Reports for the eighth year in a row, which is the highest form of recognition in governmental accounting and financial reporting.

  The total tax levy is estimated to be $169,522,500. A tax levy is the amount that a community raises through property tax. The amount of taxes estimated to be levied to balance the fiscal 2024 budget is $119,545,788, which is approximately a 9.7 percent increase from fiscal 2024, leaving an excess levy capacity of $49,976,762. Revenues are $194,410,589, and expenses are $76,417,637, according to Demas.

  The School Department’s budget is $128,612,364, which is an 18 percent increase over fiscal 2023. City and school expenses are $63,618,685, which is a 4 percent increase over fiscal 2023.

  “The fiscal 2024 budget is balanced with over $49 million of excess capacity available,” Demas said. “The administration will seek to receive the Distinguished Budget Award as part of its fiscal 2024 mayor’s recommended budget.”

  School Committee Chairman Michael Mangan invited Mayor Carlo DeMaria to answer questions. Mangan asked DeMaria his financial forecast in terms of tax revenues and redevelopment. The mayor stated that between the proposed use of the power plant site, phase two of Encore and the continuing redevelopment of lower Broadway, its success will largely depend upon the city getting transit access.

  “The next 10-20 years I see a huge amount of revenue coming in, but that doesn’t help the people today,” DeMaria said. “I’m going to try to offset some upfront money with Encore to reduce taxes.”

  He estimated Encore’s tax revenue to be $13 million, excluding the forthcoming hotels. DeMaria said residents weren’t happy that taxes increased, but it was due to the Exelon power plant closing. Demas estimated a $2 million loss in taxes.

  “We have the potential to redevelop maybe 500 acres,” DeMaria said. “If we could service that area, we can develop something spectacular.”

  City councillors and School Committee members had an opportunity to ask questions.

  Councillor-at-Large Michael Marchese asked what the power plant pays for taxes annually. Demas estimated $8 million. “It will be taxed at its highest and best use when a new owner takes over,” Demas said. “There are a lot of positive improvements, much like Encore.”

  Ward 1 Councillor Wayne Matewsky asked how much in property tax dollars goes to the School Department. DeMaria estimated a quarter. Demas said net school spending increased 19 percent. That doesn’t include any forthcoming schools that will be built, which are fixed costs.

  “I think that’s very important,” Matewsky said. “I want to know where we’re at as an obligation to our students.”

  Ward 2 Councillor Stephanie Martins asked to get a copy of the School Committee budget before next Wednesday’s public hearing.