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Mayor pitches $93.4M city operating budget

 By Christopher Roberson

 

Edward Bettencourt
Mayor

Although the city’s financial position remains favorable, Mayor Edward Bettencourt acknowledged that there have been some bumps in the road. He said that for the past year, Peabody has been purchasing water from the Massachusetts Water Resources Authority (MWRA) following the three-alarm fire that destroyed the Coolidge Avenue Water Treatment Plant in March 2017. As a result, the city owes $2.5 million to the MWRA.

“It’s amazing, the costs,” said Bettencourt as he presented the city’s $93.4 million operating budget during the June 7 meeting of the City Council’s Finance Committee. The school budget will go before the council on June 19.

He requested authorization from the state to pay the money back to the MWRA at $250,000 per year for five years. “The state denied our request; they said it wasn’t an emergency,” said Bettencourt.

Therefore, he suggested taking $1.2 million from the city’s Stabilization Fund to help cover the cost. The Stabilization Fund would then be replenished at $125,000 per year for 10 years. Bettencourt also proposed taking $300,000 from the salary increase line item, which was originally budgeted at $600,000. The other $300,000 would be combined with the remaining $125,000, which would have been included in the annual MWRA payment of $250,000. Bettencourt said the resulting amount of $425,000 would be transferred to the School Department to assist with a “very difficult school budget year.”

Regarding staffing, Bettencourt said he wants a full-time nurse in all of the elementary schools, a full-time farm stand position at Tillie’s Farm, a full-time position in the Human Resources Department and a full-time school resource officer at Peabody Veterans Memorial High School.

In addition, Bettencourt said that Peabody is eligible to receive $10 million from the state and federal governments to reconstruct Central Street starting at the Walnut Street intersection and ending at Wilson Square.

He also announced the start of the Route 1 Water Quality Drainage Improvement Project, which is slated to get underway later this year. Bettencourt said that in addition to alleviating drainage problems, the other objective will be to increase water pressure in the homes adjacent to Route 1. This will be accomplished by replacing the current six-inch water mains with 12-inch water mains.

Regarding Crystal Lake, Bettencourt said the first phase of the restoration project is complete with 40,000 cubic yards of sediment being removed through dredging. He said the second phase is currently underway and will include the installation of a dock, picnic tables and a spray fountain.

Bettencourt touted Peabody’s housing market. “For the fourth year in a row, our average residential home value has increased,” he said, adding that last year property values went up by five percent and an increase of 6.5 percent is expected for this year – “Make no mistake, Peabody is a desirable place to live.”

According to a survey conducted by SmartAsset, a personal finance and technology company in New York City, Peabody was ranked fourth among the state’s “healthiest housing markets.” In addition, Peabody homes that are for sale only stay on the market for an average of 17 days, which Bettencourt said is the shortest amount of time in Massachusetts.

“Peabody continues to provide residents with great services for their dollar,” he said.

Finance Director Michael Gingras looked at both the city and school budgets, which total $174.3 million. That figure represents a 4.1 percent increase over last year. He said the primary budget drivers include increases of $2.4 million in employee salaries, $2.5 million for the MWRA and $1.5 million in health insurance. Gingras said 46 percent of the $174.3 million is earmarked for the schools, 15 percent is for employee benefits, another 15 percent is for public works and 12 percent is for public safety. Gingras said funding for 84 percent of the budget will be “generated at the local level.”

“There’s an ever-increasing reliance on property tax,” he said.

The remaining 16 percent of the budget will be funded by state aid.

 

Skating Rink and Golf Course Updates

In other news, City Auditor Mary Martin provided financial updates for the McVann-O’Keefe Skating Rink and The Meadow at Peabody Golf Course. Speaking about the skating rink, Martin said the facility was expected to bring in $725,000 in fiscal year 2018. However, current projections show that amount at $650,000. However, Martin said a $12,000 rebound is forecasted for fiscal year 2019.

She said 77 percent of the rink’s revenue comes from ice rental fees. Although income from public skating has gone up by $3,800, she said, the Learn to Skate program hit a $9,100 decline. Rink expenses were budgeted at $725,000 for fiscal year 2018 and are expected to come in at $757,500. Martin said the primary expenses include employee salaries, wages and utilities. She said expenses for fiscal year 2019 are projected to be $736,600 to “adjust for changes in natural gas.”

As a result of increased green fees at the golf course, Martin said, the projected revenue for fiscal year 2018 is $1.5 million, which is $100,000 more than the prior fiscal year. Martin said the clubhouse expenses for fiscal year 2018 were budgeted at $493,137 with projections showing actual expenditures of $468,807. Expenses for fiscal year 2019 are budgeted at $498,244. The grounds expenses were budgeted at $564,263 for fiscal year 2018 and are projected to come in at $533,602. The budgeted expenses for fiscal year 2019 are $569,556.

Martin said the projected profit for fiscal year 2018 is $65,657, and she expects the course will break even in fiscal year 2019.

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