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HomeMy WebLinkAbout2026-02-25 Finance Committee Minutes di Finance Committee Meeting Minutes of February 25, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i Call To Order: Chair Regina Kean called the open meeting to order at TOOPM in the School Admin Building located at 566 Main Street North Andover. Present: Chair Regina Kean, Vice Chair Denevan O'Connell, Nancy Sarro (remote), Jeanne Irwin, Eva Pastor, Christine Allen, Michelle Nadeau, and Jennifer Watson. Not Present: Keith Chaney Non-Board Members in Attendance: Finance Director Dennis Keohane. PUBLIC COMMENT None. NEW BUSINESS Town Manager FY27 recommended budget presentation Melissa Murphy-Rodrigues and Dennis Keohane were present. Ms. Murphy-Rodrigues discussed the budget process. Ms. Murphy-Rodrigues discussed the breakdown of the FY27 revenues. Ms. Murphy-Rodrigues displayed a pie chart of the revenue breakdowns. Ms. Murphy-Rodrigues provided background information on the levy and new growth. Ms. Murphy-Rodrigues provided examples of what new growth would be. Ms. Murphy-Rodrigues discussed a chart that shows the 10-year new growth they had with Amazon. Ms. Murphy-Rodrigues discussed the 10-year growth without Amazon. Ms. Murphy-Rodrigues discussed Amazon's new growth. Ms. Murphy-Rodrigues stated in 2024, $4.7 million came on in personal property due to Amazon's robotics. Ms. Murphy-Rodrigues stated in 2025, the personal property increase was due to Amazon's inventory. Ms. Irwin asked if Amazon was talking to the state trying to negotiate to lower it. Ms. Murphy-Rodrigues stated they have applied to the appellate tax board. Ms. Murphy-Rodrigues discussed what overrides and exclusions are. Ms. Murphy-Rodrigues stated this year they are not asking for an override or an exclusion at Town Meeting. Mr. O'Connell stated it is important to note that one of them is temporary and one of them is permanent. Mr. O'Connell asked if Ms. Murphy-Rodrigues could explain what happens when it is permanent. Ms. Murphy-Rodrigues stated once they increase their budget by any amount, the levy never goes down, it only increases by that 2 �/2%. Ms. Murphy-Rodrigues used an example of if a Walmart were to open and then closed in the Town. Ms. Murphy-Rodrigues stated it is similar to an override. Ms. Murphy-Rodrigues stated an override is permanent, and they will continue to have the 2 �/2% on top of the override amount moving forward. Ms. Murphy-Rodrigues discussed the levy capacity. Ms. Murphy-Rodrigues discussed the breakdowns of the expenditures for FY27. Ms. Murphy-Rodrigues stated the NAPS is going up by 4.47%. Ms. Murphy-Rodrigues stated they are level funding Greater Lawrence and Essex Tech due to them moving to a lottery system. Ms. Irwin asked if that is why Essex Tech went up so much. Ms. Murphy-Rodrigues stated FY25 was underbudgeted so they are seeing a huge increase. Ms. Murphy-Rodrigues stated Essex Tech has special legislation that allows them to take students from any community, and they do see a lot of students going there. Ms. Murphy-Rodrigues displayed a pie chart of the breakdown of the budget expenditures. Ms. Irwin asked why the capital expenditures went down so much. Mr. Keohane stated the $7.8 million is actual expenditures, and the $1 million is the amount they budgeted in the levy. Ms. Murphy-Rodrigues discussed how the different expenditures by function have changed value year to year. Ms. Murphy-Rodrigues discussed the FY budget expenditure breakdown. Ms. Murphy-Rodrigues discussed the Town budget highlights and changes. Ms. Murphy-Rodrigues stated the municipal budget is di Finance Committee Meeting Minutes of February 25, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i only going up by$1.1 million and health insurance is going up by$1.5 million. Ms. Irwin asked if Ms. Murphy-Rodrigues had any idea what FY28's insurance increase will look like. Ms. Murphy-Rodrigues stated no. Ms. Murphy-Rodrigues stated MIIA, the other insurance municipalities use is going up by 12%. Ms. Murphy-Rodrigues discussed the FY27 cuts. Ms. Murphy-Rodrigues stated they did have to cut about $800,000 from the town budget and budget requests. Ms. Murphy-Rodrigues highlighted the biggest cuts. Ms. Murphy-Rodrigues stated some of the cuts within the DPW included the composting program at the schools. Ms. Murphy-Rodrigues discussed the full-time equivalences over the last few years. Ms. Murphy-Rodrigues discussed the historical North Andover public school spending. Ms. Murphy-Rodrigues stated FY25 was the year they took utilities and facilities and put them into shared services. Ms. Kean asked what the different colors on the chart meant. Ms. Murphy-Rodrigues stated the first few up until 2023 are all actuals, and after that it moves into budgeted. Ms. Murphy-Rodrigues discussed historical health insurance. Ms. Murphy-Rodrigues discussed the potential need for an override in FY28. Ms. Murphy-Rodrigues stated they spoke with the department heads when creating the budget and asked them what they would want to see if they were going for an override. Ms. Murphy-Rodrigues discussed the sewer enterprise fund. Ms. Murphy-Rodrigues discussed the water enterprise funds. Ms. Murphy-Rodrigues stated there were no major changes in either one of these. Ms. Murphy-Rodrigues discussed reserves. Ms. Irwin asked why the local receipts went down from $16 million to $13 million from FY25 to FY26. Ms. Murphy-Rodrigues stated that is the actual amount of local receipts received in FY25. Mr. Keohane stated the biggest components are going to be building permit revenue and investment income above what they budgeted. Ms. Irwin asked if it normally fluctuates that much. Ms. Murphy-Rodrigues stated yes, it can. Ms. Irwin asked if it was getting to a point where it might be an area of concern that fire, police, water, and facilities are cutting back too much. Ms. Murphy-Rodrigues stated the cuts for police is overtime and a capital request that was under the $50,000 that would typically go into the capital budget. Ms. Murphy-Rodrigues stated Fire had put two captain positions back in their budget, and they took them out. Mr. O'Connell asked based on the potential override, would that be four captains or six. Ms. Murphy-Rodrigues stated four. Ms. Kean asked what the cuts in the DPW are. Ms. Murphy-Rodrigues stated $35,000 of that is the composing program. Ms. Allen asked how the current weather situation impacts that. Ms. Murphy-Rodrigues stated they are deficit spending. Ms. Murphy-Rodrigues stated due to being in a state of emergency, they are categorizing all of the expenses because the state will collect them to see if the Town meets the county threshold. Ms. Allen asked if this is something they can come to the finance reserve. Ms. Murphy-Rodrigues stated yes. Ms. Irwin asked when the last override was. Ms. Murphy-Rodrigues stated there is a chart on the website that shows every override and when the last one passed and which ones did not pass. Ms. Nadeau asked about the holiday pay line item for police and fire. Ms. Murphy-Rodrigues stated it is contractual. Ms. Murphy-Rodrigues stated some officers take in lieu of instead the holiday pay. Ms. Murphy-Rodrigues stated fire does not get in lieu of so they receive holiday pay. Superintendent FY27 proposed budget presentation Pamela Lathrop, Joe Hicks, and Gail Dowd were present. Ms. Lathrop stated the School Committee did pass the recommended school budget. Mr. O'Connell asked if it passed as she is presenting it tonight. Ms. Lathrop stated yes, there are no changes. Ms. Lathrop discussed the 24-25 school year demographics. Ms. Watson asked if this has changed recently. Ms. Lathrop stated it has not changed recently but has changed over time. Ms. Lathrop stated the high needs students include students who are English learners, low income, and di Finance Committee Meeting Minutes of February 25, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i students with disabilities. Ms. Lathrop discussed the FY27 budget priorities. Ms. Lathrop discussed what this recommended budget would do. Ms. Lathrop discussed the FY27 financial allocation. Ms. Lathrop discussed the FY27 salaries and expenses. Ms. Lathrop stated the budget recommended to the School Committee was $73.7 million. Ms. Lathrop discussed the budget recommendation in staffing. Ms. Kean asked by adding all of these special education positions, are they able to reduce the outplacement that is happening. Ms. Lathrop stated no. Ms. Lathrop stated they have seen a reduction in out of district placement of students. Ms. Kean asked what was the third special education position if two are for the RISE program. Ms. Lathrop stated a general special education teacher to support special education throughout the district. Ms. Allen asked if they will be bringing in out of district students to the RISE program. Ms. Lathrop stated they do not. Ms. Irwin stated the enrollment has gone down from 2025 to 2026 in kindergarten and asked if they knew if it was because residents are getting older. Ms. Lathrop stated it was an interesting year, but the current first graders who were in kindergarten last year, were one of the largest kindergarten classes they had in a long time. Ms. Lathrop stated enrollment is down, but that they plan to hold where they are right now in kindergarten for next year. Ms. Irwin asked if PreK was half days. Ms. Lathrop stated it varies. Ms. Kean asked if they are expecting enrollment to be down in FY27. Ms. Lathrop stated they are expecting it to be about the same. Ms. Watson asked how does the preschool compare in terms of overall administrative positions to the other schools. Ms. Lathrop discussed the staff at the ABECC. Mr. O'Connell asked if the$125 brings them closer to or level with other substitute rates. Ms. Lathrop stated closer but still a bit lower. Ms. Lathrop stated some districts will use a scale or range for their substitutes. Mr. O'Connell asked if they use a scale. Ms. Lathrop stated they do not. Mr. O'Connell asked if this budget goes through with the $125 increase for the daily substitute rate, what would the deficit be. Ms. Dowd stated they have been benchmarking it. Ms. Lathrop stated they are close but does not know off the top of her head. Ms. Kean asked about a change or addition for staff for English as a second language. Ms. Lathrop stated this is an area they would focus on when discussing a potential override. Ms. Lathrop stated they have used Title I funding for a paraprofessional that works within the schools that has a larger proportion of students with English as a second language needs. Ms. Lathrop stated their goal is to hire people that are dual certified. Ms. Sarro asked how many of those positions were actually positions that were taken away in the FY26 budget. Ms. Lathrop discussed the positions that they were adding back from the cuts made in FY26. Ms. Sarro asked if this budget is assuming that they continue with the four elementary schools. Ms. Lathrop stated yes. Ms. Kean asked if the special population of students is increasing. Ms. Lathrop stated the rate of North Andover special education students is higher than the state average. Ms. Watson asked how the additions rectify the MCAS testing that have trended down in performance over the last three years. Ms. Lathrop stated these positions are going to meet some of the needs however, when they share the overall larger needs of the district and what they would need in a potential override, those are going to be the drivers to help increase achievement. Ms. Lathrop discussed the FY27 expenses. Ms. Lathrop discussed how they would potentially bridge the gap between the Town and school's recommended budgets. Ms. Lathrop discussed the circuit breaker. Ms. Kean asked if they are still spending over what Town can provide. Ms. Lathrop stated yes. Ms. Kean asked if they have full confidence they will receive that$2.5 million. Ms. Dowd stated this is based upon looking at historically what the claims and the reimbursement has been. Ms. Kean asked if they could clarify using FY26 circuit breaker money for this year. Ms. Dowd stated they received additional circuit breaker funding that was released. Ms. Dowd stated the claim and reimbursement was higher than they anticipated. Ms. Kean asked if the reimbursement was from FY25 and received it in FY26. Ms. Dowd stated yes, and they can carry 100% of this year's reimbursement into next year. Ms. Kean asked about the $3.1 million in FY26 circuit breaker. Ms. Dowd stated they are building that up to be able to carry that forward for next year. Ms. Sarro stated in the document di Finance Committee Meeting Minutes of February 25, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i received by Mr. Keohane showed about$600,000 in the circuit breaker reserve as of the end of 2025. Ms. Dowd stated they received additional funds at the end of the year but did not actually receive it until this year. Ms. Sarro asked what the projected balance at the end of FY26 would be. Ms. Dowd stated $2.1 million is the carryover that was embedded in the budget. Mr. Hicks discussed the budget directives from the School Committee. Mr. O'Connell asked what happens if an override does not happen in FY28. Mr. O'Connell stated he is concerned that they do not see safeguards built into this budget. Mr. Hicks discussed the ramifications of an override not passing. Ms. Irwin asked if this was the last year of the teacher contract and if it is going up 4%. Ms. Lathrop stated yes. Ms. Irwin asked what is the negotiated rate for the following year. Ms. Lathrop stated they have open bargaining in October. Ms. Dowd stated they were conservative in their numbers. Ms. Lathrop discussed the breakdown of the FY27 recommended budget. Superintendent January 2026 budget update letter Ms. Lathrop discussed this within her FY27 recommended budget. Other business Mr. O'Connell stated he did not remember Fire station 3 being part of the plan and would just like clarification. Ms. Murphy-Rodrigues discussed Facilities Master Plan 2 and the plan at the time for Fire station 2 renovation and additions. Ms. Murphy-Rodrigues discussed the changes and planning done for a potential Fire station 3. Ms. Murphy-Rodrigues stated Fire station 3 will be its own article at Town Meeting. Ms. Kean asked if the budget for that is all in FY27. Ms. Murphy-Rodrigues stated no, design was last year FY26 and this year was just for construction. APPROVAL OF OPEN SESSION MINUTES FROM FEBRUARY 2, 2026 MOTION: Mr. O'Connell motioned to approve the open session minutes from February 2, 2026 as presented. Ms. Watson seconded. Motion approved 8-0. ADJOURNMENT MOTION: Mr. O'Connell made a MOTION, seconded by Ms. Allen to adjourn the Finance Committee meeting at 8:50PM. Motion approved 8-0. Respectfully submitted. Nicole Civitarese Executive Assistant di Finance Committee Meeting Minutes of February 25, 2026 � (IIII ��Il iilt'lli�ll I i ,i Documents used at meeting Presentations Letter Minutes from 2/2/26