Budget committee presents FY26 plan: flat local school appropriation, targeted use of fund balance and call for reserve review

The Budget Committee presented its proposed fiscal year 2026 budget to the Town Council on June 2, urging a conservative approach that relies on increased state aid and targeted use of fund balance while recommending structural reviews of reserves and capital planning.

Douglas Ozer, chair of the Budget Committee, said the FY26 plan "reflects a balanced approach to funding essential services, advancing capital priorities, and preparing for future obligations." The committee recommended the town review its reserve policies, formalize a capital project evaluation methodology and conduct a market analysis for nonunion positions.

Key points the committee raised included: - Schools: Local school appropriation is held flat because of what Ozer described as an "approximately $1.5 million" increase in state education aid; the committee said any resulting school surplus could be allocated to capital repairs. - Public safety and staffing: Police salaries remained unsettled due to ongoing union negotiations; the budget includes conservative assumptions and some grant-funded positions. The fire department completes a multiyear contract in FY26 that phased two hires; the committee recommended the council study municipalization and asked for prior review of contracts as required by the charter. - Water and sewer: The water enterprise budget includes a new staff position for succession planning and anticipates a substantial rate increase; the committee cut $180,000 from a proposed capital line to reduce the burden on ratepayers and urged the department to seek alternative funding sources. - Senior services: Council appropriation to senior services increased to "over $40,000," but the committee warned the town has not yet finalized a new provider after Aging Well's leadership change and recommended interim arrangements to avoid service interruptions. - Fund balance and capital: The committee recommended using the fund balance only for shovel-ready projects and asked the town to earmark any fund-balance allocations; it also proposed formal scoring criteria for capital projects that incorporate cost-benefit, public impact and operational risk. - Compensation: The committee held a 2.5% base salary increase assumption and recommended creating a $2,020,000 compensation reserve to support a market-driven pay strategy and future adjustments. - Litigation: The budget includes a projected $175,000 increase in extraordinary litigation costs tied to ongoing labor and legal matters.

Ozer told councilors that many of the committee's suggestions are intended to increase transparency and long-term fiscal sustainability. Councilors asked for clarifications on reserve accounting, the capital evaluation process and senior-service continuity. Town officials said some items are already under way (for example, reserve-policy review), and that further scheduling and details would be brought back to the council.

The committee said a public hearing on the budget will take place at the scheduled agenda date (public hearing date in mid-June) and that the council should present questions to the committee and administration before the first adoption meeting. The committee also recommended monthly project schedule updates from consultants working on the municipal building and other capital projects.

The presentation prompted council discussion about process, staffing shortages in the finance team, and timing: some councilors urged more collaboration between the administration and the budget committee earlier in the cycle; others emphasized independent committee review. The Budget Committee asked the council to prioritize reserve-policy and capital-project evaluation updates this fiscal year.