Council reviews draft FY26 budget: committee highlights reserves, ARPA funding and proposed fee changes

Council and the finance, revenue and budget committee conducted a preliminary review of the town manager's draft FY26 budget and accompanying five‑year projection.

Chair Peter Tynan oriented members to four documents: a one‑page summary, a revenue working paper prepared by John Medallia, the draft FY26 budget and a five‑year projection. The committee reported the town begins from a strong cash position and that roughly $4,600,000 is in town bank accounts. Committee members said more than $2,500,000 in ARPA funds has supported recent infrastructure investment and that much of FY26 capital spending is covered by obligated grants.

On revenues, staff said property tax receipts should rise because assessments are increasing (committee cited assessment increases of about 9.47% in FY26, 7.2% in FY27 and 6.89% in FY28). The committee recommended not changing the town property tax rate in the draft; at the same time it rebased income tax receipts downward for FY26 by approximately $400,000 because income tax flows are variable. Committee materials include the specific calculation spreadsheets and staff invited line‑by‑line review at future sessions.

The manager and committee identified three major revenue items—property tax, income tax and fees/permits—and presented a conservative scenario for out‑year projections so that reserves remain robust even if revenue softens. The committee reported the town's rainy‑day fund target is set at 12 months of operating expenses and that a special capital fund holds about $250,000 for longer‑term needs.

On expenditures, the draft reflects adjusted salaries across personnel categories; the mayor noted the town manager's salary will be considered separately. Capital items include streets and sidewalks work, a garage and landscaping truck purchase and a potential pool bridge project (committee noted $100,000 as an estimate that could increase if reconstruction is needed). The draft showed a FY26 capital outlay above $900,000, with the town's direct outlay ~ $360,000 because much is ARPA or other external funding.

The budget packet contains proposed fee schedule amendments for recreation and permits. Committee recommendations include listing water aerobics and swim‑team line items with transparent revenue and expense presentation (committee indicated net swim team residual ~ $5,000 but total program costs including coach fees approach $35,000). Councilors asked staff to prepare comparative fee benchmarks from neighboring jurisdictions and to provide a simple one‑page cost breakdown for programs such as early‑bird swim and water aerobics.

Councilors also discussed public safety and traffic calming elements that may be funded from ARPA or CapEx, pedestrian‑scale lighting, and consultant work (Dewberry master plan) with placeholder amounts for design; town staff said ARPA obligations were already reflected in the draft and will be tracked.

The council scheduled a follow‑up budget meeting on April 2 at 5:30 p.m. for additional line‑by‑line review and invited staff to publish the draft budget with the proposed fee changes for public comment. No final votes were taken at the work session; the budget remains a draft for public review and formal adoption in May.