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Northborough Select Board backs using $700,000 of reserves as FY2027 shortfall looms
Summary
Facing an estimated $1.33 million budget gap for fiscal 2027, the Northborough Select Board voted Feb. 23 to apply $700,000 of unassigned free cash to the budget and directed staff to pursue fee and plan‑design changes to avoid a larger override next year.
At its Feb. 23 meeting the Town of Northborough Select Board voted to support applying $700,000 of unassigned free cash toward projected FY2027 budget shortfalls and directed town staff to incorporate that approach into budget development.
“Right now we’re still looking at an unfunded $1,330,000 budget shortfall,” Finance Director Jason told the board during a detailed presentation of five‑year projections and current assumptions. He said the gap reflected several factors including the end of a SAFER grant that had funded firefighters, ongoing debt commitments, increased school transportation and special‑education costs, and a larger‑than‑expected health‑insurance renewal.
Board members discussed a suite of options to avoid an operational override — including raising pay‑as‑you‑throw bag fees, reducing or delaying OPEB contributions, pursuing health‑insurance plan‑design changes, increasing local receipts, and using available reserves. Jason said increasing bag fees could raise roughly $300,000–$400,000 depending on the size of the change, while the town currently shows about $700,000 in unallocated free cash in the FY2027 planning model.
“Part of the reason we were projecting overrides in later years is the combination of higher health‑insurance renewals and capital pressures,” Jason said. He cautioned that some revenue items (notably investment income and certain permit receipts) are variable and should not be relied on as recurring solutions.
Several select board members urged caution before relying on one‑time fixes. Jacob Jones said he was “generally favorable” to accepting non‑tax sources but added he preferred counsel review where optics could be sensitive. John (last name not provided) described some school special‑education costs as transitory and urged the board to consider timing of state reimbursement before committing to an override.
After discussion the board voted in favor of a motion supporting the use of reserve funds to address the projected FY2027 school budget needs and directing staff to incorporate those actions into budget development. The vote was by roll call; members present voted to approve the motion.
Next steps: the finance director and town staff will prepare revised budget materials, including a more detailed accounting of local‑receipt assumptions and health‑insurance plan‑design options for future bargaining. The board also asked staff to bring firm proposals for bag‑fee changes and other local‑receipt increases for separate consideration.
