Stow presents FY2027 "State of the Town," warns of heavy capital needs and insurance pressures

Assistant Town Administrator Tina McAndrew presented a detailed fiscal year 2027 "State of the Town" budget to the Stow Select Board, saying the town benefits from healthy reserves even as rising costs and a heavy slate of capital requests create near‑term pressure. "Certified free cash every year is the amount of money that we have left, revenue minus expenses," McAndrew said as she walked through fund balances and projections.

McAndrew said the town entered the fiscal year with a sizable stabilization account — about $1.671 million — and a capital stabilization account of roughly $367,000, and she reported the town's OPE (OPEB) trust balance at about $2.396 million with a liability of approximately $9.5 million. She described the combination of free cash, stabilization and capital stabilization as providing roughly 10.9% of the budget, inside the rating agencies' preferred 10–15% range.

But McAndrew warned of cost drivers that will test those reserves. She reported a snow‑and‑ice spending total near $535,000 against a budget of $225,000 and said the administration expects to include a free‑cash appropriation on the warrant to address the deficit. She also outlined an 8.48% increase in the town's health‑insurance costs through the MAYA insurance pool, noting the program removed certain high‑cost drugs from coverage this year and that utilization drove the rise.

On capital, McAndrew said initial department requests total several million dollars and that the five‑year capital plan contains "staggering" needs, especially at the school level. She described options for financing large projects, including using the capital stabilization account, borrowing within the levy, conventional debt exclusions, or a one‑time capital exclusion. "Do we want to save it so that we can offset something like a $4 million roof project, or is it to pay down debt service?" she asked, urging the board to develop a policy with the finance committee for the capital stabilization account.

The presentation also addressed expected new‑growth revenue tied to several local developments. McAndrew cited upcoming permit revenue from the Masters Academy and the Stow Acres development as likely to increase new growth in FY27 and beyond. "When you have an entity paying based on, say, an $80 million value, they're putting much more into the bucket," she said, explaining how large taxable development can lower the per‑household burden.

School assessments and debt were a prominent focus. McAndrew said education remains the largest portion of the budget (about two‑thirds of spending) and noted Neshoba regional assessments and Minuteman vocational assessment drivers. She acknowledged that some large school projects likely will require debt exclusions if they cannot be staged within the levy.

Board members asked about trade‑offs for using capital stabilization funds versus borrowing and whether callable bonds or early payoff strategies would be effective. McAndrew said the town could examine calling bonds where allowed and that capital stabilization appropriations require a two‑thirds town‑meeting vote, a constraint the board must weigh.

The presentation concluded with an appeal to use grant funding where available and to formalize capital policies. McAndrew said the town will post the full presentation online and that follow‑up work with the finance committee will occur ahead of the annual town meeting.