Peabody City Council adopts $216.996 million FY2027 operating budget; approves compensation ordinance and year-end transfers

The Peabody City Council voted on June 23 to adopt the city's fiscal year 2027 operating budget and several related measures, approving the full operating budget, enterprise budgets and a set of year-end transfers following reports from the finance committee.

Councilor Peach, presenting the finance committee's report, said the committee met June 16, June 18 and June 23 to review the mayor's budget and department presentations, including a schools presentation by the superintendent. She told the council the committee reduced the general fund budget by $114,212.83 in addition to a $244,988 reduction tied to a salary ordinance change agreed in committee. "Be it ordered by the city council of the City of Peabody to approve and adopt the fiscal year 2027 City Of Peabody operating budget as submitted by his honor, the mayor, and further amended by the city council in the amount of $216,996,238.17," Peach said; she listed personnel services at $163,079,529.17 and operating expenses at $53,916,709.

The council voted by roll call to adopt the FY2027 operating budget; the motion carried 9 to 2.

Before the operating-budget vote, the council considered an ordinance amendment affecting compensation for full- and part-time employees not subject to collective bargaining. The mayor's amended proposal, described to the committee by Peach, provided no increase for FY26 and a 2% increase for FY27. Councilor Gamache had moved that the committee draft and advertise the ordinance (which would delete existing sections 18-20 and 18-21 and insert new compensation schedule sections); the committee's motion previously passed 8 to 3 and the full council approved moving the ordinance forward by an 8-to-3 vote on the motion to draft and advertise.

Councilor Hockman said he would register a no vote on that motion because he believed ordinance (non-union) employees should receive the 3% raise promised last year and budgeted for it. "I'm voting no on this for the reasons I stated during the finance committee meeting. I think the ordinance employees should be getting the raise that they were promised last year," Hockman said.

The council separately approved enterprise budgets: the water and sewer enterprise budget, presented with personnel services of $4,823,246 and operating expenses of $18,585,898 for a total of $23,409,144, passed 9 to 2; the recreation enterprise budget (which Peach said includes the McFann O'Keefe Memorial skating rink and Meadow Golf Course) listed personnel services of $1,437,222.97 and operating expenses of $1,505,137 for a total of $2,942,359.97; that motion passed unanimously 10 to 0 (Councilor Hockman recused himself from the recreation vote because his brother works at the skating rink).

Peach also brought several FY2026 closeout transfers to the full council. The committee presented a combined transfer to adjust various payroll and expense accounts and use free cash to close FY26, with a stated total of $1,926,200; the council approved it 11 to 0. Additional transfers approved on the floor included a $90,000 transfer within the Recreation Enterprise, a $100,000 transfer within the Water and Sewer Enterprise, two Community Preservation Committee transfers (one for $31,000 and one for $5,288.67) and a cable fund reserve transfer of $13,173.17; each of those motions carried by unanimous roll call (11 to 0 where recorded).

Peach closed by thanking the mayor, finance director and city staff for their preparation and for providing the council budget updates earlier in the process. The council adjourned following a short exchange of remarks.

Votes at a glance - Ordinance amendment to establish new compensation sections for non-union employees: motion to draft and advertise carried 8 to 3 (moved in committee by Councilor Gamache; presented to full council by Councilor Peach). - FY2027 operating budget (total $216,996,238.17): adopted 9 to 2 (moved by Councilor Peach). - Water & Sewer Enterprise budget ($23,409,144): adopted 9 to 2. - Recreation Enterprise budget ($2,942,359.97): adopted 10 to 0 (Hockman recused). - FY2026 closeout transfer (total $1,926,200): adopted 11 to 0. - Recreation transfer ($90,000): adopted 11 to 0. - Water & Sewer transfer ($100,000): adopted 11 to 0. - CPC transfer ($31,000): adopted 11 to 0. - CPC transfer ($5,288.67): adopted 11 to 0. - Cable fund reserve transfer ($13,173.17): adopted 11 to 0.

What it means The council's actions finalize the city's operating and enterprise budgets for FY2027 and implement a committee-approved compensation ordinance change for non-union employees to take effect with the first pay date in July 2026. The votes also authorize multiple transfers to close FY2026 accounts and allocate funds within enterprise and special accounts. Council debate included a clear dissent from Councilor Hockman over the level of the non-union raise, which he said should match the 3% previously promised.

Next steps The ordinance language will be drafted and advertised for public notice and subsequent council consideration as required; adopted budgets will be administered by the mayor's office and the finance department in the coming fiscal year.