PEABODY — Mayor Ted Bettencourt says the goal of the budget for this new fiscal year is to help the city’s finances get back to pre-pandemic levels.
“I wanted to make sure that the departments were staffed like they were before COVID and that we continue to operate effectively,” Bettencourt said. “I wanted us to be able to have the resources we need to make sure we’re doing the job across the departments here in the city.”
The City Council approved a budget for fiscal 2023 that is roughly 6% higher than last year, providing more money for education, public employee benefits, public safety and other city works. The new budget, just over $179 million, was passed on June 21.
Over the next fiscal year, which began July 1, 50 cents of every budget dollar will be spent on education, followed by 17 cents for employee benefits, 13 cents for public safety and 7 cents for public works, according to a presentation from the city.
Peabody is projected to receive $114.5 million in property taxes during FY23. It will also receive $40.9 million in state aid, $19.2 million in local revenue and about $3.5 million in ARPA relief funds for revenue loss the city faced due to the pandemic.
Bettencourt said the city is more optimistic two years after the start of the pandemic, especially since it has seen a rebound in commercial and residential taxes compared to last year.
“We are seeing improvements there and increases that will help us in our budget going forward, but I still feel like there’s a lot of uncertainty and I’m still concerned as to how COVID is going to impact us in the months ahead,” he said.
With the exception of a diversity and inclusion director position Bettencourt added this year, the mayor’s office has held off on adding new positions in the city to help support the budget as it bounces back from the pandemic.
Residential property values are expected to rise by 8% over the next fiscal year, according to the city. Most homeowners will likely see an increase of between $225 and $245 in property taxes during that time, Bettencourt said.
“It’s been difficult the last couple of years to really give a specific number to an anticipated tax increase because there’s so many variables and so many uncertainties as to how these upcoming months are going to go in terms of tax revenue and what we expect for income to the city,” he said.
“We tried to give a range for it,” he continued. “It could be higher than that, or it could be lower than that.”
The city will determine a finalized tax rate in December, according to Bettencourt.
As part of the budget, the council approved $10.4 million for water expenses and $10.3 million for sewer expenses.
Councilors also approved $83.2 million to be spent on schools — $6.6 million more than the year before, according to a report presented at the June 21 meeting. The state provided $30.6 million of this budget, with the rest coming from the city.
Aid from the state to support Peabody’s schools went up by nearly 33% for FY23. Part of this increase resulted from 500 more students needing free or reduced lunch compared to last year, Superintendent Josh Vadala explained.
“The pandemic hit Peabody pretty hard and the number of students identified for free and reduced lunch went up…” Vadala told councilors. “We made sure we connected families to services.”
“We have more need in the district, therefore we’re receiving more funding, and we need to make sure that we’re investing that in our students,” he said.
The Peabody Public Schools will be using $3.5 million in federal COVID-19 emergency relief funds to cover some salaries in the district and one-time capital expenses.
This includes three projects that will be done this summer: An enhanced security camera system at the high school, adding new key fob door systems in the middle school, and upgrading the district’s phone system so that users can call police, fire and City Hall with a five-digit code.
“An additional benefit to the program that we’re upgrading to for the phone system is that incoming calls for our clerks and our principals can be recorded, so if there were a call that was a threat or something like that it could be recorded and that file could be sent to the police,” Vadala said. “All three of these (upgrades) are security related.”
The city also expects to retain $904,008 in combined earnings from the city-run James McVann/Louis O’Keefe Memorial Rink and Meadow Golf Course for fiscal 2023.
Contact Caroline Enos at CEnos@northofboston.com and follow her on Twitter @CarolineEnos.
