Last month Town Meeting gave its overwhelming approval for the town’s FY2024 budget of $231.67 million, an almost 2% increase from the previous year.
The bulk of that total, $214.275 million, will fund the FY2024 General Fund operating budget. The remaining $17.1 million is dedicated primarily to:
• Capital projects ($11.667 million)
• Town Meeting warrant financial articles ($1.7 million)
• Transfers from established stabilization funds ($1.06 million)
The vote was the culmination of a budget process that began with a draft prepared by Town Manager Kate Fitzpatrick and approved by the Needham Select Board.
The draft budget was submitted last September to the Finance Committee (FinCom), which then held meetings covering every town spending category to prepare the budget that was presented at Town Meeting. This conforms to the Town Charter requirement that “The Finance Committee’s recommendation on the operating budget shall be the Main Motion to be acted on by Town Meeting.”
Where does the town’s revenue come from?
An early task in preparing the budget is projecting the town’s annual revenue, which comes broadly from five sources.
• Property taxes – $183.7 million — 79.3%
• Free cash and other available funds – $16.4 million – 7.1%
• State aid –$16.2 million — 7.1%
• Local receipts – $12.9 million — 5.6%
• Enterprise funds and Community Preservation Act (CPA) reimbursements — $2.3 million – 0.9%
How will it be spent?
As FinCom Chair John Connolly noted when presenting the budget, town government is effectively a service industry.
“Unlike manufacturing, the town does not make anything,” he said. “Instead, as we all know, the town provides a multitude of services to its citizens.”
Consequently, three-quarters of the budget goes to personnel-related costs.
Expense Categories :
• Personnel (salaries and benefits) – 74%
• Purchased goods and services – 17.8%
• Debt service – 8.2%
The budget can be broken down into six broad categories of service:
• Education – 43%
• **Townwide Expenses —31.9%
• Public Facilities – 9.5%
• Public Safety – 9.4%
• General Government – 3.2%
• Community Services – 3.0%
**Townwide Expenses comprises spending not assigned to a particular town department. It is the town’s combined cost of doing business and includes spending on employee benefits, healthcare, debt service, energy costs and general administration.
There were five Townwide Expense areas with more than $1 million in spending:
• Health Insurance, Employee Benefits, Admin — $17.6 million
• Debt Service — $17.5 million
• Retirement Assessments – $12.3 million
• Needham Electric, Light & Gas program — $5.65 million
• Reserve Fund — $2.0 million
As is true of all municipalities, spending on schools is the largest portion of the Needham’s budget by a significant margin. In fact, school spending is nearly twice the combined total of funds spent on the next nine highest funded departments:
Ten largest departments
• School Department — $92.1 million
• DPW — $20.3 million
• Fire Department — $10.7 million
• Police Department — $8.75 million
• Health & Human Services — $2.55 million
• Library — $2.24 million
• Minuteman Regional — $1.64 million
• Town Manager/Select Board — $1.5 million
• Park & Recreation — $1.47 million
• Building Department — $894,312
After hearing presentations by members of the FinCom, Select Board, and School Committee, Town Meeting members spent less than an hour on line item by line item discussion before approving the budget on a near unanimous voice vote.
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