Interim Town Manager Rodney outlined the complexities of the fiscal year 2026 budget, emphasizing pressures that exceed the limits of Proposition 2½. Concerns included an 8% annual increase in retirement contributions to achieve full funding by 2035 and a significant 10.91% rise in health insurance renewal rates, translating to a $1.45 million increase. The discussion also highlighted a 3.8% increase in the public schools’ budget, driven by rising costs in special education and transportation.

The town’s financial manager addressed the loss of Danvers’ AAA rating, attributing it to increased liabilities related to Other Post-Employment Benefits (OPEB) and pension obligations. This shift in evaluation criteria from 10% to 20% liability focus has posed challenges in maintaining the prestigious rating. The manager noted that while the town’s budget performance remains strong, this change necessitates a reevaluation of financial policies and practices.

A significant portion of the meeting centered on the budget for Danvers Public Schools, which amounts to $53,965,981. This figure represents a slight reduction compared to previous years, adhering to a level service approach to maintain operational standards. Superintendent Bower underscored the importance of collaboration with the town to address rising costs, particularly in special education and transportation.

The board also examined the impact of rising special education transportation costs, which have reportedly tripled since 2022. The budget projection for special education transportation was $2.1 million, but actual costs are expected to reach $2.5 million. Discussions focused on strategic planning to address these financial pressures, including the introduction of a transportation coordinator to better manage contracts and routes.

In the realm of community resources, Noel Bach, the library director, presented on the library’s budget, noting a modest increase due to salary obligations and consortium membership costs. Despite this, the library has seen a 63% increase in circulation in the children’s department. The library’s initiatives, including a seed library and community outreach programs, have been well-received, although concerns remain about potential federal funding cuts impacting services.

The Select Board’s discussion also included potential adjustments to OPEB contributions, with the financial manager suggesting that current reliance on free cash could allow for reduced contributions. However, no immediate changes were planned. The town’s financial situation was described as precarious, with potential adverse effects from diminished state and federal aid looming.

The meeting concluded with discussions on various departmental budgets, including inspectional services, public health, planning and economic development, and recreation. Inspectional services reported a 7.4% budget increase due to salary adjustments, while the public health sector saw a 72% increase in salary and wage costs. Planning and economic development showed a 63% increase, attributed to historical usage adjustments. The recreation budget saw a modest 2.75% increase, primarily linked to contractual salary obligations.