The budget deficit represents a 1.7% shortfall of the entire budget, but when considering the $116 million portion not allocated to fixed costs, it expands to a more concerning 2.6%. Fixed costs, including benefits and insurance, account for about $60 million of the budget and are inflexible, further straining the town’s financial planning capabilities. Health insurance, a significant component of these fixed costs, is projected to rise dramatically, with premiums expected to increase by 50% over the next three years—from $4.3 million in fiscal year 2024 to $7 million by fiscal year 2027. The driving factors of this increase include medical inflation, labor shortages in the healthcare sector, and the consolidation of health systems, exacerbated by the introduction of expensive specialty drugs.

The meeting also highlighted property tax revenue expectations and recent property growth. A full revaluation year contributed to a recent growth figure of $2.3 million, although this fell slightly short of the $2.2 million projection. The former UMass West campus’s recent occupation contributed to this growth, although the revenue increase was somewhat tempered by the residential classification of new construction, impacting the residential tax split.

Moreover, the session scrutinized the town’s capital plan, particularly the need for roof repairs across several facilities, including the high school, McCarthy School, and Harrington Elementary School. These repairs are estimated to require around $8 million, but uncertainties remain regarding qualification for the accelerated repair program, which could offer 50% reimbursement but historically does not fund roofs under 29 years old.

The upcoming Parker Middle School project was another focal point, with anticipated town meeting and ballot votes within the next 18 months. This project, driven by enrollment pressures, aims to secure Massachusetts School Building Authority (MSBA) approval and is structured to impact the town’s debt service from fiscal year 31 onward.

In discussing Chelmsford’s educational spending, it was noted that the district operates efficiently, maintaining strong academic performance despite lower spending and staffing figures. Chelmsford’s 10th-grade students ranked highly in English Language Arts and mathematics proficiency, trailing only Newton and Andover. The district’s financial standing was analyzed by comparing its spending, staffing, and performance metrics against other districts identified by the Massachusetts Department of Elementary and Secondary Education (DESE). The analysis affirmed that Chelmsford is not overspending on education per student, with a consistent trend in staffing levels.

The town manager emphasized the unpredictability of the current fiscal climate, citing uncertainties at federal and state levels that affect budget planning. The assessors’ valuation efforts were noted, projecting $2.2 million in new growth, essential for the upcoming budget formulation. However, concerns about limited new development opportunities could challenge future revenue generation.

Additionally, the Select Board addressed the broader financial landscape, including rising costs for infrastructure investments and public safety needs. The discussion included the challenges of managing constraints imposed by Proposition 2½, which caps the community’s ability to raise revenue. The town’s ongoing expenses related to health care and environmental remediation, such as groundwater contamination, were also mentioned.