In a detailed presentation, Town Manager Paul Cohen highlighted several key fiscal challenges facing Chelmsford. The town is dealing with a sharp increase in health insurance premiums, which have risen by 17.77%, higher than the initially anticipated 10% to 12%. This hike is attributed to the town’s current claims experience, which shows a balance of claims to premiums that necessitates a rate increase to offset existing deficits. Cohen explained, “The reason for the extraordinary rate increase is they have to make up the loss for the current year.” Further compounding the financial strain is the Middlesex County Retirement assessment, which has surged by 88.4%, resulting in a $13 million payment primarily due to the unfunded pension liability.

The town is also facing constraints due to limited increases in state aid. The governor’s budget provided only a 2.2% increase in unrestricted general government aid, which falls short in addressing the town’s financial needs. Cohen noted this increase was underwhelming, especially in light of a 7% growth in the state budget influenced by the “fair share tax.” This limited aid increase challenges the town’s ability to manage rising costs, particularly in education, where Chapter 70 funding is at an all-time high of $75 per student but still falls short of last year’s $104 per student allocation.

With property taxes constituting over 76% of the town’s budget, the 2.5% cap imposed by Proposition 2½ has failed to keep pace with inflation, which has recently exceeded 3%. This has resulted in financial difficulties for the town, similar to challenges faced by neighboring communities like Westford and Acton, where attempts to pass overrides have been unsuccessful. The Chelmsford Finance Committee noted these broader struggles, echoing concerns shared by residents managing increasing costs in areas such as groceries and utilities.

The town’s financial outlook is further complicated by static staffing levels in the police and fire departments despite a growing population and heightened service demands. More than two-thirds of emergency calls are medical in nature, highlighting the increasing pressure on public safety services. The committee discussed concerns over employee compensation and health insurance costs, with the number of retirees insured rising over the past decade, reflecting longer lifespans and a trend of private sector individuals opting for municipal health plans due to limited options elsewhere.

In addition to operational budget pressures, the meeting delved into capital spending plans, with a focus on maintaining fiscal responsibility to avoid future deficits. Cohen emphasized the need for careful management of capital expenditures, stating, “It’s not fair to the community; it’s irresponsible for those who come after us.” The proposed fiscal year 26 capital plan includes 19 projects totaling just over $5.96 million, prioritizing community services and library rehabilitation projects. However, committee members expressed skepticism about the justification of significant spending on library-related projects, given the town’s financial situation.

The meeting also addressed the challenges of funding educational needs amidst rising costs and unresolved collective bargaining agreements. The committee underscored the budget constraints with a 2.4% increase for the schools, falling short of the requested $3.5 million. This shortfall raises concerns about the ability to maintain educational quality, especially with net school spending requirements rising and enrollment trends showing a slight decline.

The committee explored potential avenues for operational improvements and enhanced revenue sources, including a $50,000 appropriation to investigate initiatives such as cannabis revenue and regional public safety dispatching. Additionally, the committee discussed the town’s water districts and the possibility of consolidating governance to improve service efficiency.

The meeting concluded with a review of upcoming town meeting warrant articles, including proposals for property tax exemptions for veterans and seniors. The committee acknowledged the need for a careful balance between exemptions and maintaining adequate funding for municipal operations.