Stockbridge — Select Board members met on Thursday, February 5, spending the majority of the evening reviewing draft budgets for fiscal year 2027 (FY27). Town Administrator Michael Canales presented the budgets, highlighting some of the larger increases, challenges, and achievements they reflect. This was the board’s first look into FY27. The budgets presented did not factor in Berkshire Hills Regional School District’s (BHRSD’s) budget and are not considered final.
Here is what we know so far in these early stages:
- FY27 is a continuation budget, not an expansion budget.
- Any increases are not “discretionary growth.”
- Increases are being driven mostly by public safety, employee benefits, and contractual obligations.
- As a result of the recommended increases for FY27, the overall operating budget is up 2.6 percent.
- Current tax impact is 0.6 percent (without the BHRSD budget).
- Challenges for FY27 include sewer and water.
Fire and EMS Department, additional town hires
Recommended in FY27 is the hire of six new positions within the town. The Fire/EMS Department will account for the majority of these hires, with an overall increase of $325,000 for additional salaries. “[This is] the single-largest department increase,” Canales explained. “You’re adding four personnel next year. That’ll get us up and ready to be operating for fiscal year 2028. We’ve been working on this for three years. This is a service-level and safety-driven cost. I don’t see this as an optional increase if we’re to bring on a Fire-Ambulance EMS system.”
The two other positions are a town accountant and a Full-time, benefited community, senior center, and recreation director. As for the former, the town treasurer/tax collector would be transitioned into this position. Stockbridge currently uses a paid, outside firm to fill that role.
As such, employee health and dental insurance will increase $241,000. This increase factors in enrollment changes and plan cost adjustments outside of the town’s control. “It’s one of the most common upward pressures across municipalities,” Canales added.
Sewer and water, possible rate increases
Challenges the town faces for FY27 include sewer and water expenses, both of which project significant expense percentages.
Looking at sewer income and expenses, “[Sewer expenses are] going to eat up 99 percent of the income coming in, which is only going to leave us a balance at the end of the year, if we hit our estimated income, of $4,814.71.”
Canales explained that sewer is not in a terrible position at the moment. However, “the problem is that we’re going to now see the available sewer surplus be a down. And we’re going to continue to see the amount of that net change—between budget and estimated income—[and] go negative within the next year or two. You still want to run at least 20 percent income above your expenses. You don’t want to be sitting that tight. … If we were to make a five percent adjustment, we should be able to set the sewer for the next, probably, three years at least,” said Canales.
Select Board Chair Jamie Minacci asked what that increase would look like for Stockbridge residents. Canales’s answer: “It’s in the neighborhood of $30.”
Should Stockbridge see an increase in sewer rates, it would be the first in six years.
At 109 percent, water’s expense percentage for FY27 is projected to be even tighter. Water usage in Stockbridge has been on the decline since 2022, but costs continue to rise.
“Right now, as is, the water department would run a [deficit of $34,207.63],” points out Canales. “Now there is $126,810 in available surplus. So there you can see where there’s a line called ‘Retained Earnings,’ and we could take the water surplus and apply those retained earnings to balance the budget again. But this one’s going to take a little more to make that adjustment. … Because we have a combination of the expenses going up for water and we have water usage going down, what it’s doing is putting double pressure on the water budget. So that might mean we’re into doing an annual analysis of the water budget and making changes as needed.”
Capital budget for FY27
Canales continued with an overview of the anticipated capital budget. Considering stabilization, surpluses, free cash, and other categories, the starting balance for the capital budget is a solid $11.6 million.
Within the capital budget, recommendations for free cash appropriations include police radio upgrades. “One of the things coming up that is going to impact fire and police is radio upgrades. … Fire is in pretty good shape, police radios are pretty old. So I’m recommending we do the police radios this year and then we do the radios for the Fire Department once we’re up and running. Our radios work right now—I don’t want anyone to think they aren’t working. But [the Police Department has] been talking about moving to the 800 frequency [from 600]—they keep telling us it’s about to happen. … So I do think we need to move along. A lot of the communities around us have already made this upgrade and move.”
The projected ending capital balance is approximately $10 million. Overall, there is a positive outlook on FY27. “We’re in good financial position—strong reserves,” concluded Canales.
Discussions of the FY27 budget will continue among the Select Board and Finance Committee and will be passed along to other interested town boards and departments.
The next Stockbridge Select Board meeting is scheduled for Thursday, February 12, at 6:30 p.m.
