Chatham Town Manager Proposes $47M Budget; A 4.79 Percent Increase Is Sought

CHATHAM – “Welcome to budget season.”

That’s how Town Manager Jill Goldsmith kicked off her presentation of the preliminary fiscal 2027 town budget to the select board on Jan. 20.

The spending plan, which Goldsmith titled “Navigating the Fiscal Year Ahead,” calls for a $47,339,094 operating budget, a 4.79 percent or $2.1 million increase over the current year. That doesn’t include the Monomoy Regional School District or Cape Cod Technical High School funding requests. The Monomoy budget, which is expected to be presented to the board Feb. 24, is projected at $11.9 million, a 7.74 percent increase, while the Tech budget is expected to go up by 5 percent at $617,000, according to Finance Director Carrie Mazerolle.

 “This is a level service budget focused on sustaining operations, with total growth under 5 percent,” Goldsmith said. The budget, which does not call for any new staff or major initiatives, aligns with the board’s community goals and its recently adopted vision statement, she said.

The budget also calls for $5.7 million for the water department, a 4.6 percent increase, and $2.49 million in capital spending. Along with acting on the budgets, voters at the annual town meeting will be asked to approve new borrowing for renovations to the Center for Active Living and two waterfront infrastructure projects.

The budget includes $8.8 million for debt service, a figure projected to decline over the next few years. The town has a $632 million debt ceiling, Mazerolle said, and as of June 30 the total authorized town debt is $118 million, with another $34 million under the water department (which is paid for through water rate revenue, not the tax rate). Another $43 million in town debt and $2 million water debt is authorized but not yet borrowed. Mazerolle said voters will be asked to rescind unused debt from previous borrowing at town meeting.

The town has a total assessed property value of $12.3 billion, a 4.28 percent increase, Mazerolle said. The average single-family home value is $1.7 million. 

Property taxes make up the majority of town revenue, with local receipts making up the remainder. The town receives negligible state funding, Mazerolle said, with the majority going to the school department. The rest of the revenue derives from local receipts, including fees, charges and meals and room occupancy taxes, which have remained relatively steady over the past several years, she said. The room tax, which includes a surcharge on short-term rentals, increased 8.65 percent last year, bringing in about $3.7 million. Meals tax revenue was also up at more than $600,000. Together, the meals and room tax raised $4.6 million in the last fiscal year. The proposed budget assumes estimated revenue from those sources at 89 percent of actual receipts, a 10.7 percent increase.

Free cash has been certified at $5 million, Mazerolle said. Of that, $2.2 million will cover capital expenditures, with another $2.4 million going toward other funding requests, which are tentatively set to include $400,000 for new financial software, $475,000 for flooring repairs to town buildings, $24,600 for airport capital improvements, and $500,000 for the assessors’ overlay account to help cover the cost of planned residential property tax exemptions. 

Free cash will also cover $515,000 of the estimated $1.8 million that is projected to be required for the CFAL renovations. The renovations are currently projected at $6.8 million, $5 million of which was previously authorized. A one-time tax rate increase of $1.3 million will be sought from voters to cover the expense. The figures will be adjusted once bids on the project are received in March.

Approval will also be sought for two other one-time capital exclusion debt expenses: $2 million to replace the bulkhead at the Barn Hill town landing and $3.5 million to upgrade and replace the bulkhead and ramp at the Ryder’s Cove landing. Approval of both, as well as the CFAL debt exclusion, requires two-thirds votes at town meeting and majority votes at the May 14 annual town election.

Most of the increase in the operating budget is attributed to salary hikes (up 4.87 percent), with other increases including utilities (up 25.5 percent), employee benefits (up 14.6 percent) and insurance (up 12.6 percent). Mazarolle projected that health insurance costs will go up 10 to 12 percent.

 “We’ll have a better idea where our health insurance will be in mid-February,” she said.

Education remains the biggest sector of town spending at 19 percent, followed by public safety at 15 percent, debt service at 14 percent, public works and facilities at 13 percent, and employee benefits at 12 percent. Water department spending sits at 8 percent of the total budget, with general government at 6 percent, community and social services at 5 percent, natural resources at 3 percent, and community development and insurance and reserve fund spending at 2 percent each.

Voters will also be asked to approve a number of community preservation projects. Mazarolle said 13 applications were received totalling $3.3 million, which exceeds the $2.6 million in available funding. The committee has not yet voted on which projects to endorse, she added.

The finance committee will report its preliminary recommendations to the select board on Feb. 17, after which the board will finalize its recommendations and forward them to the finance committee. Final recommendations from the fincom are due March 11. The annual town meeting warrant closes on March 17.

The digital budget book, available via the town’s website, contains details of the proposed spending plan.