OK, OK, we read Wellesley’s Town-Wide Financial Plan

It’s that time of year when Wellesley town leaders strongly encourage Town Meeting members, and really anyone who will listen, to read the Town-Wide Financial Plan—and if you’re really ambitious, the full Budget Book.

So OK, OK, we read the Town-Wide Financial Plan, which comes together based on reports from town departments and bodies, plus estimates and financial assumptions previously approved by the Select Board. The plan, which outlines the town’s budgeting and financial planning processes, also is built on a foundation of a bunch of other plans, from the Climate Action Plan to the Unified Plan.

If you haven’t been through the 41-page document —prepared by the town’s executive director and assistant, finance team, and the Select Board—it’s not as scary as it might sound (though 12 mentions of the term “override” could spook you and you might want to avert your eyes from the median tax bill table).

“This has become a very readable document,” Select Board member Tom Ulfelder said during the March 11 Select Board meeting, during which the Board approved approved the plan ahead of Annual Town Meeting, set to begin April 1 at Wellesley Middle School.

The Town-Wide Financial Plan team over the past couple of years has increased its emphasis on a cover letter within the document to make the information clearer and easier to get into. You can dive as deep as you want by selecting various exhibit and appendix links.

The writers of the plan don’t pussyfoot around tough challenges ahead, stating early on that: “A key take-away from the TWFP is the emerging challenge created by the many significant capital projects proposed by Town boards and departments. Many of these projects will also add significant operating costs… It is critical for Town Meeting Members to assess each project as part of a holistic longer-term picture and to consider the capacity and willingness of Wellesley taxpayers to fund them all as currently proposed.”

While the document details efforts by the Select Board to help the town generate more revenue, cut costs, and strategically use reserves, it acknowledges that “this approach will not address all the proposed capital projects and additional operating costs on the horizon. Debt exclusions and operating overrides will likely be necessary.”

Big potential projects that have been discussed include high profile ones (school building air conditioning, Morses Pond beach and bath house upgrade) and others that have likely flown under most of the public’s radar (DPW master plan). Oh, and then there’s the possibility of a new fire station and more PFAS remediation for the water supply.

The plan states: “The combined inside-the-levy financing budget (cash capital and debt service) for FY 2026 is $11,719,263 or 5.98% of revenue, which is slightly below the Capital Spending Range as a result of reduced borrowing and the movement of capital projects further out in the Five-Year Capital Plan.”

The plan focuses both on the immediate future and further out. The FY26 budget will need to account for new capital spending (new fire engine, tennis/pickleball court redesign, etc.), the ramifications of a town employee classification and compensation study designed to make sure Wellesley is compensating people fairly, and some additional positions. Overall, the proposed town budget comes in at $224,493,903, a year-over-year increase of 1.13%.

Property taxes still make up the bulk of the town’s revenue (82.46% of that estimated for FY26). Good news in the report is that Wellesley also has been experiencing significant local revenue growth from sources such as motor vehicle excise, meals/hotel/motel tax (thanks in part to the local  restaurant boom), and “over-performance of investment income.” The glory days of that investment income boost look to be coming to an end, though the town has jacked up building permit fees that should contribute significant gains.

“The Board continues to make conservative assumptions on local revenue growth, considering historic trends, traffic and parking revenue reaching a plateau, continued increase in supply chain costs, a moderated decline in interest rates, and inflation returning to a more normalized rate,” the report reads.

Government aid is always something of an unknown based on the differing budget schedules of local, state, and federal governments. This year Wellesley’s leadership anticipates a modest increase in state aid, and notes “At this time, potential federal funding is uncertain and there may be reductions that impact the Commonwealth’s budget.”

On the expense side, rising employee healthcare costs remain a concern. Meanwhile, it’s the quiet before hopefully no storm on the union contracts front—contracts expire in mid-2026. Most town employees belong to unions.

The plan dives deep as well into the town’s retirement benefit costs.

The School Department accounts for the largest piece of the town’s overall expenses, and has been under pressure to tighten its budget in light of falling enrollment. The school budget, which adhered to the town’s 3.25% budget guideline, “reflects the reduction of 18.85 [full-time equivalents] as a result of elimination of vacant positions and enrollment decreases,” per the plan.

One comfort is that the town’s reserves remain strong. “The proposed FY 2026 budget would result in estimated reserves of 13.25% as of June 30, 2025, above the upper level of the reserves policy,” the report reads. The town is looking to use $2,2M in free cash to balance the FY26 budget.

If you make it to the end of the document, you’ll find a section labeled “Looking Ahead.”

Some of what you’ll see is this: “Based on the budget assumptions outlined in the table below, the current projected deficit for FY 2027 is approximately $2.8 million with no modifications to the cash capital budget or application of additional Free Cash. The projections for FY 2028 and FY 2029 have deficits in the range of $5.6 million to $9.3 million.”

So there is a window between now and then to figure out how to possibly close the gaps. Wellesley last voted on a general operating override ($3.3M) in 2014, and it passed.

The Town-Wide Financial Plan has been in the works since fall, building off gatherings such as the All-Board Meeting held in September. Now at Annual Town Meeting, Wellesley’s elected legislative body will have its turn at discussing the town’s financial proposals and vision.

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