AGAWAM — The goal of this year’s budget is to be as fiscally conservative as possible, while maintaining essential services, said Mayor Christopher Johnson.

“The proposed annual operating budget reflects our best effort at preparing a fiscally-conservative budget that meets the needs of our community, while creating no new fees and trying to keep the tax increase to as minimal as possible,” said Johnson in a presentation to the Agawam City Council.

To that effect, the budget is $4 million more than FY24’s, a 3.6% increase. Last fiscal year, the budget was increased by $6 million, or 5.8%, he said.

“If we hope to build a new high school, we have to start to tighten our belts as much as we can, to bring down the increases,” he said.

The total budget is approximately $132 million. The general fund budget is $117.8 million, he said. That includes the approximately $112 million general operating budget and the $2.47 million capital improvements budget.

For the three “self-sustaining” departments, the ones funded by fees, the golf course is budgeted around $1.1 million, the Water Department is around $8 million, and wastewater is approximately $5.4 million.

Most, 57%, of the revenue will come from property taxes. Johnson proposed raising the FY25 tax levy to $75.3 million, a 2.5% increase. The levy incorporates estimates from the assessor’s office of $500,000 of new growth, he said.

“Last year, the tax increase was 3.5%. So, this is a lower number than what we did in the current fiscal year,” he said.

The levy limit would be $91.2 million, leaving $15.8 million in excess levy capacity.

The FY25 school budget is $51.9 million, up 3.78% from FY24’s $49.96 million. Superintendent Sheila Hoffman said it includes fixed costs like contractual salary increases, but also increases in special education tuitions, transportation, and out-of-district regular education tuitions. There is also an IT cost increase “to maintain our one-to-one device replenishment system,” she said.

The School Committee also made reductions in non-building based budgets, she said.

Highlights, she said, include a focus on the academic needs of students, the continued integration of technology skills into the curriculum, an increase in engagement with families, the maintenance of appropriate student-to-teacher ratios, and the providing of educators with professional development.

“It recognizes and values and supports the diverse needs of students through differentiated, personalized instruction, and maintains high expectations for all students while providing the support needed for them to be successful,” she said.

The general operating budget includes a 2.57% increase in the law department budget to make the solicitor a full-time job, with a full-time salary.

There is a 5% increase in public safety spending. In particular, the police budget, which was slightly increased, reflects the overtime hours staff will spend moving evidence to the new station, Johnson said. It also reflects two new tasers and the planned replacement of three marked cars and two undercover cars.

The Fire Department budget, also slightly increased, reflects a need to maintain current staffing levels, he said. The town is looking into ways to deal with the “skyrocketed” amount of emergency calls its two full-time ambulances can’t cover without mutual aid, he said.

Stormwater was moved from being a line item to being its own cost center. Johnson said this was to bring attention to the stormwater projects in town that need to be addressed. The projects are costly, he said, and Agawam was lucky that the North Street and May Hollow projects, $3 million each, are being paid for with American Rescue Plan Act funds.

“Our infrastructure is decades and decades and decades old,” he said. “We’re going to have to look at trying to come up with a revenue stream to be able to fund stormwater projects in the future.”

The building maintenance budget is increasing by 18.5% due to solar credits. Agawam, Johnson said, buys solar power from two different arrays at 85% of Eversource’s standard rate. The state used to give the town credit on its bills for 100%, giving the town 15% in revenue. A change in state law means the town doesn’t need a credit anymore; it can just receive the money, he said.

Johnson said the town is now buying the credits and selling them for that 15% revenue, which is going into the “local receipts” section of the budget.

The budget appropriates $300,000 to the Capital Stabilization Fund. It also closes some principal and interest accounts from the FY24 budget, which will increase the amount of money in the fund. The fund will be used to offset the tax increases from the new high school’s bond payments, Johnson said, which are expected to start in FY29.

In line items, there will be an increase in veteran’s benefits and assessment from the Western Hampden District Veterans Office. The total budgeted amount for veterans will go up 16.49%.

In the capital improvements budget, there is $500,000 for equipment for the DPW, and $250,000 for sidewalk rehabilitation. There is an increase of $100,000 for street and infrastructure improvements, a 20% increase from the last fiscal year.

There is also money for Fire Department equipment, such as a new fire truck and replacing PFAS foam.

All budgets reflect a 3% cost of living increase, Johnson said, and step raises for employees.

Decreasing is the budget for boards and commissions, by 3.15%. Johnson said the funding for the Beautification Committee was removed due to being funded by the Berkshire Power settlement.

“They don’t need taxpayer money to plant the flowers or do what they do. They have an ample revenue source,” he said.

The capital outlay budget also decreased 11.39%, as well as debt service, which decreased by 5.62%.

Councilors were positive about the budget.

“We talk about inflation at around 3.4% and our contractual obligations that we have, and here we’re coming in at about 3.63%. I think we’re running pretty lean and mean. I’m going to support this budget,” said Councilor Dino Mercadante.

Councilor George Bitzas also praised it, though he also said there could be more funding for road improvements.

“I hope if we can, we can do more, if we can,” he said. “I know it’s complex there with the streets and sidewalks and I’m glad to see you increased that, and I was glad to see some reductions, also.”

Councilor Edward Borgatti thanked everyone who worked on the budget, and said it was a reflection of current and past leadership.

“We’re in a pretty good position if we can pull off a police station and high school, very needed projects,” he said. “I think we can do it. I think this is well-done.”

Borgatti about the tax impact of the police station with the budget and the new high school. Johnson said the first bond payment for the station, whose bond is combined with that of Still Brook Park’s and the library roof work, will happen next year, raising principal and interest costs.

He reiterated that if a new school isn’t built, the town will spend more than $70 million fixing the current one, starting with its roof, meaning there will be a cost to taxpayers regardless of which project advances. Council President Rosemary Sandlin asked if the roof project will be bonded and will have an immediate financial impact, which Johnson said it would.

The City Council will vote on the budget at their June 3 meeting, following a public hearing. Council meetings start at 7 p.m. in the Senior Center, 954 Main St., Agawam. Johnson said those with questions on the budget are welcome to attend the hearing. They can also reach out to the mayor’s office at 413-786-0400, ext. 8200, or through a form on the website.

The FY25 budget can be read at agawam.ma.us/Archive.aspx?AMID=51.

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