Methuen’s FY27 Budget: A Hope That Everything Goes Perfectly

The Mayor's budget was a solid start to getting the City on the right foot to start reshaping our fiscal practices but there is still opportunities in there we should take advantage of...

Written by: Dan Shibilia InsideMethuen@gmail.com

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Tomorrow night, the City Council holds its second and final vote on the city’s $226.4 million budget for Fiscal Year 2027, which begins July 1. Once the Council votes, this budget is the law of the city for the next twelve months. There are no more reads, no more hearings.

On paper, the budget balances. But a close look at the numbers reveals a plan built on very thin margins and a real chance that several assumptions may not hold up once the fiscal year actually begins.

“ Think of it this way: the city is finishing a jigsaw puzzle where every single piece has to fit perfectly. If even one piece is wrong, an unexpected lawsuit, a bad winter, fuel prices spiking… we’re going to free cash again.”

Education Gets The Brunt… Again.

The Methuen Public Schools are receiving $114.28 million in this budget. That sounds like a lot, and it is, but it’s $9.1 million less than what the School Department said it actually needs to operate at the same level which it does currently today. .

“ To put that gap in perspective: $9.1 million is roughly the cost of 90 to 100 teacher salaries. Whether those cuts mean layoffs, program eliminations, or something else, the Council should know the specific answer before voting tonight. ”

They know, or otherwise should as it’s been quite the conversation for the last week. However, they should discuss it openly. My biggest gripe following the first read was that they spent over an hour listening to speakers call attention to the decline in educational value due to class sizes and decreased service, the increased risk to safety due to limited staffing, and when the budget came up… not a peep. Throughout the night, the mayor and the councilors who actually spoke, as some of them sat primarily silent, remarked on concern over continuity of services and focus on safety. Then it came time to discuss the school budget… crickets. Not a single word from anybody.

The Schools did pick up an extra $200k in the first read due to a surprise addition to our tax base. However, we are still gambling on the State bailing us out. It is rumored that the new budget appropriations will have about $4M for our Schools. If the State comes through and bails us out… again… we are looking at 59 positions eliminated with 32 layoffs. If the State doesn’t come and bail us out, we are looking at about 77 layoffs and 119 eliminated positions.

Meanwhile, the Greater Lawrence Technical School assessment also jumped from $5.8M to $6.4M. They’re adding several new teaching positions, continuing to pay their superintendent a disgusting amount of money, and running primarily unchecked.

A Real Focus on Overtime.

The Council cut the Police Department’s general overtime budget from $311,420 to $150,000 during the first read, a reduction of more than 50 percent. Fire overtime was trimmed from $1.8 million to $1.5 million.

“ Here’s why this matters: cutting an overtime budget line doesn’t make overtime go away. Officers still have to show up for court. Firefighters still have to cover shifts when someone calls in sick. The city still holds elections. The overtime will happen the question is just whether there’s money budgeted for it. If not, the city has to scramble to move money around at year’s end. ”

Historical spending records show these lines have run at or over budget consistently going back to at least FY22. Cutting them doesn’t save money. It just moves the problem to the end of the year.

It makes sense why it was done this way and it’s not even the only thing in the budget that we’re going to discuss in this article that’s essentially being kicked down the road for later. There will be a real focus on trying to manage OT. The mayor made that clear with an emphasis on weekly meetings to discuss status and compliance.

It’s worth noting that the challenge here isn’t simply one of poor planning,... overtime culture in municipal government runs deep. For decades, public safety employees have reasonably maximized the overtime available to them under their contracts. That is not a criticism of any individual; it is how the system works. But it is precisely why budgeting overtime at half of recent actual spending is a bet the city is unlikely to win. Mix this with the furloughs and it’s a recipe for disaster and something the city will have a hard time managing.

Utilities…

I had a quick exchange with the Mayor before writing this to confirm my understanding of Utilities and how we pay them. I learned something new and it’s worth explaining clearly because it’s not obvious from reading the budget.

The Fire Department and the Senior Center each have their own utility budget lines. Every other city building, City Hall, the police station, the library administration, all of it, has its utility costs paid from a single line in the DPW budget. That line totals $934,010 in FY27.

“ Imagine one credit card that pays the electricity, heat, water, and fuel for almost every city building except the fire stations and senior center. That’s essentially what the DPW utility block is. ”

The Fire Department's electric and gas line historically has been level-funded at $45,000 a year. To the mayor’s credit, this year it’s gone up to $70, 000. At the same time, the Senior Center has spent the last two fiscal years at $40,000 and this year gets a $5,000 increase. Do either of these accounts adequately cover the actual anticipated expense… I couldn’t tell you but I know from the last two meetings that Councilor Drew has the actuals and this is a question I hope he asks.

The electricity line item in the DPW budget that is designed to cover the rest of the city buildings, excluding the schools, as historically been budgeted around $110,000. The budget document from the first read has the actuals for the current fiscal year at the time of printing of $167,500. The mayor has budgeted $185,000. The water and sewer line has maintained a flat 47,110 over the past couple of fiscal years. There is nothing that I can see on this budget related to natural gas that is used to heat the majority of these buildings.

Winter is Coming

The snow and ice budget for FY27 is $200,000, the same as this year and down from $400,000 in FY25. Massachusetts law actually allows cities to spend more than their snow budget and settle up at the end of the year, which is why this line is routinely underfunded.

“ But here’s the catch: when snow costs run over budget, that overage has to come from somewhere at year’s end. While we hope for a light winter, we protect our free cash account to offset if this winter gets crazy. ”

Trash Costs Keep Climbing

Methuen pays tipping fees, the cost to dispose of the city’s garbage, and those fees are rising. The FY27 budget sets aside $6.02 million for tipping fees, up from $5.5 million in FY25. That’s a $520,000 increase in two years driven almost entirely by contract pricing the city doesn’t control.

The Council cut $200,000 from this line at the first read. Given the upward trend, that cut may need to be revisited before the fiscal year ends.

Councilor Drew and DiZoglio had a disagreement over the management of this line. DiZoglio wants to avoid what happened this year and having to tap into free cash to balance out the account. Drew believes that since we have the new trash czar (as they call it), we are better off using the $200,000 that was cut and, quite possibly a little more, to fund more necessary items. His belief seems to be that because of the efforts of this individual, tipping fees will decrease and it will make more money where we need it. … I don’t disagree.

Twenty Fewer City Employees

The FY27 budget eliminates 20 full-time positions across city government, dropping from 392 to 372 employees. These aren’t all formal layoffs. Some positions are simply zeroed out and left vacant. But the effect is the same: less staff to do the same work.

Notice it says “City Employees.” That is specifically phrased as it doesn’t include layoffs facing our schools.

“ The positions being cut include the Deputy Police Chief, the Assistant Appraiser, the Assistant Treasurer, and multiple DPW laborers and equipment operators. For each one, the Council should know: was this position actually vacant already, or does cutting it mean someone loses their job and their duties just don’t get done? Hopefully someone asks the same question about the schools”

Here are Some Lines that Should be Cut

Here’s a list of things the council should discuss for cuts…

1. Assistant Council Clerk

You may recall that a few weeks ago, the council brought a resolution to increase the salary of the assistant Council clerk. It failed. Reason cited included alignment with the position and a statement was made that we should be paying the position and not the individual. The 2026 budget has the position at 57,882. The 2027 proposed budget after the $2,000 cut plus the furlough amount of $553.81 has it at $66,215. It looks like the council chair, who manages this budget, is getting the raise through regardless. It’s also worth noting that this is exactly what she’s upset about with the mayor… circumventing the process.

2. City Council Office Supplies Budget Line

The Council Chair budgeted $2,500. This line item is routinely at $1,500. It was reduced in the first read by $500. The reason stated at the last meeting was not the increased cost of paper but the fact that she wants a date stamp in the office. The now $2,000 line item, as clarified during the discussion, still allows the Council to buy its own stamp. Currently, the date stamp is in the Solicitor’s office and the Clerk’s Office. This $500 stamp saves a few steps down the hall to the Solicitor’s Office. When we are scraping every dime to fund much more important items, this is something that screams of privilege and ego. Someone should reduce it to it’s original $1,500 budget. If they want to save money by going digital instead of printing their large packets for meetings, they can save up for their stamp.

3. Mayor’s Chief of Staff

Speaking of paying the person and not the role… the mayor’s chief of staff has a great story. If you look at the budget, the previous Chief of Staff spent the bulk of her term under Mayor Perry, making about $105k. Keep in mind, she had 30-plus years of service and an immense amount of knowledge regarding city government and its operation. She did spend 20ish years as the city clerk before being ousted by Mayor Jajagu so he could put his friend Jack Wilson in there. After her departure, the mayor brought in his new CoS, who has next to nothing for work experience and minimal experience in the actual operation of the municipality outside of his 6 years as a city councilor. He started at the same pay that she went out on. Simply, that’s not okay. It does show some favoritism. He should be at step two on that scale

4. Payroll Services

The Council should cut this line by 25% ($12,500) forcing the City to move to a biweekly pay cycle. There is a reason many companies opt for the biweekly (26 pay cycles) or semi-monthly (24 pay cycles) as opposed to the current weekly (52 pay cycles). It’s archaic and costly. The best way to foce the change is to cut the line.

5. Postage (Across the entire budget)

It’s time for the City to explore email as an option. It’s 2026 and we need to embrace savings opportunities.

6. On-Call Overtime in IT

Overtime has been reduced or removed in every department EXCEPT this one. Given the scope of the City and our hours of operations, there shouldn’t be much need for on-call after-hours services.

7. Secretaries at the Police Department

The PD runs a 24/7 operation. So does the FD. The PD runs 2 confidential secretaries and two administrative assistants, while the FD runs with one administrative aide. It’s time to right-size the Police Department.

8. Tuition from Other Expenses in the Police Department

This line was originally funded for $129k and reduced by $42k. This needs some clarification, but since we are in a hiring freeze, there seems to be no reason we need to pay tuition during this time. Zero out the line and free up another $87k.

None of this is going to win political points. Many of these are going to be damning to relectability. However, we need to continue to put pressure on the open wound to stop the bleeding.

Methuen’s finances are in better shape than they were several years ago. The S&P bond rating upgrade is real, and it matters. But a budget that balances only because every variable lands exactly right, no overtime surprises, no hard winter, no litigation, no rate spikes, is a fragile document to govern from.

Second Read is the last chance to ask the hard questions. After the vote, the city lives with the answers.

What did I miss? What do you think should be looked at more carefully?