Middlesex Town Budget Analysis: FY2011 - FY2024

Overview

Budget Growth vs. Inflation

*CPI-U annual averages from Bureau of Labor Statistics.

Three Budget Eras

Phase 1: Fiscal Austerity (FY2015–FY2020)

• Target: 2-3% annual increases
• Method: Deferred maintenance, nominal stipends for elected roles
• Trade-off: Infrastructure and personnel gaps accumulated

Phase 2: Correction (FY2021–FY2022)

• 11.45% increase in FY2021—largest in a decade
• Acknowledged: Severe weather required capital road reconstruction, not patching
• Wages adjusted: Fire stipends increased 500%, part-time floor set at $20/hr

Phase 3: Crisis & Inflation (FY2023–FY2026)

• July 2023 and July 2024 floods caused millions in road damage
• Town paying $60k+ interest on credit lines while awaiting FEMA reimbursement
• State mandates added: town-wide reappraisal, website accessibility, IT modernization

Primary Cost Drivers

1. Personnel Professionalization

• Elected Listers → contracted professional assessors
• New roles added: Recreation Director (FY18), Grants Manager (FY22)
• Highway wages rose 17.3% in FY23 to retain plow drivers

2. Road Resilience

• Shifted from routine grading to climate-resilient infrastructure
• Mud season mitigation: $37,500 line item created in FY24
• Materials inflation: gravel and parts up 50-135% in single years

3. Health Insurance

• Premiums rose 23% (FY26) and 27.9% (FY23)
• Often consumes most of the allowable annual budget increase

4. Capital Planning

• $50,000 annual set-aside for future equipment purchases
• Replaces old method of emergency loans when vehicles failed
• Example: Fire Station bond ($780,000 principal, 2009 issuance, refinanced 2014)
  • 27-year term with semi-annual payments through 2038
  • Coupon rates: 1.91%–5.42%
  • Annual debt service: ~$70,000–$80,000 in early years, declining to ~$40,000 by 2025
  • As % of budget: ~6.5% in 2016 ($71k / $1.1M) → ~2% today ($40k / $1.8M)
  • Interest alone averaged ~2% of total town budget annually
• Looking ahead: The town faces 4–5x this amount in capital needs over the next 5 years (town garage, town hall, road crew vehicle replacements—estimated $3–4M total). The choice: invest in a capital fund now, or require future residents to pay 20%+ in interest on those purchases a decade from now.

What the Data Shows

2017–2020: Budget tracked inflation closely (1-2% range)

2021 (Breakpoint): Budget jumped 11.45% while inflation was only 1.2%—correcting years of deferred spending

2023–Present: Budget increases of 9-11% despite inflation falling to 2-3%—driven by flood debt, state mandates, and new capital reserves, not general price increases

Key Takeaways

• Total growth (FY2012→FY2024): $1.07M → $1.66M (+55%, ~3.6%/year)
• Biggest driver: Public Works (+91%)—wages, benefits, equipment debt, and materials
• Biggest shock: 2023 floods caused $2.6M in unbudgeted emergency spending
• Structural shift: Town moved from reactive spending to planned Capital Improvement reserves

Budget Growth by Department

What's Driving Costs?

Public Works (Highway)

• Wages & benefits: $163k → $390k (health insurance, retirement)
• Winter maintenance: salt, sand, trucking costs volatile
• Equipment debt: graders, dump trucks, excavators on rotating loans

Administration

• IT/Computer: $0 → $22,000 (cybersecurity, records digitization)
• Health insurance and wages for Clerk/Treasurer roles

Fire Department

• Dispatch fees tripled: $9k → $28k
• New volunteer stipends: $18,000 (can't rely on unpaid labor)
• Fire Station bond still being paid down

Flat or Declining Budgets

Notable Changes

Major Events

1. Fire Station Bond (Pre-2011)

• $40k principal + ~$29k interest annually
• Still paying it down; interest declining

2. Equipment Debt Cycle

• Heavy equipment (graders, dump trucks) financed on rotating loans
• Debt service is a permanent budget feature

3. 2023 Flood Disaster

• Budgeted: ~$828,000
• Actual: ~$3,410,000
• Emergency line items: "Highway - Emergency Flood 2023" ($1.9M)
• Covered by reserves and expected FEMA reimbursement

Year-over-Year Volatility