By Adam Swift
With a vote on a $493 million bond authorization for a new high school by the city council set for later this month, finance director Richard Viscay presented a long-range economic forecast for the city that takes into account the debt payments for that project.
Monday night, Viscay presented a preliminary look at a $294.5 million FY25 budget that sets the base for a 10-year long-range forecast.
The forecast shows that the city should be able to absorb the debt payments for the high school project over that period without a Proposition 2-½ debt exclusion vote thanks in large part to projected new growth as well as other debt coming off the books in the years to come.
While the forecast does not include any new fees or a debt exclusion vote, Viscay noted during his presentation that there are options for increasing revenue in the city that could help negate possible economic challenges over the next decade or more.
Viscay also recommended the city establish a long-range economic planning committee and various subcommittees composed of council, finance, and administration appointees to look at issues such as new growth and development, local receipts and other revenues, education costs, enterprise funds, debts, and employee benefits and pensions.
“We need to come together as a community,” said Viscay. “I think everybody has said over and over that they want a new high school, but many people, but many people are nervous about many different things. I’m as nervous as anyone and I am up here trying to tell you how we are going to pay for this, but I think we can do it and I think the forecast shows that we can do it.”
Councillor-at-Large Robert Haas III asked Viscay how Revere compares to other communities when it comes to new growth and development.
“Our growth is very good compared to our peers, and it is one of the driving forces that can help us build this high school,” said Viscay.
Mayor Patrick Keefe, who serves on the Massachusetts Mayors’ Association, said that Revere is in a much stronger financial position than many other cities in the state.
Keefe said there are a number of communities facing large budget gaps and possible overrides just to keep up regular government operations.
“Across the Commonwealth, there are communities that decided they did not want to do anything eight to 10 years ago,” said Keefe. “Revere, fortunately, had the foresight not to do that.”
Keefe said the long-range forecast shows a few lean years and a few good years, but he said he was confident the city could address the lean years and that he and his administration feel good about what was presented to the city council.
Viscay noted that the long-range forecast includes the anticipated debt payments for all projects in the city, including the new high school.
“We’re estimated to get almost a quarter of a billion dollars reimbursement (from the state) for this school, which is spectacular,” said Viscay. “We still have to borrow enough to pay for $254 million, and we are forecasting that debt at 4 percent, which would peak, according to this forecast, in 2033 at $15.9 million.”
The 10-year budget forecast presented to the council included the expected annual increase in expenses, which varied from 4 to 6 percent depending on the budget item, ranging from education to health insurance and other benefit costs.
While there were no new revenues built into the forecast, Viscay said the proposed long-range economic planning committees could look at potential increases in rooms, meals, and motor vehicle excise taxes that may soon be allowed under state law. Viscay suggested the city also reconsider allowing recreational marijuana sales in the city so that it could benefit from those tax dollars and fees.
Ward 1 Councillor Joanne McKenna said she appreciated the efforts and transparency that have gone into the long-range planning by Keefe and his administration.
McKenna, who voted against moving forward with the high school building project last year, said she believed the city needed the extra time for the additional data and financial planning.
“I feel like we have a better perception of what is going on, and I have a better feeling,” said McKenna.
Councillor-at-Large Anthony Zambuto, who has had concerns about the economics of building a new high school at Wonderland, said the forecast was well done but that he still sees problems down the road.
“I see problems in public safety, limiting it to 4 percent … the projections are the projections and I’m not going to say I don’t believe them, I’m hoping your projections stay what you said,” said Zambuto. “But the bottom line is that without reducing services, without limiting public safety and all the other things that come along with it, I don’t think we can afford it.”
Council President Anthony Cogliandro thanked Viscay for the forecast, and like McKenna, praised the openness of the Keefe administration in providing data to the council.
“For me, this is a risk, we all know that this is a financial risk, but it is being made more comfortable to take it, and that’s what this whole process is,” said Cogliandro. “We needed this year, and this council deserved what it got this time around.”
