The Town of Danvers Finance Committee on Oct. 27 reviewed and approved multiple FY26 operating budgets, from the town manager’s office and department heads to retirement and employee health benefits, voting by voice for each item as the committee moved through its agenda.

Committee members and town staff highlighted a handful of drivers that shaped the budgets: a postage‑related 7.94% increase in the town manager’s operating line; planned consolidation of seven separate telephone systems to a single system (projected to save an estimated $40,000–$50,000 in operating costs); a $750,000 financed acquisition of a preservation restriction on the Rebecca Nurse Homestead; and a projected 10.9% renewal increase for the town’s employee health insurance plan.

The health‑insurance discussion drew the most sustained concern. Benefits staff reported a loss ratio of 96.49% for the current plan year (not including administrative costs, which staff said run about 12–13¢ on the dollar), and total claims for the pool rose from about $13 million in calendar year 2023 to just over $15 million in 2024. Staff and committee members discussed education for employees, possible plan‑design changes, benchmarking against the state Group Insurance Commission (GIC) and the limits of the town’s current pooled arrangement through its carrier, Blue Cross New England.

On pensions and long‑term liabilities, the Danvers Retirement System representative said the most recent actuarial valuation shows the system about 64.5% funded. The retirement board and town are pursuing an 8% year‑over‑year contribution increase intended to reach full funding by 2035, and the retirement plan’s assumed rate of return was lowered to 7% in the most recent valuation.

Other approvals included level funding of the finance committee reserve at $125,000, modest increases for IT (1.21%) and accounting (4.5%), and a reorganization in assessing that created a data analyst position while reducing contract inspection costs. The committee received details on a planned reallocation of one administrative position to field work in assessing and a reclassification within human resources tied to an assistant HR director salary adjustment.

Votes at a glance

- Management (Town Manager) operating budget (7.94% operating increase driven by postage): approved by voice vote.
- Department heads budget: approved by voice vote.
- Legal counsel budget (Murphy, Hesse, Toomey & Lehane referenced as primary firm): approved by voice vote.
- Legislative budgets (Town Moderator, Select Board): approved by voice votes; Select Board increase noted for Mass Municipal Association dues.
- Finance committee reserve ($125,000): approved by voice vote.
- Information Technology (IT) budget (1.21% increase; phone consolidation discussed): approved by voice vote.
- Human Resources budget (salary adjustment for assistant HR director): approved by voice vote.
- Town Clerk budget (fewer elections in FY26 driving lower costs; early voting options explained): approved by voice vote.
- Accounting (4.5% increase) and Assessing (reorg creating a data analyst): approved by voice votes.
- Treasurer/Collector (operating increase for bill printing and software maintenance): approved by voice vote.
- Debt service (overall decline; $750,000 financed for Rebecca Nurse Homestead preservation restriction): approved by voice vote.
- Danvers Retirement System budget (targeted 8% increase; valuation details reported): approved by voice vote.
- Benefits & Insurance (main driver: 10.9% renewal for employee insurance): approved by voice vote.

Discussion and context

Town finance staff reminded the committee that several increases are driven by external market pressures rather than new service lines: postage costs and vendor increases for motor vehicle mailings were called out for higher costs in the manager’s and treasury budgets. For IT, director Colby Cousins described the difference between roles when the committee asked about staffing: “a technical support specialist is like a hands‑on help‑desk type of person. And then the IT strategist… is more of a higher level strategic role,” and he said the town expects savings by consolidating seven phone systems into one vendor contract.

Committee members pressed staff on long‑term liabilities. The retirement representative reported that lowering the actuarial assumed rate to 7% and continuing an 8% contribution escalation is the town’s path to full funding by 2035; staff noted that, if projections hold, excess levy capacity would be redirected toward other liabilities such as OPEB once pensions are fully funded. On debt service, staff said some school and utility projects were level‑funded, leading to a long plateau in the debt schedule that does not begin to decline materially until later in the multi‑decade schedule.

On employee health insurance, benefits staff (Jim) presented plan metrics and next steps: the plan’s loss ratio was reported as 96.49% (excluding admin costs), and calendar‑year claims rose to about $15 million in 2024. Jim described the plan structure: a GIC‑benchmark compatible plan with co‑pays (the benchmark) and a separate high‑deductible plan (family deductible $4,000; individual $2,000) with an affiliated HSA; an FSA is available with the benchmark plan. Staff outlined summer outreach and education for employees, potential plan‑design tweaks, and the constraints posed by benchmarking to the GIC. Committee members suggested pooled regional solutions would require broader state or intermunicipal action.

What happens next

Each budget approved by the committee will be forwarded in the town’s established timeline for review and inclusion in the FY26 warrant materials presented to Town Meeting (specific next steps and dates were not specified in the transcript). Staff said they will bring follow‑up materials on phone consolidation savings, requested principal‑balance columns for future debt presentations and additional retirement projections when updated actuarial numbers are available.

Ending

The committee concluded the session after approving the evening’s items by voice vote and noted that the next meeting would review public safety and public works budgets. Several members thanked town staff for their work in preparing the budget book and supporting documents.