By Linda Scott
Watertown Resident
A Quick Look at Watertown’s Proposed Fiscal Year 2026 Budget
I’ve been looking at ourFiscal Year 2026 Budget. First, I’d like to thank our City Manager for. presenting us with a very well laid out document. These are some of my observations and some questions that I’d like answered as we continue to look at this very lengthy and detailed document.
Let’s look at some City departments that actually bring in revenue. Some may surprise you. This information is on pages 44 and 45 of the budget.
But first, on pages 42 and 43, you’ll see the categories where our City’s revenues come from. You’ll see that our taxes fund almost 78% of the budget for 2026. That’s, in effect, the lifeblood of our City’s operations.
Under Other Financing Sources:
As you can see, (in the light blue section) this is called “Other Financing Sources.” This includes fees, licenses, permits, fines and forfeits. I believe that this money goes into the General Fund for the City Manager and City Council to spend as they see fit. Let’s start with a look at where the income is generated, from highest to lowest.
*What is included in the categories of “Rentals” and “Costs”? Does the increase in the Rentals category reflect any money spent by the City to rent the space or is it all private rental sources?
Now let’s do a 5 year look back. The 2022 numbers are taken from pages 13 to 15 of the Fiscal Year 2023 Budget Overview.
The top five earning categories (Inspections, Fire Department, Parking and Police and Rentals) are still the same in 2022.
As you can see, in terms of fines and fees, etc., Watertown Fiscal Year 2026 promises to be far less lucrative, with the exception of the Fire Department, Rentals, Health Department, the Town Clerk’s Office, and the DPW. According to these projections from the City Manager, we will have $5,769,267 coming in. That’s 59.3% of what we had in 2022, or a 40.7% decrease.
If you’d like to look at local receipts (meals and hotel taxes, excise tax, etc.), you can find that for FY 2022 on page 12 of the Fiscal Year 2023 Budget Overview, and on page 44 of the. Fiscal Year 2026 Budget. Local Receipts look a bit better. Mr Proakis’ projection is that compared with 2022, we’ll be making $16,760,104, or $636,717 more. That would be an increase of 3.8 % over 5 years.
Other Revenues:
To see the entire revenue picture in detail, see pages 43 to 45. There you can see the rest of. the projected revenue. This section includes terms, like ESCOS that may be confusing. Here is an explanation of an ESCO:
And, here is a very good on-line resource to explain the difference between a City’s General Fund and a City’s Enterprise Fund (click in the middle of the images to get the arrow to start):
Noted Continuing City Budget Revenue Problems:
On page twelve of the budget, the City Manager lists eight life science buildings that are partially filled or empty and seven approved projects that are on hold to be built, awaiting tenant commitments. That means no taxes from life science businesses and no linkage fees yet for those construction projects, which have been a tremendous boon to our bottom line.
Note: in contrast with the projections from experts a few years ago, the newest predictions are that, given the outsourcing of lab work outside of the US and the reduction of federal grants to NIH, etc., the Life Sciences industry is in danger of not fully rebounding. See this April 14, 2025 Boston Globe Article. In this article, the consequences of those slowdowns and cuts are discussed.
It is mentioned in the Watertown budget pages nine and ten that we don’t have a lot of Federal moneys coming in, but since the state depends on that money, and we depend on the state for this money, we could be indirectly negatively impacted. “A reduction in federal support for state programs could result in the state reducing aid commitments to local government, and that could have an impact on Watertown.”
On page ten, the City Manager writes about the negative effect a recession could have on economic development in Watertown, which could in the near future negatively impact programs and services in the City.
Questions:
The City has used the previous year’s numbers to project FY 2026 numbers. Can they reliably use the revenue numbers of the previous year for FY 2026, when we’re in a very different fiscal and political situation?
If these projections turn out not to be in the ballpark, given that many Watertown residents have already been “served up” a significant tax increase, what’s “Plan B” to keep all programs and services fully operational?
On page thirteen, City Manager Proakis outlines various strategies that we have to control residential taxes. Will those strategies, like residential exemptions, hold if this crisis deepens?
Here’s a table produced by The Watertown Assessor’s office comparing us to other local communities. The data is from 2024. As you can see, our tax rate is the highest, but our average tax bills are sixth out of seven. To see the whole document with explanations: https://watertownma.portal.civicclerk.com/event/5634/files/attachment/1455
So, in 2024, of these seven communities, Watertown ranks:
First (Highest) in Residential Tax Rate: 11.70%
Sixth in Residential Property Value $840,331
Sixth in Average Residential Tax Bills $6,587
Also notice that the communities paying the highest tax bills do not have a residential exemption.
Next Steps:
See Part Two of this series, called “Where Does Our Money Go?”
Attend the Meetings/ Send your thoughts to your councilors.
There will be hearings on the departmental budgets coming soon. My understanding is that each department’s budget will be reviewed individually. Keep an eye out for those City Council meetings.
In another budget-related matter, there’s also a second meeting of the Budget and Fiscal Oversight Committee to continue the discussion of the cost/benefits of a second ambulance for the Watertown Fire Department. That meeting is on April 29, 2025 from 6:00 – 8:00. Here are more meeting details: meeting details
And if you’re interested in a particular department’s budget, here’s the link to the whole budget again: Fiscal Year 2026 Budget. On pages one and two you can find the table of contents to quickly access the department(s) that you’re interested in.
Watertown Budget 101: Where Does Our Money Go?
A Quick Look at Watertown’s Proposed Fiscal Year 2026 Budget
I’m on pages 46 – 48 of the 246 page Fiscal Year 2026 Budget. Here I’m looking for trends… where did cuts occur? Are there common areas that got cut, for instance? Please keep in mind that department percentage cost cuts are all relative. A 10% cut in a department with a $100,000 and a 10% cut in a department with a $200,000 budget are different, for instance.
Okay, here’s what I found:
The Departments that Received Cuts and What Percentage:
Senior Services -14.55%
Health Department -8.81%
Veterans -8.31%
Library -6.43%
Constituent Services -4.43%
City Manager -3.04%
Procurement -1.78%
There’s a department under the Health and Human Services category, called “Human Services” that doesn’t have comparison data, since it’s new this year, so there’s no percentage change. That new department, Human Services, has been allotted $531,635 in the FY 2026 budget.
In an area where all other departments under the Health and Human Services category (Health,
Senior Services, and Veterans) received the largest cuts, this new department’s budget brings the overall total for the Health and Human Services category up to a 17.85% increase.
That seemed very odd to me, until I read further and found that this new department, Human Services, is absorbing:
Staff from Senior Services (the Food Pantry Coordinator)
From the Health Department: Contracted social services provided by Wayside
From the City Manager’s budget: ($5,000) will also go to the Human Services Department, earmarked for the Human Rights Commission.
Personnel (the Wellness Team) is also being taken out of the Department of Community Development and Planning (DCDP). That is the only department contributing to this new Department (Human Services) that does not sustain a budget decrease. That budget increases by 4.99%. (See below)
Details on Other Departments with Budget Decreases:
To see cuts to the Veteran’s Department, see pages 147 -149 of the budget.
To see cuts to the library, see pages 154 – 158. It looks like custodians and utilities are moved to other departments.
To see Constituent Services cuts, see pages 94 – 97.
To see cuts to the City Manager’s budget, see pages 57 – 62.
To see Procurement cuts, see pages 66 – 68.
Here are Watertown Government Departments that are planned for increases in FY 2026.
Departments with Percentages of Budget Increases:
Public Buildings 36.66%*
Health & Human Services 17.85
Ryan Skating 10.63%
City Attorney 9.9%
Waste Disposal 7.54%**
Human Resources 7.4%
Public Works 7.22%
Police 6.65%
City Council 5.29%
Elections 5.88%
DCDP 4.99%***
City Clerk 4.45%
Education 3.67%
Recreation Dept. 3.49%
Treasurer/Collector 2.77%
City Auditor 2.22%
Fire 1.50%
Parking Lots/Meters 1.10%
Information Technology 0.84%
Emergency Management 0.71%
City Assessor 0.28%
Snow and Ice Removal 0.00%
*See pages 98-102 in the budget for details, which include switching library and school custodial line items to this department.
**Waste disposal costs are going up significantly!
***As noted above, DCDP received a budget increase of 4.99%, despite losing personnel and a lull in building projects.
And on Page 48, I Have Some Questions about Pensions:
In the Pension row, I noticed that we’re up 242.20%. What can you attribute that number to? Is this a function of all of the new hires (see Kounelis Letter) and the raises given to staff as a result of the Classification/Compensation Study? In July of 2021, we had fully funded that pension obligation. Are we back in the hole again?
The Watertown Square Stabilization Plan gets $1,500.000 in 2026? This looks different from what I’m seeing on page 20, where it says that if you add the $1,500,000 this year, that fund will have a total of $6,400,000. What do you plan to spend this year on Watertown Square?
You’ve got an RFQ (Request for Quotation) out right now to get consulting services for studying traffic rerouting in Watertown Square.
Do you plan to use money in the Watertown Square Stabilization Fund to pay for these consultants? If not, what “pots of money” would that be coming out of, and how much do youanticipate spending for such services?
I was curious, so I looked on the Procurement Page of the Watertown City Government website and was able to see the “RFQ,” (Request for Quotation) for that consultant project.
I was pretty surprised when I saw the criteria for Watertown awarding this contract in this RFQ:
9. Awarding of Contract
This is not a price competition, but rather the City’s decision will be based upon qualifications and experience. The City will initially evaluate and score all proposals. The City may schedule interviews with the highest scoring individuals/firms. The City will rank the finalists based on consideration of the minimum criteria/qualifications, the comparative evaluation criteria, and the interview (if applicable).
I’m all for qualifications and experience, but I’m curious that price doesn’t even come in third, after qualifications and experience in the decision for who will be hired to do this Watertown Square project. Doesn’t this arrangement accrue to the benefit of the consultant, not the City?
Comments, Questions, Opinions:
It has been mentioned numerous times by residents that circumscribing the Watertown Square area with cones and barriers to test out the realities of this new traffic plan might be a cheap and efficient way to gather data before hiring expensive consultants, who would then be able to use this data in their plans. That suggestion has been met with a flat “No!”
I believe this has been done in other communities, such as Somerville. This effort would realistically play out scenarios in our already traffic overtaxed square. And given the fiscal uncertainty of the next few years, wouldn’t that be both heading in the right direction while saving this community a large expense (consultants) until the project could reasonably and financially be able to be undertaken?
I see this particular Watertown Square Stabilization (rainy day) Fund, and I ask myself, “Is it
raining yet? And if it is, why doesn’t the City show any signs of feeling the drops?” Funding an
expensive project like this in these fiscal hard times, seems to be a bit tunnel-visioned and
short sighted and could put us in an untenable position in the near future.
What are the rules guiding a Stabilization Fund? If we actually needed that money to keep our
employees and services operational, could it be accessed? Or once it’s put in there, is it then
unaccessible for operational necessities?
As one frustrated resident told me, “I want residents to clearly see that Watertown is on a path to becoming a high tax to value community. As taxes continue to vigorously grow, less of a percentage of the revenues will ever reach the direct resident services.”
Shouldn’t there be a concerted effort to find uses for the hundreds (thousands?) of square feet in this City (for business and for residences) that is new and unoccupied? We see it all over town.
At the April 22, 2026 City Council Meeting, City resident, Rita Colafella, had this to say in public forum after praising the City Manager for his budget and the use of best practices: “I think that we need to look at ways to grow the revenues. We should look for other avenues, other industries …”
She also mentions (I’m paraphrasing):
1. That 1.5% had come from the residential, but we shouldn’t give up on the commercial side.
2. That labs aren’t going to come back anytime soon
3. We have a lot of space to rent … maybe to hospitals and universities?
To see Rita’s full remarks: http://vodwcatv.org/CablecastPublicSite/show/3841?site=3 minutes 6:00 – 7:30.
Revenues are down by a lot, and they don’t look so rosy for a few years to come. I’m not sure how hospitals and universities will help, though, since most have a non-profit status, but I agree in principle with Rita’s assessment that we should be looking for other possible industries to fill our empty commercial spaces.
One other kind of strategy a resident has studied is to enforce the auto excise tax law, which he estimates would bring in about $1,500,000 a year.
One of the City Council’s Cost-Savings/Revenues guidelines to the City Manager was to actively seek payment in lieu of taxes (PILOT) agreements from non-profits. In the 2026 budget, the City Manager projects that those payments will decrease by $9,460, or 10.73%.
Given these “facts of life,” could we please concentrate on filling the empty commercial space that we have, which will build revenues and assure that we have the capacity to maintain and improve direct services to the community? In these stressful times, it would really help keep us all safe, sane and dry!
Thanks again to the City Manager for making this important City document much more transparent and to the City Council for working so hard on the City’s priorities. I hope that residents will respond to your hard work with their thoughts and ideas.