The Select Board had a lengthy discussion with Treasurer Patrick Luddy during Thursday’s meeting about account deficits that require immediate action.
Luddy presented a $575,716 deficit stemming from the assessors’ overlay and Coronavirus Aid, Relief and Economic Security (CARES) Act spending.
Luddy said “two properties were assessed that should not have been.” The properties had been redeveloped before the 2026 fiscal year but “came back on” the system as needing assessments following an update to the assessment record tracker. The error led to the reassessment of the two properties, resulting in a $200,000 deficit.
The error was noticed after “tax bills went out,” Luddy said.
“There’s multiple opportunities to do this better,” said Town Administrator Nick Connors, noting that “this is a mistake that shouldn’t be happening.”
Properties in Swampscott are typically reassessed every five years, according to Luddy.
The Select Board reiterated the need for a full-time assessor. Assessors track property sales and overall supply and demand, in addition to factors such as property size, condition and interest rates, to determine property values.
“There’s a job posting,” Connors said. “I’ve had multiple conversations with towns as an additional partner that we could potentially do something together.”
Select Board Member Mary Ellen Fletcher noted the “really diligent” work of the Board of Assessors. She suggested that the town advertise for a part-time position so Swampscott could have two or more part-time assessors and “opens it up.”
Along with the CARES Act spending, Luddy said certain items originally budgeted to be covered were later determined to be “not allowable.” The issue has been “carried on our balance sheet” since 2023.
Fletcher said the Select Board was never informed about the CARES Act deficit.
If no action is taken, Luddy said the Department of Revenue will require the town to fund the deficit through the tax levy in fiscal year 2027. The Select Board also has the option to fund the deficit through free cash or other available funds, he said.
Thursday’s presentation served as a discussion of the issue. Luddy said that if free cash were appropriated to offset the impact, it would need to be done before the December Town Meeting.
The Department of Revenue is expected to certify the town’s free cash by the end of October.
Luddy also shared that preliminary results for fiscal year 2026, based on unaudited financials, show general fund revenue exceeding estimates by $589,000 and total general fund expenditures coming in $461,000 under budget. Property tax revenue was 1.67% below the estimated amount, while local receipts were 46.6% higher than originally projected.
Retained earnings for the sewer enterprise fund are about $322,217 above the required reserve floor, while water retained earnings were $598,504 above the reserve floor.
In fiscal year 2025, revenue was $81,000 above estimates, while expenditures were $176,000 under budget.
Local receipts exceeded estimates by $1 million, excluding miscellaneous and non-recurring revenues.
Luddy said the “main budget pressures” came from public safety personnel, snow and ice removal, town counsel expenses, payroll taxes and unemployment expenses. There were budget savings in areas such as health insurance, state assessments and various staffing vacancies.
Luddy also presented the Select Board with an overview of the transitional audit, which was completed when Connors was hired as town administrator. The audit examined the water and sewer enterprise funds and their procurement, as well as the recreation revolving fund.
“The declining balance in the water and sewer fund is primarily driven by consumption projections not aligning with the actual consumption for multiple fiscal years,” Luddy said.
