Hanover Faces $6.9 Million Budget Deficit as Town Unveils Sobering Five-Year Financial Forecast
HANOVER - October 20 - Hanover town officials laid out a stark financial picture Monday night, presenting a five-year budget forecast showing cumulative operating deficits totaling $6.9 million between fiscal years 2027 and 2032, with fiscal year 2030 emerging as the most difficult to manage with a projected $2.6 million shortfall. The sobering projections came during a lengthy Select Board meeting that also addressed immediate infrastructure needs, including a $600,000 request for critical school repairs and a $45 million, ten-year capital investment plan dominated by PFAS water treatment costs.
The Full Story
Budget Director Jim Hoyes presented the town’s updated fiscal year 2027 operating budget and multi-year forecast, revealing annual deficits ranging from $1 million to $3.6 million across the planning window. The forecast assumes maximum year-over-year spending increases of 3% for public schools, 1.3% for the library to maintain accreditation, and 2.5% for other municipal departments.
Town Manager Joe Colangelo acknowledged the severity of the projections, telling the board he has already begun conversations with department heads about potentially reducing those maximum run rates. “I just don’t want anyone to think that I’m just kind of sitting here not paying attention to the information that Jim is providing and reacting accordingly,” Colangelo said. “It’s still early in the cycle, but I think it’s pretty obvious some of the things that we’re probably going to have to try to do to make this more manageable through 32.”
The forecast includes several built-in assumptions that could help address portions of the deficit. The town plans to utilize approximately $500,000 in excess levy capacity over the next two years, rather than using it all at once, to avoid dramatically increasing the property tax burden on residents in a single year. Town officials indicated they are exploring additional revenue opportunities through licenses, permits, investment income, and potentially favorable state aid adjustments, though Hoyes cautioned these would likely only “chip away a couple hundred thousand” from the deficits rather than solving them entirely.
The fiscal year 2027 and 2028 deficits of approximately $1 million each appear “digestible” through a combination of expense reductions, free cash utilization, and drawing down excess levy capacity, according to Hoyes. However, the fiscal year 2030 deficit of $2.6 million represents the most significant challenge. The final year of the forecast, fiscal year 2032, shows a surplus, but that projection is “highly dependent” on the town achieving fully funded status with Plymouth County retirement contributions, officials warned.
In a related financial update, Town Accountant Debbie Dunn and Assistant Town Accountant Matthew DeMayo presented the first-quarter expenditure report for fiscal year 2026. While many department budgets appear off-track at first glance, Dunn explained that most discrepancies result from timing issues rather than overspending problems. Many annual expenses, such as pension obligations, insurance premiums, and membership dues, hit in July, making quarterly percentages misleading.
Dunn did identify several areas requiring attention. The town manager’s salary line has a $25,000 error dating back to the town meeting warrant preparation, when an Advisory Committee recommendation to cut funds from the finance expense line was mistakenly applied to the salary line instead. “We thought we could just do a budget amendment because it just seems like a Scribner’s type error, but after talking to [Town Clerk] Kathy Harder-Bernier and getting the motion, whatever is in that motion that was certified, we have to stick to,” Dunn explained. The discrepancy will require a budget transfer at year’s end.
The treasurer-collector department is running at 68.9% of budget due to hiring a consultant to help clear the backlog from fiscal year 2025. The consultant has been working to get revenue recorded through September and is expected to have the department current within a month.
Select Board member Greg Satterwhite praised the detailed financial reporting, saying, “It’s really nice to have that type of ability and expertise in finance to have such a clear explanation of everything that’s gone on so far.” The enhanced financial reporting represents a significant improvement from prior years when the town lacked the staffing capacity to produce monthly budget updates.
Turning to capital needs, Hoyes presented a comprehensive ten-year capital investment plan totaling approximately $45 million, with $25 million of that dedicated to addressing PFAS contamination in the town’s water supply. The plan reflects years of deferred maintenance and underinvestment in town infrastructure as officials struggled to balance operating budget pressures.
“This underinvestment is now very evident to us,” Hoyes told the board, citing leaking roofs at the middle school, repeated HVAC failures, and general deferred maintenance issues. He characterized the town’s approach during and after the pandemic as “very pragmatic” in terms of delivering on resident expectations despite limited resources, but acknowledged the consequences are now manifesting in aging infrastructure.
The most urgent capital request comes from the school department: $600,000 for health and safety improvements at Cedar School and the middle school. The request, fully supported by school administration and the Department of Public Works facilities team, includes a wheelchair lift at Cedar School to meet ADA requirements, carpet replacement, gym floor refurbishment to eliminate tripping hazards, and critical roof and HVAC repairs beyond the stopgap funding approved in May.
“These are immediate fixes that it’s viewed as there’s not a way to get eight years of work out of those,” Hoyes explained, noting the repairs must be completed during the July-August window when school is not in session. The roof and HVAC work would be incremental to approximately $300,000 freed up in the May town meeting, bringing total investment in those systems to nearly $600,000.
The school refurbishment request represents only the highest priorities. Additional needs identified for future consideration include roof replacements at other schools on a proper maintenance cycle, fire alarm and electrical system upgrades, parking lot reconstruction at Cedar and the middle school, and an additional access road for the middle school to address safety and traffic concerns.
The broader capital plan shows the town currently has $7.56 million in active projects, with $4.4 million in the water enterprise fund. A concerning trend emerged in the data: vehicle purchases far outstrip infrastructure investment, with approximately $2 million dedicated to fleet and vehicles compared to much smaller amounts for building maintenance. “Normally you would want infrastructure investment to be higher,” Hoyes noted.
The town’s current debt load stands at $38.2 million in long-term principal and interest, running through fiscal year 2047 primarily due to school bonds. Debt service expenses will climb to just under $5.4 million by fiscal year 2029, driven by the recently approved fire engine purchase and the new South Shore Vocational Technical High School construction project.
Speaking of the vocational school, Hoyes reminded the board of the critical importance of passing that debt as an exclusion in the May election. If not excluded from the tax levy limit, the approximately $1.3 million in annual debt service beginning in fiscal year 2029 would require additional cuts from the operating budget. For an average-valued home, the debt exclusion would add approximately $220 per year to the tax bill, separate from normal Proposition 2½ increases. All South Shore Vocational Technical school district towns that have voted already except Marshfield have approved the debt exclusion; Marshfield’s vote failed by a handful of votes.
The water enterprise fund faces particularly significant challenges due to PFAS remediation requirements. Over the next ten years, the water fund will require $45 million in investment, with $25 million dedicated specifically to meeting new PFAS regulations. An additional $8.7 million would support ongoing water quality improvements, including water main replacements and upgraded wells and well fields.
Water enterprise officials have strategically minimized vehicle replacement requests, understanding the massive impact of PFAS costs on water rates. The plan proposes internal transfers of vehicles between DPW departments, chassis replacement instead of full truck replacement, and targeting zero vehicle funding in three of the next six years to keep rate impacts manageable.
The transfer station enterprise fund requires $2.8 million in capital investment over ten years, with minimal spending in fiscal year 2027 beyond $20,000 for safety issues. The largest item, a $225,000 scale replacement critical for weighing incoming construction debris and outgoing trash, has been pushed from fiscal year 2027 to 2028 due to concerns about sufficient retained earnings. However, Hoyes cautioned this may be a long-lead-time item that could still require approval at the May annual town meeting even if the purchase and debt don’t occur until later.
Even with the staggered investment approach, transfer station permit fees would increase approximately $40 by fiscal year 2032 to cover the $1.4 million in debt, though Hoyes emphasized that any fee increase impacts residents.
Select Board member Steve Louko questioned several projects on the current active list that he believed were complete, including Walnut Hill roadway improvements and water tower repainting. Hoyes explained departments prefer keeping some projects open in case residual costs emerge, but acknowledged the list will continue to be refined, with some potentially closing out by the end of the budget cycle.
The board also discussed vehicle fleet management. Member Vanessa O’Connor asked whether the town maintains an updated inventory of all vehicles, noting a log had been created a couple years ago showing which vehicles were slated for replacement. Colangelo confirmed the list is typically updated by summer interns and committed to sending the current version to the board.
O’Connor questioned whether the town could permanently reduce its fleet to require less capital investment, asking about the analysis of when repair costs outweigh replacement costs. She also inquired about mileage reimbursement for town employees using personal vehicles, which Colangelo confirmed is already available.
Regarding roadways, the town anticipates receiving just over $500,000 annually in Chapter 90 state funding for road maintenance going forward. While fiscal year 2026 saw over $1 million due to supplemental funding from the “millionaire’s tax,” officials are not counting on that continuing given budget uncertainties at the state and national levels. Committed funds include completion of the salt shed and recent paving work, leaving approximately $1.1 million uncommitted for new projects.
In other business, the board appointed three students to the Hanover Cultural Council as non-voting members: Dominic Fobert, Colum Clarke and Emma Louko. The appointments make Hanover among the first municipalities in Massachusetts to add youth members to a cultural council, part of an initiative sponsored by the Massachusetts Cultural Council.
Cultural Council Chair Christopher Haraden said the council wanted to “expand the interest and the abilities” of the council through youth participation. Member Bonnie Clarke emphasized that “teenagers are going to bring fresh energy” and “help to build our community,” noting the Cultural Council funds all its grants through Hanover Day proceeds with minimal support from the state.
“You really should be honored and proud to be the first of the first,” Select Board Chair Rhonda Nyman told the appointees. “This is something new for across the Commonwealth.” Board member Louko, whose daughter Emma is one of the appointees, abstained from the vote but praised all three students, saying “it’s great to have young people that are interested in public service.”
The board also approved a change of officers, directors, and LLC managers for the Section 12 on-premise all-alcoholic beverage license held by Blazing Wings, Inc., doing business as Buffalo Wild Wings at 1799 Washington Street. Licensing Coordinator Janet Tierney reported all necessary paperwork had been submitted and departmental approvals completed with no issues.
Looking ahead, the December 8 Special Town Meeting warrant is taking shape. In addition to the MBTA zoning district overlay articles currently under public hearing by the Planning Board, the warrant may include an article providing supplemental revenue in case voters reject the MBTA zoning and the state imposes penalties on the town.
“If voters are understanding the risks of being out of compliance, they would at least provide supplemental revenue so that we do not lose services, at least in this current fiscal year that was already voted on,” Colangelo explained. He noted the Attorney General’s office has been “purposefully a little vague” about potential penalties, which could include lawsuits, withholding grant funds or state aid, or appointment of a special master.
The warrant will also likely include an article closing out completed capital projects and returning funds to free cash and Community Preservation Act accounts. Completing this in December rather than waiting for the annual town meeting would allow the town to have a certified free cash number that includes the returned funds, providing more flexibility for budget planning.
Hughes requested that Colangelo reach out to the Advisory Committee to schedule a joint meeting in January to discuss the budget situation. She asked that the request be placed on the Advisory Committee’s agenda for a formal vote to ensure all members are included in the decision.
Why It Matters
Hanover residents face difficult financial decisions in the coming years that will directly impact property taxes, town services, and infrastructure quality. The $6.9 million cumulative deficit over five years means town leaders must either raise additional revenue, cut services, or employ some combination of both approaches. The fiscal year 2030 deficit of $2.6 million represents a particularly significant challenge that cannot be easily bridged without substantial changes to spending patterns or revenue sources. Meanwhile, years of deferred maintenance on schools, roads, and other infrastructure are creating immediate safety concerns and costly emergency repairs that could have been avoided with consistent investment. Water customers will face rate increases to cover $45 million in improvements, primarily driven by state-mandated PFAS remediation that must proceed regardless of the town’s broader financial challenges. The upcoming votes on school repairs and the vocational school debt exclusion will test residents’ willingness to invest in facilities and education during a period of fiscal constraint.
Meeting Minutes
Key Motions & Votes
Motion: Approve meeting minutes of August 11, September 8, September 22, and October 6, 2025. Outcome: Approved. Vote: Unanimous. (Timestamp: 00:01:47)
Motion: Approve meeting minutes of September 19, 2025. Outcome: Approved. Vote: 4-0 (Vanessa Ramos abstained due to absence). (Timestamp: 00:02:02)
Motion: Appoint Dominic Fobert, Colum Clarke and Emma Louko as student members of the Hanover Cultural Council. Outcome: Approved. Vote: 4-0 (Steve Lucco abstained due to family relationship). (Timestamp: 00:07:10)
Motion: Approve application from Blazing Wings, Inc., DBA Buffalo Wild Wings, for change of officers, directors, LLC managers on Section 12 on-premise all-alcoholic beverage license. Outcome: Approved. Vote: Unanimous. (Timestamp: 00:12:34)
Motion: Adjourn meeting. Outcome: Approved. Vote: Unanimous. (Timestamp: 01:29:49)
Public Comment
No members of the public offered comments during the public comment period at the beginning of the meeting. Department representatives and appointees addressed the board during specific agenda items.
What’s Next
The Select Board will hold a joint meeting with the Planning Board at an upcoming meeting to discuss the MBTA zoning district overlay articles currently under public hearing. Town Manager Colangelo will reach out to the Advisory Committee to schedule a joint meeting in January to discuss the budget forecast. The Cultural Council’s three new student members will begin participating in council activities. The board expects to receive additional capital plan presentations covering fire, police, town clerk, and town-wide IT and technology needs at future meetings. Town officials will continue refining the fiscal year 2027 operating budget, with the goal of presenting budget scenarios showing different run rate options by early January. The December 8 Special Town Meeting will address MBTA zoning compliance and potentially include articles on supplemental revenue and closing out completed capital projects.