Peabody moves forward $200 trash fee

PEABODY — The City Council approved a new $200 trash fee that would affect most residents in an 8-2 vote Tuesday night.

This fee, if given a final seal of approval by the council later this month, will go into effect on July 1 and push off the need for a Proposition 2½ override by several years, Mayor Ted Bettencourt said.

“This is certainly a day I have dreaded for many years now,” Bettencourt said at the start of the meeting. “This was always kind of a last option for me. If it wasn’t, I would have brought it forward many years ago, and not 15 years into me being mayor.”

The ordinance change stipulates a five-year freeze on the $200, and that veterans, their families, and residents over age 65 who own the home they live in would only have to pay a $100 trash fee each year.

The fee only applies to the city’s single-family, two-family, and three-family homes, excluding condos. This covers just under 14,000 properties in Peabody, as larger multi-family properties and businesses have private contracts to pick up trash.

“I believe (this fee) would provide fiscal stability and allow us to continue those core services that we need, and to give us as a community time to slowly reduce every year our budget obligations,” Bettencourt said.

Budget concerns

A double-digit rise in employee health insurance each year over the last several years has been a budget buster for Peabody and surrounding communities. That increase was originally 19.3%, or $10 million more, for the city when the bill came due in February. But that dropped to 11.1% (or a $6.2 million rise) when Blue Cross Blue Shield cut out weight loss drugs from its coverage.

During a meeting with the director of Massachusetts’ Blue Cross director, Bettencourt was told to expect two more years of double-digit increases, he said.

The city’s assessment for Essex Tech will rise by $1.27 million for Fiscal 2027, an 18% jump over last year – the largest increase in this cost Peabody has ever seen.

Peabody must also pay $648,000 more on its waste hauling contract with Republic Services this year due to a rise in prevailing wages for curbside waste collectors. It doesn’t help that Peabody is lumped in with the Boston market for trash hauling, which sees an hourly rate around $51 for these workers, when the northern market that begins in Danvers only requires a $32 hourly rate, Bettencourt said.

The city currently has five years left on its contract with Republic.

“When our contract expires… that’s going to be a significant increase to what the trash and recycling bill will be,” he said, noting Beverly saw a large rise in trash costs this year as a result of a new trash contract.

The trash fee will be key in holding off the need for a Prop 2½ override in Peabody, he said. Otherwise, that vote will be required in two years.

Peabody has maintained a healthy cushion with its excess levy capacity for years. Most of the time, excluding the mortgage crisis in 2009 and 2010, the city has left between $10 million and $15 million in what it could tax residents.

Currently, that number sits at $8 million as Peabody has encroached on its excess levy limit to help fill gaps in its budget over the last few years. Once it hits that 2½ limit, the city’s budget will only be able to increase about $5 million year to year, Bettencourt said.

That’s a problem when the annual budget increase has averaged $10 million to $11 million over the last few years. If Peabody is suddenly forced to cut the difference off of those increases to meet the levy limit, there would have to be cuts to police, fire, schools and all other city departments, Bettencourt said.

An approval of a trash fee would help push off a Prop 2½ vote for about five more years, Bettencourt said. That could give the city time to see health insurance increases start to shrivel through action by the state, though Bettencourt said he is concerned that might not happen, and time to gradually lower the city’s budget increase over each year through reductions, he said.

This would involve a gradual reduction in workforce and the city’s services, he said.

“But it would be done in a very stable, consistent, effective way, where each department gets used to every year having maybe less employees, and will be able to provide less,” Bettencourt said.

Already, the city has cut its proposed budget increase for Fiscal 2027 from $10 million down to $9.3 million, in large part by eliminating 20 positions across city departments. This includes a net reduction of 11.7 full-time equivalent employees in Peabody Public Schools.

Residents react

Peabody is the last city in the area that does not have a trash fee. Until now, the city has always absorbed any increases to its waste collection in its budget.

Many of the members of the public who spoke were upset the city was asking for more money from residents. Some questioned why the city hasn’t searched for a new health insurance or trash contract, or why it hasn’t negotiated better terms.

The city has switched to the state’s Group Insurance Commission from Blue Cross in the past, but the costs under that plan “exploded” soon after and there were no cost savings, Bettencourt said. Peabody does offer buy-outs to employees who take insurance elsewhere, and certain plans now require employees to pay higher deductibles.

“We looked at plus-one plans, we looked at all kinds of high-deductible different plans, but I cannot do that unilaterally. It has to be agreed to with the Peabody Public Employee Coalition,” Bettencourt said.

Resident Russell Donovan said the fee would not be equitable.

“I put out about a half a bag of trash a week. The neighbors next door put four or five bags,” he said. “I figure at this current rate, I’ll be paying $5 a bag. They might be paying a buck.”

Other residents advocated for a pay-as-you-throw program. Bettencourt said that would create significantly higher costs than what he is proposing, noting Peabody does have an ongoing contract with Republic.

“There’s no perfect system, but we looked at everything, and I can just say that the trash fee is the last one I wanted to come forward with,” Bettencourt said.

Councilors weigh in

Some suggested the city buy its own trash trucks.

“Peabody uses five trash vehicles a week at $300,000 to $350,000 a truck, not including maintenance, not including gas, not including salaries, and not including tipping fees,” Ward 5 City Councilor Dave Gamache said. “You’re looking at well past what we pay Republic.”

He said he would support the trash fee as this is “a good start” to tackling issues down the road for the city. Councilor at-Large Jon Turco also supported the measure, saying “this is a revenue generating account that will almost immediately put us in a better situation financially as a city.”

“I know that I’m gonna lose votes tonight. I’m okay with it. I’m fine with it, just because I know that I’m doing the right thing for all of you, in the sense that the city will be more sustainable, it’ll be more viable, it’ll give us time to make corrections,” Turco said.

Ward 4 Councilor Julie Daigle said she can’t say no to the fee without a solution.

“I don’t have a solution to this, so I’m not sold on the ‘no’,” she said. “If we put this in the tax rate…your fee could be higher in the taxes.”

Councilor at-Large Anne Manning-Martin did not support the fee, and said the proposal needs more research and should be brought up again after the city wraps up its budget process this month.

She said this fee and others like it are a runaround for Prop 2½. She made a motion to send the proposal back to the mayor and rework it, which failed 4-1 before the Finance Subcommittee, made up of Manning-Martin, Turco, Daigle, Gamache and Ward 3 Councilor Stephanie Peach.

“You have to show the taxpayers you spread the pain before you go to them for more money, and we haven’t done that,” Manning-Martin said.

Councilor at-Large Tom Rossignoll said the fee was an unfortunate but necessary road, and Ward 1 Councilor Craig Welton said the fee is an “opportunity to raise revenue that’s needed.”

Ward 2 Councilor Wendy Lattof and Manning-Martin said the fee should not be presented to the public before the budget is fully presented, but rather after, as the Council is still looking line by line for savings.

“I disagree completely that the easy thing to do is to vote ‘no.’ The easy thing to do is to vote ‘yes’,” Lattof said. “No means we have to go back and look at these numbers and do the due diligence for our residents.”

At-Large Councilor Jaclyn Corriveau agreed and said she too would vote ‘no’ when the fee appears before the entire council. Councilor at-Large Jarrod Hochman said he struggled with putting more costs on residents but was encouraged this fee would be cut in half for veterans and older residents.

Ward 6 Councilor Michael Higgins said the fee “represents the least unfavorable path forward.” Peach said her favorable vote behind this fee was not made lightly.

“I’ve looked at the numbers. I’ve gone through the budget. If I could find $8 million for the city over the next five years, which is what we’re talking about here, I would,” Peach said. “I would vote ‘no’ in a heartbeat, but we can’t find that money because it’s not there.”

Corriveau and Lattof were the two councilors who voted against the fee. Manning-Martin left Tuesday's meeting before a vote was taken by the entire council.

The online version of this article has been updated to reflect a vote taken by the entire City Council on the trash fee.

Contact Caroline Enos at [email protected].

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