ATHOL – Town Manager Shaun Suhoski told the Selectboard at its meeting on Feb. 18 that there appear to be bumps in the road on the way to a balanced budget.

“We’re about two weeks or a week behind what my usual process is,” he said. “I’m still recovering from…sticker shock. The pension assessment we expect every year. It’s part of a forward funding plan, and we’re going to go up 9.9% this year, plus or minus – usually plus – any adjustments that occur in our employment base. But this year that’s $220,000 more than it was last year.”

Suhoski didn’t stop there, adding that health insurance costs have also become a concern.

“The COVID years gave us a couple of years – one year it (insurance) was flat and one was a minimal increase, just like everybody across the commonwealth. Now it’s catching up with us post-COVID and the rise in medications like Wegovy and Ozempic, because they’re being used for other things beyond diabetes. Those are expensive. So the number of prescriptions, according to our health group, doubled. And now, the amount we spend on just those medications is a half-million dollars for the group, which covers central and western Mass.”

As a result, said the town manager, health insurance is going to go up almost $300,000 from last year.

“We’re putting it out there just to let folks know we’re in a tough spot this year,” Suhoski told the Athol Daily News Thursday. “And I wanted to let the board know that, while it may not seem like much is happening on the surface, the finance team and I have begun working very diligently on the budget matters.”

The town manager then emphasized that just these two line items are accounting for a $500,000 increase over last fiscal year.

“Until our retirement pension obligations are fully funded, in about 2036, we expect our contribution to go up about 10% per year,” Suhoski said. “But 10% on $2 million, this year, is about $220,000.”

As for the increase in health insurance costs, Suhoski said, ‘They’ve come back. Not just in our group but across the commonwealth, from western Mass to the Boston area. Our increase is 18% for the health group we’re part of.”

Several years ago, the Town of Athol changed providers, transitioning from Massachusetts Interlocal Insurance Association to Hampshire Group Insurance Trust, according to Suhoski.

“When we did the transfer it saved us substantially,” he added. “We had our savings when we transitioned but things still go up every year.”

Asked if it will be necessary to dip into reserves or trim budgets in other departments to meet the increases in retirement and insurance, Suhoski said, “It’s a little too soon because I’m waiting for input on a couple of other budgets. Another big one is the regional schools assessments.”

The assessment for Montachusett Regional Vocational Technical School, he said, is up about $35,000 over FY25. As for the assessment for the Athol Royalston Regional School District, Suhoski said he is scheduled to meet with the district administration in the week ahead.

Suhoski told the board he would be able to provide more clarity on the budget in coming weeks and the budget presentation would be held on April 1.

“We’re moving into high gear, and I just wanted to signal that it’s going to be a difficult year,” he said. “No matter what, we’re going to have a balanced budget because that’s what we’re required to do. If we can crack open some other revenue streams, whether it’s a temporary use of free cash or non-recurring revenue, or it’s cuts – it’s all on the table. Just as we’ve done for 250 years, we’ll figure it out.”

Greg Vine can be reached at gvineadn@gmail.com.