Andrew Maylor Town Administrator November 16, 2009

• • • • $2Billion State Structural Deficit in FY2010 will likely lead to additional local aid cuts in FY2011 if State Revenues don’t increase significantly.

Significant Service Rollbacks Have Been Required During The last several years and Additional Service Cuts and Staff Reductions Should Be Expected in FY 2011.

The Town has Implemented A Significant Number of Cost-Cutting Measures And Revenue Enhancements During The Past Several Years.

We Must Continue the Commitment to Restoring our Reserves to Appropriate Levels and Decreasing our Reliance on One-Time Revenue or we will Jeopardize the Town’s Bond Rating and Cost of Capital.

• State Aid is Projected to be Cut 10% in FY11 and Remain Level in FY2012 with Slight Increases Through FY15; • Tax Levy and Levy Limit will Grow Approximately by 3% Through FY2015; • Charges, Licenses, Fees and Miscellaneous Revenue Projected to be Decline in FY2011 and in FY2012 with Minimal Increases Through FY2015; • The Use of Free Cash is Expected to be $200,000 for Years FY2011 Through FY2015.

• Nahant Tuition has been Lowered to $1,125,000 for the Next Five Years.

• Other Sources of Revenue Include: Enterprise Fund Indirects ($760,000).

• Salaries and Operating Expenses (Including Schools) Projected to Increase 1.3% for FY11 and 2.5% Annually Thereafter; • Health Insurance Costs Projected to Increase By 5% Annually; • Due to the Current State of the Economy and Loss on Investments, the Retirement Appropriation is Expected to Increase by 10% in FY2012 and 5% Each Year Thereafter; • State and County Charges and Cherry Sheet Offsets are Expected to Increase 10% Each Fiscal Year; • Debt Service Based Upon Current and Future Capital Improvement Programs; • Includes Sewer Debt Exclusion through FY 2014. FY2014 Will be Last Year of Payment;

FY10-ACT FY11-EST FY12-EST FY13-EST FY14-EST FY15-EST REVENUES

Property Taxes New Growth Debt Exclusion Total Tax Revenue Local Receipts State Aid Free Cash Other Available Funds

TOTAL REVENUE

35,501,727 36,660,895 37,849,043 39,000,269 40,180,275 41,389,782 $ 40,145,733 $ 40,895,140 $ 41,967,117 $ 43,079,908 $ 43,512,411 $ 44,164,534 4,144,648 3,925,000 3,752,500 3,846,313 3,942,470 4,041,032 265,000 4,379,006 4,139,510 350,000 265,000 3,969,245 3,725,559 200,000 200,000 3,918,074 3,725,559 200,000 200,000 3,879,639 3,800,070 200,000 3,132,136 3,876,072 200,000 200,000 2,574,752 3,953,593 200,000 200,000 760,000 760,000 760,000 760,000 760,000 760,000

$ 49,539,891 $ 49,505,699 $ 50,405,176 $ 51,686,290 $ 52,290,953 $ 53,119,159 EXPENSES

Base Operating Expense $ 34,215,968 $ 34,760,776 $ 35,629,795 $ 36,520,540 $ 37,433,553 $ 38,369,392 Group Health 4,170,000 4,378,500 4,597,425 4,827,296 5,068,661 5,322,094 Other Personnel Benefits 3,372,226 3,541,126 3,895,239 4,090,001 4,294,501 4,509,226 Debt Service - CIP Sewer Debt Non- Appropriated Exp.

TOTAL EXPENSES $

5,413,605 1,141,753 1,209,755

49,523,307 $

4,905,905 1,154,884 1,310,731

50,051,921 $

4,738,632 1,170,986 1,531,804

51,563,881 $

4,687,148 1,188,358 1,664,984

52,978,327

4,388,165

$

498,902 1,811,482

53,495,264

4,084,271

$

1,972,630

54,257,613 SURPLUS (DEFICIT) $ 16,584 $ (546,222) $ (1,158,705) $ (1,292,037) $ (1,204,311) $ (1,138,454)

 Chapter 70 Equity;  Increased State Revenue;  Change in Enrollment Migration Trend;  Limited Increases to CBA’s;  Regionalism;  Expanded Revenue