Transcript City of Chelsea

Town of Swampscott
Financial Forecast Fiscal Years
2008-2012
And FY08 Budget Overview
Presented to the Board of Selectmen, School
Committee, Finance Committee and Town Meeting
Andrew Maylor
Town Administrator
November 13, 2006
Table of Contents
I.
Introduction
•
•
•
II.
Five Year Financial Forecast
•
•
•
III.
Revenue Sources and Chart
Expense Categories and Chart
Water and Sewer Enterprise Funds
•
•
•
V.
Pro Forma Assumptions General Fund
Revenue and Expense Summary and Chart
Town and School Charts
Fiscal 2008 Budget
•
•
IV.
Financial Planning Process
Goals and Priority Areas for FY08
Managing the Impact of the Slow Economic Recovery
FY08 Budget Overview
Pro Forma Assumptions Enterprise Funds
Five Year Forecast and Rate Projections
What to Expect
•
•
•
Fiscal Reality
Solutions Implemented to Date
Goals
Introduction
Financial Planning Process
•
•
•
•
•
•
Annual Financial Planning Process Mandated by Town
Charter.
The Financial Forecast Outlines the Status of the
Town’s Finances for the Future and Identifies Areas of
Need for Further Attention.
Coordination and Communication are Essential to
Develop the Financial Plan Required to Maintain the
Town’s Fiscal Stability.
Town Administrator will Distribute Budget Packages to
Departments by December 8th.
Budgets will be Due in the Town Accountant’s Office by
Monday, January 8, 2007.
School Committee Must Submit School Budget No Later
than February 9, 2007.
Introduction
Financial Planning Process (continued)
•
Capital Improvement Committee Shall Recommend a
Capital Improvement Program to the Town Administrator by
February 2, 2007, Including:
-
•
•
•
A Clear and Concise Summary of its Contents;
Proposed Capital expenditures for the Ensuing Year;
A Five Year Capital Improvement Plan with Supporting
Information as to the Need, Cost and Method of Financing for
Each Projected Capital Expenditure.
Town Administrator will Submit Operating Budget to
Selectmen and the Finance Committee in Accordance with
Town Charter.
Selectmen Approval by a Majority Vote by March 1st.
Financial Policies will be Used as Guideposts to Developing
Financial Plan.
Introduction
Goals and Priority Areas for FY08
•
•
•
•
•
Present a Balanced Budget to the Board of Selectmen
and the Finance Committee.
Control Personnel Related Costs and Find Additional
Sources of Revenue to Offset Out Year Deficits.
Develop an Improvement Plan for Public Buildings and
Open Space.
Continue to Review, Evaluate, Alter and Track Policy
that Maintains and Enhances Town Government.
Improve the Coordination of Municipal Service
Delivery.
Introduction
Managing the Impact of the Slow Economic Recovery
•
•
•
•
•
Although the economy appears to be rebounding from
the post 9/11 recession, it will take years, if not longer,
for the State and its municipalities to fully recover from
the financial devastation caused by what was arguably
the worst municipal finance environment in decades.
Limit the Use of One Time Revenues to Balance the
Budget.
To Increase Balances in Reserve Accounts to Ensure
Future Financial Stability.
Limit Expenditure Growth to the Average Rate of
Inflation.
Water and Sewer Enterprise Fund Projections are Based
Upon Full Cost Recovery.
Five Year Financial Forecast
Pro Forma Assumptions - General Fund Revenues
• State Aid is Projected to Increase 5% in FY08 and 3%
from FY09 Through FY12.
• Tax Levy and Levy Limit will Grow Approximately by 3%
Through FY2012.
• Charges, Licenses, Fees and Miscellaneous Revenue
Projected at Either Level Funded or Minimal Increases.
• Fee Schedule will be Analyzed and Reviewed to
Maximize Local Receipts.
• The Use of Free Cash is Expected to be Approximately
$325,000 for FY2008 Through FY2012.
• Nahant Tuition is Level Funded From FY08 Through
FY2012. Actual Dollar Amount will not be Known Until
January For FY08.
• Other Sources of Revenue Include: Enterprise Fund
Indirects ($575,000).
Five Year Financial Forecast
Pro Forma Assumptions - General Fund Expenses
• Salaries and Operating Expenses (Including Schools)
Projected to Increase 2.5% Annually, Plus $750,000 in
Increased School Operating Costs.
• Health Insurance Costs Projected to Increase By 12%
Annually. This is Net of Savings From the Town Accepting
MGL 32B s18.
• State and County Charges and Cherry Sheet Offsets are
Expected to Increase 2.5% Each Fiscal Year.
• Special Education Costs are Expected to Increase on the
Average of 10% Each Fiscal Year Through FY2012.
• Debt Service Based Upon Current and Future Capital
Improvement Programs Cost Expected to Remain at
approximately 5% of the Tax Levy Through FY2012
Exclusive of School Construction.
• Includes Sewer Debt Exclusion through FY 2012.
• Uncompensated Balance Account has a $83,440 Balance.
This Appropriation will be Gradually Reduced.
Five Year Financial Forecast
Revenue and Expenditure Summary
General Fund (FY07 Debt Includes New High School)
FY07-ACT
FY08-EST
FY09-EST
FY10-EST
FY11-EST
FY12-EST
REVENUES
Property Taxes
New Growth
Debt Exclusion
Total Tax Revenue
$
31,795,507
32,785,145
33,758,523
34,756,236
35,778,892
36,827,115
190,000
150,000
150,000
150,000
150,000
150,000
2,861,785
1,117,717
1,130,103
1,141,753
1,154,884
1,170,986
34,847,292
$
34,052,862
$
35,038,626
$
36,047,989
$
37,083,776
$
38,148,101
Local Receipts-
4,423,025
4,425,000
4,425,000
4,450,000
4,450,000
4,475,000
State Aid
4,026,826
4,228,167
4,355,012
4,485,663
4,620,233
4,758,840
Free Cash
661,811
325,000
325,000
325,000
325,000
325,000
Other Available Funds
575,000
575,000
575,000
590,000
590,000
605,000
TOTAL REVENUE
$
44,533,954
$
43,606,029
$
44,718,639
$
45,898,652
$
47,069,009
$
48,311,940
$
28,640,204
$
30,106,209
$
30,858,864
$
31,630,336
$
32,421,094
$
33,231,622
EXPENSES
Base Operating Expense
Group Health
4,058,125
4,545,100
5,090,512
5,701,373
6,385,538
7,151,803
Other Personnel Benefits
Special Education
2,742,135
3,160,370
2,872,293
3,476,407
3,015,908
3,824,048
3,166,703
4,206,452
3,325,038
4,627,098
3,491,290
5,089,807
Debt Service - CIP
4,076,760
1,900,268
1,751,931
1,802,399
1,854,189
1,907,405
Sewer Debt
1,108,565
1,117,717
1,130,103
1,141,753
1,154,884
1,170,986
747,795
856,392
873,520
890,990
908,810
926,986
Non- Appropriated Exp.
TOTAL EXPENSES
SURPLUS (DEFICIT)-
$
$
44,533,954
-
$
44,874,386
$
$
(1,268,357) $
46,544,886
$
(1,826,247) $
48,540,008
$
(2,641,356) $
50,676,651
$
(3,607,642) $
52,969,899
(4,657,959)
Five Year Financial Forecast
Revenue and Expenditure Gap
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$0
FY08 FY09 FY10 FY11 FY12
Total Revenue
Total Expenses
School Department Spending
FY2006
(FY2006 Schedule 19)
Instruction
82%
Pupil
Transportation
2%
Administration
3%
Payments to NonPublic Schools
8%
Operations &
Maintenance
5%
School Department Funding Summary
Excluding Indirect Costs
100%
90%
Town Appropriation
80%
Chapter 70
70%
60%
50%
40%
30%
20%
10%
0%
FY03
FY04
FY05
FY06
FY07
Fiscal 2008 Budget
Revenue Sources
Revenues Projected for the FY08 Operating Budget Total
$43,606,029
Revenues are Derived From The Following Re-occurring Sources:
•
Taxes - $34,052,862
•
Nahant Tuition - $1,403,025
•
Motor Vehicle Excise - $1,850,000
•
Licenses and Permits – $160,000
•
Fines and Forfeits - $95,000
•
State Aid- $4,228,167 (Gross)
•
Local Receipts - $916,975
Note- Revenue Detail Does Not Include Free Cash or Other Available
Funds Which Total $900,000
Fiscal 2008 Budget
General Fund Revenue Sources FY 2008
Motor
Vehicle
Excise
4%
Taxes
84%
Other
Revenue
2%
Intergovernmental Aid
9%
Grand Total - $43,606,029
Other Local
Receipts
6%
Fiscal 2008 Budget
Expense Categories
For Presentation Purposes FY08 Expenses are
Detailed in the Following Categories:
•
•
•
•
•
•
•
General Government -$5,391,285
School Department - $22,037,598
Public Safety- $5,838,733
Pensions- $2,872,293
Insurances- $4,860,100
Debt Service- $3,017,985
State Charges- $856,392
Fiscal 2008 Budget
General Fund Expenditure Categories FY 2008
School
Department
49%
General
Government
12%
NonAppropriated
2%
Public Safety
13%
Debt Service
7%
Insurances
11%
Grand Total - $44,874,386
Pensions
6%
Water and Sewer Enterprise Funds
FY08 Budget Overview
•
The Town’s water/sewer system infrastructure remains in
adequate condition and requires yearly maintenance and
upgrades. With the assistance of $550,000 provided by the
MWRA through an interest free loan, the DPW was able to
re-line and replace close to mile of water main.
•
Over the past several years, the Department has contracted
out the re-lining or replacement of close to six miles of
water main. This total represents only about fourteen
percent of the Town’s overall infrastructure.
•
Many of the remaining water mains are decades old, and
present the Town with significant losses in water pressure,
as well as, considerable water discoloration problems. Thus
the need for continuous maintenance, which again we hope
will be funded through the MWRA’s Local Pipeline
Assistance Program.
Water and Sewer Enterprise Funds
FY08 Budget Overview (cont.)
• The completion of the water meter replacement project has
resulted in the Town of Swampscott reducing its unaccounted
water from 33% to just over 10%.
• The new system has allowed for the implementation of quarterly
billing, which will go into effect November 15th.
• Through an inter-municipal agreement signed with the City of
Lynn in 1989, the Town of Swampscott sends all its raw sewage
to Lynn for treatment. The sewer system infrastructure is in very
poor condition.
• Some of the remaining mains are well over one hundred years
old, and are constructed of brick or clay. Both these materials
have become obsolete, and contribute significantly to the
infiltration and inflow into the Town’s sewer system.
Water and Sewer Enterprise Funds
FY08 Budget Overview (cont.)
•
During periods of heavy precipitation, the total daily flow to
Lynn is increased by as much as 500%, significantly increasing
the Town’s costs for treatment.
•
As the City of Lynn continues to remove infiltration and inflow
from its own sewer system, the resulting percent of costs for
Swampscott rises sharply, again increasing our costs for future
capital projects.
•
The Town through a sub-contractor, video inspected over 10
miles of sewer main, is now working with an engineering firm,
to implement a plan to reduce infiltration and inflow into the
Town’s sanitary sewer system.
Water and Sewer Enterprise Funds
Pro Forma Assumptions - Enterprise Funds
•
•
•
•
•
Water Debt will Increase by $56,000 Each of the Next
Several Years. This Represents the Additional
Commitments to the Zero Interest Loan Program
Conducted Through the MWRA.
Debt Service Includes $265,000 to Pay for Replacement of
All Meters and the Installation of Radio Read Devices.
The General Fund Continues to Pay the Debt Service on
Bonds Required for the Connection to the Lynn SWC. This
represents $1,117,717 for FY 2007 the impact on rates
would have been $2.11.
For Projection Purposes, the MWRA and Lynn WSC
Assessments have been Increased by Ten Percent Each
Year. The MWRA has Projected a Double Digit Increase for
FY2007, and the Lynn WSC Fees Should also be in This
Range.
Direct Expenses were Increased by 2.5 % per year and
indirect costs are level funded.
Water and Sewer Enterprise Funds
Five Year Forecast and Rate Projections
ENTERPRISE FUND
Revenues
Water and Sewer Fees
Interest
Liens/Miscellaneous
Total Revenues
Expenditures
Direct Expenses
MWRA Assessment
Lynn WSC Assessment
Debt Service
Additions to Reserves
Indirect Expenses
Total Expenditures
Combined Rate
Percent Change
Projected
FY 2008
$
$
$
$
$
$
$
Projected
FY 2009
Projected
FY 2010
Projected
FY 2011
Projected
FY2012
5,004,982
5,335,154
5,734,647
6,126,252
6,593,031
5,004,982
5,335,154
5,734,647
6,126,252
6,593,031
904,351
1,850,631
825,000
800,000
50,000
575,000
5,004,982
$
$
$
$
$
$
926,960
2,035,694
907,500
840,000
50,000
575,000
5,335,154
$
$
$
$
$
$
950,134
2,239,264
998,250
882,000
75,000
590,000
5,734,647
$
$
$
$
$
$
973,887
2,463,190
1,098,075
926,100
75,000
590,000
6,126,252
$
$
$
$
$
$
998,234
2,709,509
1,207,883
972,405
100,000
605,000
6,593,031
9.00 $
9.18 $
9.36 $
9.55 $
9.74
1.1%
2.0%
2.0%
2.0%
2.0%
What to expect
Fiscal Reality
 Solutions Implemented to Date
 Goals

The Fiscal Realty
Fiscal 2002 – Fiscal 2007
Estimates




State Aid has decreased by $202,371.
Health insurance costs have increased by $1,782,710.
The Town’s retirement appropriation has increased by
$478,935.
Property and casualty increases $185,000.
Solutions Implemented to Date
Partial List
 Expense reductions




Renegotiated the ambulance contract - savings $135,000 annually.
Privatized streetlights – savings $35,000 annually.
Adopted M.G.L. Chap. 32B, Section 18, re: medicare provision –
savings $25,000 annually.
Reorganized town hall staff – savings $20,000 annually.
 Revenue enhancement




Re-bid leases on town owned property – revenue increase $15,000
annually.
Entered into the town’s first towing contract - $6,000 annually.
Increased town’s inspectional services fees - $50,000 annually.
Cell Tower Expansion – $37,000 annually.
Goals
 Close the Fiscal 2008 budget gap




State aid increase possible.
Stabilization Fund balance.
Health Insurance premium increase less than expected.
Reduce spending without impacting service delivery.
 Looking ahead

Reduce long-term debt as a percentage of budget.
Find additional sources of revenue.
Reduce the dependency on one-time revenue.

Adopt a Financial Reserve Policy.

