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Town of Swampscott

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Town of Swampscott Financial Forecast Fiscal Years 2007-2011 And FY07 Budget Overview Presented to the Board of Selectmen, School Committee and Finance Committee – PowerPoint PPT presentation

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Title: Town of Swampscott


1
Town of Swampscott
  • Financial Forecast Fiscal Years 2007-2011
  • And FY07 Budget Overview
  • Presented to the Board of Selectmen, School
    Committee and Finance Committee
  • Andrew Maylor - Town Administrator
  • November 14, 2005

2
Table of Contents
  • I. Introduction
  • Financial Planning Process
  • Goals and Priority Areas for FY07
  • Planning for Future Financial Stability
  • II. Five Year Financial Forecast
  • Pro Forma Assumptions General Fund
  • Revenue and Expense Summary and Chart
  • Town and School Charts
  • III. Fiscal 2007 Budget
  • Revenue Sources and Chart
  • Expense Categories and Chart
  • IV. Water and Sewer Enterprise Funds
  • FY07 Budget Overview
  • Pro Forma Assumptions Enterprise Funds
  • Five Year Forecast and Rate Projections

3
Introduction Financial Planning Process
  • Annual Financial Planning Process Mandated by
    Town Charter.
  • The Financial Forecast Outlines the Status of the
    Towns Finances for the Future and Identifies
    Areas of Need for Further Attention.
  • Coordination and Integration of the Components
    are Necessary to Develop the Financial Plan
    Required to Maintain the Towns Fiscal Stability.
  • Town Administrator will Distribute Budget
    Packages to Departments by December 9th.
  • Budgets will be Due in the Town Accountants
    Office by
  • Monday, January 9, 2006.
  • School Committee Must Submit School Budget No
    Later than February 10, 2006.

4
Introduction Financial Planning Process
(continued)
  • Capital Improvement Committee Shall Recommend a
    Capital Improvement Program to the Town
    Administrator by
  • February 1st, 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 in Accordance with Town Charter for
    Approval by a Majority Vote by March 1st.
  • Selectmen will Forward Budget to Finance
    Committee within Seven Days.
  • Financial Policies have been created and will be
    used as Guideposts to Developing the Financial
    Plan.

5
Introduction Goals and Priority Areas for FY07
  • 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.
  • Develop a Program for Roadway Improvements and
    Maintenance.
  • Voter Acceptance of M.G.L. Ch. 44B, the Community
    Preservation Act.
  • Continue to Review, Evaluate, Alter and Track
    Policy that Maintains and Enhances Town
    Government.
  • Improve the Coordination of Municipal Service
    Delivery.
  • Implement a Fiscal Policy for Future Budgeting.

6
Introduction Planning for Future Financial
Stability
  • Begin to Increase the Balances in Reserve Funds
    to Meet Nationally Accepted Standards.
  • Develop a Long Range Plan for Funding Special
    Education, including Proposing Special
    Legislation.
  • Limit the Use of One Time Revenues to Balance the
    Budget.
  • Establish a New Method for Calculating the
    Funding Available for Annual Capital
    Improvements.
  • Water and Sewer Enterprise Fund Projections are
    Based Upon Full Cost Recovery, As Required By
    Statute.

7
Five Year Financial Forecast Pro Forma
Assumptions - General Fund Revenues
  • State Aid is Projected to increase 5 through
    Fiscal 2011.
  • Tax Levy and Levy Limit will Grow Approximately
    by 3 Through FY2011.
  • 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 275,000 for FY2007 with an
    Incremental Increase Through FY2011.
  • Nahant Tuition is Level Funded From FY06 to FY07
    and Through FY2010. Actual Dollar Amount will
    not be Known Until January For FY07.
  • Other Possible Sources of Revenue Include
    Enterprise Fund Indirects (500,000).

8
Five Year Financial Forecast Pro Forma
Assumptions - General Fund Expenses
  • Salaries and Operating Expenses (Including
    Schools) Projected to Increase 2.5 Annually.
  • Health Insurance Costs Projected to Increase By
    15 Annually. This is Net of Savings From the
    Town Accepting MGL 32B s18 and Assumes a Change
    to the Existing Benefit Mix.
  • State and County Charges and Cherry Sheet Offsets
    are Expected to Increase by 2.5 Each Fiscal
    Year.
  • Special Education Costs are Expected to Increase
    on the Average of 10 Each Fiscal Year Through
    FY2011.
  • Debt Service Based Upon Current and Future
    Capital Improvement Programs Cost Expected to
    Remain at approximately 5 of the Tax Levy
    Through FY2011 Exclusive of School Construction.
  • Includes Sewer Debt Exclusion.
  • Uncompensated Balance Account has a 58,914
    Balance. This Appropriation will be Gradually
    Reduced.

9
Five Year Financial ForecastRevenue and
Expenditure SummaryGeneral Fund
10
Five Year Financial ForecastRevenue and
Expenditure Gap
11
School Department SpendingFY2005(FY2005
Schedule 19)
12
(No Transcript)
13
Fiscal 2007 Budget Revenue Sources
  • Revenues Projected for the FY07 Operating Budget
    Total 42,072,155
  • Revenues are Derived From The Following Sources
  • Taxes - 33,054,068
  • Nahant Tuition - 1,231,696
  • Motor Vehicle Excise - 1,850,000
  • Licenses and Permits 160,000
  • Fines and Forfeits - 95,000
  • State Aid- 4,041,391
  • Local Receipts - 865,000
  • Note- Revenue Detail Does Not Include Free Cash
    or Other Available Funds Which Total 775,000

14
Fiscal 2007 Budget General Fund Revenue Sources
FY 2007
Grand Total - 42,072,155
15
Fiscal 2007 Budget Expense Categories
  • For Presentation Purposes FY07 Expenses are
    Detailed in the Following Categories
  • General Government -5,165,812
  • School Department - 20,915,202
  • Public Safety- 5,414,014
  • Pensions- 2,872,293
  • Insurances- 4,341,250
  • Debt Service- 3,008,561
  • Non-Appropriated- 856,392

16
Fiscal 2007 Budget General Fund Expenditure
Categories FY 2007
Grand Total - 42,573,524
17
Water and Sewer Enterprise Funds FY07 Budget
Overview
  • The Towns water/sewer system infrastructure
    requires yearly maintenance and upgrades. With
    the assistance of 565,000 provided by the MWRA
    through an interest free loan, the DPW was able
    to re-line and replace three miles of water main.
  • Over the past several years, the Department has
    contracted out the re-lining or replacement of
    close to eight miles of water main. This total
    represents about sixteen percent of the Towns
    overall infrastructure.
  • Obsolete water mains present the Town with
    significant losses in water pressure, as well as,
    considerable water discoloration problems.
  • The installation of new waters meters is
    virtually complete with less than 100 of the
    5,000 old meters remaining unchanged. This will
    greatly reduce the amount of unaccounted for
    water consumption.
  • The new meters are equipped with radio read
    technology, which will ensure accurate and timely
    reading of usage and allow the town to institute
    quarterly billing in FY07.

18
Water and Sewer Enterprise Funds FY07 Budget
Overview (cont.)
  • 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.
  • Many of the existing mains are 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 Towns sewer system.
  • During periods of heavy precipitation, the total
    daily flow to Lynn is increased by as much as
    500, significantly increasing the Towns 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 could rise sharply if our system is
    not upgraded as well.
  • Through a low interest loan from the DEP, the
    Town is currently working with a consultant,
    engineering firm, to implement a plan to reduce
    infiltration and inflow into the Towns sanitary
    sewer system.

19
Water and Sewer Enterprise Funds Pro Forma
Assumptions - Enterprise Funds
  • Water Debt will Increase by 56,000 Each of the
    Next Few Years. This Represents the Additional
    Commitments to the Zero Interest Loan Program
    Conducted Through the MWRA.
  • Debt Service Includes 189,890 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 1,108,561 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.

20
Water and Sewer Enterprise FundsFive Year
Forecast and Rate Projections
21
WHAT TO EXPECT
  • Fiscal Reality
  • Solutions Implemented to Date
  • Goals

22
The Fiscal RealtyFiscal 2002 Fiscal
2006Estimates
  • State Aid has decreased by 482,866.
  • Health insurance costs have increased by
    1,499,585.
  • The Towns retirement appropriation has increased
    by 478,935.
  • The School departments special education budget
    has increased by 1,805,575.
  • Property and casualty increases 170,000.

23
Solutions Implemented to DatePartial List
  • Expense reductions
  • Renegotiated the ambulance contract - savings
    135,000 annually.
  • Negotiated a new Trash contract - savings
    80,000.
  • Purchased 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
  • Bid cell tower placement increasing revenue by at
    least 30,000 annually.
  • Adopted M.G.L. Chap. 59, Section 2A to capture
    additional new growth - 100,000.
  • Entered into the towns first towing contract -
    6,000.
  • Increased towns inspectional services fees -
    25,000 annually.
  • Appropriated unspent article balances - 600,000.
  • Sold surplus town owned land - 585,000.

24
Goals
  • Close the Fiscal 2007 budget gap
  • State aid increase possible.
  • Additional use of Overlay Surplus.
  • 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.
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