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Home My Public Portal AboutBudget ForecastBREWSTER BUDGET FORECAST FISCAL YEARS 2021-2025 Peter Lombardi, Town Administrator Mimi Bernardo, Finance Director Town of Brewster, Massachusetts December 4, 2019 Agenda •Where are we now: Recap of the FY20 Budget •What can we afford: FY21 (and beyond) Budget Capacity •Where do we go from here: Budget Process and Financial Policy Implications 12/04/19 2 Overview of FY20 Budget •Budget built using 2.25-2.75% COLA and contractual step increases •Assumed slight increase in new growth and conservatively estimated local receipts at 95% of the FY19 estimated receipts •$1.1M in FY19-20 capital needs funded outside of operating budget utilizing FY18 Free Cash – return to past practice •NRSD net operating increase including new OPEB request was 4.28% •Brewster Schools operating increase was 2.5% •Town OPEB was funded in FY20 at $200k; helped by one-time Medicare reimbursement of $154k •$309k operating override for (3) new positions was approved by voters •Resulted in a 4.79% increase in the overall town budget •Tax rate increased from $8.58 to an estimated $8.87 12/04/19 3 FY21 Budget Forecast: Revenue Assumptions •New Growth - $175k in FY21 and $150k in FY22+, based on Assessor’s analysis •State Aid (cherry sheet) - 1.5% annual increase •Local Receipts - FY21 projected at 90% of past 3 year actuals (FY17-19), with 7.5% annual escalator for FY22+ •New Short-term Rental Revenues - $250k in FY21+ (unallocated), based on preliminary FY20 actuals to date •New Marijuana and/or Solar Revenues - $0 in FY21+ •Water and Golf Indirects - $130k and $100k in FY21 respectively, with 2.5% annual escalator •Overlay Reserves (Abatements) - $250k in FY21, with 2.5% annual escalator 12/04/19 4 FY21 Budget Projection: Expense Assumptions •General Expenses 2% •Personnel 4-5%* •Schools 2.5% •Pension 12% (FY21); 10% (FY22+) •Health Insurance 5% (FY21); 7% (FY22+) •Liability Insurance 4.5% •OPEB $250k (FY21); $300k (FY22+) * Varies by department but includes 2.5% annual COLA + approximate 2% contractual steps 12/04/19 5 FY21 Budget Forecast: Other Noteworthy Items •Water and Golf budget projections not addressed (funding for both removed from prior year budget/actuals) – separate presentation planned to consider viability of moving one or both to full enterprise funds for FY21+ •All ambulance receipts and corresponding operating expenses returned back to General Fund in FY21+ •DPW Solid Waste chronic underfunding addressed with $50k increase in FY21 & another $50k increase in FY22 •Snow and Ice returned to stand alone line item in FY21+, separate from DPW operating budget •FY22+ placeholder of $3+M for Nauset High School debt exclusion (assumes 20 year term) 12/04/19 6 Revenue Projection FOR ILLUSTRATIVE PURPOSES12/04/19 7 FY 2016 Budget FY 2017 Budget FY 2018 Budget FY 2019 Budget FY 2020 Budget FY 2021 Projection FY 2022 Projection FY 2023 Projection FY 2024 Projection FY 2025 Projection REVENUES Real Estate Taxes Prior Yr Property Tax Limit 27,622,908 28,517,123 29,589,263 30,648,080 31,766,927 33,179,671 34,184,163 35,188,767 36,218,486 37,273,948 2.5% Levy Growth 690,573 712,928 739,732 766,202 794,173 829,492 854,604 879,719 905,462 931,849 New Growth 203,642 359,212 319,085 354,749 309,571 175,000 150,000 150,000 150,000 150,000 Potential Operating Override 0 0 0 0 309,000 0 0 0 0 0 Levy Limit 28,517,123 29,589,263 30,648,080 31,769,031 33,179,671 34,184,163 35,188,767 36,218,486 37,273,948 38,355,797 Debt Exclusions- Town 979,348 761,949 1,462,481 1,931,715 2,388,797 1,602,115 1,554,665 1,504,215 1,454,765 1,411,315 Debt Exclusions- Schools 0 0 0 0 0 416,500 416,500 416,500 416,500 416,500 Nauset HS Building Debt Exclusion 0 0 0 0 0 0 3,387,682 3,387,711 3,387,398 3,386,643 Cape Cod Comm. Asses. +2.5%149,025 152,751 156,807 160,727 168,354 172,563 176,877 181,299 185,831 190,477 Current Yr Property Tax Levy 29,645,496 30,503,963 32,267,368 33,861,473 35,736,822 36,375,341 40,724,491 41,708,211 42,718,442 43,760,732 Other Revenues Cherry Sheet (State Aid) +1.5%1,738,130 1,788,487 1,823,400 1,840,629 1,868,238 1,896,262 1,924,706 1,953,577 1,982,880 2,012,623 Estimated Local Receipts 3,841,999 3,900,277 4,821,120 5,134,184 4,608,942 4,797,593 5,157,413 5,544,218 5,960,035 6,407,037 Short Term Rentals Revenue 0 0 0 0 0 250,000 250,000 250,000 250,000 250,000 Free Cash 0 0 0 0 0 0 0 0 0 0 Overlay Surplus 375,000 125,000 0 0 50,000 0 0 0 0 0 Transfers In To General Fund Waterways RRFA 0 0 0 0 5,000 0 0 0 0 0 Cable RRFA 12,000 13,000 0 0 7,200 7,200 7,200 7,200 7,200 7,200 Telecomm. Revolving +2.5%66,300 67,626 0 0 65,000 66,625 68,291 69,998 71,748 73,542 Road Betterments RRFA 165,819 145,882 0 0 151,436 102,623 88,235 79,785 76,735 63,710 Ambulance RRFA 298,810 300,410 0 0 0 448,550 459,764 471,258 483,039 495,115 Transfer fr Special Revenue 398,253 365,953 0 0 154,400 0 0 0 0 0 Bond Premium Amortization 0 47,814 0 0 35,810 32,371 28,931 25,492 22,053 18,614 Indirect Costs from Water +2%0 0 0 0 0 130,000 132,600 135,252 137,957 140,716 Indirect Costs from Golf +2%0 0 0 0 0 100,000 102,000 104,040 106,121 108,243 TOTAL REVENUES 36,541,807 37,258,412 38,911,888 40,836,286 42,682,848 44,206,564 48,943,630 50,349,031 51,816,210 53,337,533 Expenditure Projection FOR ILLUSTRATIVE PURPOSES12/04/19 8 FY 2016 Budget FY 2017 Budget FY 2018 Budget FY 2019 Budget FY 2020 Budget FY 2021 Projection FY 2022 Projection FY 2023 Projection FY 2024 Projection FY 2025 Projection EXPENDITURES Cherry Sheet Charges +1.5%599,255 656,880 635,036 679,088 624,563 633,931 643,440 653,092 662,888 672,832 Overlay Reserve +2.5%400,000 400,000 200,000 200,000 400,000 250,000 256,250 262,656 269,223 275,953 Operating Budget General Govt 1,946,446 2,013,959 2,125,908 2,339,099 2,143,191 2,158,755 2,171,123 2,183,752 2,196,646 2,209,812 Public Safety 5,129,014 5,307,505 5,256,274 5,447,941 5,874,780 6,342,920 6,353,902 6,365,104 6,376,530 6,388,184 Education +2.5%17,817,809 17,983,836 18,440,571 19,130,846 19,591,056 20,080,832 20,582,853 21,097,425 21,624,860 22,165,482 Public Works 1,626,464 1,787,379 1,848,681 2,080,586 1,892,521 1,954,101 2,019,513 2,035,246 2,051,306 2,067,702 Human Services 540,249 583,080 703,465 755,990 839,506 849,849 860,297 870,852 881,516 892,291 Culture & Recreation 696,566 711,924 803,774 892,494 910,426 915,080 919,828 924,670 929,610 934,648 Debt 1,168,462 1,445,918 1,509,449 2,313,310 2,899,521 2,284,085 5,582,691 5,516,045 5,461,768 5,393,251 Local Assessments 0 0 11,280 12,190 15,840 15,840 16,157 16,480 16,810 17,146 Employee Benefits 4,939,408 5,310,580 5,488,935 5,826,281 6,365,746 7,315,373 8,314,902 9,318,375 10,379,778 11,503,431 Utilites 2%482,816 430,088 337,123 456,473 417,171 425,514 434,025 442,705 451,559 460,590 Liability Insurance 391,689 460,050 426,616 437,789 393,000 412,605 433,189 454,802 477,494 501,320 Subtotal Operating Expenses:34,738,923 36,034,319 36,952,077 39,692,999 41,342,758 42,754,956 47,688,481 49,225,455 50,847,877 52,533,857 TOTAL EXPENDITURES 35,738,178 37,091,199 37,787,113 40,572,087 42,367,321 43,638,887 48,588,171 50,141,204 51,779,988 53,482,642 FY21 Budget Forecast Implications •Annual estimated FY21 revenue totals are $44,206,564 •Projected FY21 operating appropriations are $43,638,887 •Estimated $567k in FY21 total available levy capacity, including $250k in new short-term rental revenues (specific allocation TBD) •$317k in projected net FY21 levy capacity represents 0.7% of annual operating budget •No new major capital (debt) included in forecast but continued conservative local receipt estimates will help to create capacity to fund ongoing needs via Free Cash as has been done historically –more details to come with FY21-25 Capital Improvement Plan in February 2020 (debt exclusions likely needed for major projects) •While medium-term levy capacity is limited, no looming structural deficits are anticipated that would require immediate attention (ie. operating override) 12/04/19 9 FY21 Budget Building Process •Operating budget: begin work with Department Heads now to gain a clear understanding of FY21 actual departmental expense needs suggested guidance to prepare level services budget - avoiding any substantial increases absent compelling rationale requests due December 30 internal review through mid-January FY21 budget presentation on January 29 (joint meeting) Department Head presentations planned for February 1 (joint meeting) •Capital budget: begin work with Capital Planning Committee now to review FY21-25 departmental requests FY21-25 CIP to be delivered by end of January and presentation planned for February 10 (joint meeting) Supplemental FY20 capital needs to be addressed at Spring 2020 Town Meeting ($2M in unappropriated Free Cash available) 12/04/19 10 Upcoming Financial Policy Decisions with Significant Long-Term Budget Implications •Recommended Nauset High School Project Debt Term •Financial Reserves Policy regarding: Appropriate levels of Stabilization Fund, Free Cash, and Retained Earnings (and unappropriated balances) Allocation of new local revenues (short-term rental, etc) Need to create/fund Capital Stabilization Fund •Select Board FY20-21 Strategic Plan goals: Adopt Other Post-Employment Benefit funding policy Establish permanent funding mechanism for Affordable Housing Trust Determine need for short-term rental regulations 12/04/19 11