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HomeMy Public PortalAboutFiscal Year 2024 Preliminary Budget Overview r '�� •s' oo j ,r, f�� ram. f -y.{. ' i'l•' ��.� - 1 1 � • Manager's Introduction Today's Closeout of FY '22 (through June 30, 2022) Presentation Update on FY '23 (7/1/2z — 6/3o/zoz3) An early look at FY '24 (starting 7/1/23) z Leadership Formula and Strategic Priorities Revenue Expenditures Unreserved Fund Balance Debt Enterprise Funds Fund Balances ' FiscalYear 2023 Actions FiscalYear 2023 Budget Amendment FiscalYear 2024 Revenue Forecast FiscalYear 2024 Expenditure Forecast FY '24 Forecasted Budget Maintaining the Highest Ethical Standards Ensuring Collaborative Departments City Manager's ACE Customer Service Leadership Formula (Accurate, Courteous, Easy) Transparency in Process and Outcomes " Be Abnormal " 4 Enhancing the Leadership Team Building an Effective Organizational Structure City Manager's A Commitment to Planning Strategic Priorities Climate Mitigation and Resiliency Continued Fiscal Stability Building for the Future 5 FY 2022 : A Look Back Real and Personal Property Tax General Fund State Aid Revenue Local Receipts "Other Sources" Revenue and Other Sources FY 2021 FY 20211 12023 Budget Actual Budget Budget Real & Personal Property • Tax $ 122,391,323 $ 130,783,605 $ 133,418,141 $ 134,133,351 $ 140,728,594 State Aid $ 11,955,612 $ 13,142,271 $ 13,482,722 $ 13,710,411 $ 14,243,029 Total $ 134,346,935 $ 143,925,876 $ 146,900,863 $ 147,843,762 $ 154,971,623 FY 2021 FY 2021 FY 2022 FY 2022 FY 2023 Source Budget Actual Budget Actual Budget Motor Vehicle $ 3,915,000 $ 4,378,523 $ 4,100,000 $ 4,423,920 $ 4,350,000 Meals Excise $ 412,500 $ 407,607 $ 550,000 $ 760,164 $ 650,000 Hotel and Other Excise $ 525,000 $ 250,679 $ 525,000 $ 836,024 $ 675,000 Cannabis Excise $ 333,389 $ 500,000 Penalties & Interest $ 250,000 $ 402,704 $ 250,000 $ 388,047 $ 250,000 PILOT $ 1,024,699 $ 305,679 $ 81,948 $ 71,912 $ 87,088 COMM. Trash $ 15,000 $ 25,663 $ 15,000 $ 31,676 $ 20,000 Fees $ 3,850,000 $ 7,150,845 $ 8,850,000 $ 15,089,863 $ 4,500,000 Rentals $ 128,841 $ 131,243 $ 178,312 $ 192,176 $ 227,769 Cemetery $ 95,000 $ 106,725 $ 95,000 $ 135,475 $ 100,000 Recreation $ 420,000 $ 364,077 $ 420,000 $ 452,845 $ 420,000 License & Permits $ 192,000 $ 96,554 $ 192,000 $ 224,744 $ 200,000 Fines & Forfeits $ 610,000 $ 356,465 $ 510,000 $ 328,904 $ 450,000 LOCAL RECEIPTS Investment Income $ 500,000 $ 119,361 $ 250,000 $ 407,453 $ 250,000 Sale of City Prop. $ 5,000 $ 10,900 $ 5,000 $ 42,155 $ 5,000 Belmont Reimb. $ 74,595 $ 81,281 $ 76,127 $ 104,571 $ - Grant/Employee Reimb. $ 25,000 $ 36,218 $ 25,000 $ 80,272 $ 25,857 Medicaid $ 222,376 $ 579,153 Miscellaneous $ 354,108 $ 571,044 Total $ 12,042,635 $ 14,801,007 $ 16,123,387 $ 25,053,786 $ 12,710,714 Source Transfer from: FY 2021 FY 20211 12023 Budget Actual is Budget Actual Budget Sale of Lots Ad or 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 Parking Meter $ 250,000 $ 250,000 $ 150,000 $ 150,000 $ 150,000 Opioid Settlement $ 60,000 Cemetery Perpetual Care $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Capital Proj. Stab. Fund $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 ESCO Capital Project Stab. Fund $ 508,388 $ 508,388 $ 505,938 $ 505,938 $ 500,938 New High School Stab. Fund $ 5,798,555 $ 5,798,555 $ 201,000 Utilization Of Overlay Surplus $ 1,500,000 $ 1,500,000 $ 750,000 •ITHER SOURCES Free Cash $ 12,250,000 $ 12,250,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 Collective Bargaining Stabilization $ 440,000 $ 440,000 Water Fund $ 1,588,520 $ 1,588,520 $ 1,553,006 $ 1,553,006 $ 1,511,731 Sewer Fund $ 1,491,802 $ 1,491,802 $ 1,507,448 $ 1,507,448 $ 1,397,994 Total $ 17,063,710 $ 17,063,710 $ 13,549,947 $ 13,549,947 $ 7,106,663 FY 2021 FY 20211 12023 Budget Actual Budget Actual Budget Property Tax $ 122,391,323 $ 130,783,605 $ 133,418,141 $ 134,133,351 $ 140,728,594 State Aid $ 11,955,612 $ 13,142,271 $ 13,482,722 $ 13,710,411 $ 14,243,029 Local Receipts $ 12,042,635 $ 14,801,007 $ 16,123,387 $ 25,053,786 $ 12,710,714 Other Sources $ 17,063,710 $ 17,063,710 $ 13,549,947 $ 13,549,947 $ 7,106,663 Total Revenue $ 163,453,280 $ 175,790,594 $ 176,574,197 $ 186,447,495 $ 174,789,000 FY 2022 FY 20221 Budget Actual Budget Property Tax $ 133,418,141 $ 134,133,351 $ 715,210 $ 140,728,594 State Aid $ 13,482,722 $ 13,710,411 $ 227,689 $ 14,243,029 Local Receipts $ 16,123,387 $ 25,053,786 $ 8,930,399 $ 12,710,714 Other Sources $ 13,549,947 $ 13,549,947 $ - $ 7,106,663 Total Revenue $ 176,574,197 $ 186,447,495 $ 9,873,298 $ 174,789,000 Departmental Expenses Debt Service and Capital Projects General Fund State & County Charges Expenditures Pension and OPEB Insurance and Employee Benefits Other Financing Uses 13 M 1 1 1 1 1 W Budget Actual Budget Actual a Budget General Government $ 6,815,945 $ 6,239,181 $ 7,283,624 $ 7,004,138 $ 10,391,143 Public Safety $ 21,899,910 $ 21,633,482 $ 22,464,429 $ 22,017,864 $ 22,929,991 Public Works $ 5,802,548 $ 5,495,649 $ 6,282,037 $ 6,103,940 $ 6,870,284 Snow & Ice $ 1,500,000 $ 1,317,325 $ 1,375,000 $ 1,340,112 $ 1,500,000 Waste Disposal $ 3,422,265 $ 3,420,148 $ 3,692,300 $ 3,691,504 $ 4,432,925 Health & Human Services $ 1,558,265 $ 1,316,660 $ 1,415,627 $ 1,338,172 $ 1,615,678 .4 Library $ 3,197,791 $ 3,062,203 $ 3,387,679 $ 3,302,816 $ 3,626,204 Recreation Department $ 388,035 $ 382,834 $ 402,886 $ 388,433 $ 477,669 Skating Arena $ 402,497 $ 350,734 $ 486,361 $ 476,158 $ 501,898 Education $ 51,937,315 $ 51,937,315 $ 53,755,121 $ 53,755,121 $ 55,636,550 Total Departmental $ 96,924,571 $ 95,155,531 $ 100,545,064 $ 99,418,258 $ 107,982,342 General Government FY 2023 budget amount includes City Council Reserve of$2,081,611 FY 2021 FY 20211 12023 Budget Actual Budget Actual Budget W IOU W- Debt Retirement $ 7,573,650 $ 7,511,369 $ 15,715,354 $ 15,512,687 $ 22,946,963 School Capital Projects $ 5,754,000 $ 5,754,000 $ 6,490,330 $ 6,490,330 $ 310,000 City Capital Projects $ 3,509,768 $ 3,509,768 $ 3,984,478 $ 3,984,478 $ 2,373,920 WoM Total Debt Svc. & Cap. Proj. $ 16,837,418 $ 16,775,137 $ 26,190,162 $ 25,987,495 $ 25,630,883 FY 2021 FY 20211 12023 Budget Actual Budget Actual Budget IF i Total Departmental $ 96,924,571 $ 95,155,531 $ 100,545,064 $ 99,418,258 $ 107,982,342 Total Debt Svc. & Ca Pro' p• ). $ 16,837,418 $ 16,775,137 $ 26,190,162 $ 25,987,495 $ 25,630,883 GENERAL FUND EXPENDITURE State & County Charges $ 2,816,632 $ 2,958,371 $ 3,028,130 $ 3,061,398 $ 3,164,445 SUMMARY Pension & OPEB $ 16,967,196 $ 16,966,689 $ 14,207,208 $ 14,207,114 $ 14,834,426 Insurance & Employee Benefits $ 16,863,538 $ 16,445,285 $ 17,541,330 $ 17,398,727 $ 19,129,849 Other Financing Uses $ 13,043,925 $ 13,027,011 $ 15,062,303 $ 15,062,133 $ 4,047,055 Grand Total $ 163,453,280 $ 161,328,025 $ 176,574,197 $ 175,135,125 $ 174,789,000 Unreserved Fund Balance 1 1 1 1 1 1 Unreserved Fund Balance - Beginning of Fiscal Year $ 15,383,922 $ 16,374,245 $ 20,183,763 $ 22,212,609 $ 24,822,306 S V Revenues Over/(Under) Budget $ 1,817,753 $ 2,808,326 $ 1,420,636 $ 12,337,314 $ 9,873,298 BALANCE Expenditures (Over)/Under Budget $ 1,496,600 $ 2,497,923 $ 3,598,973 $ 2,125,255 $ 1,439,072 Use of Free Cash $ (2,000,000) $ (2,000,000) $ (3,250,000) $ (11,000,000) $ (2,000,000) CERTIFIED FREE CASH GAAP Adjustments $ (324,030) $ 503,269 $ 259,237 $ (852,872) $ (313,645) ANALYSIS Unreserved Fund Balance - End of Fiscal Year $ 16,374,245 $ 20,183,763 $ 22,212,609 $ 24,822,306 $ 33,821,031 Certified Free Cash $ 12,978,697 $ 17,019,246 $ 18,365,067 $ 22,663,363 $ 27,000,000 FY 2022 Certified Free Cash is an Estimated Amount To fund and maintain Financial Reserves of 8 - 15% of the City's annual budget, we must: i. Preserve the City's AAA bond rating z . Promote financial flexibility and stability IMeet extraordinary and unforeseen events Financial Reserve Goal 4. Have sufficient liquidity and cash flow to pay bills on time without the necessity of short-term borrowing A declining reserve is an indicator that Watertown is living beyond its means. ig Debt Balances FY Permanent Debt Budgeted Permanent Debt 1 :o • 6/30/23 FY 2008 Bond Issue $ 3,500,000 $ 500,000 $ 3,000,000 FY 2010 Bond Issue $ 1,835,000 $ 270,000 $ 1,565,000 FY 2012 Bond Issue $ 625,000 $ 125,000 $ 500,000 FY 2013 Bond Issue $ 3,575,000 $ 280,000 $ 3,295,000 FY 2014 Bond Issue $ 1,280,000 $ 215,000 $ 1,065,000 FY 2014 Refunding Bond Issue $ 2,030,000 $ 680,000 $ 1,350,000 FY 2016 Bond Issue $ 425,000 $ 145,000 $ 280,000 , FY 2018 Bond Issue $ 2,100,000 $ 9370,000 $ 1,730,000 FY 2019 Bond Issue $ 2,455,000 $ 650,000 $ 1,805,000 . FY 2020 Bond Issue $ 12,925,000 $ 1,340,000 $ 11,585,000 FY 2021 Bond Issue $ 49,535,000 $ 2,610,000 $ 46,925,000 FY 2021 Bond Issue $ 36,685,000 $ 2,385,000 $ 34,300,000 FY 2022 Bond Issue $ 6,863,500 $ 773,500 $ 6,090,000 FY 2022 Bond Issue $ 26,790,000 $ 1,360,000 $ 25,430,000 TOTAL $ 150,623,500 $ 111703,500 $ 138,920,000 Reflects existing bonds issued for general fund purposes as of June 30, 2021. 0% interest MWRA Loans and bonds issued for water and sewer projects are not included. Date of • . Order BANs Vote Maturing 1pr Description 6/24/23 Total Permanent General Fund Debt $ 138,920,000 Authorized General Fund Debt (not yet issued ): 11/13/2018Feasibility Study and Schematic Design for High School $ 1,000,000 $ 1,000,000 03/22/2022 New High School Construction $ 198,844,242GENERAL FUND 03/22/2022Streets and Sidewalks Improvements $ 2,500,000 DEBT PLUS 03/22/20223 Elementary School Construction (remaining unissued amount) $ 26,683,728UN - ISSUED DEBT 05/24/2022 Sewer System Improvements $ 750,000 08/09/2022 Sewer System Improvements $ 750,000 09/27/2022 Streets & Sidewalks $ 2,000,000 Subtotal Authorized Unissued Debt: $ 203,844,242 Total Permanent & Short Term And Authorized Un-issued Debt $ 342,764,242 Previously authorized projects, which have been permanently financed, are not included in the above list as any remaining portions are expected to be rescinded. 22 Enterprise Funds 23 FY 2022 FY 20221 BUDGET ACTUAL BUDGET REVENUE & OTHER SOURCES: USAGE CHARGES $ 10,886,108 $ 10,519,436 $ 11,215,263 MUNICIPAL CHARGES $ 85,000 $ 85,000 $ 77,190 INTEREST AND PENALTY CHARGES $ 50,000 $ 70,772 $ 60,000 SEWER LIENS $ 401,053 OTHER UTILITY CHARGES $ - $ 1,170 $ - INTEREST INCOME $ 15,000 $ 1,378 $ 5,000 TOTAL REVENUE $ 11,036,108 $ 11,078,809 $ 11,357,453 SEWER EXPENDITURE & OTHER USES: FNTERPRISE PERSONNEL SERVICES $ 677,878 $ 547,601 $ 693,999mn SUPPLIES AND SERVICES $ 481,000 $ 456,198 $ 481,000 FUND MWRA ASSESSMENT $ 6,859,624 $ 6,806,903 $ 6,870,077 CAPITAL OUTLAY $ 1,055,000 $ 1,055,000 $ 1,355,000 TRANSFER TO GENERAL FUND $ 1,507,448 $ 1,507,448 $ 1,397,994�1 DEBT SERVICE $ 455,158 $ 369,578 $ 559,383 TOTAL EXPENDITURES $ 11,036,108 $ 10,742,727 $ 11,357,453 FY 2022 FY 20221 BUDGET ACTUAL BUDGET REVENUE & OTHER SOURCES: USAGE CHARGES $ 8,202,530 $ 7,304,812 $ 8,491,308 MUNICIPAL CHARGES $ 185,675 $ 185,675 $ 171,810 INTEREST AND PENALTY CHARGES $ 50,000 $ 43,905 $ 50,000 WATER LIENS $ 245,685 OTHER UTILITY CHARGES $ 125,000 $ 68,287 $ 100,000 TEST CHARGES $ 75,000 $ 77,255 $ 80,000 USE OF RETAINED EARNINGS $ - $ - $ - SALE OF PROPERTY $ 5,000 $ - $ - Ak INTEREST INCOME $ 10,000 $ 1,177 $ 5,000 TOTAL REVENUE $ 8,653,205 $ 7,926,796 $ 8,898,118 EXPENDITURE & OTHER USES: , PERSONNEL SERVICES $ 1,107,857 $ 999,818 $ 1,125,825 SUPPLIES AND SERVICES $ 395,100 $ 368,269 $ 415,100 MWRA ASSESSMENT $ 4,184,354 $ 4,174,780 $ 4,147,401 CAPITAL OUTLAY $ 236,000 $ 219,757 $ 236,000 TRANSFER TO GENERAL FUND $ 1,553,006 $ 1,553,006 $ 1,511,731 TRANSFER TO CAP. PROJECT/WATER $ - $ - $ - DEBT SERVICE $ 1,176,888 $ 645,750 $ 1,462,061 TOTAL EXPENDITURES $ 8,653,205 $ 7,961,379 $ 8,898,118 Account Description Current Year Fun• Carryover Water: Street Repair Services $ 127,975 Improvements $ 84,047 Sidewalk Repair Services $ 63,617 Water Materials & Supplies $ 39,089 Replacement Of Equipment $ 23,591 Tools $ 4,268 Total Water Prior Year • $ 342,587 Sewer: . . . • Additional Equipment $ 770,522 • Improvements $ 311,301 Replacement Of Equipment $ 135,727 Contracted Services $ 112,895 J Sidewalk Repair Services $ 64,238 ■ Street Repair Services $ 60,182 Rental of Equipment $ 44,000 Sewer Materials & Supplies $ 32,487 Total Sewer Prior Year $ 1,531,352 Fund Balances as of June 30, 2022 z, Overlay Accounts Special Revenue Accounts Fund Balances as of June 30, ZOZz CPA Fund Balances Capital Projects Accounts Stabilization, Trust and Agency Accounts 28 Fiscal Year Amounts 2019 $ 54,049 ., OVERLAY ACCOU NTS 2020 .1 mw� m ' '' 654,083 BALANCES AS OF J U N E 3 0, Zo22 $ 1,919,123 zg Fund Description Fund Balance ARPA Fund $ 5,371,206 FY 22 Circuit Breaker $ 2,671,324 O'Neill Property Charitable $ 1,225,524 School Extended Day Program $ 1,144,504 School Lunch Program $ 844,544 Parking Meter Fund* $ 542,778 Pre-school $ 491,385 Cannabis Host Agreement $ 466,125 Athletics Revolving Fund $ 396,205 Multi Drug Task Force $ 326,970 • Sale Of Cemetery Lots* $ 325,255 Food Pantry $ 292,352 Affordable Housing Dev $ 269,269 Non-resident Tuition $ 250,962 School Foundation Reserve $ 250,000 Top Fifteen Total $ 14,868,401 All Others (119) $ 2,787,770 Total Special Revenue (134) $ 17 656171 *Includes amounts to be transferred for FY 2023 Budget. Account • 1 Account Balance FY 2018 Reserve for Open Space/Recreation - COMMUNITY FY 2019 Reserve for Open Space/Recreation $ 92,544 PRESERVATION ACT FY 2020 Reserve for Open Space/Recreation $ 248,140 (CPA) FY 2021 Reserve for Open Space/Recreation $ 260,000 FY 2022 Reserve for Open Space/Recreation $ 305,121 BALANCES AS OF Total Reserve Open Space/Recreation $ 905,805 JUNE 30, 2022 FY 2018 Reserve for Historic Preservation $ 117,000 FY 2019 Reserve for Historic Preservation $ 236,739 (PAGE :L OF 2) FY 2020 Reserve for Historic Preservation $ 248,140 FY 2021 Reserve for Historic Preservation $ 260,000 FY 2022 Reserve for Historic Preservation $ 305,121 Total Reserve for Historic Preservation $ 1,167,000 Account 1 I Account Balance FY 2018 Reserve for Community Housing $ 1501000 FY 2019 Reserve for Community Housing $ 2361739 FY 2020 Reserve for Community Housing $ 2481140 • • • FY 2021 Reserve for Community Housing $ 2601000 FY 2022 Reserve for Community Housing $ 305,121 Total Reserve for Community Housing $ 11,2001,000 id Reserve for Expenditures Open Space/Recreation Projects $ 294,195 Historic Preservation Projects $ 33,000 ' Total Reserve for Expenditures $ 3271,195 Reserve for Encumbrances $ - A Undesignated Fund Balance $ 9,897,899 Total: $ 13,497,899 . NOTE: During Fiscal Year 2023, it is estimated that the CPA fund will grow another $3,700,000. Fund Description Fund Balance Three Elementary School Project $ 36,877,804 Greystar Capital Mitigation $ 1/250,000 Arsenal Corridor $ 800,000 Arsenal Mitigation $ 671/412 Water Meters $ 666,833 • Various Stormwater Mitigation $ 592,810 DPW Equipment $ 517,883 Water Improvements $ 385,895 ■ • Howard St Project $ 383,421 DPW Equipment $ 355,973 Police Building $ 340,495 Top Eleven Total $ 42,842,527 All Others (58) $ 1,911,230 Total Capital Projects (69) $ 44/753,756 Fund Description : . OPEB Trust Fund $ 19,796,631 Acquisition of Land/Open Space Stabilization $ 10,000,000 Unfunded Pension Stabilization $ 5,024,429 New High School Stabilization $ 4,376,445 , Capital Proj. Stabilization* $ 2,638,588 ESCO Stabilization* $ 1,303,021 Stabilization Fund $ 1,275,298 Sped Stabilization $ 1,027,056 Cemetery Perpetual Care (Non-expendable) $ 1,024,476 • Federal Law Enforcement Trust $ 662,386 Albert Fleming Scholarship (Non-expendable) $ 300,000 Cemetery Perpetual Care (Expendable) $ 247,109 UPIT Scholarship Fund (Non-expendable) $ 228,630 Top Thirteen Total $ 47,904,069 All Others (60) $ 1,029,795 Total Trusts & Agency (73) $ 48,933,864 *Includes amounts to be transferred for FY 2023 Budget FY 2023 : Where are we now? 35 To preserve the City's financial condition we committed to: 1. Continue to strive to provide the hi hest level of essential services possible with t e most efficient utilization of resources. FiscalYear 202 Budget 2. Ensure annual costs of all operations to be 3 funded on an annual basis out of current Development revenues. 3. Not defer maintenance and/or recognition of (Included for background informational purposes) costs of capital equipment, facilities and infrastructure to tuture years. 4. Remain focused on achieving our long-term goal of sound financial management and fiscal stability. 5. Present budget based on sound business practices. 36 The following are the top two priorities of the ranked Cost-Savings/Revenues Guidelines: City Council FY 2023 1. Continue to proceed with the guidelines of the Budget Policy Guidelines Strategic Framework for Economic (Page s of 3) Development, with the long-term goal to (adopted November 23, 2ozs) promote a diversified and growing tax base. z. Continue pursuing mitigation monies and/or other measures for larger scale projects. 37 The following are the top six priorities of the ranked Program Enhancements/Expenditures Guidelines: 1. Continue support for Building for the Future Initiative funding in collaboration with the School Building Committee, for the Three Elementary Schools project, and for the MSBA High School project, without debt exclusion funding. 2. Continue to work collaboratively with the Watertown Public Schools to City CounciI FY2023develop a comprehensive multi-year educational budget that assures sustainable funding for our schools and the successful education of our Budget PolicyGuidelines c hildren, and seek to accommodate a FY23 Education appropriation that will provide level-service funding for our schools. (Page 1 of 3) (adopted November �3, 2021) 3� Improve the operational efficiency, flexibility, and capacity of the Public Works Department to meet the City s growing needs to manage contractors, respond to work order requests, oversee development projects, plan and implement infrastructure improvements, improve communications to residents about road construction, comply with the MassDEP 2030 Solid Waste Management Plan, and maintain complete streets infrastructure. Consider what technology platforms are needed to support the Department. 38 The following are the top six priorities of the ranked Program Enhancements/Expenditures Guidelines: 4. Update the five year plan and funding schedule for the integrated improvements of the City's streets and sidewalks, water-sewer- stormwater infrastructure, and underground utilities. The plan should show status of ongoing projects, identify future projects including those with no funding source, identify sources of stormwater outflow to the Charles River, and coordination with water-sewer-stormwater City CounciI FY2023projects and underground utility projects. Budget PolicyGuidelines 5. With the creation of the Acquisition of Land/Open Space Stabilization Fund continue workingon plans with the City Council to meet the (Page 3 of 3) p y identified and ongoing need for acquisition of land for open space and (adopted November 23, 2021) recreational use; including proposals submitted to the Community Preservation Committee. 6. Continue to work with the Watertown Transportation Management Association to identify sustainable sources of funding, including tax revenue if needed, for the shuttle bus program in Watertown. 39 FY 2023 Actions 40 Enhancing the Leadership Team Building an Effective Organizational Structure Strategic Priorities A Commitment to Planning Climate Mitigation and Resiliency Continued Fiscal Stability Building for the Future 41 • Hire Deputy Manager • About the Auditor Position Strategic Priority: • Appoint the Residents' Advisory Committee Enhancing the 0 Fill vacant department head positions LeadershipTeam Police Chief — assessment center Fire Chief — assessment center FY ' 23 Actions Director of Senior Services • Connect with the Watertown Community "Meet and Greet" in each district Meetings with staff and the public 42 Strategic Priority: • Study H R Building an • Study Health and Human Services Effective * Study compensation to bring pay to Organizational market Strategy * Open negotiations for union contracts FY ' 23 Actions • Develop a strategy to implement 31-1. 43 Strategic Priority: Complete ComprehensiveA Commitment to Plan Planning • Implement Housing Linkage FY ' 23 Actions * Join Metro Mayors / Managers Coalition 44 Strategic Priority: • Increase composting / organics program Climate Mitigation * Complete tree inventory and Resiliency * Add electric vehicle charging capacity FY ' 23 Actions * Monitor the state's opt- in net-zero building code 45 • Maintain strong reserves through the Strategic Priority: remainder of the fiscal year Continued Fiscal . Additional support for High School Stability Stabilization Fund FY ' 23 Actions • Implement City Council 's strategy for investment of ARPA funds 46 • Schools : Compete Lowell School Begin work on temp High School Strategic Priority: Complete high school design / financing plan Building for the • Buy Walkers Pond Site " Lot 8"' Future • Buy the "Parker School "' office building FY ' 23 Actions • Commission a stu dy of municipal office use and related uses, including : Administration Building Philips School / Senior Center site "Parker School" office building 47 The Parker . School " Office . Building I L 14 IF ma'�y use 48 INCREASE REVENUE (DECREASE) TO READ REAL ESTATE AND PROPERTY TAXES $ 2,354,675 $ 143,083,269 STATE AID $ 192,746 $ 14,435,775 HOTEL EXCISE $ 150,000 $ 825,000 INVESTMENT INCOME $ 400,000 $ 650,000 OTHER FINANCING SOURCES-TRANSFR FROM O'NEILL FUND $ 1,227,579 $ 1,227,579 TOTAL REVENUE ADJUSTMENT $ 4,325,000 INCREASE EXPENDITURES (DECREASE) TO READ SCHOOL CHOICE ASSESSMENT $ 45,419 $ 255,278 0182056-560629 CHARTER SCHOOL ASSESSMENT $ (30) $ 411,521 0182056-560630 , ORGANICS/COMPOSTING PROGRAM $ 75,000 $ 500,000 0143352-520293 , MUNICIPAL SPACE USE STUDY $ 85,000 $ 85,000 0194000-530336 HEALTH& HUMAN SERVICES STUDY $ 90,000 $ 90,000 0194000-530332 ACQUISITION OF LAND $ 2,000,000 $ 2,100,000 0194000-580950 TRANSFR TO NEW HIGH SCHOOL STABILIZATION FUND $ 2,000,000 $ 3,983,055 0194000-596809 CITY COUNCIL RESERVE $ 29,611 $ 2,081,611 0111152-570780 TOTAL EXPENDITURE ADJUSTMENT $ 4,325,000 � 1 _ 1 i i - ` f +_ R 9 r s1 Yr OR! E_ MR MEN IN I. I r :momME IN Is �■ �� S 1 u + '..;._,„, INN ( ;Ni+' .., /I ,a,1r�Ainnrttf„ — 14 i a ra^ � 't iiiiiir. i�iRr m i r-' rei nonnnnn iw y t _ manic I !Cr'iIIIIIIIIIIIII�I�� tooWWI �� °r- WATERTOWN HIGH SCHOOL 51 " 4' • 1 y Y � 'r►- � t 1°^k w f V"'lam'� h, FY 2024 : A look ahead • Annual revenues and expenditures will be estimated by use of objective analysis . The assumptions and factors through which the estimates are derived Fiscal Yea r 2024 will be clearly stated and explained Preliminary Budget Overview during the budget process . Revenues & Expenditures • The numbers provided are preliminary and subject to change as the budget process evolves . 53 Real and Personal Property Tax FY ' 24 General Fund State Aid Revenue Forecast Local Receipts "Other Sources" 54 • Real Estate and Personal Property taxes are increased z . 5% per year. • New growth is projected to be s6, 000, 00o in FY zo24; and $4, 500, 000 Revenue Forecast : for FY Zo25 and FY zoz6 . Assumptions • Funding for the Optional Tax Exemption ( page 1 of 3) for homeowners at soo /o over the statutory level is included in the overlay adjustment. • State Aid is level funded at the FY zoz3 amount. 55 • The majority of Local Receipts are projected to remain constant or increase z. 5% annually. Inspection Fees are projected at $z,75o,000 Investment Income is projected at s650, 000 annually through FY Zoz6. Revenue Forecast : MotorVehicle Excise is projected to Assumptions increase $125,00o annually from FY Zo24 ( page 2 of 3) through FY zo26 . Meals Excise is projected to increase $50,000 annually from FY zoz4 through FY Zoz6. Hotel Excise is projected at $825,000 in FY 2023 and Zo24 and is pro ' cted to increase to $975, 000 for FY 2o2s an�FY 2026. 56 • Other Financing Sources reflect transfers: From the Cemetery Perpetual Care Expendable Trust Fund and the Sale of Lots Fund to partially offset the Department of Public Works Cemetery Budget From the Water and Sewer Enterprise Funds to cover applicable indirect costs From the Parking Meter Fund to partially offset the Revenue Forecast : Parking Lots and Meters Budget. Assumptions • Utilization of Free Cash is recommended at a level of ( page 3 of 3) $2,000,00o annually through FY Zoz6 which includes $250,000 annually for the Special Education Stabilization Fund for FY zoz4 through FY zoz6. • Transfer from the Capital Projects Stabilization Fund is projected at $500,00o annually through FY 2oz6, which represents the current balance of the Fund . • Transfer from the ESCO Capital Project Stabilization Fund includes projected funds from departmental energy savings, rebates and grants. 57 1 1 1 1 Prior Year Levy Limit $ 134,418,140 $ 144,133,269 $ 153,736,600 $ 162,080,015 Add 2.5% $ 3,360,454 $ 3,603,332 $ 3,843,415 $ 4,052,000 New Growth $ 6,354,675 $ 6,000,000 $ 4,500,000 $ 4,500,000 REVENUE FORECAST: Adjusted Levy Limit $ 144,133,269 $ 153,736,600 $ 162,080,015 $ 170,632,015 TAXES Overlay $ (1,050,000) $ (1,050,000) $ (1,100,000) $ (1,100,000) Net Levy Limit $ 143,083,269 $ 152,686,600 $ 160,980,015 $ 169,532,015 State Aid 1 1 1 1 REVENUE FORECAST Cherry Sheet Receipts $ 14,435,775 $ 14,435,775 $ 14,435,775 $ 14,435,775 Total State Aid $ 14,435,775 $ 14,435,775 $ 14,435,775 $ 14,435,775k- STATE AID 1 1 1 1 Motor Vehicle Excise $ 4,350,000 $ 4,475,000 $ 4,600,000 $ 4,725,000 Meals Excise $ 650,000 $ 700,000 $ 750,000 $ 800,000 Hotel Excise $ 825,000 $ 825,000 $ 975,000 $ 975,000 REVENUE FORECAST Cannabis Excise $ 500,000 $ 500,000 $ 500,000 $ 500,000 LOCAL RECEIPTS Penalties & Interest $ 250,000 $ 250,000 $ 250,000 $ 250,000 (3. OF PILOT $ 87,088 $ 87,628 $ 88,168 $ 88,708 Commercial Trash $ 20,000 $ 20,000 $ 20,000 $ 20,000 Fees $ 4,500,000 $ 4,500,000 $ 4,500,000 $ 4,500,000 Rentals $ 227,769 $ 227,215 $ 226,644 $ 226,644 Cemetery $ 100,000 $ 100,000 $ 100,000 $ 100,000 Recreation $ 420,000 $ 420,000 $ 420,000 $ 420,000 Licenses & Permits $ 200,000 $ 200,000 $ 200,000 $ 200,000 REVENUE FORECAST Fines & Forfeits $ 450,000 $ 450,000 $ 450,000 $ 450,000 kp L LOCAL RECEIPTS Investment Income $ 650,000 $ 650,000 $ 650,000 $ 650,000 (20F2) Sale of City Property $ 5,000 $ 5,000 $ 5,000 $ 5,000 Grant/Employee Reimbursements $ 25,857 $ 25,857 $ 25,857 $ 25,857 Total Local Receipts $ 13,260,714 $ 13,435,700 $ 13,760,669 $ 13,936,209 r Transf • 11 Sale of Lots $ 25,000 $ 25,000 $ 25,000 $ 25,000 Parking Meter $ 150,000 $ 250,000 $ 250,000 $ 250,000 Opioid Settlement $ 60,000 $ 60,000 $ 60,000 $ 60,000 Cemetery Perpetual Care $ 10,000 $ 10,000 $ 10,000 $ 10,000 Capital Project Stabilization $ 500,000 $ 500,000 $ 500,000 $ 500,000 O'Neill Properties $ 1,227,579 $ - $ - $ - ESCO Capital Proj. Stabilization $ 500,938 $ 494,438 $ 493,225 $ 492,125 New High School Stabilization $ 201,000 $ - $ - $ - • Water Fund $ 1,511,731 $ 1,511,731 $ 1,511,731 $ 1,511,731 Sewer Fund $ 1,397,994 $ 1,397,994 $ 1,397,994 $ 1,397,994 Free Cash $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 Utilization of Overlay Surplus $ 750,000 $ - $ - $ - Total Other Sources $ 8,334,242 $ 6,249,163 $ 6,247,950 $ 6,246,850 Real Estate & Personal Prop. Tax $ 143,083,269 $ 152,686,600 $ 160,980,015 $ 169,532,015 State Aid $ 14,435,775 $ 14,435,775 $ 14,435,775 $ 14,435,775 Local Receipts $ 13,260,714 $ 13,435,700 $ 13,760,669 $ 13,936,209 Other Financing Sources $ 8,334,242 $ 6,249,163 $ 6,247,950 $ 6,246,850 Total Revenue $ 179,114,000 $ 186,807,238 $ 195,424,409 $ 204,150,849 Considerations FY ' 24 Forecast Assumptions Preliminary General Fund AWord about Education Funding Expenditure Forecast Departmental Funding The OPEB and School Debt Situation A Preliminary Expenditure Forecast 64 Considerations FY ' 24 Forecast Assumptions Preliminary General Fund AWord about Education Funding Expenditure Forecast Departmental Funding The OPEB and School Debt Situation A Preliminary Expenditure Forecast 65 Enhancing the Leadership Team Building an Effective Organizational Structure Strategic Priorities A Commitment to Planning Climate Mitigation and Resiliency Continued Fiscal Stability Building for the Future 66 Strategic Priority: Enhancing the • Launch ACE customer service program LeadershipTeam • Implement recommendations from the HR FY ' 24 and HHS studies Considerations 67 Strategic Priority: Building an • Expand Economic Development efforts Effective for small businesses and local business Organizational districts Strategy FY ' 24 • Launch 311. Considerations 68 • Annual funding for the affordable housing trust Strategic Priority: • Continued support for Mt. Auburn Street A Commitment to and Arsenal Street projects Planning • Community Conversations on the North Branch Library FY ' 24 • Watertown Square Initiative : Considerations Intersection Development/zoning Small business strategies City owned land / parking lots / former police station 69 I — y 11 . "fir 00 A-At 1 fir+ kaY'� y I s y _ S. ' z � ,� .* ay`J��! -«. j y 'k{a. I IF _ e Iwo— lie" N i L` OF r Pro tuC •:. � + 61 ., '� ��� � • 11� _ .y � � yam.+ eµ WATER WN ARE Q2 71 • Identify opportunities to use electric or plug - in hybrid vehicles when replacing city fleet Strategic Priority: • Continue aggressive tree planting program Climate Mitigation . Continue growth of organics recycling program and Resiliency • Solar panels at DPW FY ' 24 * Continued Investment in Stormwater Considerations Infrastructure • Encourage private homeowners to do solar and heat pumps 72 Strategic Priority: • Continue to fund OPEB Continued Fiscal • Additional funds to High School Stability Stabilization FY ' 24 • Additional funds to Pension Stabilization Considerations • Additional funds to SPED stabilization 73 * Implement plan for Parker School Strategic Priority: Parks and Recreation Projects : Victory Building for the Phase z; Saltonstall; Arsenal Phase B Future * Additional funding for streets and FY ' 24 sidewalks; commitment to walkability " Considerations and "complete streets * High school under construction 74 Considerations FY ' 24 Forecast Assumptions Preliminary General Fund AWord about Education Funding Expenditure Forecast Departmental Funding The OPEB and School Debt Situation A Preliminary Expenditure Forecast 75 • Departmental expenditures are projected to increase z.5% annually from FY aoz4 through FY zoa6. The Education appropriation is projected to increase 3.50% annually from FY Zoz4 through FY zo26. Snow and Ice Removal is projected at $1,500,000 through FY zo26. Expenditure . The Waste Disposal appropriation is projected to increase Forecast : 5% annually from FY Zoz4 through FY zoz6. Funding of the Assumptions Service Agreement with Wheelabrator North Andover beginning in FY zoza through FY zoa6 has been included. ( page 1 of 3) The current agreement with Republic Services for solid waste and recycling hauling ends June 30, Zoz3. • State Assessments, exclusive of the MBTA Assessment, are projected to increase z.5% annually. The MBTA Assessment is projected to increase 2.75% annually. 76 • Health Insurance costs, included within Insurance & Employee Benefits, are projected to increase 7.5% annually. • The Watertown Contributory Retirement Board Funding Schedule approved by the Public Employee Retirement Expenditure Administration Commission has the Retirement System Forecast : fully funded on July 1, zozs. Pension costs are projected to be ss,1z5,000 annually from FY 2oz3 through FY zoz6. Assumptions ( page 2 of 3) • Along-range financial plan for the pay down of the Unfunded Other Post-Employment Benefits (OPEB) Liability has been created beginning in FY zozo through FY 2031. Funding of the OPEB Liability is projected at $9,719,420 in FY Zoz4, $9,044,806 in FY zoz5 and $5,659, 275 in FY Zoz6. • Funding of the Three Elementary Schools Pro'ect is projected at $12,916 675 in FY 2U24, $12,318,9�8 in FY 2025 and $11,952,550 in fY 2026. • Debt figures are from current and gr�ected future debt as listed in the FY 2023-2027 CIP / Detrojection Table of the Capital Improvement Program. Expenditure 0 The level of projected debt may change pending decisions on various projects that are lisfed within the Proposed FY Forecast : 2023-2027 Capital Improvement Program. Assumptions 0 Street and Sidewalk Improvements are projected to ( page 3 of 3 increase 5% annually. • Transfer to the Acquisition of Land/Open Space Stab j�� ration Fund is projected at $1,20,00(7 annually from FY ZU3 through FY 2026. • Transfer to the Sp ecial Education Stabilization Fund is Y rojected at $25U,000 annually from FY 2024 through FY 026. Considerations FY ' 24 Forecast Assumptions Preliminary General Fund AWord about Education Funding Expenditure Forecast Departmental Funding The OPEB and School Debt Situation A Preliminary Expenditure Forecast 79 Two of the top priorities of the Program Enhancements/Expenditures section of the Honorable City Council's Fiscal Year 2023 Budget Policy Guidelines that were adopted on November 23, 2021 reads as follows: Expenditure Forecast II.A. Continue support for Building for the Future Initiative funding in collaboration with the School Building Committee, for the Three Elementary FY2023 Education Schools project, and for the MSBA High School project,, without debt exclusion funding. g Appropriation l . • II. B. Continue to work collaboratively with the (Included for background informational purposes) Watertown Public Schools to develop a comprehensive multi-year educational budget that assures sustainable funding for our schools and the successful education of our children, and seek to accommodate a FY 23 Education appropriation that will provide level-service funding for our schools. so Expenditure Forecast FY zoz3 Education Appropriation (Included for background informational purposes) Education* $ 55,636,550 $ 57,583,829 $ 59,599,263 $ 61,685,237 The Submitted FiscalYear 2023 Budget continues the City's very strong commitment to Education. As indicated earlier in this presentation, the Expenditure Forecast included within the Submitted FiscalYear zoz3 Budget document has Departmental Expenditures are projected to increase 2.5% annually from FY 2024 through FY 2026. The Education appropriation is projected to increase 3.5% annually from FY 2024 through FY 2026. We look forward to continue working collaboratively with the Watertown Public Schools to develop a comprehensive multi-year Education Budget that assures sustainable funding for our schools and the successful education of our children. Considerations FY ' 24 Forecast Assumptions Preliminary General Fund AWord about Education Funding Expenditure Forecast Departmental Funding The OPEB and School Debt Situation A Preliminary Expenditure Forecast 82 General Government $ 8,339,127 $ 8,547,605 $ 8,761,295 $ 8,980,328 Public Safety $ 22,930,001 $ 23,503,251 $ 24,090,832 $ 24,693,103 Public Works $ 6,870,287 $ 7,042,044 $ 7,218,095 $ 7,398,547 EXPENDITURE Snow & Ice Removal $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 mob FORECAST Waste Disposal $ 4,507,925 $ 4,733,321 $ 4,969,987 $ 5,218,487 MP Health & Human Services $ 1,615,679 $ 1,656,071 $ 1,697,473 $ 1,739,909 P- A T A Library $ 3,626,206 $ 3,716,861 $ 3,809,782 $ 3,905,027 'P�EXPENDITURES Recreation $ 979,567 $ 1,004,056 $ 1,029,158 $ 1,054,887 Education $ 55,636,550 $ 57,583,829 $ 59,599,263 $ 61,685,237 Total Departmental $ 106,005,341 $ 109,287,038 $ 112,675,885 $ 116,175,527 Insurance & Employee Benefits $ 19,129,850 $ 20,482,838 $ 21,935,708 $ 23,495,902 Considerations FY ' 24 Forecast Assumptions Preliminary General Fund AWord about Education Funding Expenditure Forecast Departmental Funding The OPEB and School Debt Situation A Preliminary Expenditure Forecast 84 Expenditure Forecast 4/26/2022— Submission of the Fiscal Year 2023 Budget 1 1 ■ 1 1 Pension $ 1,125,000 $ 1,125,000 $ 1,125,000 $ 1,125,000 Other Post Employment Benefits(OPEB) $ 13,709,426 $ 9,519,420 $ 6.844,806 $ 3,459,275 3 Elementary School Project $ 10,965,574 $ 12,916,675 $ 12,318,988 $ 11,952,550 Transfer To New High School Stabilization $ 1,983,055 $ - $ - $New High School Debt Service $ 1,016,945 $ 5,238,905 $ 8,511,206 $ 12,263,175 TOTAL $ 28,800,000 $ 28,800,000 $ 28,800,000 $ 28,800,000 Expenditure Forecast 10/11/2022— Fiscal Year 2024 Preliminary Budget Overview 2023 & J 1 1 1 Pension $ 1,125,000 $ 1,125,000 $ 1,125,000 $ 1,125,000 Other Post Employment Benefits(OPEB) $ 13,709,426 $ 9,719,420 $ 9,044,806 $ 5,659,275 3 Elementary School Project $ 10,965,574 $ 12,916,675 $ 12,318,988 $ 11,952,550 Transfer To New High School Stabilization $ 3,983,055 $ 2,000,000 $ - $ - New High School Debt Service $ 1,016,945 $ 5,238,905 $ 8,511,206 $ 12,263,175 TOTAL $ 30,800,000 $ 31,000,000 $ 31,000,000 $ 31,000,000 Variance Between the Expenditure Forecasts Pension $ - $ - $ - $ - Other Post Employment Benefits(OPEB) $ - $ 200,000 $ (2,200,000) $ (2,200,000) 3 Elementary School Project $ - $ - $ - $ - Transfer To New High School Stabilization $ (2,000,000) $ (2,000,000) $ - $New High School Debt Service $ - $ - $ - $ - TOTAL $ 2,000,000 $ 2,200,000 $ 2,200,000 $ 2,200,000 • As of July 1, 2021, the Unfunded OPEB Liability is estimated to be $70,824,000 which is projected to be fully funded in FY 2031. 85 3 Elementary Schools Debt Service $ 10,965,574 $ 12,916,675 $ 12,318,988 $ 11,952,550 $ 11,591,363 New High School Debt Service $ 1,016,945 $ 5,238,905 $ 8,511,206 $ 121263,175 $ 12,023,481 Transfer To New High School Stab. $ 3,983,055 $ 2,000,000 Pension & OPEB $ 14,834,426 $ 10,844,420 $ 10,169,806 $ 6,784,275 $ 7,385,156 • • Total $ 31,811,100 $ 31,000,000 $ 31,000,000 $ 31,000,000 $ 31,000,000 1) Fiscal Year 2024 is the projected high point for the 3 elementary schools debt service. 2) New High School Project estimated at$200,000,000 ($150,000,000 City & $50,000,000 MSBA) 3) New High School debt service will be financed over 30 years. 4) Fiscal Year 2026 is the projected high point for the New High School debt service. Considerations FY ' 24 Forecast Assumptions Preliminary General Fund AWord about Education Funding Expenditure Forecast Departmental Funding The OPEB and School Debt Situation A Preliminary Expenditure Forecast 87 Permanent Debt/Interest $ 6,158,914 $ 5,833,306 $ 5,374,325 $ 3,722,550 ESCO - Permanent Debt/Interest $ 500,938 $ 494,438 $ 493,225 $ 492,125 Three Elem. School Project- Permanent Debt/Interest $ 8,155,150 $ 7,902,900 $ 7,425,650 $ 7,179,650 Three Elem. School Project- Auth/Unissued & Planned $ 2,810,424 $ 5,013,775 $ 4,893,338 $ 4,772,900 New High School Project - Authorized/Unissued $ 1,016,945 $ 5,238,905 $ 8,511,206 $ 12,263,175 Street& Sidewalk - Auth/Unissued & Planned $ 1,347,500 $ 3,037,500 $ 4,075,600 $ 5,120,400 Acquisition of Land Debt Service q $ 1,140,000 $ 1,113,000 $ 1,086,000 Other Debt - Authorized/Unissued & Planned $ 2,952,092 $ 4,625,997 $ 6,385,028 $ 7,465,275 Cost of Certifying Bonds $ 5,000 $ 5,000 $ 5,000 $ 5,000 Total Expenditure $ 22,946,963 $ 33,291,821 $ 38,276,372 $ 42,107,075 City Capital $ 1,145,000 $ 470,000 $ 495,000 $ 495,000 • School Capital Projects $ 310,000 $ 295,000 $ 280,000 $ 230,000 Street& Sidewalk Improvements $ 1,228,920 $ 1,290,366 $ 1,354,884 $ 1,422,628 Total Expenditure $ 2,683,920 $ 2,055,366 $ 2,129,884 $ 2,147,628 Departmental Expenses Debt Service and Capital Projects General Fund State & County Charges Expenditures Pension and OPEB Insurance and Employee Benefits Other Financing Uses go Departmental $106,005,341 $109,287,038 $112,675,885 $116,175,527 Debt Service & Capital Projects $ 25,630,883 $ 35,347,187 $ 40,406,256 $ 44,254,703 State & County Charges $ 3,209,834 $ 3,296,199 $ 3,384,890 $ 3,475,973 EXPENDITURE ORECAST Pension & OPEB $ 14,834,426 $ 10,844,420 $ 10,169,806 $ 6,784,275 Insurance & Employee Benefits $ 19,129,850 $ 20,482,838 $ 21,935,708 $ 23,495,902 Other Financing Uses $ 10,303,666 $ 7,636,470 $ 5,794,164 $ 5,952,089 Total Expenditure $179,114,000 $186,894,152 $194,366,710 $200,138,469 FY ' 24 Forecasted Budget Total Revenue $ 179,114,000 $ 186,807,238 $ 195,424,409 $ 204,150,849 • Total Expenditures $ 168,810,334 $ 179,257,682 $ 188,572,546 $ 194,186,380 Projected Surplus/(Deficits) $ _ $ (86,914) $ 1,057,699 $ 4,012,379 Prior Year Balance Budget $ _ $ - $ 86,914 $ (1,057,699) Remaining Surplus/(Deficit) $ _ $ (86,914) $ 1,144,612 $ 2,954,682 Lowell Elementary School �� , y 1as `� !SDI - e • � _ ° — u 94