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Home My Public Portal AboutSelect Board -- 2022-12-12 MinutesDATE: 1 2022 TIME: 6:00 PM PLACE: Remote Participation 'Town of Brewster 2198 Main Street Brewster, MA 02631-1898 Phone: (508) 896-3701 www,brewsterwma.gov O ice of: Select Board Administrator REGULAR SESSION REMOTE PARTICIPANTS: Chair Whitney, Selectperson Chatelain, Selectperson Bingham, Selectperson Chaffee, Selectperson'. Hoffmann, Town Administrator Peter Lombardi, Assistant Town Administrator Donna Kalinick, Finance Director Mimi Bernardo; Finance Committee Members: Frank Bridges, Bob Young, Alex Hopper, Andy Evans, Honey Pivirotto, Bill Meehan, Robert Tobias, Chair Pete Dahl, ABSENT: Bill Henchy ; F� Chair Whitney called the meeting to order at 6:OOpm, declared a quorum by stating that all members oft e Select Board are present and read the meeting participation and recording statements. None Mr. Lombardi shared that the Town's first Charter that was overwhelmingly approved at the May 2021 Town Meeting has been with State legislature. With the help of Representative Whelan, the Charter is currently pending with the Senate. The hope is that the Senate will approve our Charter before the end of this legislative session and, then go to the Governor for signature before the transition in administration. Mr. Lombardi thanked th6 legislative delegation in helping to navigate the process. Consent Agenda a. Appointmentsk Pond Parcel Planning Committee- Allen Ryone, Conservation Commission -Kimberley Crocker Pearson I Selectperson Hoffmann moved to approve the Consent Agenda from December 12, 2022. Selectperson Bingham second. A roll call vote was taken. Selectperson Hoffmann -yes, Selectperson Bingham -yes, Selectperson Chaffee yes, Selectperson Chatelain- yes, Chair Whitney -yes, The Board vote was 5 -Yes, 0 -No. Budget Calendar (Strategic roan twat u-�► Finance Committee Cfair Dahl declared a quorum by stating all members expect Bill Henchy are present and called the Finance Committee meeting to order. The Budget Forecast for Fiscal Years 2024-2028 PowerPoint was presented by Mr. Lombardi, Finance Director Mimi Bernardo and Assistant Town Administrator Donna Kalinick, Mr. Lombardi noted that the 1 P Select Board 12.12.2022 www.brewster-ma.gov a e 8 6 Doc ID: 3eadOd6bc4286f1aea6835bb1ac9c691ae73d \\oo" N E W S r/o/i� Off( V✓;�DB'p`u,�lC Town of Brewster Office of: 2198 Main Street 4 Select Board Brewster, MA 02631-1898 II Town Administrator = to= Phone: (508) 896-3701 www.brewster-ma.gov lot JJ//IIHIIIIIIII11141\\\1\\\ { Town transitioned to the online budget platform, OpenGov last year and will be adding the 5 -year Capital Improvement plan to the platform as well. Which provides transparency and accessibility to the Towns finance and budget documents. • Overview of FY23 Budget 1 o Stayed relatively conservative with revenue estimates for State aid and tlocal receipts, there is still unknowns on the horizon, but there were these concerns over the fast two years as well. o The Co'Irpensation and Classification study changes were implemented{in FY22, the focus was to get all bargaining units in sync. The cost -of -living adjustment (COLA)for FY23 was 2.75%. o OPEB is level funded at $300K ($267K from the general fund) o Short -Term rental revenues: allocated $187.5K to Capital Stabilization and $375K to Affordable Housing Trust. Created a new Water Quality Capital Stabilization fund and appropriated $112.5K. F o Created a new Special Education Stabilization Fund and appropriated $100K of available funding due to unanticipated significant increase in Ch. 70 school fundi g. o Staffing changes: new full-time Cape Cod Sea Camps property managers part-time Town Hall floater, 2 seasonal staff for Department of Natural Resources, part-timc' Town nurse and increased hours of the Zoning Board of Appeals administrative assistant. Net effect is $52K as the Town was able to leverage ARPA funds. 1 o Increase in Brewster students at CC Tech assessment, 18 student enrollment increase. Nauset Regional Assessment increase of 4.1%. Brewster Elementary schools is consistent with past increase at 2.5% (does not include benefits). • Revenue Assumptions o New Growth: $225K a year annual increase, additive over the span of 5 years. Worked with Deputy Assessor who has completed comprehensive analysis and projections. o State Aid (cherry sheet): Level funded for FY24; 2% increases in FY25+. o Local Receipts: 6% increase for FY24 & FY25 estimates based on FY194Y22 actuals and record,,, high Free Cash totals in FY21 & 22 (specifically motor vehicle excise an� traditional lodging). Approximately 4.5% increase for FY26 through FY28. o Short-term Rental Revenues: $100K increase to $80K in FY24 based on $1+M FY21 & 22 actuals. 5% increase in FY25+. Summer 2022 (June, July, and August) actual short-term rentals was about $860K. Allocation breakdown is 50% to Affordable Housing Trust, 25% to Capital Stabilization, 15% to Water Quality Stabilization fund and 10% to the General Fund (directed to operating expenses that directly support and help implement goals on the Select Board's Strategic Plan). o Solar Revenues: $20K in FY24+ to General Fund for Energy Manager and $70+K balance to the Golf Department to help cover operating expenses. o New Marijuana Revenues, $150K starting in FY25 (when they will be online), increasing $50K per year FY2&FY28. Based on the DOR statewide actuals from comparable communities. o Indirects: increased in FY23 (Golf & Water) to better reflect actual contributions, 5% increase in FY24+ Select Board 12.12.2022 www.brewster-ma.gov Pae 2 of 6 Doc ID: 3ead0d6bc42$6f1aea6835bb 1ac89c691ae73d Town of Brewster 2198 Main Street a Brewster, MA 02631-1898 Phone, (508) 896-3701 www,brewster-ma.gov office oft Select Board Town Administrator o Overlay Reserves (Abatements): $250K FY24+ based on current balance and anticipated annual expenses, including expected expansion of targeted tax relief. Or. Lombardi noted that when looking at the Revenue Assumption visualization bar chart, can see that our excluded debt increased from FY22 to FY23, this is the $1M excluded debt from the Bay Property, the Pond Property is being funded through non excluded debt and other contributions. In FY24, our assumption is that the High School will come online with about $4.21VI of new excluded debt. In FY21 & 22 Brewster had abnormally low excluded debt based on the size of the community and organization. • Expense Assumptions o General Expenses carried at 2% and the Town will be monitoring line items. Department heads deliver budgets that are sustainable and typically their expenses come in at 2%. o Personnel carried a 2.5% COLA in FY24-26 (2% in FY27-28), plus step increases. Includes some department heads moving from 37.5 hours per week to 40 hours. o Nauset Schools forecasting a 3% increase in FY24-25 and carrying 2.5% in FY26+ o Cape Q`od Tech traditionally at 2.5% or below; FY24-26 at 2.5% and 2% in FY27+, Enrollment figured are based on current enrollment. o Pensio.� increase is 11% in FY24, 10% in FY25-26 and 9% in FY27-28. Increases are calculated on theoverall personnel costs; this includes the increase in positions. o Health. Insurance has a 5% increase in FY24+ and will be reviewed each year. o OPEB Is level funded at $300K, we receive an update every two years. The Town has a long- term plan, that once the pension responsibilities is paid off we will shift more money from pension to OPEB. o Short -berm Revenues (STR): Housing Trust $425K (50% of STR), Capital Stabilization $212.5K (25% d'f STR), and Water Quality Stabilization $127.5K (15% of STR) I When looking at expenses overtime, it increases from FY22 to FY23, due to the compensation and classification study and the debt from the Cape Cod Sea Camps. Another large jump from FY23 to FY24, in which the main drivel• is the projected debt from the High School. From FY24 to FY28 the expenses are consistent. c • Excluded Debt o Sea Camps Properties- $20M debt issuance; 30 -year term level debt starting in FY23. FY24 payment is $981,623. The true interest cost on the loan is 2.74%. o The sc�ool debt is not debt carried on financial statements, it is paid when the Town makes its assessjpent payments. ■ Cape Cod Tech High School- $81M debt issuance; 20 -year term level principal started in FY20, FY23 payment was $549,461 and FY24 payment will be $471,498 based on 6 student decrease. ■ ' Nauset High School Project- $133M debt issuance; assume a 25=year term level debt starting in FY24 at a 4.5% interest rate. Brewster's share will be about +$4.25M in 3 of 6 P Select Board 12.12.2022 www,brewster-ma.gov Pame Doc ID: 3eadOd6bc4286f1aea6835bb1ac89c691ae73d i or r4$% � LOE�tsTown of Brewsterof a Office of: O � a +, 2198 Main Street Select Board r ao= mTown Administrator *° _¢ Brewster, MA 02631-1898 kdo Phone; (508) 896-3701 —4 �M 6 www.brewster-ma.gov ��/�/�»/U1/11111111191114UU�� f i FY24. Approximately $450 to $500 annual cost for the average Pnedium home value of $636,700. • Forecast Implications o Estimated FY24 General Fund revenue totals = $55,120,434 o Projected FY24 General Fund operating appropriations= $54,9821377 o Estimated available FY24 levy capacity= $138, 377 Mr. Lombardi noted that our levy capacity is limited in FY25 and beyond, on the orderr,'of magnitude of a $55M budget, plus orminus $50-100K is not statistically significant. The Town feels there are not any looming structural deficit as long as the FY24 budget remains consistent with the projections. One of the primary reasons why the out years look like more of a challenge in this year's forecast is the fact that the Nauset Regional assessment increased by over 4% this year, when our assumption was 2.5%. The operating expenses were closer to 6%. Mr. Lombardi stated that one change on a significant portion of our budget in one fiscal year has a ripple effect into future fiscal years. • Budget Development o Suggested operating budget guidance: ■ Target school expense increases of 3.0% ■ Instruct Town departments to deliver level service budget • FY24 budget presentation on February 6 (joint meeting):; • Department head presentations planned for February 8 `& 10 (joint meetings) o Suggested capital budget guidance; ■ Update FY23-27 requests, the goal is to maintain $1.75-2M annual commitment to funding capital needs via free cash y • Spring FY23 department head requests due December 22 • FY23-27 CIP presentation planned for January 11 (joint meeting) • Supplemental FY23 capital needs to be addressed at Spring 2023 Town Meeting, there is $2,641,154 in unappropriated Free Cash available. • Select Board FY23-24 Strategic Plan Goals with Operating Budget Implications r o Currently have one full time position as the property manager for the Sea Camps properties, this level of staffing has worked since the property is not actively used.;'As the Town tries to provide access to the property, there is the potential need to expand staffing in FY24 and beyond. The Town will have to make strategic decisions in the near future regarding property insurance for the Bay property as it has been a challenge. The Town wants to provide public access but does not want to unnecessarily expose the Town in terms of liability. In the hopes of opening the pool for public use to residents there are staffing and infrastructure considerations in supporting the expanded access of the property. o Targeted tax relief that will likely have budget implications for FY24 and beyond. o Develop a 5 -year financial plan for the Affordable Housing Trust, a sustainable plan that supports the need to continue the investment of short-term rental revenues at the 50% threshold. Select Board 12.12.2022 www.brewster-ma.gov Page 4 of 6 Doc ID: 3eadOd6bc4286flaea6835bbMIac89c691ae73d i, pvAAvvon,�,,..,,.,,,,.�.�ig0/// -�_ \��°' ��"'sr"'��%� Town of Brewster o '� of: ;�� ,"=�E2u�flt,,,hF.Q'% Select Board ��°` a'��a, �% 2198 Main Street Town Administrator 3 �� p a � Brewster, MA 02631-1898 0 0,� __ = � � 1- Phone: (508) 896-3701 -� ° www.brewster-ma.gov �9,�19 "1 Pb� \\\\\�� i Illllllillllllll@,\U\\\\ o Need to identify the areas the Town needs to make targeted investments in increasing our staffing capacity to help meet the community and organizational needs and support the needs long term. Expect as part of the FY24 budget discussion will look at potential staffing increases in a couple of different departments. o Continue to build our relationship with the Nauset School Officials, our goal is different than what vve have done historically. The Town will need to be very clear in identifying what we view as our capacity for school budget increases based on our big picture forecast and develo"ping sustainable budgets. As well as being clear that if their operating expenses come in higher,;we won't necessarily have the ability to incorporate it into a budget that is also within our levy limit. i The Select Board and members of the Finance Committee took turns commenting and asking questions about the presentation. Selectperson Hoffmann inquired about the marijuana revenues and the community host agreement. Mr. Lombardi stated that we have assumed only the local option tax revenues from the businesses coming ori�line. The Town has negotiated host community agreements with both businesses that include additional community impact fees but based on the recent case law and legislative changes that were made, we will be able to collect some revenues for community impact fees, they are likely to be significantly less than''original thought. Therefore, the Town assumed a 3%tax revenue. ,� Mr. Bridges asked if there are significant labor contracts that come up during this forecast that highlights specific years, that we should be aware of? Mr. Lombardi noted that all the Town's employment agreements have the same terms'and expire June 2023. The Town is in the process of negotiating new 3 -year contracts and have assumed 2.5% COLA in FY24-26. This will then reduce to 2% in FY27 and FY28. Adding that we have accounted for the step increases and contractual obligations for existing staff, assuming that the step and grade system remains in its current form. The schools have one year left through the end of FY24 on their existing agreements and then will be negotiating new 3 -year contracts. i Mr. Young expressed ��Goncern about the messaging to the Nauset School Qistrict, noting that overall enrollment for the di�;trict is down 14.6%, but the budget is up 49% on a gross dollar basis and 21% on an inflation adjusted basis. Mr. Lombardi responded that he recognizes that the Town is taking a different approach with the school than we have in the past. Weare trying to balance being realistic with being fiscally prudent. Mr. Lombardi noted that the Town has given budget requests and not necessarily stronger directives in the past.;' The employee steps vbere discussed, noting that the increment between steps is 3% with a couple of exceptions, which way standardized through the Compensation and Classification process. Mr. Lombardi noted that some employees in the next couple of years will be reaching the top step and will not receive step increases. This data is tracked and has been applied to personnel expenses as a percentage. Ms. Bernardo shared that labor costs would increase as follows, for FY24 just over 5%, for FY25 4.95%, for FY26 4.52%, for FY27 3.93%, and for FY28 3.67%. Mr. Lombardi noted that the Town wanted to make sure that we are competitive in the market and wanted our pay scale to be around the 75th percentile. Select Board 12.12.2021 www.brewster-ma.gov Pagge� 5 of 6 Doc ID: 3eadOd6bc4286f1aea6835bbZ31ac89c691ae73d E IV Town of Brewster 5,P pf ggF�6 �. 2198 Main Street 3 a a = Brewster, MA 02631-1898 ti Co Phone: (508) 896-3701 _4ff www.brewster-ma.gov Office of: Select Board Town Administrator Chair Dahl inquired about Brewster's contribution to the Cape & Islands Water Protection Fund and how it is reflected in the budget. Mr. Lombardi noted the contribution is collected directly by i he State so we don't see it in the general fund, the only time we would receive it would be as a subsidy from the fund to directly cover debt payments of an eligible project. Adding that eligible businesses are required to make payments to the State, then it is allocated to the fund. Regarding student enrollment, Mr. Lombardi shared that can rely on the Oct 1 enrollment report to be consistent with what ultimately survives the state process for Cape Cod Tech, but this'is not the case for the Regional District because the similar reports for the charter schools and so forth are n'o't available. The Town only has a portion of the data and have not made assumptions for Nauset. Mr. Lombardi shared that the Finance team developed a 5 -year financial forecast for the golf department, there have been significant policy discussions and decisions and the Town's interest is;"to have their rate recommendations grounded in the financial forecast as an expected expense. This wa's well received by the Golf Commission and will be something to continue to build on in future years. The plan is to do something similar with the Water Department in March. Finance Committee Member Tobias moved to adjourn at 7:39pm. Member Evans second. A roll call vote was taken. Member Bridges- yes, Member Young -yes, Member Tobias -yes, Member Pivirotto -yes, Member Evans -yes, Member Meehan -yes, Chair Dahl -yes. The Board vote was 7 -Yes, 0 -No. Matters Not Reasonably Anticipated by the Chair None C�uestions from the Media None 1 Next Meetings December 19, 2022, January 9, January 11 (Joint with the Finance Committee re. 5 Year Capital Improvement Plan) and January 23, 2023 Adjournment Selectperson Hoffmann moved to adjourn at 7;40pm. Selectperson Chatelain second.?A roll call vote was taken. Selectperson Hoffmann -yes, Selectperson Chaffee -yes, Selectperson Bingham -dies, Selectperson Chatelain-yes, Chair Whitney -yes. The Board vote was 5 -Yes, 0 -No. Respectfully submitted by Erika Mawn, Executive Assistant Approved; 12/20/2022 Signed: ;0 Date Selectperson Hoffmann, Clerk of the Select Board Accompanying Documents in Packet: Agenda, Consent agenda items, Financial Forecast PowerPoint, Select Board 12.12.2022 www.brewster-ma.gov Pa e 6 of 6 Doc ID: 3ead0d6bc4286f1aea6835bb 1ac89c691ae73d r j