Budget Guidance

Budget Guidance

As we have done the past several years, before starting the annual budget building process, the Finance Team updated our financial forecast in order to clearly understand our short- and medium-term financial outlook and estimated budget capacity for the next five (5) fiscal years. The findings from that analysis are summarized in the attached presentation which was presented to the Select Board and Finance Committee on December 13, 2021. While this analysis does not anticipate any major structural deficits or need for operating overrides in the near future, based on the limited levy capacity these projections show, we need to continue to take a conservative approach to developing our budgets in order to be financially sustainable. Accordingly, we asked Department Heads to produce FY23 requests that reflect a level services budget. Nauset schools were instructed to produce an FY23 operating expense increase of no more than 2.5% from FY22 based on anticipated available levy capacity.

We have transitioned to a new online budgeting platform for FY23 and beyond, a major step forward in managing a $45+M General Fund operating budget. This new platform is intended to meet the Select Board and Town Administration's continued goal of improving the accessibility and transparency of Town finances.

We have asked Department Heads to list FY22 Department Achievements and FY23 Goals/Initiatives, which should generally reflect the Select Board’s FY22-23 Strategic Plan.

FY23 personnel line items include a 2.75% COLA and contractual step increases for all employees as well as continued phased implementation of the compensation and classification study for certain Personnel Bylaw employees (ie. transition to 37.5 hour workweek for some Department Head positions on July 1, 2022).

While the Finance Team applied an across-the-board 2% expense increase assumption in the financial forecast, we examine all expense lines as part of our internal budget review and development process. We understand that there may be inflationary increases in fixed cost centers and we have asked Department Heads to make accommodations within their budgets to mitigate these pressures to the best of their abilities. However, we realize that this may not always be possible, and have asked departments for written explanations as to why specific lines may need to be increased in excess of $1,000. Where appropriate and sustainable, certain budget lines have been decreased. Any such decrease in excess of $1,000 is also accompanied by supporting documentation.

A deadline of Thursday, January 6 was set for FY23 budget requests. Meetings between the Finance Team and Department Heads occurred during the 2nd and 3rd week of January for a review of FY23 requests.

We have scheduled a joint meeting with the Select Board and Finance Committee on Wednesday February 9th where all Department Heads will be asked to present their budget recommendations and answer questions. In advance of that session, we will provide the Select Board and Finance Committee with an FY23 Budget Overview on Monday February 7th.

At its core, the budget development process is a referendum on what services we provide, how we deliver them, and where we strategically invest in our organization.