FY2021-FY2025 Long Range Financial Plan

December 17, 2019

Summary

Employee Benefits and Collective Bargaining continue to put pressure on Town and School budgets

New Growth continues to lag from projections

Sanitation costs continue to drain budget

School Cost pressures: SPED, Steps, Collective Bargaining

Town Cost pressures: Collective Bargaining, Solid Waste and Recycling, Pension and OPEB funding

Town budget $807K deficit and the Schools have a FY2021 deficit of approx. $2.3M (structural deficit)

Primary Assumptions

Revenue

Follow the override funding plan for the property tax levy.

Within the Property Tax projections, “new growth” no longer based on anticipated projects –timing has been hard to predict and has reduced the base from which override plans have been built.

Consensus revenue number of 2% for UGGA, 2.5% for Ch. 70.

Marijuana Sales tax - $1.85M assumed.

  • $350K part of base, plus $1.5M growth
  • anticipating next quarter disbursement soon

Expenditures

Health Insurance rate increases of 5% in FY21 -22 + continued subscriber growth 30/10 S/T.

Pension- follows funding schedule based on valuation as of 1/1/18.

2% Collective Bargaining increases in each fiscal year, 2.5% in FY21.

Continued funding of OPEB’s per the Town’s funding schedule.

All formal Financial Policies (CIP, Free Cash, Reserves) are continued.


Recent History

In FY08, $3.2M budget gap addressed by a combination of revenue increases ($1.5M), Health Insurance plan design changes ($755K), DPW Initiatives ($369K), and Budget cuts ($548K).


In FY09, voters approved a $6.2M Override for structural deficit ($2.1M), infrastructure shortfall ($1.5M), Lengthened School Day & EWL ($2.6M).


In FY10, closed a $5M budget gap via cuts and reorganizations/consolidations, many proposed by the EIC. (Primary cause of deficit = $3.1M (19%) cut in State Aid.)


In FY11, entered the GIC, saving $5.6M, thereby avoiding budget cuts and service reductions. Began implementing an enhanced OPEB funding plan. Also realized first full-year of new meals tax and increased lodging tax, which was dedicated to pension funding.


In FY12 - FY14, Forecast dynamic of balanced Town budget vs $1.5M - $2M+ deficit for Schools.

Budgets ultimately balanced by a combination of increases in local revenues, realizing additional State Aid, lower growth in Health Insurance rates, and reductions in the School budget.


In FY15 “Bridge year” GIC rate savings allowed the town to delay implementation of a Parking Meter rate increase


FY16-FY18 Three-year funding plan provided $7.665M of addl. tax capacity (override funds) plus $2.3M in non-tax revenue primarily from the Parking Meter Rate Increase and Town expenditure reductions


FY2019 - FY2021 Override Plan

Future Revenue & Expenditure Growth