AGENDA

FORECASTING PRINCIPLES AND CONSIDERATIONS

FORECASTING PRINCIPLES 

1. Continue conservative forecasting of revenues and controlled expenditures

a. Protect against unanticipated negative impacts

b. Maintain objective of budgetary surpluses which creates free cash to fund capital projects and reduces bonded debt

2. Establish new revenue source trends before expending

a. Per the current Select Board policy, a full year of short-term rental tax receipts should be examined before considering any reallocation of rooms tax based on an evaluation of priorities.

b. Marijuana tax revenue continues to be uncertain and therefore cannot be allocated to any particular project at this time.

OTHER CONSIDERATIONS

1. Budgeting

2. Recommendations for Utilization of New Revenue

3. Landbank

4. Housing

Budgeting

2. Review: 1st & 2nd quarter revenue & expenditures prior to Operating Budget submission

3. Prioritize: OPEB, capital projects, and reserves to extent feasible

4. Prioritize: 2020 commemoration/Provincetown 400 related capital projects and tourism expenditures

5. Prioritize: climate change, both budgetary (operations) and fiscally (reserves)

Recommendations for Utilization of New Revenue

1. Receive and secure new revenue from short-term rental tax and marijuana for at least one year to determine funding levels

2. Continue to prioritize funding of General Purpose Stabilization Fund, funding capital projects and OPEB whenever funds are available

3. Utilize future revenue on identified priorities:

• Housing

• Marijuana Impacts

• Capital Projects

• Coastal Resiliance

Conclusion of Landbank Program

• The Town’s Landbank Program ends in FY2020 as will the 3% Landbank surcharge on real estate tax bills.

• Taxpayers are billed 3% of their real estate tax with their tax bill which is recognized as revenue in the Landbank Fund.

• The Town will realize a decrease in revenue in the Landbank Fund of approximately $600,000 annually.

• A decrease in revenue will also be realized the the Affordable Housing Trust (AHT); ten (10) percent of Landbank Revenue is transferred to the AHT (approximately $60,000 annually).

Housing

• Affordable Housing Trust (AHT) balance $517,300

• Per the Town's Inclusionary by-law and Board of Selectmen policy, payments in lieu will be recorded as revenue in the AHT until the number of the Town’s Subsidized Housing Inventory (SHI) eligible units surpasses ten (10) percent and will then be recorded as revenue in the YRMRHT.

• Year Round Market Rate Housing Trust (YRMRHT) balance $757,000 which will be used to complete the Harbor Hill Renovation Project.

• Harbor Hill Update: The renovation project is 53.9% complete as of September 30, 2019. Building #5 is complete and fully occupied with all six units leased. There are commitments for units in Building #6 once they become available. The construction timeline is anticipated with some units coming online in January.

PROJECTION ASSUMPTIONS

• A conservative estimate of $185,000 has been used for annual new growth.
• Meals tax is projected to grow at a rate of 3% per year.
• Rooms tax is projected to increase 16% for FY21; then 3% for FY22-FY25 .
• Other estimated local receipts are projected without increase.
• The overlay reserve is projected to be $220,000 a year.
• County charges are projected to increase 4.0% a year.
• State charges are projected to increase 1.5% annually.
• For the purpose of the 5 Year financial projection, enterprise fund indirect costs are projected to be $400,000 per year
• Payroll costs are calculated by using the current existing union contracts and projecting those contracts into the future. Estimates of salary increases for non‐union personnel are based on the compensation plan as approved by the Personnel Committee.
• Seasonal employee increases are projected to increase 2%.
• Other operating expenses are increased annually under the following assumptions:

Personnel 2.0% Worker’s Compensation 2.5%

Health Insurance 8.0% Trash Tipping Fees 2.5%

OPEB Contribution 2.5% Finance Committee Reserve 2.5%

Retirement Assessment 8.0% Vehicle/Comprehensive Insurance 2.0%

Utilities 2.0% Legal Services 2.0%

Medicare 3.0% Hardware/Software 1.5%

Building Maintenance Plan 2.0% Pier Contract 2.0%

Ambulance Services 3.0% Other Operating Expenses 0.5%

Audit Services Flat for 3 years, then 10%

FORECAST SUMMARY

REVENUE/EXPENDITURE PROJECTIONS

REVENUE PROJECTIONS

Revenue by Type: FY21 - FY25 Projected

EXPENDITURE PROJECTIONS

FIVE YEAR ACTUAL RESULTS

ESTIMATED LOCAL RECEIPTS

STATE & COUNTY RECEIPTS AND EXPENDITURES

DEBT SERVICE SUMMARY

EMPLOYEE BENEFITS DETAIL

APPENDIX

1. Glossary and Explanations

2. Departmental Expenditure Summary

3. Estimated Receipts Summary

4. FY19 Budget to Actual Results

DEPARTMENTAL EXPENDITURES SUMMARY

ESTIMATED LOCAL RECEIPTS - DETAIL

FY19 BUDGET TO ACTUAL RESULTS (without Property Tax Receipts)