Five Year Financial Forecast FY 2022-2026

Financially, physically, and operationally resilient


October 20, 2020


Index

  • Assumptions
  • Forecast Summary
  • Five Year Actual Results
  • Estimated Local Receipts
  • State Aid (Cherry Sheet)
  • Other Raise & Appropriate
  • Debt Service Summary
  • Insurance & Employee Benefits Detail
  • Revenue Projections
  • Expenditure Projections
  • Glossary

Assumptions

  • Assessor’s estimate of $200,000 has been used for annual new growth.
  • Meals tax is projected to increase at a rate of 1% per year beginning in FY23; FY22 is projected at 75% of FY20 actual.
  • Room’s tax is projected to increase 2% per year beginning in FY23; FY22 is projected at 75% of FY20 actual.
  • Other estimated local receipts are projected without increase.
  • The overlay reserve (tax abatements) is projected to be $300,000 a year. Historically, the Town collects 98%-99% of property taxes annually.
  • County charges are projected to increase 2.50% a year.
  • State charges are projected to increase 2.5% annually.
  • 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.
  • Other operating expenses are increased annually under the following assumptions:

Personnel 3.0% 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 1.0%

Audit Services Flat for 3 years, then 10%


Revenue / Expenditure Projections

Five Year History FY2016-FY2020 Actual



Revenue Projections


Revenue by Type: FY21 - FY26 Projected





Expense Projections





Operating Budget Changes by Category

Glossary

Prior year tax levy

The prior year's maximum tax levy is carried over.


2.5% Tax Levy Increase

Proposition 2 1/2 allows a 2.5% tax levy increase each year. Line 2 calculates the 2.5% increase based on the prior year tax levy


New Growth

The State of Massachusetts allows new growth based on development to be added to the tax levy each year. The State must approve new growth.


Operating Override

Operating overrides must be approved by town meeting vote. Once approved they are a permanent addition to the tax levy. At the point when expenditures are projected to exceed revenues there are options (or some combination of the three options): increase local revenues, decrease expenditures or request voters approve an operating override.


Tax Levy

The maximum amount, before adjustments, that may be raised from real and personal property taxes.


Debt Exclusions

Debt exclusions are those town meeting votes that vote to raise the funds necessary to pay debt service costs for a particular project. The authorization must also be approved at the ballot box. The amount of annual debt service for the particular project is added to the tax levy limit for the life of the debt only. Debt for which a long-term bond has been issued provides an actual amount for a debt exclusion.


Capital Outlay Exclusion

A temporary increase in the tax levy to fund a capital project or make a capital acquisition. The increase is added to the tax levy only during the year in which the project is being funded.


Other Adjustments

The State of Massachusetts allows the charges from Barnstable County to be added to the tax levy.


Current Year Property Tax Levy

This is the maximum that may be raised through property taxes under proposition 2 1/2.


State (Cherry Sheet) Aid

Aid from the State of Massachusetts including Chapter 70 (education), Charter School Reimbursements, School Choice, Unrestricted Government Aid, Veteran's Benefits and Exemptions for Vets, Blind, Surviving Spouses & Elderly.


Estimated Local Receipts

Each year an estimate is made of local receipts. Local receipts include parking revenue, room and meals taxes, excise taxes, licenses, fees and other receipts collected at the local level.


Transfers - Waterways Fund

Mooring fees collected are deposited into the Waterways Fund and are transferred each year to fund Harbor and Pier related expenses.


Transfers - Wetlands Fund

Receipts collected in the Wetlands fund are transferred to partially fund Conservation expenses.


Transfers - Ferry Embarkation Fund

Receipts collected in the Ferry Embarkation fund are transferred each year to fund Harbor and Pier related expenses.


Transfers - Septic Loans Fund

Receipts collected in the Septic Loans fund are transferred each year to fund debt service expenses.


Enterprise Fund Indirect Reimbursement

Each year the Water and Wastewater Enterprise Funds reimburse the general fund for their indirect costs paid out of the general fund. Those expenses may include employee health insurance and retirement benefits, vehicle and comprehensive insurance and a portion of the payroll costs for departments that work with the Enterprise Funds such as the Town Manager's office, the Finance and MIS department, etc.


State (Cherry Sheet) Charges

The State of Massachusetts charges the town for its contribution to various state and county programs. Those programs include the Mosquito Control Project, the Air Pollution District, the Regional Transit Authority assessment, School Choice Sending Tuition and Charter School Sending Tuition.


State (Cherry Sheet) Offsets

Cherry Sheet Offsets are items that do not go in to the general fund, but instead go in to separate funds designated by specific use. Because the receipts are not deposited in the general fund, they are removed from total Cherry Sheet Charges.


Overlay Reserve

Each year the Board of Assessors determines an overlay reserve estimate. The Overlay Reserve is the account charged for senior tax and low income proprerty tax abatements.


Other Raise and Appropriate

Appropriations for additional programs, projects or capital improvements may be paid through the current levy limit without the need to borrow funds or through an override if there is remaining levy capacity (revenues less expenditures).


Operating Budget

The operating budget funds the various ongoing departments within the town.