MIDDLEBOROUGH FY16

OPERATING BUDGET

February 12th, 2015

Robert G. Nunes

Town Manager

FY16 HIGHLIGHTS

• Strong financial policies and procedures

• Conservative revenue projections

• Consistent monitoring of revenues and expenditures

• Nonuse of one-time reserves on recurring expenses

• No causes for structural deficit in FY17

• Stabilize workforce hours

• Exceed state requirements for education spending

• Improved Technology

• $1.3 in capital improvements throughout town government

• Implementation of a five year pavement management program

• $25m capital upgrade at the water pollution control facility

• Implementation of automated town wide curbside trash program

• New water treatment plant on East Main Street

REVENUES BY SOURCE$70,732,094.26

52%31

%

8%

9%

Tax Levy

State Aid

Local Receipts

Other & Offsets

REVENUES

Projected Revenues:

Levy 35,585,189.00

2.5% Increase 889,630.00

New Growth 400,000.00

Debt Exclusions 144,699.00

Total Tax Levy 37,019,518.00

Other Projected Revenues:

State Aid 20,511,000.00

SBAB Reimbursement 1,313,437.00

Local Receipts 5,457,000.00

High Point Pilot 136,875.00

Debt Stabilization 200,000.00

Prior Year Overlay Surplus 180,419.26

27,798,731.26

PROPERTY TAX LEVY

• The property tax is:

• A statutory mechanism to fund local government operations• Administered by local government• Largest source of local government revenue

• The average single family FY15 tax bill is $4,126.

• The average statewide single family FY15 tax bill is $5,230.

• The average FY15 single family residential value is $261,491.

• FY16 : 37,019,518*

*Includes levy, 2.5% increase, new growth and debt exclusions

New Growth:

• FY16 Projection: $400,000

• FY15 Certified: $452,079

• FY14 Certified: $608,939

STATE AID

• The two largest forms of state aid are Chapter 70 and Unrestricted General Aid.

• FY15: $20,511,000

• Chapter 70: $17,459,284• Unrestricted Aid: $2,193,849

• FY16 Level Funded at $20,511,000

• School Building Reimbursement on the Nichols Middle School $1,313,437*

*Reimbursement until 2020

REVENUES

Offsets from Enterprise Funds:

Health and Life 1,190,539.00

Retirement 1,585,020.00

FICA 85,135.00

Workers Comp 66,345.00

Debt 1,228,704.00

Unclassified 130,316.00

Administration 535,031.00

4,821,090.00

Other:

G&E Pilot 650,000.00

Council on Aging 300,000.00

WPAT Reserve 142,755.00

Total Offsets & Other 5,913,845.00

LOCAL RECEIPTS

• Examples of local receipts include motor vehicle excise, meals and rooms excises, penalties, medicaid reimbursements, fees, licenses & permits, fines, investment income, charge for service

• FY16 Projection: $5,457,000.00

• FY15 Projection: $5,350.000.00

• FY14 Actual: $6,197,492.00

Motor Vehicle Excise:

• FY15 February Commitment: $2,179,905.00 or $117,518 over last year’s commitment

• FY 14 Collected: $2,850,057*

• FY13 Collected: $2,429,596*

* Includes prior years

LOCAL RECEIPTS

• Local Option on Meals and Rooms:

• Rooms: Local communities may levy a tax up to 6%

• FY15 Collections ahead of FY14 after two distributions

• FY14 Collected: $305,352• FY13 Collected: $331,850

• Meals: Communities may impose a levy on restaurant meals at the rate of .75% on the gross bill

• FY15 Collections ahead of FY14 after two distributions• FY14 Collected: $325,191• FY13 Collected: $300,647

FREE CASH

• Free Cash is defined as unrestricted and available funds for appropriation by town meeting.

• Free Cash is certified as of July 1 based on the June 30th balance sheet which reflects results from the prior year.

• Free Cash should be considered as non recurring revenue.

• In October, town meeting voted several free cash transfers to the general and stabilization funds.

• 7/1/2015 free cash will be certified in the fall of 2015 and will be used for non recurring expenses in FY16 and to be voted at special town meeting

• 7/1/2014 Free Cash: $1,728,727

• 7/1/2013 Free Cash: $690,623

• 7/1/2012 Free Cash: $1,741,758

STABILIZATION FUND

• A stabilization “rainy day” fund is a special reserve fund into which monies may be appropriated and reserved for a later appropriation.

• Stabilization Fund balances carry forward form one fiscal year to another.

• Interest earned on investment of the balance in this fund remains with the fund.

• A two-thirds vote of town meeting is required to appropriate into or from the fund, and to amend the purpose of the fund.

• Current balance in the stabilization fund is $2,338,403.59

FY16 GENERAL FUND APPROPRIATION $69,445,013.26

4%

10%

42%

2%2%1%

7%

4%

23%

5%

General GovernmentPublic SafetyEducationDPWHuman ServicesCultureDebtTransportationEmployee BenefitsUnclassified

PERCENTAGE OF FY16 GENERAL FUND APPROPRIATION

General Government 2,497,044.81 3.60%

Public Safety 7,266,516.05 10.46%

Education 28,894,643.00 41.61%

DPW 1,072,411.00 1.54%

Human Services 1,560,527.31 2.25%

Culture 887,192.00 1.28%

Debt 4,804,315.00 6.92%

Transportation 2,761,908.00 3.98%

Employee Benefits 16,098,983.09 23.18%

Unclassified 3,601,473.00 5.19%

69,445,013.26 100.00%

EXPENDITURES

• FY16 Budget Requests: $71,899,508.70

• $2,454,495.44 in cuts were made

• Restored clerical hours in the following departments:

• Accountant’s Office 2.25 hours• Clerk’s Office 15 hours• Conservation Office 5 hours• Planning Board 7 hours

• Clerical Pool

• Veterans 10 hours• Building 9 hours

• Increase Conservation Agent’s hours from 37 to 40

• Increase Youth Services Librarian duties by 7 hours

EXPENDITURES

• Office of Community and Economic Development (OECD)

• As of July 1, grant funding will run out, which will leave the town without an Economic Development Director. This appropriation funds the Director’s position and 10 hours of clerical support.

• Police

• 2 civilian dispatchers• Increase in hours in patrol

• Fire

• Current staffing levels

• Information Technology

• Funding for:• Online Permitting• Codification of Bylaws

HEALTH INSURANCE

Group Insurance Commission (GIC)

• Middleborough joined in July of 2014

• 3 year contract

• GIC offers health insurance to all state employees and 65 cities, towns, regional school districts, charter schools and planning councils.

• GIC is currently facing a $120m deficit that could grow to $150-190m.

• Subscribers to GIC could see increases in premiums, copayments and deductibles to close the budget gap.

• GIC commission members will vote in mid-February on FY16 rates.

• The FY16 health insurance appropriation will be fully funded to provide health insurance to employees in the town’s health program.

• The FY16 health insurance appropriation is $9,329,199.09.

PENSION

• Middleborough is a member of the Plymouth County Retirement Association

• 23 communities• Housing Authorities• Special Districts

FY15 Appropriation: $5,233,794

FY16 Appropriation: $5,660,784

Increase: $426,990

• The appropriation is fully funded in FY16

• A $200,000 transfer will be made at the fall town meeting to the Other Post-Employment Benefits Stabilization Fund (OPEB).

DEBT SERVICE

• The FY16 Appropriation is $4,804,315*

* A decrease of $334,399 over FY15

• The Capital Planning Committee (CPC) received more than $5.4m in capital requests for FY16.

• The town’s financial position is strong which will allow town meeting to authorize up to $1.3m in borrowing in FY16.

• The CPC will present a capital plan to annual town meeting for approval.

SNOW AND ICE

Blizzard of 2015 Snow Removal Costs

$110,277.75

• A snow emergency was declared by the Board of Selectmen.

• Reimbursement for storm costs from MEMA will be sought.

• Initial Damage Assessment Report (IDA) was filed in the amount of $173,632.79.• The FY15 shortfall will be closed at annual town meeting.

• Free Cash will used to supplement the FY16 appropriation at special town meeting.

• The FY16 appropriation base was increased by $40,000.

• The appropriation is underfunded.

• Future annual appropriation increases will occur in the snow and ice line item.

• The DPW is responsible for plowing 170 miles of roads and 20 miles of sidewalks.

COLLECTIVE BARGAINING

• Collective Bargaining Agreements are in place until June 30 th with the exception of the two police unions.

• The police have been working without a contract for the past two years.

• Funding will be in place to fund the police contract award that will be issued by the Joint Management Labor Committee (JLMC).

• Negotiations will commence shortly with all town unions.

• The FY16 Budget funds collective bargaining agreements on the school side.

ENTERPRISE FUNDS

• Enterprise accounting allows for a separate accounting and financial reporting mechanism for municipal services for which a fee is charged.

• Retained earnings stay with the fund and are certified similar to free cash.

• Indirect costs/offsets are costs for various administrative overhead.

• FY16 $4,821,090

Enterprise Funds:

• Sanitation• Wastewater• Water

SANITATION

• FY16 Appropriation: $1,038,975.00

• A transfer from retained earnings will not be sought to balance the fund.

• Current balance in retained earnings: $200,506.96

• Automated trash pickup starts July 2015

• 4 new trucks purchased $1,014,252• 6600 96 gallon recycling carts $307,560• 5500 64 gallon carts $216,370• 1000 32 gallon carts $32,340

• Town Meeting authorized the borrowing for the procurement of trucks and recycling carts.

• The town will receive a $74,000 DEP Grant to offset the costs of the carts.

WASTEWATER

• FY16 appropriation: $1,839,189

• Current balance in retained earnings: $1,331,100.44

• A transfer from retained earnings will not be sought to balance the fund.

• The DPW will seek authorization to purchase capital equipment at annual town meeting.

• The 25m upgrade at the Water Pollution Control Facility is ongoing.

• The General Contractor (GC) contract will be signed by April 1st.

WATER

FY16 Appropriation: $3,664,595.00

• Current balance in retained earnings: $2,318,625.02

• A transfer from retained earnings will not be sought to balance the fund.

• DPW will seek authorization to purchase capital equipment at annual town meeting.

CONTACT

For additional information please feel free to contact:

Robert G. Nunes

Town Manager

rnunes@middleborough.com

508-947-0928