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Town of North Andover Financial Forecast Fiscal Years 2015-2019

Town of North Andover Financial Forecast Fiscal Years 2015-2019. Andrew Maylor Town Manager December 2, 2013. Budget Development Process. Selectmen adopt Fiscal Year Budget Calendar. Selectmen hold Strategic Planning Meeting (Oct). Selectmen approve annual Budget Policy Statement (Nov)

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Town of North Andover Financial Forecast Fiscal Years 2015-2019

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  1. Town of North AndoverFinancial ForecastFiscal Years 2015-2019 Andrew Maylor Town Manager December 2, 2013

  2. Budget Development Process • Selectmen adopt Fiscal Year Budget Calendar. • Selectmen hold Strategic Planning Meeting (Oct). • Selectmen approve annual Budget Policy Statement (Nov) • Budget request packages are sent to departments. • Revenue and Fixed Cost Review Committee approves draft report. • Town Manager presents Five Year Financial Forecast. • Revenue and Fixed Cost Review Committee approves final report. • Superintendent submits budget to School Committee. • Departmental operating budget requests submitted to Town Manager. • School Committee holds public hearing. • School Committee approves school department budget. • Town Manager recommends budget to Selectmen. • Selectmen approve its budget recommendations • Finance Committee holds meetings with Town Manager and Department representatives. • Finance Committee holds public hearing. • Finance Committee approves its budget recommendations. • Town Meeting approves final budget.

  3. North Andover Mission Statement The Town of North Andover is dedicated to serving residents and to creating a community in which residents may join together for the common good. The Town’s purpose is to offer services and government that provide for the general welfare, education and public safety of its residents. The administration of the Town fosters this commitment to community by delivering municipal services in a professional, cost-effective manner through prompt, courteous and equitable service and by insuring that the public’s business is conducted with the highest level of integrity.

  4. Budget Pressures • The economic recovery has been inconsistent and uncertainty remains; • Non-discretionary spending, like health insurance and pension costs, have risen faster than inflation for the past decade; • State revenues have not shown steady growth which will impact local aid; • Deferred building maintenance and space needs will need to be addressed; • Increasing the reserve balances to reach acceptable national standards, such as Stabilization at 5% of revenues.

  5. Five Year Financial ForecastPro Forma Assumptions – General Fund RevenuesBased on Preliminary Revenue and Fixed Cost Review Committee Estimates • Increase Tax Levy by less than the allowed 2.5%. • New Growth to remain steady at $600k per year. • Debt Exclusion figures are actual based on the debt schedule. • Local Receipts are assumed to increase by slightly more than 1.3% in FY15 and 2.5 % annually thereafter. • State Aid projected to be level funded in FY15 and increase by 2.5% in each fiscal year from FY16-FY19. • Operating Transfers are assumed to increase at 2.5% during the five year period.

  6. Revenue Allocationby PercentageFY05-FY15

  7. Five Year Financial ForecastPro Forma Assumptions – General Fund Expenses • Health Insurance is assumed to decrease by $1.2 million in FY15 and increase by 2% in FY16 with 7.5% increases in FY17, FY18 and FY19. • Other Personnel Benefits (primarily Retirement) are projected to increase by 9% in FY15 and 8% in each of the other four fiscal years. • Debt Service figures are actual based on existing debt schedules. • Public Works expenses assumed to increase by 4% in FY15 and FY16 and 3.5% in FY17, FY18 and FY19. • School Department appropriations are projected to increase by 4% in FY15 and FY16 and 3.5% in FY17, FY18 and FY19. • Additional School Department increases in FY15 include funding of free full-day kindergarten ($660,000) and SPED reserve fund ($150,000). • Support Services and General Government projected to increase by 4% in FY15 and FY16 and 3.5% in FY17, FY18 and FY19. • Public Safety expenses are assumed to increase by 4% in FY15 and FY16 and 3.5% in FY17, FY18 and FY19.

  8. Five Year Financial ForecastRevenue and Expenditure Summary General Fund

  9. Plan the work, work the plan…our path to fiscal stability GIC Health Insurance Solid waste contract savings - $556k • Maintain acceptable service levels. • Recognize the impact to the taxpayer of our decisions. • Understand that employees represent our most important asset. • Control the increases of discretionary spending to sustainable levels. • Build reserves to create financial flexibility. • Develop strategic partnerships. • Invest in our infrastructure. • Reduce our energy costs. • Keep debt service costs under control. • Use technology to reduce the cost of service delivery. Streetlight purchase savings - $260k Financial Reserve Policies Facilities Master Plan Pay-as-you-go Integrated Financial Software

  10. Sustainabilitythe north Andover definition If the decisions we make today do not result in a quality of life for future generations that is at least as good as we have, then we have not achieved our goal of sustainability.

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