Manchester's 2014 Finance Committee Report and Town Warrant

Manchester-by-the-Sea

Finance Committee

ANNUAL REPORT

2014

Please be sure to attend

Town Meeting

at Memorial School

April 7, 2014 at 7:00 P.M.

and

bring this report with you.

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Definitions used in discussing money articles

ApportionmentA�formula�used�to�compute�the�amount�each�town�owes�to�the�Regional�School�District.�

Article 4The�operating�budgets�for�the�town.��

Article 5Most,�but�not�all,�capital�items.��

Assessors’ overlayA�fund�in�reserve�for�the�Board�of�Assessors�to�cover�abatements.

AssessmentThe�Town�Board�of�Assessor's�opinion�of�the�value�of�your�property.��

Available fundsFund�balances�plus�amounts�in�other�accounts�that�are�not�Enterprise�funds.

BorrowingLoans�the�town�takes�to�pay�for�large�capital�items.��

Capital budgetOne-time�expenses.�Traditionally�Manchester�has�included�some�maintenance,�including�road�repair,�new�roofs,�etc.�as�capital�expenditures.�

Chapter 70The�Chapter�of�the�State�law�that�governs�the�funding�of�schools.�It�is�also�the�common�name�for�the�largest�part�of�state�funding�to�schools.��

Cherry sheetsState�aid�to�the�town.��So�called�because�they�were�once�printed�on�red�paper.��

ChoiceMoney�that�flows�into�the�school�district�from�the�state�when�the�system�accepts�students�from�outside�the�district.�

Enterprise fundAn�account�separate�from�the�town's�general�fund�for�the�revenue�and�expenses�of�aparticular�function�of�the�town.�

ExclusionAn�item�that�the�Town�Meeting�and�voters�agree�to�fund�outside�the�limits�of�Proposition�2�1/2�.��

Fund balancesFormerly�known�as�free�cash,�the�amount�of�money�left�over�in�the�general�fund�atthe�end�of�the�year.��Most�of�the�fund�balances�come�from�unanticipated�revenues.��

General fundThe�Town’s�checking�account.�The�General�Fund�can�be�expended�only�for�the�itemsapproved�by�Town�Meeting.

HoldThe�request�to�delay�consideration�of�one�part�of�a�multi-part�article.�Any�item�that�aTown�Meeting�member�questions�is�marked�as�a�hold�and�will�be�discussed�after�theunquestioned�items�have�been�voted.

Definitions are continued on the outside back cover

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TAX RATE ESTIMATE FORFISCAL YEAR ENDING JUNE 30, 2015

JULY 1, 2014 - JUNE 30, 2015

As Requested As RecommendedIn Warrant By FinCom

Fiscal year 2015Article 4 Department Requests 13,192,990 13,192,990(salaries and normal operating expenses)Article 5 Capital items requested by Departments 1,434,000 1,434,000Article 6 Regional School Operating and Debt 13,359,514 13,359,514Other Articles (4) 1,007,745 1,007,745TOWN MEETING TOTAL 28,994,249 28,994,249

PLUS:State Assessments 158,619 158,619Assessors' Overlay 150,000 150,000Snow Deficit 100,000 100,000Tax Lien Purposes 10,000 10,000GROSS AMOUNT TO BE RAISED 29,412,868 29,412,868

LESS:State Aid 204,900 204,900Estimated Receipts - Local Revenues 1,627,500 1,627,500Off Set Receipts - Recreation And Trash Fees 529,160 529,160Enterprise Accounts - Water & Sewer 2,183,124 2,183,124Community Preservation Funds (CPA) 597,745 597,745Unreserved Fund Balance ( Free Cash) 684,000 684,000Overlay Surplus 115,000 115,000Available Funds 70,000 70,000Subtotal of Deductions 6,011,429 6,011,429

NET AMOUNT TO BE RAISED BY TAXATION 23,401,439 23,401,439

PERMITTED LEVY 20,279,013 20,279,013ESTIMATED GROWTH FACTOR 150,000 150,000PREVIOUS DEBT EXCLUSION 2,972,426 2,972,426MAXIMUM PERMITTED LEVY 23,401,439 23,401,439

TOTAL ASSESSED VALUATION AS OF FY-2014 2,161,963,375FISCAL YEAR 2014 TAX RATE 10.45 PER THOUSANDESTIMATED FISCAL YEAR 2015 TAX RATE 10.82 PER THOUSAND

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REPORT OF THE FINANCE COMMITTEETO THE VOTERS OF THE TOWN

The Finance Committee has reviewed the budgets, capital items and other warrant arti-cles that will be presented to voters at the Annual Town Meeting on April 7, 2014. Weagain thank the many Town and School District employees, elected officials and volunteerswho prepared budgets, appeared before us and provided information in response to ourinquiries. In particular we appreciate the hard work and cooperation of all the departmentheads who continue to show good discipline in managing their budgets.

In the course of reviewing the Town’s operating and capital budgets the Finance Com-mittee met regularly with the Town Administrator and Town Accountant and also met indi-vidually with the heads of the major Town departments. We also met with School Districtleaders, attended School Committee meetings and participated in both a school budgetworking group and the District’s facilities task force. In addition, we reviewed multi-yearmodels for both the operating budget and the capital budget. These models project theeffects that changes in this year’s budgets will have on future years’ budgets, debt levelsand reserve balances.

Through a combination of strong local receipts (which include items such as excise taxpayments and beach fees) and prudent management by Town and School District person-nel, the Town is in relatively good financial shape. We are pleased to report that we areable to recommend a Fiscal Year 2015 budget that we believe offers the high level of pub-lic services that the citizens of Manchester expect and deserve while still keeping withinthe levy limit permitted by Proposition 2 ½.

However, it is worth reminding citizens that the 2011 override did not give the Town asmuch flexibility as we had initially hoped. Because the Town of Essex failed to pass anoverride in 2011, the state Department of Revenue disallowed the portion of Manchester’soverride that applied to the School District budget, thereby reducing the override from theexpected $1,250,000 to $887,843 – a reduction of $362,157 or 29%. This has constrainedthe School District’s budget for the last few years, and as a result, both Manchester andEssex may need to consider an override relating to the School District budget again in Fis-cal Year 2016.

Our work also includes an attempt to benchmark the cost efficiency of the delivery ofservices in Manchester to that in other similar communities. However, comparing Man-chester to other towns is not straightforward and can easily be misunderstood for a num-ber of reasons, including: (i) the types of services offered in different communities canvary widely, (ii) the reporting and allocation of expenses differs significantly betweencommunities, and (iii) some towns may pay for a service through taxation, while othersmay use a different revenue source such as an enterprise fund. To give just a couple ofexamples of these differences, Manchester has its own ambulance service with AdvancedLife Saving capability while our neighbors rely on commercial services located in othercities and towns. Similarly, Manchester operates its own water treatment and distributionsystems, which is not the case in many other communities. Nonetheless, the Finance Com-mittee will continue to seek useful inter-community benchmarks.

Moreover, the Finance Committee and the Town Administration are always weighingthe cost efficiency of providing services through Town employees versus outsourcing to

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private contractors. This analysis is frequently difficult because of many factors rangingfrom quality and timeliness of service to effect on pension and other retirement obligations.

On the capital side, as we have discussed in prior years, the Town has struggled to keepup-to-date with the maintenance of its infrastructure for a variety of reasons, including theweak economy and the need to fund the Pine Street reclamation project as required byMassachusetts Department of Environmental Protection. However, the Fiscal Year 2015capital budget begins to implement a multi-year plan to tackle the problems with theTown’s physical assets. Fortunately, a considerable amount of the Town’s current out-standing debt will be retired over the next several years, and so it should be possible tobegin to repair or replace our aging equipment and infrastructure without a significantimpact on the tax rate. As discussed in more detail below, the Town will be able to utilizea combination of new borrowing and a portion of its financial reserves to implement thiscapital improvement program.

Before turning to the Financial Highlights, it is worth noting that early in 2014, thecredit rating agency Standard & Poor’s, raised the Town’s bond rating to AAA, its highestlevel. That makes Manchester one of only 30 municipalities in Massachusetts (out of atotal of 351) to hold the top rating. In awarding Manchester its top rating, Standard &Poor’s cited, among other things, the Town’s strong property base, solid per capita income,good fiscal management and policies, stable reserves, and healthy debt and contingent lia-bilities position as positive credit factors.

Financial Highlights

• In Fiscal 2013, which ended on June 30, 2013, the Town had an operating surplus ofapproximately $800,000 primarily because of increased local receipts, lower healthinsurance premiums and a reduction in school-related debt service.

• Fiscal 2014, ending on June 30, 2014, is projected to close with an operating surplus ofapproximately $300,000 primarily because of conservative estimates of our localreceipts (various fees, rental income, etc) along with realized savings in a number ofoperations.

• Fiscal 2015 compared to Fiscal 2014:

Increase in Expenses:

Town 4.6% (2.5% excluding new debt previously approved)

School 3.9%

• Debt service is up by 17.4% in FY15 because of the new debt recently taken on for thePine Street reclamation project, beach repair following the 2013 storms and the seweroutfall repair in the harbor.

• Salaries, which make up the largest part of the Town Operating budget, are up by 3.2%from FY14 to FY15. This generally reflects salary increases of 2.5%, plus a fewlongevity increases and additional part-time hours in the land use departments.

• Pension expense is up 4.4%, and health insurance costs are up 3.6% from FY14 toFY15; these are largely beyond the Town’s control. The Town’s health insuranceexpenses are primarily dictated by union contracts. Employees will be picking up a big-ger share of the premium costs over the course of the next three years. The Town’s

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annual pension contribution is mandated by state law.

• Non-bonded capital expenditures for FY15 will be $1,434,000 and will be funded by acombination of taxation, fund balances, water and sewer rates and other sources. Asdiscussed in more detail below, this is a significant increase from FY14 and previousyears because of the need to catch up on repair or replacement of our deterioratinginfrastructure.

• The Town plans to borrow a total of $2,440,000 in FY15 to take advantage of a Stateprogram that offers favorable interest rates on borrowings for water and sewer projects.This money, only a portion of which will be actually spent in FY15, will fund a Com-prehensive Wastewater Management Program (which is mandated by the State) as wellas repairs to the water and sewer systems.

• Manchester’s share of the Manchester-Essex Regional School District (MERSD) oper-ating budget is up 3.9% for FY15. The student population has grown significantly overthe past several years. Moreover, because the student population from Manchester hasbeen growing faster than that from Essex, Manchester’s share of the District expenseshas increased under the allocation formula in the District Agreement.

• The budget is projected to leave the town with financial reserves (Fund Balances, whichwere formerly known as “Free Cash” plus Stabilization Fund) of approximately $2.7million at the end of FY15.

We also call your attention to the graphs on the back pages of this booklet.

Overview of FY15 Town Operating Budget

The department heads have once again demonstrated admirable restraint in their budgetrequests. Most departmental discretionary expense budgets were either held flat or slightlyreduced for FY15. In FY15, all unionized employees are expected to receive pay increasesof 2.5% in accordance with the new union contracts that should be in place at the start ofFY15. Most non-union employees will also receive a 2.5% salary increase in FY15. Theonly expansion in headcount is some additional part-time hours in support of the PlanningBoard, Historic Commission and Appeals Board, and this is mostly offset by consolidatinghours in the Council on Aging and the Treasurer/Collector’s Office. Further headcountconsolidations are anticipated through retirements. The new planning position will pro-vide assistance to our land use boards, facilitate the crafting of a new master plan for thecommunity and help guide our capital improvement program. An updated master plan isa prerequisite for various state grant programs.

The FY15 budget also includes an increase in the snow removal budget of $25,000 plusfunds related to the FY14 snow removal deficit. State law allows towns to carry a snowremoval deficit forward to the next year due to the unpredictability in this weather-relatedbudget item. As this report goes to press, we are not yet beyond the snow and ice seasonso that any additional impact on the FY15 budget cannot be finalized, but it may be sig-nificant.

Other Post-Employment Benefit (OPEB) and Pension Liabilities

The Town has made good progress in dealing with its unfunded liabilities for healthcareobligations to current and future retirees, which is often called OPEB (Other Post-Employ-ment Benefits). The Town has taken important steps both to reduce the future liabilitiesand to begin setting aside assets to fund those liabilities.

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On the liability side, the structural changes made to the Town’s health insurance plansover the past few years should significantly reduce its unfunded OPEB obligations. Thesechanges include:

• Requiring all eligible retirees to enroll in Medicare, which significantly reduces theTown’s obligations for their healthcare costs;

• Auditing the benefit rolls to remove persons not entitled to Town benefits and to iden-tify eligible retirees who had not yet enrolled in Medicare;

• Enacting new rules that prevent retirees who voluntarily leave the Town’s health insur-ance from later rejoining it;

• Changing the insurance program for current employees to increase deductibles andincrease employee contributions; and

• Having employees and retirees pay a higher share of the premiums for a given plan.

On the asset side, the Town has established an OPEB Trust and is funding the trust at alevel that is considered actuarially to be “fully pre-funded.” This means that, assuming theTown continues to make annual contributions at the appropriate level, within 30 years theassets in the trust are projected to be sufficient to meet the Town’s OPEB liabilities at thattime.

The Town also has significant pension liabilities, but a state statute has established aprogram that all municipalities must follow to fund those liabilities. Manchester is fol-lowing the state mandated program, and its pension liabilities should be fully funded by2035. For more details about the Town’s pension and OPEB liabilities, see the Board ofSelectmen’s report that follows this report. In addition, the Town’s OPEB actuarial reportand the annual Town Audit are available on line or at Town Hall.

Capital Plan and Sources of Funding

The Town is undertaking a ten-year capital improvement plan that is designed to rem-edy past deficiencies and meet the Town’s infrastructure needs well into the future. Theplan calls for significant spending on roads, the water treatment and distribution systems,the sewer collection system and a number of Town vehicles and buildings. The plan alsoseeks to reduce future operating costs by making energy-saving improvements to a num-ber of Town facilities.

The capital expenditures planned for FY15 total $3,874,000, which includes$1,434,000 that are described in Article 5 and $2,440,000 funded by new borrowing forthe sewer and water systems that is described in Article 6. The Article 5 expendituresinclude an expanded road improvement program, vehicle replacements, water and sewerplant upgrades and improvements, replacement of the computer network in Town Hall,needed enhancements to the Fire Station and public safety radio equipment and a reservefund for future fire and rescue vehicles.

Article 6 asks the voters to put on the ballot in the May 2014 election a proposed bor-rowing of $2,440,000 to fund the replacement of the main water line along Pine Street, anew interconnection with the Gloucester water system, a waste management plan andsewer line improvements to reduce the amount of infiltration and inflow into the sewer sys-tem. The Town has been approved for a state program that offers especially low interestloans in part because of the high needs we have for system improvements. We can lock inthese rates now and take the next two years to finalize the engineering for the neededimprovements with loan repayment not starting until FY16 and FY17. This will allow our

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current debt payments to drop further thereby reducing the impact of this new debt on thetax rate.

The Town will fund the FY15 capital budget of $3,874,000 through payments of$825,000 from taxation, $359,000 from Fund Balances, $2,440,000 from borrowing asdescribed above, $195,000 from the Water and Sewer Funds, and $55,000 from the HarborFund. Added to this total is another $148,000 for roadwork from Chapter 90 monies paidby the state. As part of the ten-year capital improvement plan, the amount of funding fromtaxation will increase by $100,000 each year until the annual amount reaches $1 million.

A total of $684,000 ($359,000 for capital and $325,000 for the OPEB and Stabiliza-tion funds) that we are proposing to take from the Undesignated Fund Balance (oftenreferred to as “Free Cash”) will temporarily reduce the Town’s financial reserves, but thisis a one-time reduction which will allow us to get a good start on our back-log of capitalneeds. As shown below, the Town has been able to build up reserves (which consist of theUndesignated Fund Balance and the Stabilization Fund) over the last few years, and theFinance Committee and the Board of Selectmen believe it is now appropriate to devote aportion of those reserves to fund our urgent capital needs. The graph below shows the totalof reserves (Fund Balances plus Stabilization) at the beginning of each fiscal year as a per-centage of that fiscal year’s overall Town budget (including the School District). The FY15estimate of 8.7% is after the $684,000 has been used for FY15 capital, OPEB and stabi-lization and falls within our targeted range of 8-10% of total operating expenses. Our 10year plan anticipates keeping the reserves within this range.

Also, as noted above, a significant amount of the Town’s outstanding debt will matureover the next several years as shown on the next page. This will allow us to issue new debtin the coming years to address our ten-year capital improvement plan without negativelyimpacting the tax rate.

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Manchester-Essex Regional School District Budget

While the school budget is the responsibility of the District Administration and theSchool Committee, the Finance Committee reviews the budget carefully before recom-mending it to Town Meeting. As mentioned above, the Finance Committee has a repre-sentative on the small working group (consisting of representatives of the School Districtas well as the towns of Essex and Manchester) which plays an active role in developing thebudget, beginning in the late Fall. The Committee also reviews the final budget withSchool District officials.

Although the proposed increase of 3.9% in the Town’s portion of the School DistrictBudget may seem high in this era of relatively low inflation, a couple of factors must betaken into consideration. First, as mentioned above, because Essex failed to pass its Propo-sition 2 ½ override in 2011, the School District was also denied the benefit of its portionof Manchester’s FY 2011 override. This has severely constrained the school budgets forthe last few years. The other major force that shapes the school budget is an increase inthe student population, an influx of 281 students over the last 6 years, a 24% increase.Moreover, because more of these new students came from Manchester than from Essex,Manchester’s share of the school costs has gone up under the terms of the District Agree-ment. Not only has the number of students gone up, but the diversity of the students hasalso increased, which puts new demands on the schools. Despite all this, while total costshave risen, per pupil costs have decreased. The Finance Committee has concluded that theincrease in the School District Budget is reasonable in the light of these factors.

Looking Ahead to FY16

While it is always difficult to project the Town’s finances, we are hopeful that we canavoid an override request for the Town’s operating budget for several years to come, espe-cially if local receipts remain strong. Of course, this is dependent on a number of factorssuch as health insurance costs, energy costs and state and federal regulation, many ofwhich are beyond the Town’s control. However, on the school side the failed override in2011 has constrained the District’s budget for the last few years. As a result, both Man-chester and Essex may need to consider a new override to cover the needs of the School

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District in Fiscal Year 2016.

We want to be sure that residents understand the financial condition of the Town. Wewill be prepared to discuss this further at Town Meeting, and we welcome your questionsand input.

FINANCE COMMITTEE MEMBERS

George Putnam, Chair 2015 Sam Martin 2016

John Croft, Vice Chair 2015 Sarah Mellish 2016

Mory Creighton 2015 Andy Oldeman 2014

Morgan Evans 2014 Sue Thorne 2014

Ann Harrison 2014

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BOARD OF SELECTMEN REPORT ON FUTURE OBLiGATiONSFOR RETiREMENT AND HEALTH CARE BENEFiTS –

AN UPDATE OF OUR FUTURE LiABiLiTiES

Pursuant to the provisions of Article IX, Section 3 as amended of the Town’s GeneralBy-laws, the Board of Selectmen submit the following report concerning the Town’s futureobligations for pensions and retiree health insurance.

IntroductionPensions and retiree health insurance are benefits that are offered to all Town employ-

ees who work more than 20 hours a week per the requirements of Massachusetts GeneralLaws. Like the vast majority of municipalities, Manchester has historically paid for thesebenefits in a “pay as you go” fashion – that is, we pay only the bill that is due that year,not the bill we are incurring for future years in the form of promised retiree benefits.While this approach was fine when benefits where less expensive and the number ofretirees were relatively modest, the cost trends, life expectancy trends and the desire fortruer cost accounting has put a new emphasis on putting money aside now in order to payfor future pay-outs. It also makes financial sense to pre-fund our future obligations as thefunds put aside for future use earn interest.

Town PensionsThe Town of Manchester is a member of the Essex Regional Retirement System. All

employees contribute their own funds to the system but not enough funds have been col-lected to fully fund the future payments promised by the retirement board. While this hasbeen corrected for new employees, all municipalities are contributing funds to make up forthe under collection in the past. It is anticipated that the retirement system will be fullyfunded by 2035 at which time the Town will no longer have an unfunded pension liability.

The Essex Regional Retirement Board’s unfunded liability was estimated by an actuar-ial study to be $304,773,155 as of January 1, 2013 based on current assets of approxi-mately $315 million and total liabilities of $619 million. This is the present day value ofobligations expected to be incurred over the next 30 years. Manchester employees com-prise 3.34% of the total pool thus our share of the system’s liability is $10,179,423, againover a projected 30 years. Annually we contribute a portion of this liability. For FY15 wewill contribute $821,748 for both current and future liabilities. This number is expectedto grow by 7% annually through FY2019 and 4% annually from FY2020 -2035.

Essex Regional Retirement SystemTotal Assets = $315 millionTotal Liabilities = $619 millionUnfunded Liabilities = $305 millionManchester Share 3.34% = $10.2 millionAnnual Town Payment = $821,748 increasing 7% through 2019; then 4%On schedule to be fully funded by 2035

Town OPEB (other post employment benefits – retiree health insurance)The Town provides health insurance to all retirees eligible for a pension. Voters

approved this benefit decades ago and, by state law, we must now continue to do so.Because the Town has been in operation for hundreds of years, our pool of retirees, whilegrowing slightly, is relatively stable. Thus, our “pay as you go” amount already is 70% ofthe required Annual Required Contribution, or ARC. Our most recent actuarial study,

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completed by Sherman Actuarial Services, concluded that our total Actuarial Accrued Lia-bility for both active employees and retirees comes to $16.7 million. This is the presentday value of the cost of retiree health insurance for the next 30 years. This calculation islikely to come down in the next actuarial study as the full impact of the lower cost healthinsurance plan that was introduced is realized and the recent years of substantially lowerannual premium increases is factored in. Under “pay as you go”, we are currently bud-geting some $540,000 annually which fully covers the annual expenses.

In addition to this pay as you go funding, the Town has established and is funding annu-ally a new OPEB Trust Account. The contribution schedule we are following is containedin the Sherman Actuarial Study. Assuming voters approve the next payment installment tothe recently established OPEB Trust account, we will have over $540,000 in the trustaccount which, when combined with our pay as you go amount, should put us slightlyahead of the 30 year plan to be fully pre-funded for our OPEB obligations. The annualappropriation to the OPEB Trust is slated to grow in the 4% range.

In addition to funding the Trust, the Town continues to work on controlling the cost ofour health insurance obligations. We have successfully implemented new plans that havehigher co-pays and deductibles. We now require all eligible retirees to enroll in Medicare.We are aggressively pursuing wellness strategies to keep cost increases down. We areworking with our unions to negotiate fair premium cost sharing. New employees now pay30% of the premium.

Legislative changes also may help to lower our liabilities. Beacon Hill has a proposedbill from the Governor that continues to be debated. We will monitor these developmentsand urge our legislative delegation to push through more needed reforms to the laws thatgovern how we provide benefits to our retirees to ensure that we can afford to provide afair and cost effective package.

OPEB Assets and LiabilitiesTotal Liabilities over 30 years $16.70 millionCurrent Assets (assuming 4/7/14 addition) $ 0.54 millionAnnual Town Appropriation $ 0.765 million increasing 4+% yrlyOn schedule to be fully funded in 30 yrs

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March 5, 2013

To the Residents of Manchester and Essex:

In the past few years, our budget presentations have included information about"Unfunded Liabilities," specifically employee pensions (excluding teacher pensions,which are funded by the Commonwealth) and retiree health insurance, which is alsoknown as Other Post Employment Benefits (OPEB). This letter is intended to provide:

• A brief explanation of what these liabilities are

• An update on the magnitude of these liabilities for the Manchester Essex RegionalSchool District (MERSD), and

• A summary of steps that MERSD is taking to address these liabilities, which face notonly every other governmental entity in Massachusetts, but also most governmententities nationwide.

What Are Unfunded Liabilities?

Pensions and retiree health insurance are benefits that are offered as a requirement ofMassachusetts General Law to employees of MERSD. Because these benefits are legallymandated, government entities must include in their financial statements an estimate ofthe value of future obligations related to these programs.

In the past, MERSD, like most school districts and towns in the state, paid the cost ofthese benefits as they came due each year. This is often referred to as a "pay as you go"approach. Recently, attention has turned to the growing nature of these costs and the con-cern that benefit costs will grow faster than municipal budgets can absorb in future years.

A potential solution to this challenge has two main facets. First, cost growth must becontained to ensure that benefits are appropriate and affordable for taxpayers. Second,government employers must begin to move from the "pay as you go" approach towardsa strategy that pre-funds future year obligations and invests those funds to ensure thatlarger obligations due in future years can be afforded without undue pressure on theannual operating budget. Setting aside money for these obligations in advance wouldbegin to render these liabilities "funded" in accounting terms instead of "unfunded," asthey are today.

How Big Are MERSD's Unfunded Liabilities?

Estimates of these liabilities are updated each year and published in MERSD's financialstatements which are audited by an outside accounting firm. The financial statements forthe most recently concluded fiscal year (which ended on June 30, 2013), contain the fol-lowing estimates.

Pensions

The unfunded portion of the pension liability attributable to MERSD is estimated to be$5,256,948.

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Most pension programs require contributions from employees and employers. MERSDteachers and other licensed personnel (e.g. principals and district administrators) partici-pate in the Commonwealth of Massachusetts' Teachers Contributory Retirement System(MTCRS). For these employees, the Commonwealth pays 100% of the employer shareof pension expense, and employees also contribute directly by way of an 11% payrolldeduction. As a result, MERSD has no expense whatsoever, for pension costs related tolicensed employees.

Non-licensed employees (e.g. custodians, and administrative or school building assis-tants), participate in the county pension program, known as Essex Regional RetirementSystem (ERRS). In the current fiscal year, MERSD's employer-share obligation totaled$426,747. ERRS, by way of this contribution, has begun to require its members, includ-ing MERSD and the Towns of Manchester and Essex, to pre-fund future pension liabili-ties and the program is on track to achieve full-funding by 2035, in accordance withMassachusetts General Law. Doing so requires MERSD to increase its annual pensioncontribution by 7% each year through 2019 and 4% thereafter.

The estimate referenced above for MERSD's unfunded pension liability is based on thefollowing information from ERRS' most recent valuation dated 1/1/13:

• A total pension liability for all of ERRS of $619 million and assets of $315 million. Thedifference between these two figures is the ERRS-wide unfunded liability of $305 mil-lion. Based on these figures, approximately 51% of the plan's total liability is currentlyfunded with assets on hand.

• MERSD represents 1.72% of total ERRS payroll. ERRS applies this percentage to thetotal annual required contributions from its members to arrive at MERSD's employershare obligation for the year,

• Taking the $305 million total plan unfunded liability and multiplying it by MERSD's1.72% share of costs leads to the $5.3 million estimated unfunded liability forMERSD.

OPEB (Retiree Health Insurance)

MERSD's unfunded liability for OPEB is $25,010,077 as of July 1, 2013.

By law, MERSD must provide health insurance to all employees who retire with eligibilityfor pension. For employees and retirees hired after to July 1, 2013, the district pays 70%of insurance premiums and the remainder is paid by the insured party. For employeeshired prior July 1, 2013, the district's contribution rate is 80%. MERSD's annual obliga-tion for insurance payments on behalf of retirees was $505,801 in the most recently con-cluded fiscal year. As a relatively new Regional School District, however, MERSD does notyet have many retirees. Our actuary estimates that as this changes and costs continueto rise, our annual obligation for retiree health insurance will grow at an average annualrate of 6.6% through 2043. This is much faster than MERSD's typical budget growtheach year, and would put excessive constraints on important educational spending. Ourmost recent actuarial study estimated that the current value of future year benefits,including benefits not yet earned but likely to be earned in the future, is $39.5 million.MERSD has not yet begun to set aside assets to cover future year costs, and the actuar-ial report estimates that an annual contribution of $2.3 million (or 4.6 times our mostrecent 'pay as you go' annual expense) would be necessary to do so.

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What is MERSD's Plan to Address these Challenges?

Management of these Unfunded Liabilities is a critical priority for MERSD. In its recentlypublished District Improvement Plan, MERSD identified the need to develop within threeyears a sustainable, longterm financial plan to address these challenges.

Pensions are a guaranteed contract; benefit levels cannot be changed. Although MERSDdid not establish benefit levels, we are committed to paying for them and will continue tomake the contributions required by ERRS to achieve full funding by 2035. For the nextseveral years, the 7% increase in our annual pension expenditure will have a noticeable,but manageable impact on the budget. Knowing this allows MERSD to plan ahead andidentify funding sources from savings in other areas of the budget. Outsourcing eveningcustodial services at the new Middle High School when it first opened, for example, notonly brought savings in salaries, but also meant that fewer employees will be broughtinto the pension system, which helps to keep the cost of our contributions down. Theproposed outsourcing of evening custodial services at the elementary schools couldsimilarly help to reduce future pension costs.

With regard to OPEB, MERSD has more flexibility, within the confines of MassachusettsGeneral Law, to manage costs and establish a viable plan to set aside funds and ensurethat future obligations can be met. Recently, the MERSD School Committee endorsed a"Roadmap for Funding OPEB" with three main components that can put MERSD on apath to fully funding its OPEB liability:

1. Take Steps Within MERSD's Control To Reduce Costs.

• The recently enacted Municipal Health Reform Law allows MERSD to introduce lessexpensive plans outside of the collective bargaining process. These plans could lowerthe long-term OPEB liability by up to 10% and provide additional short-term savingsthrough reduced annual costs that can be set aside for future obligations.

2. Negotiate Cost Reductions That Must Be Collectively Bargained By Law.

• Contribution rate changes for retirees and/or spouses could lower the OPEB fundinggap by an additional 50-60%. To the extent possible, MERSD would seek to exemptcurrent retirees and those near to retirement, focusing instead on those current em -ployees who have more time (and current income) to plan for their eventual retirement.

3. Increase Budget Funds Over Time To Close Remaining Gap.

• This year, MERSD's School Committee voted to establish a trust fund that can beused to set aside and invest funds to make future obligations more affordable.MERSD's Fiscal 2015 budget includes an initial deposit of $50,000 into the trust. Sav-ings from exercising the Municipal Health Reform law could bring the total initialdeposit up to $200,000 or more. Additionally, the OPEB Roadmap envisions a 5-10year time frame to gradually ramp up prefunding to supplement the cost savings generated by the first two components of the plan.

A more detailed presentation of this plan, including calculations of potential savings andthe path to full funding can be found on the MERSD website (see address below).

Additional initiatives that MERSD has undertaken to mitigate the cost of OPEB include:

• Annual competitive bidding of insurance programs to get the best rates from the mar-ket. Rate increases for the past three years of bids for MERSD plans have been 0%,3.6%, and 0% respectively. This average increase of 1.2% per year is significantlylower than the 4.5%-7.5% rate assumed by our actuaries in forecasting the future

16

costs. Savings from this bidding process reduce the annual cost of retiree health andwill help to contain growth of the OPEB liability forecasts in future actuarial reports aswell.

• All retirees who are eligible for Medicare are now required to enroll, so MERSD will nolonger be their primary insurer. MERSD pays for some supplemental insurance forthese retirees, but implementing this change reduces MERSD's cost per participatingretiree by 43-60%, based on the differential in current rates between the district andMedicare supplemental plans.

• Negotiations between MERSD and META (Manchester Essex Teachers' Association)helped to curtail growth in spending on insurance as well. Prior to 2011, the districtpaid 85% of premiums. For employees hired after July 1st, 2013 the district contribu-tion rate has declined to 70% of premiums and for those hired before that date, thedistrict contributes 80%.

• A new policy beginning July 1, 2013 prohibits retirees from adding insurance cover-age after retirement, which will make changes in enrollment levels more predictable.

• A newly enacted provision of Massachusetts General Law enables MERSD to recoupthe portion of retiree health costs earned by retirees during previous service to otherschool systems. MERSD is currently one of the few early adopters, having invoicedfifteen other towns and regional school districts this year to ensure that these entitiespay their fair share of the cost.

Additionally, recognizing that legally mandated OPEB costs are a challenge statewide,the Massachusetts state government has begun to get involved. In addition to theMunicipal Health Reform Law, a new legislative proposal from the Governor's officecould curtail MERSD's OPEB obligation further, by taking into account each retiree'syears of service and age. MERSD will continue to monitor these developments and workcollaboratively with META and other employee groups to make sure that health insur-ance costs are affordable to employees, retirees, and the district.

For more information about MERSD’s unfunded liabilities, please visit www.mersd.org,follow the Quick Link "Budget," and choose the "Unfunded Liabilities" link. This site con-tains presentations regarding MERSD's plans to address these liabilities, copies of actu-arial reports, and other informational resources about this topic.

17

COMMONWEALTH�OF�MASSACHUSETTS

TOWN OF MANCHESTER-BY-THE-SEA

ANNUAL TOWN MEETiNG WARRANT

Essex, ss.To�any�of�the�Constables�of�the�Town�of�Manchester-by-the-Sea:

Greetings:In�the�name�of�the�Commonwealth�of�Massachusetts�you�are�hereby�required�to�notify

and�warn�the�inhabitants�of�the�Town�of�Manchester-by-the-Sea�qualified�to�vote�in�elec-tions,� to�meet� in� the�Memorial�School,�on�Lincoln�Street,� in�Manchester-by-the-Sea,�onMonday,�the�seventh�day�of�April,�two�thousand�and�fourteen�AD,�at�seven�o'clock�in�theevening,�for�the�purpose,�to�wit:

ARTiCLE 1. To�see�if�the�Town�will�vote�to�receive�and�place�on�file�thereports�of�the�Town�boards�and�committees�appearing�in�the�Annual�Report,�or�take�anyother�action�relative�thereto.

Per�petition�of�the�Board�of�Selectmen

WE RECOMMEND APPROVAL.The Board of Selectmen recommends approval.

ARTiCLE 2. To�see�if�the�Town�will�vote�to�fix�the�12-month�fiscal�yearsalary�and�compensation�of�all�elective�officers�of�the�Town�as�provided�in�Section�108�ofChapter�41,�as�amended,�as�follows:

Moderator $0.00Chairman,�Selectmen $0.00Other�four�Selectmen $0.00

or�take�any�other�action�relative�thereto.Per�petition�of�the�Board�of�Selectmen


ARTiCLE 3. To�see�if�the�Town�will�vote�to�raise�and�appropriate�or�trans-fer�from�available�funds�a�sum�of�money�as�the�Town's�share�of�the�North�Shore�RegionalVocational�School�District,�or�take�any�other�action�relative�thereto.


WE WiLL MAKE OUR RECOMMENDATiON ON THE TOWN MEETiNG FLOOR.The Board of Selectmen will make its recommendation on the Town Meeting Floor.

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ARTiCLE 4. To�see�what�sums�of�money�the�Town�will�raise�by�taxationor�otherwise�to�pay�Town�debts�and�charges�for�the�ensuing�12�months,�effective�July�1,2014,�and�appropriate�the�same.


DEPARTMENTAL REQUESTS AND

FiNANCE COMMiTTEE RECOMMENDATiONS

Item Appropriations Requests RecommendationsNo. FY�'14 FY�'15� FY�'15 Funding�Sources

GENERAL GOVERNMENT31.23% OF ARTiCLE 4

SELECTMEN’S DEPARTMENT1 Salaries 198,965 203,794 203,794 TAXATION2 Expenses 15,000 14,400 14,400 TAXATION3 Audit 42,000 42,000 42,000 TAXATION4 Information Technology 92,050 96,000 96,000 TAXATION

MODERATOR5 Expenses 50 50 50 TAXATION

FINANCE COMMITTEE6 Salaries 1,550 1,589 1,589 TAXATION7 Expenses 405 405 405 TAXATION8 Reserve Fund 175,000 175,000 175,000 TAXATION 60,000.00

OVERLAY SURPLUS 115,000.00

ELECTION & REGISTRATION9 Salaries 2,500 3,800 3,800 TAXATION10 Expenses 9,500 10,800 10,800 TAXATION11 Town Reports 11,500 11,500 11,500 TAXATION

ACCOUNTING12 Salaries 120,273 123,325 123,325 TAXATION13 Expenses 4,400 4,370 4,370 TAXATION

ASSESSORS14 Salaries 127,836 132,505 132,505 TAXATION15 Expenses 54,200 40,070 40,070 TAXATION

TREASURER/COLLECTOR16 Salaries 150,992 152,984 152,984 TAXATION17 Expenses 25,818 25,818 25,818 TAXATION

TOWN CLERK18 Salaries 79,922 85,001 85,001 TAXATION19 Expenses 2,900 5,900 5,900 TAXATION

LEGAL20 Expenses 100,000 100,000 100,000 TAXATION

APPEALS BOARD21 Salaries 8,000 17,800 17,800 TAXATION22 Expenses 10,800 12,900 12,900 TAXATION

PLANNING BOARD23 Salaries 16,625 34,641 34,641 TAXATION24 Expenses 2,820 2,820 2,820 TAXATION25 Professional Services 8,000 15,000 15,000 TAXATION

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TOWN HALL & COMMON26 Expenses 56,200 57,600 57,600 TAXATION27 Seaside One 2,000 1,750 1,750 TAXATION

PENSIONS28 Contributory 787,478 821,748 821,748 TAXATION 733,748

SEWER RATES 44,000WATER RATES 44,000

29 Non-Contributory 3,100 2,400 2,400 TAXATION

INSURANCE30 Group Health Insurance 1,540,000 1,595,000 1,595,000 TAXATION 1,455,000

SEWER RATES 60,000WATER RATES 80,000

31 Workers' Compensation 65,000 65,000 65,000 TAXATION 45,000SEWER RATES 10,000WATER RATES 10,000

32 Fire/Auto/Liability 133,000 125,000 125,000 TAXATION 97,000MOORING FEES 6,000SEWER RATES 11,000WATER RATES 11,000

33 Unemployment Compensation 15,000 20,000 20,000 TAXATION

34 FICA-Medicare 75,000 79,438 79,438 TAXATION 73,438SEWER RATES 3,000WATER RATES 3,000

Total General Government 3,937,884 4,080,408 4,080,408 TAXATION 3,683,408MOORING FEES 6,000OVERLAY SURPLUS 115,000SEWER RATES 128,000WATER RATES 148,000

4,080,408.00

PUBLIC SAFETY22.65% OF ARTICLE 4

POLICE35 Salaries 1,467,239 1,498,282 1,498,282 TAXATION36 Expenses 74,550 112,300 112,300 TAXATION

PARKING CLERK/RESIDENT PARKING37 Salaries 8,124 8,739 8,739 TAXATION38 Expenses 8,660 8,760 8,760 TAXATION

FIRE39 Salaries 1,070,336 1,098,369 1,098,369 TAXATION40 Expenses 83,430 95,000 95,000 TAXATION41 Ambulance Billing

Expenses 20,000 20,000 20,000 TAXATION

HARBOR MASTER42 Salaries 82,000 84,050 84,050 MOORING FEES43 Expenses 11,850 11,850 11,850 MOORING FEES44 Care of Floats 6,500 6,500 6,500 MOORING FEES

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BUILDING DEPARTMENT45 BUILDING

INSPECTOR 19,423 19,909 19,909 TAXATION46 GAS/PLUMBING

INSPECTOR 11,468 11,755 11,755 TAXATION47 SEALER OF WEIGHT'S

& MEASURES 3,231 3,312 3,312 TAXATION48 ELECTRICAL

INSPECTOR 11,468 11,755 11,755 TAXATION49 INSPECTORS'

EXPENSES 4,900 4,800 4,800 TAXATION

EMERGENCY MANAGEMENT50 Salaries 8,500 8,713 8,713 TAXATION51 Expenses 1,250 1,000 1,000 TAXATION52 Emergency Notification 5,500 5,500 5,500 TAXATION

ANIMAL CONTROL53 Salaries 13,311 13,644 13,644 TAXATION54 Expenses 4,600 5,500 5,500 TAXATION

Total Public Safety 2,916,340 3,029,738 3,029,738 TAXATION 2,927,338MOORING FEES 102,400

3,029,738.00

DEPARTMENT OF PUBLIC WORKS13.39% OF ARTICLE 4

DEPARTMENT OF PUBLIC WORKS55 Salaries 690,153 713,214 713,214 TAXATION56 Expenses 208,500 162,600 162,600 TAXATION

57 Park/Beach Maintenance 30,000 30,000 30,000 TAXATION 20,000BEACH FEES 10,000

58 Maintenance 60,000 60,000 60,000 TAXATION59 Trees 15,000 15,000 15,000 TAXATION

SNOW REMOVAL60 Salaries 30,000 31,000 31,000 TAXATION61 Expenses 121,000 145,000 145,000 TAXATION

62 STREET LIGHTING 95,000 95,000 95,000 TAXATION

SANITATION/COMPOSTING/RECYCLING63 Salaries 22,000 22,550 22,550 TAXATION64 Expenses 65,000 65,000 65,000 TAXATION

65 Rubbish Collection/Recycling 278,837 287,202 287,202 TAXATION 237,202

TRASH FEES 50,00066 Disposal 125,000 120,000 120,000 TRASH FEES

Total Dept. of Public Works 1,740,490 1,746,566 1,746,566 TAXATION 1,566,566

BEACH FEES 10,000TRASH FEES 170,000

1,746,566.00

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OTHER ENVIRONMENTAL.52% OF ARTICLE 4

HISTORIC DISTRICT COMMISSION67 Salaries 2,100 5,353 5,353 TAXATION68 Expenses 1,200 1,200 1,200 TAXATION

CONSERVATION COMMISSION69 Salaries 56,815 58,411 58,411 TAXATION 43,411

WETLANDS FD. 15,000

70 Expenses 4,650 2,650 2,650 TAXATION

71 CHEBACCO WOODS 800 1,250 1,250 TAXATIONTotal Other Environmental 65,565 68,864 68,864 TAXATION 53,864.00

WETLANDS FD. 15,000.0068,864.00

HUMAN SERVICES2.06% OF ARTICLE 4

HEALTH72 Salaries 57,700 59,316 59,316 TAXATION73 Expenses 56,830 56,095 56,095 TAXATION74 HAZARDOUS

WASTE DEPOSAL 4,500 4,500 4,500 TAXATION

VETERANS' SERVICES75 Veterans' Agent 11,930 12,228 12,228 TAXATION76 Expenses 750 550 550 TAXATION77 Veterans' Benefits 2,000 2,000 2,000 TAXATION

COUNCIL ON AGING78 Salaries 124,721 121,954 121,954 TAXATION79 Expenses 7,800 14,700 14,700 TAXATION

Total Human Services 266,231 271,343 271,343 TAXATION 271,343.00

LIBRARY3.26% OF ARTICLE 4

LIBRARY80 Salaries 275,845 282,670 282,670 TAXATION81 Expenses 143,162 147,062 147,062 TAXATION

Total Culture and Informational Services 419,007 429,732 429,732 TAXATION 429,732.00

RECREATION2.55% OF ARTICLE 4

PARKS & RECREATION82 Salaries 119,429 122,414 122,414 TAXATION 20,414

PROGRAM FEES 40,000BEACH FEES 62,000

83 Expenses 8,350 8,550 8,550 PROGRAM FEES 8,550

SINGING BEACH OPERATIONS84 Salaries 60,805 62,325 62,325 BEACH FEES85 Expenses 15,525 14,325 14,325 BEACH FEES

LIFEGUARDS86 Salaries 46,554 50,160 50,160 BEACH FEES87 Expenses 3,400 3,400 3,400 BEACH FEES

TUCK'S POINT88 Salaries 2,000 2,000 2,000 TAXATION89 Expenses 33,300 35,300 35,300 TAXATION

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OTHER RECREATION90 ATHLETIC FIELD

MAINTENANCE 25,000 25,000 25,000 TAXATION91 MEMORIAL DAY 1,500 1,500 1,500 TAXATION92 FOURTH OF JULY 10,000 10,000 10,000 TAXATIONTotal Recreation 325,863 334,974 334,974 TAXATION 94,214.00

PROGRAM FEES 48,550.00BEACH FEES 192,210.00

334,974.00

DEBT SERVICE13.97% OF ARTICLE 4

DEBT SERVICEPRINCIPAL ON BONDS 1,293,719 1,556,779 1,556,779INTEREST ON BONDS 228,301 251,587 251,587TEMPORARY LOANS/INTEREST 43,000 30,000 30,000WPAT ADMINISTRATION FEES 3,228 2,517 2,517

93 Total Debt Service 1,568,248 1,840,883 1,840,883 TAXATION 1,519,241SEWER RATES 321,642

1,840,883.00

ENTERPRISE FUNDS 10.55% OF ARTICLE 4

SEWER FUND94 Salaries 245,805 263,039 263,039 SEWER RATES95 Expenses 249,800 235,300 235,300 SEWER RATES96 Maintenance 30,000 30,000 30,000 SEWER RATES

WATER FUND97 Salaries 241,307 243,097 243,097 WATER RATES98 Distribution Expenses 66,900 57,500 57,500 WATER RATES99 Treatment Expenses 500,000 524,046 524,046 WATER RATES100 Maintenance 35,000 37,500 37,500 WATER RATESTotal Enterprise Funds 1,368,812 1,390,482 1,390,482 SEWER

RATES 528,339.00WATER RATES 862,143.00

1,390,482.00

TOTAL ARTICLE 412,608,440 13,192,990 13,192,990

EXPENSES BUDGET SUMMARYGENERAL GOVERNMENT 31% 3,937,884 4,080,408 4,080,408 TAXATION 3,683,408.00

MOORING FEES 6,000.00OVERLAY SURPLUS 115,000.00SEWER RATES 128,000.00WATER RATES 148,000.00

4,080,408.00

PUBLIC SAFETY 23% 2,916,340 3,029,738 3,029,738 TAXATION 2,927,338.00MOORING FEES 102,400.00

3,029,738.00

23

DEPARTMENT OF PUBLIC WORKS 13% 1,740,490 1,746,566 1,746,566 TAXATION 1,566,566.00

BEACH FEES 10,000.00TRASH FEES 170,000.00

1,746,566.00

OTHER ENVIRONMENTAL 1% 65,565 68,864 68,864 TAXATION 53,864.00

WETLANDS FUND 15,000.00

68,864.00

HUMAN SERVICES 2% 266,231 271,343 271,343 TAXATION 271,343.00

LIBRARY 3% 419,007 429,732 429,732 TAXATION 429,732.00

PARKS & RECREATION 3% 325,863 334,974 334,974 TAXATION 94,214.00

PROGRAM FEES 48,550.00BEACH FEES 192,210.00

334,974.00

DEBT SERVICE 14% 1,568,248 1,840,883 1,840,883 TAXATION 1,519,241.00SEWER RATES 321,642.00

1,840,883.00

ENTERPRISE FUNDS 11% 1,368,812 1,390,482 1,390,482 SEWER

RATES 528,339.00WATER RATES 862,143.00

1,390,482.00

TOTALS 100% 12,608,440 13,192,990 13,192,990 13,192,990.00

WE RECOMMEND APPROVAL AS iNDiCATED iN THE “RECOMMENDA-TiONS” COLUMN AND FUNDiNG AS iNDiCATED iN THE “FUNDiNGSOURCE” COLUMN.

The Board of Selectmen recommends approval.

24

ARTiCLE 5. To� see� if� the�Town�will� vote� to� raise� and� appropriate� thesums�of�money�called�for�under�the�following�items,�or�any�other�sums,�for�the�purposesindicated,�and�to�determine�whether�the�money�shall�be�provided�by�taxation,�by�appro-priation�from�available�funds�in�the�Treasury,�or�by�borrowing,�or�take�any�other�action�rel-ative�thereto.

Dept. item Requested Recommended1� DPW Road�Resurfacing $ 127,000 $ 127,0002 DPW Small�Dump�Truck�Body $��8,000 $� 8,0003 DPW Pickup�Truck�� $��35,000�� $ 35,0004 DPW Mower�&�2�Snow�Blowers�� $��13,000�� $� 13,0005 DPW Sidewalk�Tractor�� $ 95,000�� $ 95,0006 DPW Mechanical�Equipment�� $� 7,700�� $�� 7,7007 DPW Garage�Bay�&�Office�Additions� $250,000�� $ 250,0008 Conservation Trail�Work�&�Land�Improvements $ 10,000�� $� 5,0009 Town�Hall Computer�Network�Replacement�� $ 65,000�� $� 65,00010 Library Paint�Exterior�Trim�� $ 7,000 $� 7,00011 Parks�&�Rec. Sweeney�Parking�Lot�� $ 40,000�� $� 40,00012 Public�Safety Radio�Enhancements�� $ 50,000�� $ 50,00013 Public�Safety Fire�Engine�Fund�� $ 50,000�� $ 50,00014 Public�Safety Fire�Station�Renovations�� $� 65,000�� $ 65,00015 Public�Safety Police�Cruiser�� $� 36,300�� $ 36,30016 Harbormaster Replace�Dockage� $� 55,000 $� 55,00017 Water General�Plant/Pumps�Upgrades�� $ 150,000 $ 150,00018 Sewer Plant�Improvements�� $ 100,000�� $�100,00019� Sewer Infiltration�and�Inflow�Improvements $�275,000�� $ 275,000

_________ ________Total� $1,434,000�� $1,434,000


WE RECOMMEND APPROVAL AS iNDiCATED iN THE “RECOMMENDED” COL-UMN, AND THAT;

iTEMS 1, 2, 3, 4, 5, 6, 7, 8, 9, 10,11,12,13, and 14; $817,700 BE FUNDED BY TAXATiON;

iTEM 15, $7,300.00 BE FUNDED BY TAXATiON AND $29,000.00 BE FUND BYUNDESiGNATED FUND BALANCE (FREE CASH);

iTEM 16, $55,000 BE FUNDED BY WATERWAYS FUNDS;

iTEM 17, $30,000 BE FUNDED BY UNDESiGNATED FUND BALANCE (FREECASH), AND $120,000 FROM WATER RATES;

iTEM 18, $25,000 BE FUNDED BY UNDESiGNATED FUND BALANCE (FREECASH), AND $75,000 FROM SEWER RATES;

iTEM 19, $275,000 BE FUNDED BY UNDESiGNATED FUND BALANCES (FREECASH).

25

REVENUES FY15General�Fund�(taxes) $ 825,000Fund�Balance� $ 359,000Water�Funds� $ 120,000Sewer�Funds� $ 75,000Harbor�Funds� $ 55,000Other�Funds� $��-

__________Grand�Total� $ 1,434,000

==========

The Board of Selectmen recommends approval.

ARTiCLE 6. To�see�if�the�Town�will�vote�to�raise�and�appropriate,�trans-fer�from�available�funds,�or�borrow�$2,440,000�to�pay�costs�of�capital�improvements�to�theTown’s�water� and�wastewater� systems;� and� to� determine�whether� this� amount� shall� beraised�by�taxation,�transfer�from�available�funds,�borrowing�or�otherwise,�or�to�take�anyother�action�relative�thereto.



ARTiCLE 7. To�see�if�the�Town�will�vote�to�raise�and�appropriate�or�trans-fer�from�available�funds�a�sum�of�money�for�the�Town’s�assessment�from�the�District�forthe�Gross�Operating�and�Maintenance�Budget�of�the�Manchester-Essex�Regional�SchoolDistrict�including�debt�service�-�said�sum�to�be�calculated�solely�in�accordance�with�the"Agreement�Between�the�Towns�of�Essex�and�Manchester-by-the-Sea,�Massachusetts�withRespect� to� the�Formation�of�a�Regional�School�District",�as�most�recently�amended,�byinvoking�and�approving�the�provision�found�in�paragraph�four�of�G.L.�c.�71,�§�16B�allow-ing�District�members�"to�reallocate�the�sum�of�their�required�local�contributions�to�the�Dis-trict�in�accordance�with�the�regional�agreement",�for�the�fiscal�year�beginning�July�first,two�thousand�fourteen,�or�take�any�other�action�relating�thereto.

Per�petition�of�the�Manchester-Essex�Regional�School�Committee


ARTiCLE 8. To�see�if�the�Town�will�vote�to�hear�and�act�on�the�report�ofthe�Community�Preservation�Committee�on�the�Fiscal�Year�2015�Community�Preservationbudget�and�to�appropriate�from�the�Community�Preservation�Fund�estimated�annual�rev-enues�a�sum�of�money� to�meet� the�administrative�expenses�and�all�other�necessary�andproper�expenses�of�the�Community�Preservation�Committee�for�Fiscal�Year�2015;�and�fur-ther�to�reserve�for�future�appropriation�a�sum�of�money�from�the�Community�PreservationFund�estimated�annual�revenues�for�open�space,�including�land�for�recreational�space,�his-toric�resources,�and�community�housing�purposes,�as�well�as�a�sum�of�money�to�be�placedin�the�2015�Budgeted�Reserve�for�general�Community�Preservation�Act�purposes;�and�fur-ther�to�appropriate�from�the�Community�Preservation�Fund�a�sum�or�sums�of�money�for

26

Community�Preservation�projects�or�purposes�as�recommended�by�the�Community�Preser-vation�Committee�as�follows,�or�take�any�other�action�relative�thereto.

Community�Preservation�Committee�Administrative�Expenses $��20,000

Winthrop�Field�Stonewall�Restoration (undesignated�reserve) $��18,800Cedar�Swamp�Entranceway�Project (recreation/open�space) $��30,000Tuck’s�Point�Chowder�House�Restoration (historic�preservations) $��40,000Town�Hall�Boat�Ramp�Engineering�&�Design (open�space/recreation) $��40,000Town�Hall�Records�Management�Project (historic�preservation) $��15,000The�Plains/Newport�Park�Generators (affordable�housing) $��15,000Trask�House/Manchester�HistoricalMuseum�Windows (undesignated�reserve) $��13,945

First�Parish�Church�Steeple�and�Bell�tower�Restoration (undesignated�reserve) $��35,000

Community�Preservation�Act�Affordable�Housing�Reserve� (affordable�housing) $��45,850

Per�petition�of�the�Community�Preservation�Committee


ARTiCLE 9. To�see�if�the�Town�will�vote�to�authorize�the�Board�of�Select-men�to�acquire�the�fee�to�and�or�accept�a�lesser�interest�(including,�without�limitation,�anoption�to�purchase�and/or�a�lease�for�a�term�of�ninety-nine�(99)�years�or�more)�in��a�por-tion��of�the�Atwater�Nominee�Trust�land�holdings�(the�so�called�Donovan�property),�shownon�Map�37�as�Lot�8,�for�recreational�and�conservation��purposes,�including,�without�limi-tation,�for�the�purpose�of�constructing�and�maintaining�athletic�fields�thereon,�said�acqui-sitions�to�be�on�such�terms�and�conditions�as�the�Selectmen�deem�appropriate,�or�take�anyother�action�related�thereto.

Per�petition�of�the�Community�Preservation�Committee�


ARTiCLE 10. To�see�if�the�Town�will�vote�to�appropriate�a�sum�of�moneyfrom� the�Community� Preservation�Act� Fund� to� pay� for� the� acquisition� and� creation� ofrecreational�and�conservation� land,� including,�without� limitation� for� the�construction�ofathletic�fields�on�and�other�improvements�to�the�so-called�“Donovan�property�”,�shown�onMap�37�as�Lot�8,�and,�as�funding�therefore,�to�authorize�the�Treasurer,�with�the�approvalof�the�Board�of�Selectmen�to�borrow�said�sum�pursuant�to�G.L.�c.44B,�§11�or�any�otherenabling�authority,�and�issue�bonds�and�notes�therefore,�the�expenditure�of�such�funds�tobe�contingent�on�the�Town�increasing�the��surcharge�on�real�property�under�General�LawsChapter�44B�from�1.5%�to�3.0%�and� the�approval� thereof�by� the�voters�at� the�May�20,2014�Town�Election,�or�to�take�any�other�action�in�relation�thereto.

Per�Petition�of�the�Community�Preservation�Committee


27

ARTiCLE 11. To�see�if�the�Town�will�vote�to�amend�its�acceptance�of�theCommunity�Preservation�Act,�General�Laws�Chapter�44B,�Sections�3�through�7,�inclusive,originally�approved�under�Article�15�and�16�of�the�2005�Town�Meeting�and�accepted�at�theMay�2005�Town�Election,�and�subsequently�modified�at�the�2010�Annual�Town�Meetingand�Election�to��increase�the�surcharge�on�real�property�from�the�present�level�of�1.5%�to3.0%� beginning� in� Fiscal� Year� 2015,� such� amendment� to� become� effective� upon� theapproval�of�the�voters�at�the�May�20,�2014�Town�Election,�or�to�take�any�other�action�inrelation�thereto.�

Per�Petition�of�the�Community�Preservation�Committee


ARTiCLE 12. To�see�if�the�Town�will�vote�to�amend�the�Zoning�By-Lawof�the�Town�of�Manchester-by-the-Sea�by�replacing�Section�4.8.2�with�a�new�Section�4.8.2to� reflect� new� flood� maps� as� issued� by� FEMA� as� follows� (deletions� are� shown� asstrikethrough,�and�additions�as�underlined):

4.8.2�Flood�Plain�District�Boundaries�and�Base�Flood�Elevation�and�Floodway�Data

4.8.2.1�The�Flood�Plain�District�is�herein�established�as�an�overlay�district.�Any�use�other-wise�permitted�in�the�underlying�district�is�permitted�as�a�matter�of�right�in�the�Flood�PlainDistrict,�provided� the�use�meets� the� following�additional� requirements�and� those�of� theMassachusetts�State�Building�Code�dealing�with�construction�in�flood�plains�and�coastalhigh�hazard�areas�as�applicable.�The�Flood�Plain�District�includes�all�special�flood�hazardareas�within�the�Town�of�Manchester-by-the-Sea�designated�as�Zone�A,�AE,�AO,�or�VE�onthe�Essex�County�Flood�Insurance�Rate�Map�(FIRM)� issued�by� the�Federal�EmergencyManagement�Agency�(FEMA)�for�the�administration�of�the�National�Flood�Insurance�Pro-gram.�The�map�panels�of�the�Essex�County�FIRM�that�are�wholly�or�partially�within�theTown�of�Manchester-by-the-Sea�are�panel�number�25009C0429F�dated�July�3,�2012;�andpanel� numbers� 25009C0431G,� 25009C0432G,� 25009C0433G,� 25009C0434G,25009C0441G,� 25009C0442G,� 25009C0451G,� 25009C0453G,� 25009C0454G,� and25009C0475G,�dated�July�16,�2014.�The�exact�boundaries�of�the�District�shall�be�definedby�the�100-year�base�flood�elevations�shown�on�the�FIRM�and�further�defined�by�the�EssexCounty�Flood�Insurance�Study�(FIS)�report�dated�July�16,�2014.�The�FIRM�and�FIS�book-let�are�both�incorporated�herein�by�reference�and�are�on�file�with�the�Town�Clerk,�PlanningBoard,�and�Director�of�Public�Works.

and�by�deleting�in�Section�4.8.4.4.�the�following4.8.4.4� Other� Use� Regulations�(a)� Within� Zones� AH and AO� on� the� FIRM,� adequatedrainage�paths�are�required�around�structures�on�slopes�to�guide�flood�waters�around�andaway�from�proposed�structures.or�take�any�other�action�relative�thereto.

Per�petition�of�the�Planning�Board�

WE RECOMMEND THE ADViCE OF THE PLANNiNG BOARD.The Board of Selectmen recommends the advice of the Planning Board.

28

ARTiCLE 13. To�see�if�the�Town�will�vote�to�amend�Article�XVII�(GeneralWetlands� By-Law)� of� the� General� By-Laws,� as� follows� (deletions� are� shown� asstrikethrough,�and�additions�as�underlined):

Amending�Section�4.4.3�as�follows:4.4.3��30�feet�of�the�top�of�any coastal�bank,�or�the�top�of�the�bank�of�any�stream or�inland�bank.

Amending�Section�5.1�as�follows:5.1��A�Notice�of�Intent�(“NOI”)�or�permit�not�is is�not required�to�be�issued�prior�to��com-mencing�an�emergency�project�necessary�for�the�protection�of�the�health��and�safety�of�thepublic,�provided�that:

Removing�the�requirement�to�notify�abutters�when�filing�a�Request�for�Determinationof�Applicability�(RDA)�and�clarifying�those�permits�that�require�notification�by�amendingSection�7.1�as�follows:7.1��Any�person�filing�a�NOI,�RDA,�ANOI�(Abbreviated�Notice�of�Intent),�ANRAD�orother�request an�Amendment�to�an�OOC with�the�Conservation�Commission�shall,�at�thesame�time,�give�written�notice�thereof,�by�certified�mail�(return�receipt�requested),�certifi-cate�of�mailing,�certification�of�delivery,�or�by�hand�delivery�to:

Amending�the�last�sentence�of�Section�9.11�as�follows:Any�formal�evaluation�should�be�performed�by�an�individual�who�at�least�meets�the�qual-ifications�under�the�wildlife�habitat�section Section�10.60(1)(b) of�the�Regulations.

or�take�any�other�action�relative�thereto.

Per�petition�of�the�Conservation�Commission

WE RECOMMEND THE ADViCE OF THE CONSERVATiON COMMiSSiON.The Board of Selectmen recommends the advice of the Conservation Commission.

ARTiCLE 14. To�see�if�the�Town�will�vote�to�transfer�the�care,�custody�andcontrol�of� the�parcel�of� land�described�below� from� the�board�or�officer�having�custodythereof�for�the�purposes�for�which�it�is�held�to�said�board�for�such�purposes�and�also�to�theBoard�of�Selectmen�for�the�purpose�of�entering�into�telecommunications�leases,�and�autho-rize�the�Board�of�Selectmen�to�enter�into�telecommunications�leases�from�time�to�time�forterms�of�up�to�twenty�years�each�and�on�such�other�terms�and�conditions�as�the�Selectmendeem�appropriate,�pursuant� to�which�the�Town�will� lease�portion(s)�of� the�Town-ownedparcel�of�land�known�as�the�Powder�House�Hill�and�shown�on�Map��42�as�Lot�4�and�31,the�portion(s)�to�be�leased�being�the�site�of�the�existing�Police�Radio�Tower,�and�to�grantsuch�access,�utility�and�related�easements�on�the�parcel�as�may�be�necessary�or�convenientto� serve� the� telecommunications� equipment� thereon,� and,� further,� to� recommend� � thatTown�Meeting� annually� appropriate� a�minimum�of� 2�month’s� � rent� received� from� saidleases�for�land�management�projects�undertaken�on�Town�conservation�land�by�the�Town’sConservation�Commission,�and,�further,� to�authorize�the�Board�of�Selectmen�to�petitionthe�General�Court� for�approval�of�such� leases�and/or�easements�under�Article�97�of� theAmendments� to� the�Massachusetts� Constitution,� if� the�Board� of� Selectmen� deems� thatsuch�approval�is�needed,�or�take�any�other�action�relative�thereto.�


WE RECOMMEND THE ADViCE OF THE BOARD OF SELECTMEN.The Board of Selectmen recommends approval.

29

ARTiCLE 15. To�see�if�the�Town�will�vote�to�authorize�the�Board�of�Select-men�to�acquire�by�purchase,�gift,�eminent�domain�or�otherwise�and�on�such�terms�and�con-ditions� as� the�Board� of� Selectmen� shall� determine� to� be� appropriate,� permanent� and/ortemporary�easements�on� the�parcels�of� land� referenced�below� for�public�way�purposes,including,� without� limitation,� the� construction,� alteration,� maintenance,� improvement,repair�and/or� replacement�of� rights�of�way,�driveways,�sidewalks,� ramps,�parking�areas,utilities�and/or�traffic�control�devices,�to�be�undertaken�in�connection�with�the�Safe�Routesto�School�project,�and�for�all�uses�and�purposes�incidental�thereto,�said�easements�to�be�in,on� and� under� the� parcels� of� land� in� and� around� the�Manchester�Memorial� ElementarySchool�and�the�intersections�of�Summer�and�Lincoln�Streets,�all�as�shown�more�particu-larly�on�a�plan�entitled�“Preliminary�Right�of�Way,�Safe�Routes�to�School,�Memorial�Ele-mentary�School,�Lincoln�Street�–�Summer�Street�in�the�Town�of�Manchester�by�the�Sea,”dated�12/20/2013,�prepared�by�TEC�Inc�for�MassDOT,�a�copy�of�which�is�on�file�with�theTown�Clerk,�and�to�authorize�the�Board�of�Selectmen�to�grant�such�easements�in�the�Man-chester�Memorial�Elementary�School�property� and�other�Town�property� shown�on� saidplan�as�may�be�required�under�said�project,�and,�further,� to�see�if� the�Town�will�vote�toraise,�appropriate,�transfer�from�available�funds,�accept�gifts�or�borrow�a�sum�of�moneyfor�this�purpose�and�any�expenses�related�thereto�and�to�authorize�the�Board�of�Selectmento�enter�into�all�agreements�and�take�all�related�actions�necessary�or�appropriate�to�carryout�these�acquisitions,�or�take�any�other�action�relative�thereto.



ARTiCLE 16. To�see�if� the�Town�will�vote�to�authorize�the�Selectmen�toacquire�a�drainage�easement�off�of�Vine�Street�on�a�parcel�of�land�as�shown�on�Map�47,Lot�19�and�further�depicted�on�a�plan�entitled�“Drain�Easement�Plan”�drawn�by�GriffinEngineering�Group�and�dated�January�30,�2014,�a�copy�of�which�is�on�file�with�the�TownClerk,�or�take�any�other�action�relative�thereto.��



ARTiCLE 17. To�see�if�the�Town�will�vote�to�raise�and�appropriate�or�trans-fer�from�available�funds�$225,000�to�be�deposited�into�the�Town’s�Other�Post�EmploymentBenefits�Trust�Fund,� subject� to� said�appropriation�being�expended� from� the�Trust�Fundonly�for�the�purposes�authorized�by�section�20�of�Chapter�32B�of�the�General�Laws�of�theCommonwealth�of�Massachusetts;�or�take�any�other�action�relative�thereto.


WE RECOMMEND APPROVAL OF $225,000 TO BE APPROPRiATED FROMTHE UNDESiGNATED FUND BALANCE.The Board of Selectmen recommends approval of $225,000 to be appropriated from theUndesignated Fund Balance

30

ARTiCLE 18. To� see� if� the�Town�will� vote� to� reauthorize� the� revolvingfund�established�pursuant�to�the�provisions�of�Chapter�44,�section�53E1/2�of�the�Massa-chusetts�General�Laws,�for�the�fiscal�year�beginning�July�1,�2014,�said�fund�to�be�expendedby�the�Recreation�Director�for�costs�associated�with�Town�of�Manchester�recreation�pro-grams,�with�registration�fees,�or�other�funds�intended�to�support�the�programs�offered�bythe�Recreation�Department��deposited�into�the�fund,�and�total�annual�expenditures�from�thefund��not�exceeding��1%�of�the�FY�2014�tax�levy,�or�$226,000;�or�take�any�other�action�rel-ative�thereto.



ARTiCLE 19. To�see�if�the�Town�will�vote�to�accept�MGL�Chapter�59,�Sec-tion�5K�authorizing�the�Board�of�Selectmen�to�establish�guidelines�and�regulations�for�asenior�citizen�property�tax�work�off�program�to�begin�in�FY2015;�or�take�any�other�actionrelative�thereto.



ARTiCLE 20. To� see� if� the�Town�will� vote� to� raise� and� appropriate� ortransfer�from�available�funds�a�sum�of�money�to�the�Stabilization�Fund,�or�take�any�otheraction�relative�thereto.


WE RECOMMEND APPROVAL OF $100,000 TO BE APPROPRiATED FROMTHE UNDESiGNATED FUND BALANCE..The Board of Selectmen recommends approval of $100,000 to be appropriated from theUndesignated Fund Balance.

ARTiCLE 21. To�see�if�the�Town�will�vote�to�amend�the�authorization�pur-suant� to�Article�4�of� the�Special�Town�Meeting�Warrant�dated�April� 7,� 2004� to� change“authorize�the�Board�of�Selectmen�to�enter�into�long�term�leases�of�up�to�twenty�years�atthe�Town�owned�parcel�on�Pine�Street,�Map�58,�Lot�56,�commonly�known�as�the�“watertank� site”� for� the� placement� of� telecommunications� antennas� and� related� equipment� to“authorize�the�Board�of�Selectmen�to�enter�into�a�single�long-term�lease�for�up�to�twentyyears�at�the�town-owned�parcel�on�Pine�Street,�Map�58,�Lot�56�known�as�the�water�tanksite”,�or�take�any�other�action�relative�thereto.

Per�petition�of�10�or�more�citizens

WE WiLL MAKE OUR RECOMMENDATiON ON TOWN MEETiNG FLOOR.The Board of Selectmen does not recommend approval

31

ARTiCLE 22. To� see� if�Town�Meeting�will� declare� that� public� necessityand�convenience� require� the� repairing,� resurfacing�and� installations�and�construction�ofdrainage�on�Loading�Place�Road,�a�private�way�open�to�the�public,�and�to�appropriate�thesum�of�money�for�such�repairs;�provided�that�prior�to�the�commencement�of�the�work,�anequal�sum�be�deposited�with�the�Town�by�the�abutters�and�a�majority�of�abutters�petitionfor�such�repairs,�all�pursuant�to�Article�X,�Section�29�of�the�Town�By-Laws,�or�take�anyother�action�relative�thereto.

Per�petition�of�10�or�more�citizens

WE DO NOT RECOMMEND THiS ARTiCLE.The Board of Selectmen will make its recommendation on the Town Meeting Floor.

ARTiCLE 23. To�see�if�the�Town�will�vote�to�amend�Article�X,�Section�39(Snow�Emergency�Parking�Ban)�of�the�General�By-Laws,�as�follows�(deletions�are�shownas�strikethrough,�and�additions�as�bold�underlined):

Amending�Article�X,�Section�39A�as�follows:A.�The�Chief�of�Police,�in�consultation�with�the�Director�of�Public�Works,�is�authorizedto�declare�a�Snow�Emergency�Parking�Ban�when�he�or�she�determines,�in�his�or�her�dis-cretion,� that� the� likelihood� of� snow,� ice� or� other� forms� of� precipitation� will� causeovernight, on�street�parking�to�threaten�or�impair�public�safety.

Amending�Article�X,�Section�39�C�as�follows:C.�While�a�Snow�Emergency�Parking�Ban�is�in�effect�(the Blue Light system is on),�itshall�be�a�violation�of�this�Bylaw�to�park�any�vehicle�on�any�Town�street�between�thehours�of�12:00�a.m.�and�6:00�a.m., punishable�by�a�non-criminal�disposition�with�a�fineof�$25,�payable�by�the�registered�owner�of�the�vehicle.�Each�night�during�which�a�vehi-cle�remains�so�parked�shall�constitute�a�separate�violation�Each�day�during�which�thevehicle�remains�so�parked�shall�constitute�a�separate�violation.

or�take�any�other�action�relative�thereto.


WE TAKE NO POSiTiON ON THiS ARTiCLE.The Board of Selectmen recommends approval.

ARTiCLE 24. To�see�what�sum�of�money�the�Town�will�vote�to�appropri-ate�or�transfer�from�available�funds�for�the�purpose�of�reducing�the�tax�rate,�or�take�anyother�action�relative�thereto.


WE WiLL MAKE OUR RECOMMENDATiON ON TOWN MEETiNG FLOOR.The Board of Selectmen will make its recommendation on the Town Meeting Floor.

32

And�you�are�directed�to�serve�this�warrant�by�posting�attested�copies�thereof,�one�at�theTown�Hall�Building,�one�at�the�Police�Station,�one�at�the�Fire�House,�one�at�the�MemorialSchool,�and�one�at�the�Post�Office,�twenty-one�(21)�days,�at�least,�before�the�time�of�hold-ing�said�meeting.

Hereof� fail� not� to�make�due� return�of� this�warrant,�with�your�doings� thereon,� to� theTown�Clerk�three�(3)�days�before�the�day�of�this�meeting.

Given�under�our� hands� at�Manchester-by-the-Sea,� aforesaid,� this� 10th�day�of�March2014.

BOARD�OF�SELECTMEN

_______________________________�� ________________________________

Paul�M.�Barclay,�Chairman�� Margaret�F.�Driscoll,�Vice�Chairperson

_______________________________�� ________________________________

Thomas�P.�Kehoe�� Eli�Boling

_______________________________��

Robert�Hoff�

To�the�Town�Clerk:

I�have�served�the�foregoing�Warrant�by�posting�attested�copies�thereof�as�directed�bythe�By-Law�of�the�Town�and�the�Commonwealth.

____________________ ______________ _________________________�

Constable Date�of�Posting Received�by�Town�Clerk

33

Chart 1

Chart 2

FY-2015 BUDGETTOWN OPERATING 13,192,990SCHOOL OPERATING & DEBT 13,359,514CAPITAL ITEMS 1,434,000OTHER ARTICLES 410,000CPA ARTICLE 597,745EXPENSES NOT VOTED BY TOWN MEETING 418,619

$ 29,412,868

TOWN DEPARTMENT EXPENSESGENERAL GOVERNMENT 4,080,408PUBLIC SAFETY 3,029,738PUBLIC WORKS 1,746,566OTHER ENVIRONMENTAL 68,864HUMAN SERVICES 271,343LIBRARY 429,732PARKS & RECREATION 334,974DEBT SERVICE 1,840,883ENTERPRISE FUNDS 1,390,482ARTICLE 4 TOTAL $ 13,192,990

34

Chart 3

SUMMARY ARTICLE 4SALARIES 6,688,014EXPENSES 2,244,945HEALTH INSURANCE 1,595,000PENSION 824,148DEBT SERVICE 1,840,883

$ 13,192,990

Chart 4

NON-PROPERTY TAX REVENUEWATER & SEWER RATES 2,183,124EST. LOCAL RECEIPTS 1,627,500RECREATION 359,160COMMUNITY PESERVATION 597,745RUBBISH & RECYCLING 170,000FREE CASH 684,000STATE AID 204,900OVERLAY SURPLUS 115,000AVAILABLE FUNDS 70,000

$ 6,011,429

35

Chart 5

NON-PROPERTY TAX REVENUE 6,011,429PROPERTY TAX REVENUE 23,433,477

$ 29,444,906

Chart 6

ESTIMATED LOCAL RECEIPTS 1,627,500VEHICLE EXCISE 750,000BOAT TAX 17,000INTEREST ON TAXES 65,000IN LIEU OF TAXES 4,000CHARGES FOR TRASH DISPOSAL 30,000AMBULANCE FEES 150,000FEES 75,000RENTALS 160,000CEMETERIES 14,000BEACH PASSES -LICENSES AND PERMITS 270,000FINES & FORFEITS 51,500EARNINGS ON INVESTMENTS 6,000MISCELLANEOUS 35,000

$ 1,627,500

36

Chart 7

UN-USED LEVY CAPACITY UNDER/(OVER) LEVY LIMIT 32,038

REVENUESLOCAL TAXES 23,433,477STATE AID 204,900LOCAL RECEIPTS 1,627,500OFFSET RECEIPTS 529,160ENTERPRISE FUNDS (WATER & SEWER) 2,780,869AVAILABLE FUNDS 869,000

$ 29,444,906

37

Chart 8

EXPENDITURESGENERAL GOVERNMENT 4,080,408PUBLIC SAFETY 3,029,738PUBLIC WORKS 1,746,566OTHER ENVIRONMENTAL 68,864HUMAN SERVICES 271,343CULTURE & INFORMATION SERVICES 429,732PARKS & RECREATION 334,974DEBT SERVICE 1,840,883ENTERPRISE FUNDS (WATER & SEWER) 1,390,482MANCHESTER/ESSEX REGIONAL SCHOOL DISTRICT 11,760,720MANCHESTER/ESSEX REGIONAL SCHOOL DEBT (EXEMPT) 1,598,794NORTH SHORE AGRICULTURAL & TECHNICAL SCHOOL DISTRICT 85,000CAPITAL IMPROVEMENTS 1,434,000COMMUNITY PRESERVATION ACT (CPA) 597,745WARRANT ARTICLES 325,000NON-APPROPRIATED EXPENSES 418,619

$ 29,412,868

38

—Notes—

39

—Notes—

4040

LevyThe�amount�that�the�town�raises�by�property�tax,�computed�by�multiplying�the�totaltaxable�assessment�of�the�town�($2,306,400,000)�by�the�tax�rate.�

Local RevenuesFunds�the�town�receives�for�fees,�permits,�excise�tax,�etc.��

New GrowthAn�amount�equal�to�the�property�tax�that�new�construction,�additions�and�renovationswill�generate.

OffsetAn�amount�of�a�grant�or�aid�package�whose�use�is�restricted�to�a�particular�item,�e.g�library,�road�maintenance,�etc.

Operating budgetThe�routine�expenditures�of�the�Town�plus�the�school�assessment.��

Other revenueTown�income��from�fees,�excise�taxes,�fines,�stickers,�permits�etc.

Overlay SurplusUnexpended�funds�from�the�Assessor’s�overlay.

OverrideA�mechanism�that�allows�the�voters�of�the�Town�to�reset�the�levy�limit�imposed�byProposition�2�1/2.�

Proposition 2 1/2Is�the�name�associated�with�a�state�law�that�restricts�the�increase�in�the�levy�to�2�1/2%per�year�plus�new�growth.�

Reserve fundA�sum�of�money�available�to�meet�unforeseen�expenses.��

School budgetThe�amount�of�the�whole�school�budget�apportioned�to�the�town.�The�Town�Meetingcannot�change�the�school�budget.�

School choiceState�legislation�which�allows�students�from�one�school�district�to�attend�school�inanother�district.��

Sewer fundMoney�from�the�sewer�rates�that�offsets�costs�associated�with�the�sewer�system.��

Stabilization fundMoney�put�aside�by�the�Town�for�major�unexpected�events.

TaxationTown�revenue�raised�through�the�property�tax.�All�other�forms�of�revenue�are�referredto�as�“other�revenue”�or�“local�revenue”.

Water fundMoney�from�the�water�rates�that�offsets�costs�associated�with�the�water�system.�

More information is available at http://www.manchester.ma.us

Definitions continued from the inside front cover

Documents

Manchester's 2014 Finance Committee Report and Town Warrant