TOWN OF SWAMPSCOTT FINANCIAL FORECAST FISCAL YEARS

2014 – 2018

Tom YoungerTown AdministratorNovember 28, 2012

Budget Pressures

•Any Economic Recovery Underway is Not Yet Providing Relief for the Town’s Budget;

•The Chronic State Budget Crisis Continues to Impact Chapter 70 Revenues ;

•The Town is Controlling Discretionary Spending, However some Non-Discretionary Spending, Like Health Insurance and Pension Costs, Continue to Rise Beyond Inflation

•Creating a Viable Long-Term Capital Plan with Funds Available;

•Plan for Funding OPEB (GASB 45) Prior to Being Mandated;

•We Must Continue the Commitment to Increase our Reserves to “Best Practice” Levels while Eliminating our Reliance on One-Time Revenues or We will Jeopardize the Town’s Bond Rating and Cost of Capital.

Five Year Financial ForecastPro Forma Assumptions - General Fund Revenues

• State Aid is Projected to remain level in FY14 and FY15 With a 2% Increase in FY2016 Through FY2018;

• Tax Levy and Levy Limit will Grow Approximately by 3% Through FY2018;

• Charges, Licenses, Fees and Miscellaneous Revenue Projected to Increase Minimally in FY2014 Through FY2018 due to the current economy with a Tri-annual Review of Our Rates;

• Reduce the Use of Free Cash to $100,000 for FY2014 Through FY2018, Additional Amounts May Need to be Used to Fund the Town’s Rainy Day Fund;

• Nahant Tuition is Expected to be $1,135,600 for FY14;

• Other Sources of Revenue Include: Enterprise Fund Indirects ($802,000).

Five Year Financial ForecastPro Forma Assumptions - General Fund Expenses

• Salaries and Operating Expenses (Including Schools) Projected to Increase 2.5% for FY14 and 2.5% Annually Thereafter;

• Health Insurance Costs Projected to Increase by 10% in FY2014 and Increase By 10% Annually through FY2018 Based on the Presumed Cost to Implement the Affordable Health Care Bill Adopted by Congress in 2010;

• Due to the Accelerated Funding Schedule Adopted by the Retirement Board, the Retirement Appropriation is Expected to Increase by 10% in FY2014 and 10% Each Year Thereafter;

• State and County Charges and Cherry Sheet Offsets are Expected to Increase 2.5% Each Fiscal Year;

• Debt Service Based Upon Current and Future Capital Improvement Programs;

• Includes Sewer Debt Exclusion through FY 2014. FY2014 Will be Last Full Payment Year;

Five Year Financial ForecastRevenue and Expenditure Summary General Fund

FY13-TM Adopt FY14-EST FY15-EST FY1-EST FY17-EST FY18-EST

Property Taxes 39,442,674 40,706,438 41,929,099 43,182,326 44,466,885 45,783,557

New Growth 270,924 200,000 200,000 200,000 200,000 200,000

Debt Exclusion 3,885,162 3,135,660 2,578,276 2,518,921 2,457,769 2,385,793

Total Tax Revenue 43,598,760$ 44,042,098$ 44,707,375$ 45,901,247$ 47,124,654$ 48,369,350$

Local Receipts- 4,289,150 4,150,000 4,175,000 4,200,000 4,225,000 4,250,000

State Aid 3,972,571 3,972,571 3,972,511 4,051,961 4,133,000 4,215,660

Free Cash * 315,000 100,000 100,000 100,000 100,000 100,000

Other Available Funds 927,000 802,000 802,000 802,000 802,000 802,000

53,102,481$ 53,066,669$ 53,756,886$ 55,055,209$ 56,384,654$ 57,737,010$

Base Operating Expense*** 37,435,280$ 38,371,162$ 39,330,441$ 40,313,702$ 41,321,545$ 42,354,583$

Group Health 4,530,000 4,983,000 5,481,300 6,029,430 6,632,373 7,295,610

Other Personnel Benefits 4,181,700 4,599,870 5,059,857 5,565,843 6,122,427 6,734,670

Debt Service - CIP 4,748,440 4,695,700 4,591,219 4,116,463 3,813,502 3,573,138

Sewer Debt 1,188,358 498,902 - - - -

Non- Appropriated Exp. 816,350 836,759 857,678 879,120 901,097.65 923,625

52,900,128$ 53,985,393$ 55,320,495$ 56,904,557$ 58,790,944$ 60,881,626$

SURPLUS (DEFICIT)- 202,353$ (918,724)$ (1,563,609)$ (1,849,349)$ (2,406,290)$ (3,144,616)$

EXPENSES

REVENUES

TOTAL REVENUE

TOTAL EXPENSES

Net State Aid ComparisonFY2004-FY2013

Changing Enrollment Analysis

Revenue Allocationby Percentage

Closing the FY2014 General Fund Budget Gap

•State Aid Increase above Forecasted Amount;

•Health Insurance Premium Increases are Less than Expected;

•Reduce Discretionary Spending Without Impacting Service Delivery.