Town of Ashland Fiscal Year 2017 Budget

FY2017 General Fund Budget Summary Overview   FY17 OVERRIDE BUDGET FY17 BUDGET W/O OVERRIDE CATEGORY LEVY LIMIT 43,586,656.00 41,643,256.00 STATE AID 7,306,676.00 LOCAL RECEIPTS 4,380,986.00 OTHER SOURCES 1,344,810.00 TOTAL REVENUE 56,619,128.00 54,675,728.00 GENERAL GOVERNMENT 10,959,434.00 10,528,035.00 ASHLAND PUBLIC SCHOOLS 28,446,890.00 27,555,890.00 KEEFE TECH 1,405,137.00 NON-EXCLUDED DEBT 1,683,568.00 EXCLUDED DEBT 1,750,367.00 CAPITAL OUTLAY 748,267.00 BENEFITS & INSURANCE 8,999,217.00 8,728,217.00 RESERVE FUND 450,000.00 SNOW & ICE 285,200.00 OVERRIDE STABILIZATION FUND 126,738.00 - TOTAL APPROPIRATED EXPENSES 54,854,818.00 53,134,681.00   FY17 OVERRIDE BUDGET FY17 BUDGET W/O OVERRIDE CATEGORY OVERLAY 245,000.00 OFFSET - SCHOOL LUNCH 212,748.00 OFFSET - SCHOOL CHOICE 20,583.00 OFFSET - LIBRARY AID 64,745.00 STATE ASSESSMENTS & CHARGES 112,424.00 TRANSPORTATION AUTHORITIES 13,802.00 ANNUAL CHARGES AGAINST RECEIPTS 91,418.00 SCHOOL CHOICE SENDING TUITION 1,003,590.00 TOTAL ALL EXPENSES 56,619,128.00 54,898,991.00 SURPLUS/DEFICIT - (223,263.00) • The Override Levy Limit includes the prior year total tax base, Proposition 2 ½, New Growth, and the $1,943,400 override amount which becomes incorporated into the new baseline of the subsequent year’s tax levy • The current budget model assumes level funding in State Aid • Local receipts have increased in recent years, and we have budgeted for moderate growth in FY2017 over FY2016’s estimated amount • Other sources of revenue include CPA bond payments, indirect costs, and other accounts • Rising operating expenses have restrained our ability to improve and enhance essential services such as Public Safety and Department of Public Works • Absent a new source of revenue, it is challenging to present a budget that will sustain service levels long term

Revenue – Property Taxes Property Tax Levy with $1.9M Override Property Tax Levy without Override Levy will increase $3.5 million Average FY16 single family tax bill – increase $26.83/month, still below average Levy will increase $1.6 million Average FY16 single family tax bill - $6,790; one of lowest in Metrowest area Milford 4,737 Marlborough 4,820 Hudson 5,447 Framingham 6,065 Millis 6,228 Ashland 6,790 Medway 6,825 Northborough 6,850 Natick 6,868 Holliston 7,819 Westborough 8,264 Hopkinton 8,953 Southborough 9,105 Wayland 11,730 Sudbury 12,082 Sherborn 15,104 Milford 4,737 Marlborough 4,820 Hudson 5,447 Framingham 6,065 Millis 6,228 Medway 6,825 Northborough 6,850 Natick 6,868 Ashland 7,112 Holliston 7,819 Westborough 8,264 Hopkinton 8,953 Southborough 9,105 Wayland 11,730 Sudbury 12,082 Sherborn 15,104 * Average of tax bill of communities above - $7,980

Revenue – New Growth New growth has shown promise and has almost rebounded completely since the beginning of the recession in 2007.

Revenue – State Aid State aid is generally unpredictable and beyond the control a local government. Best practice is to hold State Aid constant, unless there is a reasonable or absolute certainty of a decrease or increase Although the Governor is budgeting a 4.5% increase in Chapter 70 and Unrestricted Aid, the past 3 years have only risen on average 1% and 2.5%, respectively. The House and Senate have only just begun to debate their versions of budget, which typically does not get finalized until well after Town Meeting.

Revenue – Local Receipts Local Receipts are budgeted slightly less than FY15 Actual Motor vehicle and building permits are two significant categories within local receipts; however, due to unknowns in the economy (i.e. gas prices); these figures are been budgeted conservatively

Revenue – Related to Economic Growth A balance between economic growth and other (non-growth) revenues mitigates the effect of macroeconomic changes--during a recession a higher percentage of revenue from non-growth sources is preferred. The Great Recession and slow pace of recovery had a significant negative effect on building permit fees (a precursor of future new growth), property tax from new growth, and motor vehicle excise taxes. However, newly approved projects have increased new growth significantly.

Revenue – Related to Economic Growth   Economic Growth Revenues as a Percentage of Operating Revenues Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Gross Operating Revenue $37,139,980 $40,631,988 $44,235,056 $48,148,067 $44,925,669 $57,207,951 $48,955,498 $47,132,191 $48,721,532 $50,682,436 $51,866,788 Less - Excluded Debt $2,548,621 $3,302,448 $2,981,727 $2,540,029 $2,474,223 $2,498,583 $2,427,427 $2,364,184 $2,093,734 $2,067,901 $1,943,733 Net Operating Revenue $34,591,359 $37,329,540 $41,253,329 $45,608,038 $42,451,446 $54,709,368 $46,528,071 $44,768,007 $46,627,798 $48,614,535 $49,923,055 Building Related Fees & Permits $299,713 $290,435 $238,731 $227,477 $166,424 $216,368 $288,734 $207,294 $295,344 $464,005 $374,470 Motor Vehicle Excise $2,185,622 $2,146,959 $2,037,891 $2,141,759 $2,081,134 $1,947,891 $1,995,830 $2,085,271 $2,401,472 $2,358,597 $2,401,517 Tax Levy from New Construction $672,808 $806,516 $752,001 $651,293 $451,138 $252,525 $266,297 $259,378 $284,483 $356,891 $533,905 Meals Tax $0 $14,943 $200,474 Total Economic Growth Revenues $3,158,143 $3,243,910 $3,028,623 $3,020,528 $2,698,696 $2,416,784 $2,550,861 $2,551,943 $2,981,299 $3,194,436 $ 3,510,366 Economic Growth Revenues as a % of Operating Revenues 9.13% 8.69% 7.34% 6.62% 6.36% 4.42% 5.48% 5.70% 6.39% 6.57% 7.03% *Building Related Fees & Permits includes the following permits: Street Opening, Building, Plumbing, Gas & Electrical

Revenue – Other Sources Org/Object Account Name FY17 Amount Comments 29630-55605 Recreation Revolving 35,000.00 29122-55794 Village of the Americas 2-3 more years to utilize this account to offset operating expenses 2500-59610 Staples Receipts Reserved 30,000.00 No receipts in prior years - 1 year left to utilize this account to offset operating expenses 25990-59610 Sale of Cemetery Lots Receipts vary year to year - $10k max to transfer starting in Fy18 to offset GF expenses Dog Licenses 25,000.00 Receipts $30k in prior year 155,000.00 The decreases in other sources of revenue will impact the 5 year forecast by approx. $75,000

Expenditures Potential Areas to cut due to current deficit - $223,000 Approximate Cost Comment HR Increased budget for training personnel 7,500.00 Newly created HR department will oversee a number of functions including hiring, conflict resolution, and enforcing policies; therefore, proper training is essential Elections Increased budget due to upcoming presedential election 10,000.00 Increased to cover cost of State Primary Election and Presidential Election Assessors Revaluation year for real estate and personal property 25,000.00 Historically paid out of capital account; however, this is an operating cost and should not impact the capital budget Economic Development Dues and memberships 12,000.00 MA Economic Membership - $1,000, Metrowest Chamber of Commerce Annual Membership $500, Event participation for MW Chamber & 495 Parnership $500, COStar - $10,000 Public Safety Increase in training for police and fire dept. personnel 30,000.00 Police ($10,0000 for providing training to newer inexperienced officers, newly promoted supervisors and newly assigned investigators); Fire ($20,000 - cost of training members with the National Fire Protection Agency - Fire Suppression Training, Mandatory Technical Rescue Refresher, and EMS Continuing Education) Public Works Departmentwide safety gear 6,000.00 Based on new employees and new requirements Various projects 50,000.00 Highway construction & Maintenance projects including Downtown Beautification, Main Street Planters, Downtown Sign Installation, and Street Safety Committee Budget Cemetery, Parks & Trees Seasonal Help 1,800.00 Two seasonal employees two days a week for 9 weeks at $12.50/hr 144,800.00 All other expenditure categories are either based upon a amortization or funding schedule, or has been level funded from Fy16 Keefe Tech - based on actual assessment, Snow & Ice, Reserve Fund, Capital Outlay – Level funded, Debt – based on debt schedule and August 2016 Borrowing & Paydowns on debt Will discuss benefits and insurance next

Benefits & Insurance Expenditures Benefits & Insurance are projected to decrease approximately $90,000 from the previous year based upon the following: Employee retirement assessment increased approximately $180,000 from FY2016 Worker’s compensation has increased $10,000 due to pending cases Unemployment compensation has remained level funded Other Insurance has increased $20,000 (MIAA Liability) Health insurance benefits has decreased $300,000 over the prior year (which includes current year rate adjustments from the GIC) Funded OPEB at the cost of new employees (approximately $4,400 per new employee) – budgeted at $62,500 in FY17. Contributed $10,000 in FY16

Stabilization Funds Free cash and a stabilization fund permit greater financial flexibility and provide the Town with a safety net. Between 2005 through 2013, Ashland's reserves as a percentage of operating revenue were below the minimum recommended level of 5%, with 2013 being just shy of 5%. Since 2013, reserves have gradually increased, in keeping with the Town’s Financial Policies and Objectives. Optimal Level per the Government Finance Officer’s Association