1. Town Manager’s Recommended Fiscal Year 2018 Budget and Financial Plan
Andrew P. Flanagan
Town Manager
February 27, 2017

2. Recognized by GFOA for FY17 Budget Preparation
February 27, 2017

3. The Town Manager’s Recommended Budget for Fiscal Year 2018
$181,679,548
$2,985,293M / 1.67% increase over the
FY17 Budget of $178,694,255
February 27, 2017

4. Budget Highlights
Town and School Operating Budgets to increase only by the amount of available funds after meeting the funding requirements of all obligations.
Retirement contribution to increase by 10% from current budget per the existing funding schedule established by the Retirement Board.
General Fund Other Post Employment Benefit (OPEB) funding will be based on the following:
0.4% of the FY 2018 adjusted revenue budget.
Appropriating the incremental annual savings in the health insurance budget from the OPEB Reform Plan that was adopted in April of 2016 to the OPEB Trust Fund.
Employee Health Insurance expense to increase by 8%
Based on the assumptions as outlined above, Town departmental personnel and expense budgets are increasing by $1,194,714 (3.11%).
February 27, 2017

5. Town Manager’s Recommended Budget Fiscal Year 2018
FY2017
FY2018
EXPENSES
Approved
TM Rec.
$ Change
% Change
School Department
$76,099,203
$79,143,171
$3,043,968
4.00%
Town Departments
$38,437,389
$39,632,103
$1,194,714
3.11%
Health Insurance & RMTs
$17,905,037
$19,257,000
$1,351,963
7.55%
Debt Service
$14,790,396
$14,048,907
($741,489)
-5.01%
Retirement
$8,360,984
$9,428,488
$1,067,504
12.77%
Water & Sewer
$7,670,495
$8,167,538
$497,043
6.48%
Other Obligations
$4,512,606
$4,922,936
$410,330
9.09%
Capital Projects Fund
$3,440,000
$3,678,875
$238,875
6.94%
Offset Expenditures
$2,070,000
$2,148,530
$78,530
3.79%
Warrant Articles
$5,408,145
$1,252,000
($4,156,145)
-76.85%
$178,694,255
$181,679,548
$2,985,293
1.67%
February 27, 2017

6. Town Department Budget Highlights
3.11% total increase – mainly due to contractual obligations and solid waste costs
total FTEs; increase of 1.63 FTEs
IT: 2 Technicians/1 Business Solution Team Leader (net approx. $30,000) (net FTE +1.2)
DCS: .5 Program Assistant (No GF Impact)/1 PT Admin (No GF Impact) (net FTE -.17)
CD&P .1 Transferring Portion of Nurse Salary from Grant to GF (No GF Impact (net FTE .1)
MS / P&F: .5 Town Custodian – Police Department (net approx. $23,938)
Notable Operating Budget Expense Increases
Information Technology: $40,425 for upgrading phone and internet connectivity
MS / DPW-Solid Waste: $295,245 for Solid Waste, Recycling & Materials Disposal
February 27, 2017

7. Gap Between School Budget &
TM Recommendation
TM Initial Recommendation (3.5%) $78,762,675 ($2,663,472)
TM Revised Recommendation (3.66%) $78,884,369 ($2,785,166)
TM Final Recommendation (4%) $79,143,171 ($3,043,968)
Current Gap
February 27, 2017

8. Former vs. Current Retirement Funding Schedule (10% Annual increase through 2032)
Increase of $3.28M over first five years
February 27, 2017

9. Health Insurance
February 27, 2017

10. Other Post Employment Benefits (OPEB)
General Fund / W&S OPEB Appropriation
Savings from OPEB Reform
Total OPEB Appropriation
FY 2018
$1,015,783
$632,938
$1,648,721
FY 2019
$1,037,949
$769,703
$1,807,652
FY 2020
$1,060,622
$906,194
$1,966,816
FY 2021
$1,083,812
$978,690
$2,062,502
FY 2022
$1,107,530
$1,056,985
$2,164,515
FY 2023
$1,135,218
$1,109,834
$2,245,053
FY 2024
$1,163,599
$1,165,326
$2,328,925
FY 2025
$1,192,689
$1,223,592
$2,416,281
FY 2026
$1,222,506
$1,284,772
$2,507,278
FY 2027
$1,253,069
$1,349,010
$2,602,079
February 27, 2017 10

11. Projected Obligations to 2032
Obligations as Percentage of Budget
FY 2017
16.94%
FY 2018
18.33%
FY 2019
19.17%
FY 2020
19.87%
FY 2021
20.75%
FY 2022
21.64%
February 27, 2017

12. FY 2018 Revenue Overview
Tax Levy to increase by the 2.5% (less Excess Levy Capacity)
New Growth and Local Receipt estimates are based on five year averages of actual growth and collections.
State Aid projections have been adjusted to reflect the Governor’s Budget (H1).
Free Cash to be appropriated only for one time capital expenditures
February 27, 2017

13. FY18 Revenue Highlights
Property Taxes – $135.7M: 4.89% / $6.3M increase; Prop. 2.5 Levy Limit; $2M New Growth; $300K Unused Levy Capacity; Plus $4M Exclusions
State Aid – $12.1M: -6.62% / $861K Decrease (Gov’s H1. Jan 25th)/No GF MSBA Reimbursement. Actual Increase $281,300 /2.4%
General Local Revenues – $11.49M: 4.5% / $494,872 increase
Water & Sewer Enterprises – $14.3M: 3% /$427,861 increase /2.5% water rate increase /2.5% sewer rate increase
Offset Dept. Revenues – $2.1M: +78k increase to reflect FY18 proposed programming
Other Available Funds – $1.4M: From Water & Sewer Reserves, Bond Premium Stabilization Fund, Cable Fees, AYS Gift, Parking Fund, etc.
Free Cash – $500,000 from estimated $4M available balance
February 27, 2017

14. Use of Free Cash Estimated at $4M
Ballardvale Fire Station Design - $300K
High Plain/Wood Hill Accessibility Project – $200K
FY17 Supplemental Appropriations – ?: Unknown at this time; probable Snow & Ice deficit appropriation and/or transfers
February 27, 2017

15. Expanding Capital Capacity
Prior Non- Exempt Debt Service +
New Non- Exempt Debt Service
General Fund Revenue =
Total Non- Exempt Plan
Establish Annual Spending Target for “non-exempt” Capital Investment
Composition of Target includes appropriations from Taxation and Non-Exempt Debt – Funding within the Limitations of Proposition 2 ½
Does not include Free Cash, Other Designated Funds or Water & Sewer Enterprise Funds
Goal – Provide the Town with the capacity to fund major capital projects within the tax levy and avoid debt exclusion votes
February 27, 2017

16. Establishing A “Target”
Prior Non- Exempt Debt Service +
New Non- Exempt Debt Service
General Fund Revenue =
Total Non- Exempt Plan
Non-exempt target has been set at 5.72%
FY 2018 recommended CIP is balanced and supports investments in all functions of Town government
FY 2018 Recommended CIP 5.52% of the 5.72% target
The following four years of the CIP fluctuate for a five year average of 5.64%
Provides for future non-exempt flexibility within the plan
February 27, 2017

17. Revised Capital Improvement Program for FY2018
General Fund Revenue
$3,678,875
General Fund Borrowing
$21,460,000
Use of Free Cash
$500,000
General Fund Exempt Borrowing
Special Dedicated Funds
$1,914,288
Water and Sewer Enterprise Funds
$ 5,375,000
Total Recommendation
$32,928,163
February 27, 2017

18. Municipal Services Facility Project
2016 Town Meeting
Appropriated $2,250,000 from Free Cash to purchase 5 Campanelli Drive.
Established Municipal Services Facility Mitigation Fund to mitigate the financial impact of constructing a new facility at 5 Campanelli Drive.
Appropriated $900,000 from General Fund Taxation to fund the design and engineering phase of the Municipal Services Facility Project.
2017 Town Meeting
Consider voting to authorize borrowing $17,500,000 to construct the proposed new Municipal Services Facility
February 27, 2017

19. Projected Deficit Based on Assumptions
FY 2017
FY 2018
FY 2019
FY 2020
FY 2021
FY 2022
Revenues
$162,915,552
$165,952,579
$170,901,908
$176,560,749
$182,147,642
$187,591,893
Appropriations
$172,089,476
$180,006,664
$186,959,091
$194,556,733
Deficit $0
-$1,187,568
-$3,445,915
-$4,811,449
-$6,964,840
February 27, 2017

20. FY18 Budget Process February 2017
Fri. 10th Town Manager’s Recommended FY18 Budget Released
Mon. 27th High Level Overview Presentation of Town Manager’s Recommended FY18 Budget
 March 2017
Sat. 4th All Town Department Budgets (MHL – 9:00 am to 3:30 pm)
Wed. 8th Tri-Board Meeting – School FY18 Operating Budget Presentation
Mon. 20th Final Votes on Water & Sewer Budgets & Rates
Mon. 27th Final Operating & Warrant Article Votes
Wed. 29th Final Votes (If Needed) & Chair Letters to Finance Committee 
April 2017
Fri. 21st Finance Committee Report due to Residents
May 2017
May 1st Annual Town Meeting (1st night)
February 27, 2017

21. 2017 Annual Town Meeting Monday May 1st at 7:00 PM
continues
Tuesday May 2nd (if needed)
Monday May 8th(if needed)
Tuesday May 9th (if needed)
J. Everett Collins Center,
Andover High School
February 27, 2017

22. is available on-line in its entirety at
The Town Manager’s
Recommended FY18 Budget
is available on-line in its entirety at   
February 27, 2017