1. FY 2018/19 Recommended Budget Town of Manchester, Connecticut
March 7, 2018

2. State Aid- Current Year
FY18 Town budgeted $36.2M in State Aid major formula grants
Actual revenues $34.3M; loss of $1.9M
Lifting of MV tax allowed for collection of additional $937,000
Net effect- revenue shortfall of $984,000 attributable to formula grants by end of fiscal year

3. State Aid- Upcoming Year
Year two of current State biennial budget reflects a 1.1% reduction from current funding as amended by the State
In light of continuing State deficits and holdbacks, FY19 projects a 2.5% loss in aid from major formula grants
This reflects a $2.8M decrease compared to the FY18 Town Budget; therefore a net decrease of $2M because Board substituted MV tax

4. FY 2018/19 Recommended Budget
Summary
Total General Fund budget $188,837,928
Expense increase of 1.86%
Results in mill rate increase of 3.50%
Modest increase in sewer rates (2.5%) and no increase (0%) in water rates
Fire Fund: 4.02% tax increase; propose additional three firefighters to address overtime costs in future years

5. FY 2018/19 Recommended Budget

6. FY 2018/19 Recommended Budget
FY 2018/19 Financial Highlights
Includes overall Town government increase of 1.1%, or $778,700
Town government operations (excluding non-operating expenses) increase by $851,051, or 1.7%
Increases in salary $425,858 (1.5%)
Increase in health insurance $271,017 (2.9%)
One pay period health insurance premium credit saves $361,254 for Town government (plus another $750,000 for BOE and $138,746 for other budgeted funds)
Defined benefit pension for police & employees hired before 2007 increase $444,613 (14.0%) due to re-assessment of plan funding needs
$200,000 savings from redistributing some paving costs historically shown in operating budget to bond funds, as life is 20 yrs +

7. FY 2018/19 Recommended Budget
FY 2018/19 Financial Highlights
Non-operating budget decrease of $72K, or -0.3%
Debt service increases by $34,396 (0.29%)
General fund capital budget increases by only $1,000
Capital improvement plan for FY19 utilizes:
$1,354,000 in General Fund
$585,000 in one-time funding sources from completed and/or discontinued existing project balances
$700,000 in LoCIP funding (grant program likely to be phased out of State budget after FY19)

8. FY 2018/19 Recommended Budget
FY 2018/19 Financial Highlights
Without one pay period health insurance premium credit (Town + BOE), use of capital project balances, and financing of paving costs, resulting tax increase would be 4.88% instead of 3.50% taking state aid cuts into consideration
Fiscal challenge will continue into next biennium (FY20 & FY21)

9. FY 2018/19 Recommended Budget
FY 2018/19 Financial Highlights
Board of Education increases 2.3% or $2.5 million in Manager’s recommended budget
More refined information became available after the BOE recommendation of 4.2% was submitted
Reduction in health insurance premium $404,984
$750,000 one pay period health insurance premium credit
DB pension reduction $383,175
MSIP increase $110,392
Manchester Regional Academy roof- $382,270, to be covered with school improvement bonds
These adjustments that have no operational impact total $1,810,037, bringing the BOE’s request down to 2.6% ($114,624,070)
Manager’s recommend reduces by an additional $349,963 for a total adjustment of $2,160,000, or a 2.3% increase over FY18

10. FY 2018/19 Recommended Budget
FY 2018/19 Financial Highlights
In addition to Recommended Education budget of $114 million, Alliance Grant funding of $4.8 million expected as direct payment to BOE
Alliance Grant funding restricted to Alliance Grant programming – not for core Education program
May receive additional Alliance capital funding

11. FY 2018/19 Recommended Budget

12. FY 2018/19 Recommended Budget
General Fund Summary
Proposed budget requires mill rate increase of 3.50%
FY17: 0.50%; FY18: 0.00%
Three year average: 1.33% mill rate increase
Utilizes $2,000,000 use of fund balance- same as this year
Grand List growth of about 0.4%
Generates about $635K in new revenue at the current mill rate
Revised fees recommended for health and cemetery operations could generate $90K

13. FY 2018/19 Recommended Budget
FY 2018/19 Financial Highlights
After factoring out State’s motor vehicle tax cap policy reversal, budget assumes $2.0M reduction in state aid; $1.14M attributed to current year reductions plus $860K in additional projected reductions
Governor’s budget – reduces aid by $396K, Manager budget reduces $464K further from current year revised State aid levels

14. FY 2018/19 Recommended Budget
Tax Impact
Resulting mill rate of (currently 34.85)
Examples of tax increases on homeowners:

15. FY 2018/19 Recommended Budget
Fire Fund
Expenditure increase of 5.2%
Proposed mill rate of 5.10
Increase of 4.02% compared to current mill rate
Current year overtime projected at over $500K above budgeted levels
Additional three firefighters recommended to reduce mandatory overtime triggered by contractual staffing minimum
Overtime savings net of personnel costs estimated at over $300,000 per year after first year (no savings first year due to training of new personnel)
Will be applying for SAFER Grant to cover 75% of first 2 years of cost and 35% of year 3

16. FY 2018/19 Recommended Budget
Fire Fund
Budget also includes 50% reimbursement for additional dispatcher position in Police Department
Payment towards apparatus fund reorganized to increase number of years to pay off existing liabilities, reducing annual payment from $430,213 to $250,000 (FY19 minimum established by board via apparatus reserve funding policy)
This stretches out the number of years to pay off the equipment in order to mitigate the tax increase
Without this shift, mill rate increase would be 5.42% instead of 4.02%

17. FY 2018/19 Recommended Budget
Water Fund
Total expenditure increase of 1.3%
Operations increase by 5.3%; significant increase to DB pension costs in Water Fund as a result of actuarial analysis & resulting changes to pension funding
Capital budget increases by $303,000 (64.8%)
Non-operating expenses decrease by -5.0%
Decrease in debt service of -$486,901 due to short term note refinancing
Proposed rate increase of 0%

18. FY 2018/19 Recommended Budget
Sewer Fund
Total expenditure decrease of 0.1%
Operations increase by 1.7%
Debt Service requirements decrease by $307,822 due to short term note refinancing
Proposed rate increase of 2.5%

19. FY 2018/19 Recommended Budget
Sanitation Fund
Total expenditure decrease of -3.2%
Operating expenses decrease by -$209,319 or -3.2%; new curbside collection contract resulted in savings
Non operating increases by 1.8%
Tip fee revenues expected to remain flat

20. FY 2018/19 Recommended Budget
Summary
Total General Fund budget $188,272,473
Expense increase of 1.86%
Use of reserves $2,000,000
Results in mill rate increase of 3.50%
Increases in Sewer Funds reflect continuing phase-in of debt service costs associated with plant rebuild; no increase recommended for water rates
Fire Fund: 4.02% tax increase to address overtime issues

21. FY 2018/19 Recommended Budget
Thank you.