In my rush to post the info for the Joint Budget Subcommittee meeting Wednesday evening, I had not noticed the document contained an updated 5 year fiscal outlook. Town Administrator Jamie Hellen lays out the numbers as they are and shows the budget vs. revenue forecast is red for the next several years.
As the letter (below), explains this is not a new issue. To the Town's credit, the fiscal planning that has been in place for the last several years has avoided this inevitable choice. There is a 5 year plan. There was savings put aside in the debt stabilization account. This amount was then used in the past two years to avoid further cuts. The School Budget has used their revolving fund balances for the past three years.
Plans have started for an override to be put before the voters for the FY 2021 budget. The specific amount and details remain to be finalized. The timing of the override vote also remains to be determined.
"Please find attached the five year fiscal forecast. I would like to remind everyone this is a "forecast". It uses information from the past and present to predict the future. Similar to a weather forecast, there are many factors that will affect what will actually happen. The forecast shows deficits in each year, but the Town is required by law to have a balanced budget, so decisions will be made along the way to ensure we comply with the requirement.
The takeaway message from all reports is that Franklin will continue to struggle to maintain high quality school and municipal services given the fiscal constraints that we operate under. In the long run, it will come down to a decision by the voters of Franklin to pay higher taxes or reduce the current level of services. The forecast shows that if the town wants to maintain the same service level it will need about a $4 million override for FY 21. This amount could change based on many unknowns and assumptions at this time, however I can't see any scenario that would not require additional tax dollars.
In short, the cost of doing business is exceeding our ability to raise the necessary revenue to pay for the services we enjoy. I cannot put it more succinctly than that.
This is not a new message. Over the past many years, we have both reduced services and increased taxes in order to arrive at the level of service the citizens enjoy today. Both the School Department and the Municipal departments have all made significant reforms to their operations to keep our tax rate low. We will never stop this effort and will continue to work within what the citizens give us to work with.
We do know that:
- Our population has increased from about 30,000 in 2001 to over 35,000 in 2020 and it will continue to increase. Currently there are over 1,000 housing units recently constructed, under construction or in the "pipeline".
- Health/pension/insurance care costs continue to be a concern.
- Wage increases have been modest but they put a huge pressure on the budget.
- Our unfunded retiree health insurance obligation is $74,000,000 (2018).
- Our unfunded pension liability is $41,000,000 (2018).
- We do not have the funds to provide "level services for the FY 20 School budgets and the Town services.
- We have no adequate funding source for roads/sidewalks.
- The Town's capital needs will continue to grow and in a couple years, the capital needs of our schools, facilities and fields will me in the millions.
- Water sewer rates will continue to rise due to long overdue infrastructure needs, mostly, for sewer and the Beaver Street Interceptor.
- Open space is at a critical state where with little land left, the Town will need to invest in open space, as well.
Franklin is in generally good financial shape today but we will continue to struggle to maintain high quality school and municipal services given the operating fiscal constraints that we operate under.
We are unable to maintain level service budget in FY 20 even with the use of reserves. We will need to consider an override on FY 21 to maintain level services for the citizens of Franklin.
We will continue to do are very best on behalf of all the citizens of Franklin to maintain a high quality of life while trying to control costs to the taxpayers."
Continue reading the 5 year forecast
|"We will need to consider an override on FY 21 to maintain level services"|