To: Finance Committee
From: Jamie Hellen, Town Administrator
Amy Frigulietti, Deputy Town Administrator
Re: Fiscal Year 2024 (FY24) Budget Adjustment
We are requesting the Finance Committee support the amendment to the FY24 Town operating budget and recommend the changes to the full Town Council for their approval prior to setting the annual tax rate on November 21, 2023. This proposal amends the final budget approved in June 2023.
Five-Year Fiscal Forecast Update
We drafted a five-year forecast, with assumptions, for FY25-FY29. Please review the forecast that was presented at the August 2, 2023 Joint Budget Subcommittee (JBSC). At the October JBSC, we gave high level revenue trends throughout Quarter 1 of FY24. The next forecast will be in 2024.
Revenue Adjustments
The following is a summary of the proposed revenue adjustments to the FY24 operating budget. The total revenue downgrade figure is $310,491.
1. According to the Assessor’s final approval, the town will need to downgrade “New Growth” figures by
$158,380 due to less investment in personal and commercial property improvements. After a few record breaking New Growth years, it appears the economy is beginning to show signs of slowdown.
2. Cumulatively, Local Receipts are on target through Quarter 1 (9/30/23) but we are requesting a downgrade by $150,000 to reflect three trends:
a. Building fees have not met projections through September due to fewer overall permits, as well as the types of permits for smaller construction projects.
b. Hotel tax will likely slightly decline due to the Commonwealth’s lack of a firm commitment for the entire fiscal year in funding the 6% local option tax for the hotel temporarily housing migrant families through the state's Emergency Assistance Shelter Program. That said, the state has recently committed to paying the local tax for 90 day durations, per family, which is good news.
We are confident the Commonwealth with be working with cities and towns throughout the fiscal year to ensure we receive as much of our revenue projections as possible; and
c. A modest reduction in meals tax revenue to correspond with the loss of traditional hotel rooms.
3. State Aid, Assessments & Other Revenues should see an overall decrease of approximately $2,111 after the state local aid, education, county assessment, and state budget formulas settle out. Please note the Legislature has not finalized FY24 yet, with potential overrides of the Governor’s vetoes and a supplemental budget filed by Governor Healey pending.
Expense Adjustments - Decreases
The attached resolution depicts the changes within each departmental account on the voting document. A summary of proposed expense reductions are as follows:
1. Line item 123 - The Town Administrator’s personnel and expense budgets will be reduced $58,014. The total reflects the reduction in costs for the Marketing & Communications position for 8 months ($22,514), six months of unfilled Administrative Assistant positions ($26,500), and additional expenses that are not anticipated to materialize in the Administrator’s expense budget (sign lease $9,000). Please note the Marketing & Communications position was a joint position with the School Department, which reduced the financial obligation in the school budget as well. The benefits for that position was reduced in line item 910, as the town budget included the benefits for this position.
2. Line item 390 - Tri-County School will be reduced $100,553 due a decrease in Franklin students attending the school, thus our assessment was lower.
3. Line item 910 - Benefits to be reduced $148,257 due to fewer health insurance subscribers and an increase in employees on the high deductible plan.
Expense Adjustments - Increases
1. Create a Disability Commission line item and add $1,000 to the budget for expenses. As many of you know, the Commission has spearheaded an annual fair with vendors and activities. For some reason, the Commission has never had a line item in the budget. The Town should be funding expenses for the conference and have funds like all of the other boards and committees in town.
2. Add $5,000 to the Elections budget for a pilot to test a new voting tabulator machine. The Clerk hopes to test this out in the March primary to evaluate its effectiveness for the money.
Stormwater Adjustment-Decrease
As this is the 1st year with a Stormwater Enterprise Fund, we propose reducing the Stormwater budget by $200,000 and plugging the gap with County ARPA funds to ensure the Town can depict to DOR a solvent enterprise fund with a small and proper surplus at the close of the fiscal year.
Please let us know if you have any questions
This memo was shared from pages 2-3 from the FinCom meeting agenda doc which also contains remote participation info ->
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| Finance Committee get to review the FY 24 budget changes on Wednesday, Nov 8 at 7 PM |
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