Franklin, MA: Town Council - Budget Hearing #2 - May 17

The published agenda and documents for the Franklin Town Council meeting scheduled for Thursday, May 17, 2018

(Note: where there are active links in the agenda item, it will take you to the associated document)

You can also find the full set of documents in one PDF
http://www.franklinma.gov/sites/franklinma/files/agendas/may_17_pdf.pdf

Agenda Item	Summary
A. Approval of Minutes	A. Approval of Minutes
B. Announcements	B. Announcements - This meeting is being recorded by Franklin TV and shown on Comcast channel 11 and Verizon channel 29. This meeting may also be recorded by others.
C. Proclamations/Recognitions	C. Proclamations/Recognitions
D. Citizen Comments	D. Citizen Comments - Citizens are welcome to express their views for up to five minutes on a matter that is not on the Agenda. The Council will not engage in a dialogue or comment on a matter raised during Citizen Comments. The Town Council will give remarks appropriate consideration and may ask the Town Administrator to review the matter.
E. Appointments	E. Appointments
F. Hearings	F. Hearings - FY 2019 Budget Hearing: 7:10 PM
G. License Transactions	G. License Transactions
H. Presentations/Discussions	H. Presentations/Discussions
I. Subcommittee Reports	I. Subcommittee Reports 1. Capital 2. Budget 3. EDC
J. Legislation for Action	J. Legislation for Action 1. Resolution 18-24:  Adoption of FY 2019 Budget (Motion to Move Resolution 18-24 - 2/3  Majority Vote (6))
J. Legislation for Action	J. Legislation for Action 2. Resolution 18-25: Amendment of FY 2019 Budget (Motion to Move Resolution 18-25 - Majority Vote (5))
K. Town Administrator's Report	K. Town Administrator's Report
L. Future Agenda Items	L. Future Agenda Items
M. Council Comments	M. Council Comments
N. Executive Session	N. Executive Session
O. Adjourn	O. Adjourn

Budget Collection - FY 2019

Franklin, MA: Town Council - Agenda - MAy 16, 2018

The published agenda and documents for the Franklin Town Council meeting scheduled for Wednesday, May 16, 2018

(Note: where there are active links in the agenda item, it will take you to the associated document)

You can also find the full set of documents in one PDF

http://www.franklinma.gov/sites/franklinma/files/agendas/may_16_council_agenda.pdf

Agenda Item	Summary
A. Approval of Minutes	A. Approval of Minutes
B. Announcements	B. Announcements - This meeting is being recorded by Franklin TV and shown on Comcast channel 11 and Verizon channel 29. This meeting may also be recorded by others.
C. Proclamations/Recognitions	C. Proclamations/Recognitions
D. Citizen Comments	D. Citizen Comments: Citizens are welcome to express their views for up to five minutes on a matter that is not on the Agenda. The Council will not engage in a dialogue or comment on a matter raised during Citizen Comments. The Town Council will give remarks appropriate consideration and may ask theTown Administrator to review the matter.
E. Appointments	E. Appointments
F. Hearings	F. Hearings  - FY 2019 Budget Hearing - 7:10 PM
G. License Transactions	G. License Transactions - La Cantina Winery Company
H. Presentations/Discussions	H. Presentations/Discussions - Franklin Farmer's Market
I. Subcommittee Reports	I. Subcommittee Reports 1. Capital 2. Budget 3. EDC
J. Legislation for Action	J. Legislation for Action 1. Resolution 18-21: Expenditure Limits for FY 2019 on Departmental Revolving Funds Established by Franklin Town Code Chapter 73, as Provided in G. L. Chapter 44 Section 53E 1/2, as Amended (Motion to Move Resolution 18-21 - Majority Vote (5))
J. Legislation for Action	J. Legislation for Action 2. Resolution 18-22: Salary Schedule, Full Time Elected Official (Motion to Move Resolution 18-22 - Majority Vote (5))
J. Legislation for Action	J. Legislation for Action 3. Resolution 18-23: Compensation Plan, FY 2019 (Motion to Move Resolution 18-23 - Majorirty Vote (5))
K. Town Administrator's Report	K. Town Administrator's Report
L. Future Agenda Items	L. Future Agenda Items
M. Council Comments	M. Council Comments
N. Executive Session	N. Executive Session - None
O. Adjourn	O. Adjourn

Budget Collection - FY 2019

Town Administrator's FY19 Budget Narrative (A summary & Narrative about the budget)

"While fiscal challenges remain, our resolve to overcome them is relentless.

The FY 19 proposed budget will be balanced with use of approximately $1,500,000 from our Budget Stabilization Fund (Rainy Day account). While this will work for one year the FY 20 budget will require policy decisions on how to handle the budget shortfall.

We continue to face challenges in properly funding the annual operating budget, Other Post Employment Benefits (OPEB) and roads. We should continue to maintain the capital plan and debt capacity in the annual operating budget to fund capital improvements.

The Town’s property tax revenue (not including debt exclusions) will increase by 2½ % plus new growth, or about $2.65 million. Local receipts, which include the excise tax and permit and license fees, etc., will increase $300,000, mostly due to increased motor vehicle commitments. Net State Aid (based on the Governor’s budget) will increase by $206,000. The FY 19 “net” revenue increase is estimated at $3.2 million.

Proposed FY 19 Highlights

Treasurer Collector – The budget partially funds a Deputy Treasurer Collector in preparation of the retirement of the current Deputy Treasurer Collector in 2019.

Police – We are reviewing the options to staff the police department when the Dispatch center moves in the middle of the fiscal year.

Regional Dispatch – The target date to open the new center is January 2019. The building is currently under construction.

Franklin Schools – We have provided the largest year over year increase ($3,000,000) in school funding in a decade. This will help relief much of the pressure of the school use of revolving funds but will not resolve the long term funding issues the Town/school face.

The Benjamin Franklin Classical Charter School – The school is relocating to its new location on Washington Street in 2019. This may increase busing costs for the schools when they open.

DPW – We increased the snow and ice Budget by $50,000 for a total of $1,003,500. This is still below the five year rolling average.

Board of Health – The Health office is merging with the Inspectional services
This will eliminate a part time clerk while providing full office coverage for the Health Department. Further we will be contracting for percolation tests and septic inspections.

Library – The opening of the renovated/addition to the library requires additional staffing. Further we are trying to close the gap between our current funding and the Minimum Appropriation Requirement (MAR) of the State Library Board. If the budget is approved we will close the gap from .85% to 90% of the minimum. We would need an additional
$100,000 to meet the requirement. The last time we were in compliance was FY 09.

Employee Wages/Benefits –Wages are generally increasing 3%, Pension costs increased by about 10% or about $450,000, OPEB is funded at $550,000 and health insurance continues to be a challenge. Thanks once again to the employees for working together to constrain health insurance increases. This is critical to maintaining staffing levels.

Budget Overview
In compliance with Article Six, Sections 6-3-1 through 6-5-2 of the Franklin Town Charter, I am submitting the proposed FY 19 budget to the Town Council and Finance Committee.

Process
Each department is required to submit a proposed budget to the Town Administrator. The Town Administrator, the Comptroller, and the individual Department Heads review their budget request.

The Town Administrator also reviews the highlights of the Town’s fiscal plan with the budget subcommittee of the Town Council. Based on input and the meetings with the Department Head, the Town Administrator makes a budget recommendation to the Town Council and the Finance Committee. The Finance Committee reviews the Town Administrator’s proposed budget and forwards their recommendations to the Town Council. The Town Council holds two public hearings prior to adopting the budget.

Financial Policy Summary

While the budget process identifies issues and concerns that the Town will address on an annual basis, it also must do so based in a framework of sound financial management. The Town Council has adopted fiscal policies in the past and should continue to update and review them on a regular basis. Below is a summary of current policies:

Balanced Budget
 Annual costs funded from current revenues.
 Do not defer current costs to future years.

Current status 
– Whenever possible we refrain from using one time funds to balance the budget. FY19 is an exception due to extra challenges we face. We have not addressed our GASB 45 obligation (post-retirement health insurance) although this year we have budgeted $550,000 to continue to fund the obligation of about $70 million (2017 actuarial study).

Compensation and benefits
 Budget with current revenues
 Compensate at market rates

Current status 
– We have nine municipal unions. All unions have collective bargaining agreements through June 30, 2019.

Revenues
 Estimate annual revenues in detail and project for the following three years.
 Maintain full and fair market value of property assessments.
 Ensure fees charged cover costs incurred.

Current status 
– Future revenue projections are included in the budget. New growth and local receipts have been adjusted to reflect the trends in actual collections. Included in the projection are the enterprise funds direct and indirect charges that pay back the general fund for costs attributable to those funds. Again this year we are charging the water and sewer enterprise accounts for their OPEB obligation.

Financial Reserves
 Adequately fund and maintain reserves (Stabilization, Free Cash, Overlay Surplus)
 Maintain Stabilization account at $5 million or 5% of recurring general fund revenue (less debt exclusions and SBA reimbursement).
 Short-term revenue surpluses shall fund non-recurring projects.
 Free Cash will be used to fund the capital budget and for unforeseen expenses.
 Overlay surplus will be used for capital budgets and non-recurring expenses.

Current status 
- the General Stabilization fund balance is just about $5.1 million dollars which is slightly under the Town’s policy of 5% of general fund revenue.

Long-Term Debt - Proposed
 Reserved for large capital projects.
 Net general fund debt service (not including debt exclusions) shall be targeted at not more than 3.5% of recurring general fund revenue. We are currently well below that number.

Current Status 
- The FY 19 budget calls for a general fund debt service of$6,843,101. According to the independent bond rating agency Standard and Poor’s, our debt level is moderate and manageable. Our debt plan will help to obtain our goal of improving the infrastructure of the Town without the need for debt exclusions (except schools) while maintaining a reasonable debt level. We were recently upgraded to AA+ one grade below the highest rating of AAA."


This was shared from the Town of Franklin page
http://www.franklinma.gov/sites/franklinma/files/news/2018-05-16_town_council_narrative_fy19_final_version_2.pdf

And can also be found here
https://drive.google.com/open?id=1srWLWOHO81af4aQq8cNWIJcLAtImjRJG

Town Administrator's FY19 Budget Narrative (A summary & Narrative about the budget)

FM $144 - Finance Committee - Final Budget Hearing - FY 2019 (audio)

FM #144

This internet radio show or podcast is number 144 in the series for Franklin Matters.

This recording is of the Finance Committee final budget hearing for the FY 2019 budget review. The meeting was held on Tuesday, April 24, 2018. The meeting began at 6:00 PM.

The school budget, Police Dept, and Technology budgets were reviewed and discussed before the committee made its vote to recommend the budget as proposed to the Town Council. The Town Council budget hearings are scheduled for May 16 and 17. The budget is currently unbalanced and the Town Council will need to vote to use approx $1.4M of the debt stabilization account to balance the budget as required.

As mentioned at the beginning of the budget hearings, this is the proposed approach to address the budget shortfall this year, effectively buying some time for many new players in key roles. The FY 2020 budget will also be an issue and by this move (use of debt stabilization funds), there will need to be either an override discussion or significant cuts to the services.

The use of the revolving funds on the school budget side and the use of the debt stabilization funds on the Town side creates a hole that will require some serious discussion and action to resolve. There won’t be an opportunity to avoid the discussion next year.

The meeting itself runs about 39 minutes. My notes were captured via Twitter for this meeting and can be found at FranklinMatters.org/
http://www.franklinmatters.org/2018/04/finance-committee-recap-fy-2019-budget.html

Without further ado, here is the audio recording.

-------------

This podcast is my public service effort for Franklin but I can't do it alone. I can use your help.

How can you help?

If you like this, please tell your friends and neighbors.

If you don't like this, please let me know.

Through this feedback loop we can continue to make improvements.

Thank you for listening.

For additional information, please visit Franklinmatters.org/

If you have questions or comments you can reach me directly at shersteve @ gmail dot com

The music for the intro and exit was provided by Michael Clark and the group "East of Shirley". The piece is titled "Ernesto, manana"  c. Michael Clark & Tintype Tunes, 2008 and used with their permission

I hope you enjoy!

------------------

You can also subscribe and listen to Franklin Matters audio on iTunes = search in "podcasts" for "Franklin Matters"

subscribe and listen to Franklin Matters on iTunes

The notes for the meeting can be found here

http://www.franklinmatters.org/2018/04/finance-committee-recap-fy-2019-budget.html

Finance Committee Recap - FY 2019 Budget voted on to move to Town Council

Live reporting from #FinComm0424 meeting: Conley, Dowd, Heumpher, Dugout, Weich, Fleming present. Schools budget up first

— Steve Sherlock (@FranklinMatters) April 24, 2018

Questions on use of revolving funds for school budget, enrollment down K-8 up at HS, school choice funds continue to decline as that is not open. #fincomm0424

— Steve Sherlock (@FranklinMatters) April 24, 2018

Several questions were asked on the use of the revolving funds by the schools to balance the school budget. As you listen to the questions and answers, sometimes it appears that the answer was to another point or to one of the points in the question not to another.

The revolving funds used by the school budget are similar in that to the enterprise funds used by the Town. Fees are collected for a specific purpose (busing, or lunch, on the school side vs. water and sewer on the Town side). Expenses are paid out of the fees to enable the service to be self sustaining.

The questions get at how the revolving funds had accumulated such a balance as to be used last year, and this year for the budget. If the questions were not completely answered to your satisfaction, you may have another chance during the Town Council budget hearings on May 16 and May 17.

The School Committee budget page provides a summary of the various revolving funds.

"The following pages provide an explanation and financial status of the revolving funds
maintained by the District. All balances are as of June 30th in each fiscal year with a year-to-date amount for the current year."

http://franklindistrict.vt-s.net/Pages/FranklinDistrict_budget/23.%20Revolving%20Accounts.pdf

Details on the school budget can be found on their budget page
http://franklindistrict.vt-s.net/Pages/FranklinDistrict_budget/index

Technology next up, simpler as it covers licenses and maintenance for the hardware and software used, consolidation of printing within one budget rather than an increase for this Dept. #fincomm0424

— Steve Sherlock (@FranklinMatters) April 24, 2018

Police Dept up next, most congested traffic is Saturday is when everyone is here, approx 45/folks daily come to station, 25 on weekends. #fincomm0424

— Steve Sherlock (@FranklinMatters) April 24, 2018

The discussion on the walk in traffic to the Police Station comes in the context of the new regional dispatch center coming online later this year. The dispatchers would move from the station to the regional center. However, someone will still need to remain staffing the Police station to monitor the folks held in custody as well as this walk in traffic. Discussion is still underway on how to resolve this issue. It will be simpler at the Fire Station as visitors will interact with a kiosk and talk with someone at the regional dispatch center.

Vote on budget leaves $1.4m short of balance with revenue for the TC to take from the budget stabilization fund. #fincomm0424 budget passes 6-0, 3 members absent tonight. Budget hearing at TC scheduled 5/16-17

— Steve Sherlock (@FranklinMatters) April 24, 2018

The full FY 2019 budget document including the summary letter and several great supporting pieces can be found here
http://www.franklinma.gov/sites/franklinma/files/news/fy19_complete_budget_fincom_with_page_numbers_0.pdf

or here:

Finance Committee Recap - FY 2019 Budget voted on to move to Town Council