This continues to share the Five Year Fiscal Outlook for the Town of Franklin as published by the Town Administrator, Jamie Hellen:
FY25 Financial Outlook
It is impossible to predict the state of our economy or world next week, let alone three years from now. Regardless of those factors, FY25 is when the confluence of flooded rivers are likely to converge for a very challenging year. Those factors are:
● FY25 will be a full two fiscal years into a 40-plus year high of inflation with most costs rising;
● There will not be any remaining authorized federal stimulus money and there will be less one-time revenues to plug gaps;
● Difficult choices will need to be made regarding investments in schools, public safety, public works and capital projects and equipment;
● The full assessment of the regional dispatch center (“The MECC”) will be coming back on the town's operating budget at about $1.5 million; and, most notably
● The Franklin School Department’s financial sustainability on one-time revenues, continued declining enrollment and the required net school spending dynamic sets up a possible budget deficit in FY25. The outgoing Superintendent warned that FY25 could be facing “more [financial] challenges given the continued needs of the district, the local fiscal forecast and the expiration of the local coronavirus relief funding.”
Franklin Public School District
The Franklin School Department has three current trends that should give the community a pause for concern over the long term financial sustainability and challenges of the department.
1. Declining Enrollment. At its peak in 2008, the District had 6,464 students enrolled. The enrollment in 2021-2022 was 4,764 students, or a decrease of 24% in 14 years. The Kaestle Boos Associates, Inc study suggests the District is projected to lose enrollment throughout the rest of the decade. In the 2029-2030 school year, the district is estimated to have 4,458 students enrolled - a near 2,000 student enrollment drop in two decades.
The Kaestle Boos analysis also “indicates that the Franklin Public Schools facilities are currently 26% under capacity and are anticipated to continue to decline to 31% in the next 10 years. If no changes were to occur the school facilities would: all continue to operate under capacity, continue to create a financial burden in the maintenance of these underutilized facilities [and] suffer reduced educational adequacy in schools built prior to 1996.” Closing Davis-Thayer has produced some savings and space, but not nearly the amount of savings envisioned.
The Kaestle Boos Associates, Inc. study released on December 1, 2020 shows plenty of data on this topic and the options before the School Committee. A Space Needs and Facilities Use Subcommittee of the School Committee has been established and will be charged to “analyze data sources and forecast space utilization to comprehensively review Franklin's school facilities' needs.” A redistricting analysis has also commenced to follow up on the Kaestle Boos study from last December.
2. Net School Spending. As has been discussed at many legislative and local forums, the Franklin Public School District is seeing a very unique dynamic in its finances relative to state aid. This dynamic is real and is a result of the extreme spike in growth and enrollment in the 1980’s through 2010, followed by an significant pause in growth and enrollment in the 2010’s continuing on in the 2020’s.
In short, due to state education finance law, the “required local district contribution” is accelerating at a pace that far exceeds the rate of state aid increases. Please view the Superintendent's slide on page 12 to see this trend. This dynamic presents some short and long term sustainability concerns.
Despite these two dynamics, local investments have continued in the School Department budget by almost $15 million in total dollars since 2015, an average of over
$1.8 million a year, despite the two lower pandemic years.
3. One-time revenues. The schools will be using one-time revenues from revolving funds and federal assistance to augment their operating budget for at least the next two fiscal years. The good news is the School Department has its highest amount of reserves in at least the past five fiscal years. Even if the Town does not have enough revenue to maintain a $2.4 million-a-year increase, which will be challenging, the Schools should have enough reserves in those one-time sources to meet their budget projections over the next two years.
Continue reading the full report in this PDF -> https://www.franklinma.gov/sites/g/files/vyhlif6896/f/uploads/2022-08-15_fy23_to_fy27_town_administartor_fiscal_forecast_1.pdf
Part 1 (FY 2022 closing)
Part 2 (FY 2023)
Part 3 (FY 2024)