Town of Franklin (MA): Five Year Fiscal Forecast - FY 2025 (part 4 of 5)

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)

https://www.franklinmatters.org/2022/08/town-of-franklin-ma-five-year-fiscal.html

Part 2 (FY 2023)

https://www.franklinmatters.org/2022/08/town-of-franklin-ma-five-year-fiscal_02041658049.html

Part 3 (FY 2024)

https://www.franklinmatters.org/2022/08/town-of-franklin-ma-five-year-fiscal_0565521952.html

Town of Franklin Earns AAA Bond Rating

Town of Franklin (MA): Five Year Fiscal Forecast - FY 2024 (part 3 of 5)

This continues to share the Five Year Fiscal Outlook for the Town of Franklin as published by the Town Administrator, Jamie Hellen:

FY24 Financial Outlook

FY24 will be the fiscal year to monitor the new impacts of inflation and/or a recession on the quantity of town services that can be delivered. FY24 will also be the year to monitor the overall condition of the economy, consumer spending and trends on residential households and their ability to withstand the cost increases that we know will be going into effect: stormwater and the Beaver Street Interceptor. A year from now, all town officials should keep a close eye on the ability of residents to afford the increases that are coming from these mandatory projects. These projects could have an effect on other town services.

 

As written above, rising costs will likely set up a sustainability imbalance with what the purchasing power was in FY22 versus FY24. The Town will begin its FY24 budget process later this fall where we will look at our local summer and fall revenue trends, as well as take a cautiously optimistic gaze toward how the global economy modifies over the next six months. Keep your fingers crossed!

I would expect a Joint Budget Subcommittee meeting sometime in October to check in on FY23 revenues and early prospects for FY24.

Areas of expected operational increases due to inflation include: roads, snow and ice removal, construction supplies, all basic goods and services, and personnel and labor costs. The DPW and Facilities Departments will see the greatest impacts from rising inflation on expenses.

Most departments will feel this increase as both of their departments supply basic services such as fuel, gas, electricity, water to other departments. All departments will see an increase in personnel costs due to the competitive labor market and the successful performance of our current staff.

The stormwater utility fee goes into effect townwide for all property owners on July 1, 2023. The average fee per household on a half-acre lot will be about $56. As a result, stormwater expenditures from the DPW will be transferred to the utility. A significant reduction in the DPW budget will show in FY24. This dynamic will be deceiving given the cost increases coming from goods, services, and labor/personnel throughout the entire organization, but most notably the DPW. Also, additional funds will be needed for roads and infrastructure due to rising costs. Most of the reduction of stormwater will likely give way to overall cost increases from inflation.

Lastly, FY24 is when the effects of interest rates will possibly alter town services. As I have pointed out in every budget narrative in recent years, the ratio of debt and interest as a percentage of the town budget has been slowly shrinking as old debt and interest are paid off. Of all seven major budget categories, Debt & Interest was the only category to decrease in the FY23 budget. As a result, other services are taking up a larger percentage of the budget pie, leaving less room for capital projects that require borrowing. With rising interest rates and rising project costs, future capital projects may be in jeopardy if they require borrowing. For more information, please read the Budget Narratives on Debt & Interest from previous fiscal years.

FY23 debt levels are currently at about 2.5% of recurring general fund revenues. These line items support both school and municipal projects.

The town will have some difficult decisions to possibly postpone projects. These projects will undoubtedly become much more complicated, expensive and difficult to fund based on rising interest rates and costs. The following projects will require some borrowing authority, which will increase interest in the operating budget or enterprise funds:

 

● Beaver Street Interceptor;

● The future of Davis-Thayer;

● A future decision on a new or renovated police station;

● A future decision on the Remington-Jefferson School renovation; and

● A future decision on a new recycling center.

Those are just the large projects that have been in the pipeline for years. This list is obviously not exhaustive and this is even before we tackle the issues of infrastructure, roads, sidewalks, parks, open space plans, staffing investments, among many other things the community has on its wishlist.

The Town recently received a 3.38% interest rate with the AAA bond rating. I suspect those rates will climb closer to five percent (at best) in FY23 and FY24.

In short, FY24 will likely begin a harsh reality in the community. There will likely be choices to postpone capital projects or move forward with those projects and operating services may need to be adjusted to reflect the costs of services. Unless the economy can hit a rhythmic state, some difficult financial decisions will have to be made.

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) was shared previously

https://www.franklinmatters.org/2022/08/town-of-franklin-ma-five-year-fiscal.html

Part 2 (FY 2023) was shared previously

https://www.franklinmatters.org/2022/08/town-of-franklin-ma-five-year-fiscal_02041658049.html

Town of Franklin Earns AAA Bond Rating

Town of Franklin (MA): Five Year Fiscal Forecast - FY 2023 (part 2 of 5)

This continues to share the Five Year Fiscal Outlook for the Town of Franklin as published by the Town Administrator, Jamie Hellen:

FY23 Financial Outlook

Revenues

As the Town enters FY23, revenues look to be stable in all areas: local receipts, state aid, and new growth. Up until FY23, state aid has remained at less than a 1% annual increase due to the dynamics of the Chapter 70 formula, town demographics and the Town’s growing affluence. Local receipts have remained on a steady increase due to the incredible work of our municipal staff due to an increased demand in services, such as ambulance, EMS services and permitting. FY22 saw a decrease in New Growth from FY19, FY20 and FY21. I expect a modest, stable year again. It is important to reemphasize that our permitting boards continue to see a lukewarm construction market relative to the pre-pandemic years with a notable leveling off of applications before the permitting boards. With supply chain problems continuing globally, I expect property improvement investments will maintain a plateau until there is greater confidence in those goods being provided and/or cost increases subside.

Property values, which are the foundation of the entire town budget through the property tax levy, remain strong due to supply and demand dynamics in the real estate and housing markets. Property taxes are the baseline, as well as largest source of revenue, for the town's services. As long as property values maintain a high value, the town will see decent stability in the budget.

As usual, once the state legislature is done with the legislative session and the various legislative packages being considered are complete, including the state budget, staff will see where all the numbers fall later this summer and propose any adjustments to the Town budget prior to the tax rate hearing in December. I anticipate an increase in state aid, but as discussed for years, not by enough to make a significant new investment impact in the local budget. Any additional revenues will be used to cover shortfalls in other areas due to rising costs of goods and services and labor/personnel.

Expenditures

As of this publication, the main fiscal concerns and challenges for the Town in FY23 are the issues we are all seeing in the news: rising interest rates; inflation; gas/diesel and electricity/gas costs; rising costs of goods and services; health care costs; labor and personnel costs; and the overall uncertainty of the economy. FY23 appears to be a “settle into a new normal” year of actually feeling the impacts of inflation within the local budget.

There will be stress on the FY23 budget due to inflation and increased costs. For example, the Town is looking at a doubling of the cost of fuel/diesel over FY22. Additionally, we are looking at escalating electricity rates of possibly two-plus cents a KW higher. As basic operating costs, such as utilities rise, this will have an impact on other areas of the budget.

We are also seeing bids for construction projects coming in much higher than anticipated. For example, the recent SNETT trail project we are working on with the state DCR was estimated at $200,000 a year ago when the work was designed and approved by the Conservation Commission. The bids came in between $400,000 to $800,000 - double to four times the estimated cost from one year ago! We are seeing similar issues on smaller projects. The Red Brick Schoolhouse bids came in $50,000 to $250,000 over the estimated cost, which was just designed four months ago! These examples depict an environment everyone will need to get used to: money will not be going “as far” as it did a year ago. The Town is only one month into the fiscal year and inflation is going to settle into the budget.

To weather this storm, the Town must use nimble strategies throughout the fiscal year to make sure there are no significant cost overruns by next spring. The community should be prepared

 

that costs for basic services, such as snow and ice removal, parts, supplies, personnel, goods, services, etc., will all place a strain on the FY23 budget throughout the year and therefore may require services to be reduced in areas of the budget. FY23 has all the markings of an adjustment year in terms of what levels of service the tax levy can support and how consistent the economy can be for revenues.

FY23 should also see all major collective bargaining agreements being resolved, which is good for labor relations and recruitment, staff morale, as well as financial predictability. The downside is that to complete these contracts, the use of one-time revenues for the school and town unions sets up an inflationary situation within the Town’s operating budget come the expiration of those funds in the next couple of years.

FY23 capital projects

To ensure the Town is ready for the altering dynamics in FY23, any new capital improvement projects (facilities, roads, infrastructure, borrowing) that come to our attention after August 1st, 2022 will be postponed and put on hold for discussion to ensure the Town has the accurate resources to fund current projects. All capital projects currently authorized by the Town Council or in the Town Council’s goals for 2022-2023 will continue to move forward. However, as we move through the phases of a project (design, procurement, borrowing, awarding contracts, beginning work), I will not commit to any new projects until the town has greater certainty around the cost effects of that project. In other words, unless there is a significant public emergency, do not expect new projects entering the pipeline. As described above, inflation is caused by the high demand in spending with not enough supply to accommodate the demand. Franklin will need to consider doing our part to decrease the demand in the marketplace.

I will have to evaluate and view the FY22 capital program in a new light when free cash is certified later this fall. I cannot make any commitments for new projects due to rising interest rates and the fact that many of the projects currently in the pipeline are seeing cost increases that may need to be augmented from capital funding later this fall and winter.

The American Rescue Plan Act (ARPA) federal stimulus money is proving to be a bridge for the town on many fiscal obligations that could have had a negative effect on the town’s budget and delivery of services. ARPA money allowed the town to push the implementation date of the new stormwater utility fee out one year to FY24 (July 1, 2023), which has provided financial relief to all citizens for this upcoming FY23. Other financial obligations such as water main infrastructure, sewer infrastructure, personnel and labor costs, and the mental health crisis are all areas that the Town would not have been able to subsidize or invest in without these funds.

Speaking of sewer, an issue to watch in FY23 is the Beaver Street Interceptor project: the 109-year old pipe that hauls ⅔ of all town sewerage to the Charles River Pollution Control District. This will be one of the most expensive and complicated public works projects in town history. Sewer rates are expected to rise in late FY23/FY24 to pay off the borrowing with this project. While some may say to put a project like this on hold, the truth is the cost of inaction will be far more expensive and damaging to the community than the cost of the rate increases. Nonetheless, a project of this size and importance will be taken step by step to ensure the best return on investment for the ratepayers and may require nimble decision making based on market conditions as the project moves forward. These rate increases will only affect sewer system customers, not private septic residents.

In closing, FY23 appears to be a transitional year toward a new, inflated normal with inflation, interest rates and rising costs. I remind all readers, what happens in the news on a daily basis around the economy can take months or years to actually settle in at the local level. That relates to both the good and bad news. Also, reversal of these trends also can take months or years (even decades) to recover from. As everyone knows, every day has both positive and negative signs for future economic fortunes. I have provided a few economy related reference points as the fiscal year starts to offer context as to how international and national affairs have an impact on the state and local budgets:

● The Federal Reserve has recently increased interest rates multiple times and will continue to raise them until a recession-like economy is inevitable.

● On July 27, 2022, WBUR provided a great summary on the national economics and the Federal Reserve. Many of the trends in this story ring true in Franklin.

● Massbenchmarks’ latest “Current and Leading Index” report shows what we all know: inflation, labor supply, labor and personnel costs, and uncertainty weigh on consumers in Massachusetts.

● The message coming from Fortune 500 CEOs shows a recession is inevitable.

One thing is for certain: economic volatility and mixed signals will continue for the foreseeable future, as the country struggles to get into a pre-pandemic economic rhythm. ALL departments need to be cautious about overspending. The effects of inflation could be significant as the fiscal year evolves.

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) was shared previously

https://www.franklinmatters.org/2022/08/town-of-franklin-ma-five-year-fiscal.html

Town of Franklin Earns AAA Bond Rating

Town of Franklin (MA): Five Year Fiscal Forecast (FY 2023-2027) Now Available

The Office of the Town Administrator has released the Five Year Fiscal Forecast for FY23-27. This memorandum provides a synopsis of the financial outlook for each year as well as a "snapshot" of the town today. 

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

August 15, 2022

To: Town of Franklin

From: Jamie Hellen, Town Administrator

Re: Town Administrator Five-Year Fiscal Forecast FY23-FY27

Welcome to the first “Five-Year Fiscal Forecast” from my office in almost three years. Due to the immense time pressures put on the office during the pandemic in 2020 and 2021, as well as the consistent economic shifts, it was difficult to depict an accurate picture of future town fiscal affairs. As mentioned in this year's budget narrative, I’m committed to getting back on a regular routine with this traditional update now that the country is moving past the regulatory structure of the COVID-19 pandemic. With the global and national economy in the center of everyone’s minds and the start of the new fiscal year (FY23) upon us, summer is a perfect time to hit a quick reset on town fiscal matters and get the view from 30,000 feet. I am hopeful to publish a more comprehensive version later this fall/winter as the Town approaches its annual tax rate hearing in December. By then, staff will have revenue trends through the first quarter of the fiscal year, finalized state aid numbers, and expected new growth figures. The forecast is also a requirement of bond rating agencies.

Quality of life and organization stability in Franklin

Before I dive into the forecast details, I believe it is worth taking a step back for a moment to pause and reflect. Over the past few years, our community, like the rest of the world, has gone through a tremendous disruption. Everyone has dealt with unforeseen adversity, challenge, and loss. Yet despite these professionally and personally challenging times for everyone, the overall quality of life in Franklin, as well as Massachusetts as a whole, could be considered some of the best in the United States.

The Town has exceptional, diverse schools and education opportunities, unprecedented achievement in public education, one of the most prepared local public safety operations in the state, a dedicated and well-trained public works department and countless exceptional

amenities for families and citizens of all ages and backgrounds. The Town is an attractive area for major corporate businesses and has a strong local economy with many diverse economic sectors. The Town continues to make historic investments in open space and recreation to add to the great quality of life in town.

The Town has developed a proven financial management strategy. We have had strong financial audits for many consecutive years. For the first time in the Town’s history, a AAA Bond rating was awarded due to prudent financial management, a diverse economy and well executed financial policies. For details, please visit the S&P Global Rating from May 2022 for the facts surrounding the AAA Bond rating. It is one of the most important documents to read for any member of the community.

From a bird’s eye view, everyone should feel an incredible sense of achievement for being a model community that is supportive, innovative and full of continued promise. We owe an immense amount of gratitude to our municipal and school employees for their incredible dedication over the last three years, by not only weathering a global pandemic, but improving the organization and continuing to succeed at an elite level. The social fabric of the community and citizens remains very good with a positive outlook given the countless events, festivals, community organizations and opportunities for all. As we move into a fiscal year without any COVID-19 restrictions or regulations for the first time in three years, I believe Franklin is more resilient and prepared for the future than we were three years ago. The organization remains very stable.

FY22 Closeout

Fiscal Year 2022 (FY22) closed out on June 30th. July is one of the busiest times for the Finance staff closing out the past fiscal year, entering the new one, working on state required reporting and closing out budgets. I am pleased to report that all departments did a phenomenal job managing their budgets in FY22. As a result, very few year end transfers were required and another sterling financial audit was presented in May for FY21.

The revenue source with the greatest fluctuation to economic conditions, “Local Receipts”, ended up coming in at pre-pandemic levels, which is very good news. This dynamic was predicted and reflected in the FY23 budget revenue assumptions.

This trend is bolstered by a slowly returning local economy. Hotel revenues are now about 60% back to pre-pandemic numbers. The new cannabis excise (sales) tax provided an additional $104,000 in new revenue for less than a half a year of collections. Motor vehicle excise taxes were higher than budgeted due to the valuation of cars increasing. Ambulance receipts have increased due to higher demand for EMS services. As the Town enters FY23, revenues remain steady in this category, but FY24 may need some expenditure adjustments in order to deliver the services that we see trending in demand.

That said, Local Receipts are revenues mostly generated based on consumer behavior (hotels, meals, cannabis, licenses) and public demand (such as ambulance runs or building permits). Thus, they can stabilize or decrease with the changes in consumer patterns and the broader economy. They can also increase, which the Town must consider that staffing or equipment may be needed to adjust to meet those demands. The fees in this category need to mirror the capacity at the staff level to deliver the services.

Indications from the Federal Reserve and leading local economists acknowledge that to quell inflation, policy will be focused on reducing demand for goods, services and products to help ease cost increases. I tend to believe any policy action at the federal or state levels will take a while to settle into the local consumer patterns that drive revenues in local receipts.

Nonetheless, this is an area of revenue that the Town will need to monitor in FY23 heading into FY24 to ensure we have the capacities to meet the demand for services. We'll also need to monitor any major declines in revenues from attempts to quell inflation.

A couple of final statistics to close out FY22: only ten (10) single family homes were built in Franklin during Fiscal Year 2022. By comparison, in 1994, at the Town’s peak, the Town built 172 single family homes. Population in 2021 decreased for the 1st time in over four decades.

Population in 2021 decreased for the 1st time in over four decades

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

Town of Franklin Earns AAA Bond Rating

Annual Report Of The Town Administrator - FY 2021

Note: FY 2021 is last year (July 1, 2020 to June 30, 2021). The report was prepared to cover the business for the FY 2021 period. This year’s report FY 2022 (July 1, 2021 to June 30, 2022) is in preparation now and is normally available for distribution at the polls for the November election. Updated - 08/15/22

The Town Administration works with the Town Council together to improve the quality of life of our residents. We are diligent in balancing the budget, keeping an eye on the Town’s future needs and maintaining its assets.

Accomplishments in FY21 include:

We continue to update our Town Budget webpage with helpful resources such as how the budget process works, operating and capital budgets, and fiscal forecasts. More information can be found here: https://www.franklinma.gov/town-budget

A balanced operating budget was submitted to the Town Council and was approved. We have received five year Capital plans from all departments including the Water And Sewer Enterprise fund. Having long term Capital plans prevents more expensive costs down the road.

As part of our expansion of customer service we have expanded our Viewpoint Online Permitting System to the Health Department, Assessing Department and Senior Center. We will continue adding new applications throughout the year to make for a more convenient process.

We continue to update the Town’s website to make information easily accessible for the public. All Agendas and Minutes for boards and committees are web-based and continuously updated. You can follow us on Facebook, Twitter, Instagram, Anchor (podcasts) and YouTube for up to date News and Announcements as well as visiting our website at www.franklinma.gov.

Personnel

The Town Administration staff has worked diligently with the Board of Health to ensure the Town, our employees and residents stay safe and healthy during the COVID-19 pandemic. We continue to serve the Town and its residents while staying safe and following the guidelines and requirements set forth by the Governor of Massachusetts, DPH and the CDC.

To continue our efforts in keeping the Town informed of updates and alerts related to COVID-19 our Marketing and Communications Specialist, Anne Marie Tracey has created a user friendly Coronavirus Portal on our website and sends out important information frequently through our subscriber lists and social media.

 

The Towns Executive Assistant, Alecia Alleyne has worked with our Finance team to make sure we receive FEMA and Cares Act assistance during this pandemic. Alecia has applied for and received over $2 million of assistance for the town.

COVID-19 Pandemic

Due to the COVID-19 Pandemic all Town Buildings closed in mid March 2020. However, due to our fantastic Technology staff we were able to quickly get most if not all of our staff up and running remotely. By fall 2020 the majority of Municipal staff were working in the municipal building or on a hybrid work from home and work from the office schedule. By June 2021 nearly all municipal building employees were working fulltime in the office.

The Town Administration staff, Technology staff and Franklin TV worked together to make sure Town Council Meetings could continue and comply with Open Meeting Laws. These meetings are currently being recorded, streamed live through the website, Zoom and Cable TV and as of June 2021 residents were allowed back into the chambers to attend meetings in person.

As of January 2021 the Town received its full allotment of CARES Act money, this money was spent on a variety of projects most notably the install of UV lighting in the HVAC systems of all municipal buildings and most schools to help prevent the spread of the COVID-19 virus.

Other

In time for the holiday season, Anne Marie Tracey launched the Franklin First Gift Card, this is a partnership with local businesses to help stimulate the local economy by keeping money in Franklin. Residents can purchase these gift cards which can be redeemed at a variety of participating businesses in Franklin. Over $40,000 in gift cards have been purchased and this number is only rising.

Executive Assistant, Alecia Alleyne, applied for and received two grants for energy conservation efforts in Town. The Town was awarded a Green Communities grant which aided in the purchase of two fully electric vehicles and the installation of two dual port Electric vehicle charging stations, one located at the municipal building and the other at the library. The Town also received over $13,000 for the installation of two additional dual port charging stations at the municipal building through EVIP grant funding.

Assistant to the Town Administrator, Chrissy Whelton and Human Resources Director, Karen Bratt worked with the towns Safety Committee, representatives from each department and MIIA  representatives and earned over $50,000 in insurance premium savings and was recognized by the Massachusetts Municipal Association (MMA) as a leader in preventing risk in the workplace through employee training programs.

Franklin “Bends the Trend” by working with the Insurance Advisory Committee (IAC) to keep insurance rate increases for employees to a minimum, The Town continues to offer a Qualified High Deductible Health Care Plan.

The Town of Franklin also worked with Nexamp to ensure that a portion of their farm be reserved for Franklin residents. On a first-come, first-served basis residents were eligible to subscribe to receive credit on their Electric bill at a special rate of 15%. Due to a high interest from Franklin residents the farm is now filled however Nexamp is still offering their standard discount rate of 12.5%.

Long time Senior Center Director Karen Alves retired in September 2020 and Assistant Director Erin Rogers was promoted to Director and will continue with offering the highest quality of services to Franklin Seniors.

Our goal is to deliver high quality customer service while keeping costs under control. There will be difficult challenges to our budget in the coming year; but you can be assured that the Town Administration and Town Council will work together to solve budgetary issues.

It is my pleasure to submit an annual report of the Town Administrator for your review, and please feel free to write, email, or stop by with any questions, concerns, or comments.

Respectfully submitted, 

Jamie Hellen,

Town Administrator

 

The full Annual Report for 2021 can be found

https://www.franklinma.gov/sites/g/files/vyhlif6896/f/uploads/2021_annual_report.pdf

The collection of Annual Reports can be found online

https://www.franklinma.gov/town-clerk/pages/town-franklin-annual-reports

Annual Report Of The Town Administrator - FY 2021

Town Officials Office Hours - May 19 - 8:30 AM

Town Officials Office Hours

Franklin Senior Center

10 Daniel McCahill Road, Franklin, MA

Third Thursday/Monthly 8:30 AM

The Franklin (MA) Town Council will be holding monthly office hours at the Franklin Senior Center. One or more Councilors, along with the Town Administration, ​will be present for this standing time for seniors, their families and residents to ask questions and discuss issues of concern. State Representative Jeff Roy participates so questions and issues of a local or state district matter are open for discussion.

yes, trying to think cool thoughts

Town of Franklin - FY 2023 Budget Narrative - the high level view of what's in this year's proposed budget

In compliance with Article Six, Sections 6-3-1 through 6-5-2 of the Franklin Town Charter, we are submitting the proposed FY23 Budget Message & Budget to the Town Council and Finance Committee.

We are presenting a balanced budget proposal for Fiscal Year 2023 (FY23). The Executive Summary explains the budget process, highlights, assumptions, and some general statistics about the budget. Further below are detailed department budget narratives that speak about the mission and strategic initiatives within each department. Detailed budget line item numbers are in Appendix A. The staff will continue to update the budget model as new information becomes available. We have a Town Budget page and people should consult the website for the latest information.

As the Town, state and country exit the two year pandemic and enter FY23 on July 1, 2022, the Town of Franklin is more prepared and better than ever before. Town department operations have excelled throughout these past two years adapting to the pandemic, but continued to accomplish all of their goals and have positioned the town for continued excellence in 2022-2023 and beyond. The facts present an organization performing at a very high level with tremendous accomplishments for the constituents we serve.

Enough cannot be said for the dedication, commitment, passion, innovation, humility and teamwork the staff of this organization showcase on a daily basis. The overall achievements in this organization have been tremendous. We should all be thankful and appreciate what this team has achieved and the role the municipal and school staff play in the community. The future for the organization remains as bright as ever and the quality of life in Franklin is as exceptional as it has ever been.

The organization is poised to support the budget requests from all departments in FY23, including the Franklin Public Schools. While the DPW financial request was the only one not met, the organization was able to begin to implement a financial remedy for this when the stormwater utility set to take effect on July 1, 2023.

Here are the assumptions being incorporated into the FY23 budget:

Revenues Highlights

●       The proposed FY23 budget does not include any revenues from the Budget Stabilization “Rainy Day'' Fund. The fund currently has a balance of $2,038,652. These reserves set the town up to be prepared in the event of an emergency, but equally as important, these reserves show bond rating agencies and financial institutions good financial policy and execution. Strong financial annual audits, an effective OPEB policy, voter approved Community Preservation Act, a stormwater utility and increasing emergency reserves puts the town in a greater position to be competitive with interest rates and maintain a stable bond rating.

●       The Property Tax Levy and “New Growth” revenue forecast will increase a cumulative $3,202,527 in new property tax revenue from FY22. Traditionally, the Town has used a ten-year average model for the new growth figure. For FY23 this would be $1,224,716. However, the town did not meet its revenue projections in new growth in FY22 and remain conservative and cautious of this dynamic in FY23. Thus, staff have adjusted the revenue figure lower than the ten year average and assume $1,000,000 in new growth revenue by the time the town sets the tax rate in December. This is largely due to uncertain economic factors in the commercial development, housing construction and residential home improvements. Over the past year, the staff have seen a small downturn in planning board and conservation commission applications for larger developments. Also, many new state regulations are set to take effect on housing in the next year. New Growth assumptions will be revisited in November prior to the tax rate hearing as we have done in previous years.

●       State Aid is assumed at the Governor’s FY23 budget levels. As it currently stands, a $91,255 increase in local aid from FY22 is the net result. The House of Representatives and the State Senate have historically increased local aid and ended up with a higher figure than the Governor. That said, as staff, stakeholders, and elected officials have discussed for many years, state aid is highly unlikely to be a financial savior this coming fiscal year or in the near future.

●       The Town’s Local Receipts look to rebound closer to pre-pandemic numbers. Staff assume an additional $930,000 in local receipts. The Town is still predicting we’ll be shy of the FY21 record breaking year. However, the Recreation Department, Building Department, Board of Health and other permitting departments should see an enthusiastic public, ready to be active again with COVID restrictions removed. The Town should see a steady stream of revenues for town service permits, hotel, meals and motor vehicle excise taxes. To see FY 2023 assumptions, see below.

Finally, per a new town policy, the cannabis excise tax (or “local option sales tax” of 3% of all sales) will be included in this figure. Two retail medical and non-medical stores have opened in Franklin over the course of the past year. The Town has limited data on sales at this point. FY23 should show the community a good baseline year for revenue anticipated through this source. This local option tax diversifies the towns local receipts profile and we anticipate approximately $250,000 a year in revenues to add to the operating budget.

 

●       The recommendation for the two active Host Community Agreements (HCA’s) will be:

○       $300,000 will go to the Department of Public Works to provide revenue for the Grove Street/Washington Street traffic flight and intersection redesign. Combined with last year’s appropriations and a $2.2 million MassWorks grant, this project will now have almost $3 million to rebuild the road with traffic lights, pedestrian friendly crossings, a bike lane and a rebuilt roadway; and

○       $125,000 to the Franklin Police Department for an officer (and benefits, gear, uniform, salary, etc.) who will focus on management of the new dynamics of legal cannabis in town and serve many roles toward ensuring there is proper public service dedicated to substance abuse in town.

HCA Note: A revenue line item has now been created to budget for these agreements. Staff fully expect continued changes to this line item in assumptions, revenues streams and impacts. It will remain fluid due to state regulatory changes. Funds are earmarked in state law for impacts of a marijuana facility and are not general fund revenues to be used anywhere in the town budget.

One major factor in FY23 is the rollout of a new state law relative to Host Community Agreements and, in general, the cannabis industry. Corrective legislation on a myriad of issues with the industry are poised to in effect within the next 1-2 years, including a requirement that cities and towns re-negotiate all agreements with their licensed businesses in their communities. FY23 and FY24 will see substantial changes in this revenue source. Regardless, the mitigation projects from the impacts are good community investments to help solve issues that have arisen from the presence of the industry in Franklin.

 

Expenditures Highlights

●       The Franklin Public School District will see an increase of $2,400,000 over FY22. This represents 100% of the request from the School Committee and Superintendent’s Recommended Budget.

●       Municipal employee pension costs will absorb almost $500,000 in new revenue for the municipal departments (and some non-teacher employees). These numbers do not include the school department portion of health insurance, which is included in the Superintendent’s budget.

●       Overall, debt is still low relative to past years as a percentage of the overall town budget. The proposed budget decreases $296,405 in non-excluded debt and interest as two significant projects, a $2 million School Repairs Bond and a $824,000 Public Buildings Remodeling Bond come off the books. This offsets the debt service increases from Town borrowing $1.55 million for technology infrastructure and  $808,000 for two fire trucks in FY22.

●       The Department of Public Works will see an overall increase of $350,842. The increase is for restoration of smaller services that have been reduced over the past two years at the DPW due to the impending requirements for stormwater. The FY23 budget restores the two ground and highway positions that were eliminated from the FY22 budget.

In addition, the community has established a stormwater utility and fee, which should significantly help the funding challenges the DPW has been experiencing in recent years.

See the narrative on the proposed changes in the DPW narrative below.

 

●       On January 1, 2021, the Mendon-Millville regional dispatch center merged into the Metacomet Emergency Communications Center (MECC), which gives the special district access to state development grants. This move will save the Town approximately half of its annual assessment in operating budget capacity in FY23. We have budgeted a half year assessment at $610,664, which is anticipated to be ½ of the actual assessment. The state 911 Department is paying for the other half.

In FY24, the District will be eligible for the final grant award as part of this merger. The Town will be obligated to pay 25% of the FY24 assessment.

The Town has established a MECC Stabilization account, which has deposited savings from the MECC into this account to ensure that the Town has the resources when the full MECC assessment comes back on the Town’s books in FY25. Staff anticipate a large increase in one year and will need to phase that share of the budget back in with one-time revenues from the Stabilization account.

Additionally, as part of the merger agreement with Mendon and Millville, excess and deficiency (unspent savings, similar to free cash) funds from the four original communities will be seeing a savings rebate of the first two years of the MECC that will come back to the Town. This rebate is $230,857. Those monies will also be deposited into the Stabilization account, which will then have a balance of approximately $1.134 million.

●       New municipal positions in operating budget:

○       Two additional staff for the DPW, which were eliminated from the FY22 budget;

○       Two additional part-time kitchen staff for the Senior Center cafe;

○       Full-time Benefits Coordinator under the supervision of the Town Human Resources Department, but will service all Municipal and School benefits programs and employees; and

○       Full-time Conservation Agent/Natural Resource Protection Manager (formerly part-time at 19 hours) will now be full-time given the volume of community planning work being asked of the town on its parks, open space planning, Franklin Greenway, Delcarte management, Earth Day coordination and many more projects. The former part-time position barely met the Town’s needs. Additionally, part-time professional work is a difficult recruitment task these days.

●       Community Preservation Act (CPA). In FY23, the Town will see its first state match for CPA and the first slate of projects. The CPA is completely outside of the general budget of the Town (like water, sewer, trash and stormwater utilities). For those interested, please see the CPA Plan HERE.

●       The FY23 budget proposal does not include dollars from various federal stimulus allocations (such as CARES Act, American Rescue Plan Act) or federal stimulus grants. All of those revenues are in “special revenue accounts” by state statute. For a complete update on federal stimulus, please visit the Town website here.

Future Trends

Municipal and School departments have been doing a great job managing their budgets, investing in value added services and adapting to citizen feedback and a changing world. Moving forward in to FY23 and the following two fiscal years, we see a handful of issues to monitor:

●       Net School Spending. The Superintendent of Schools and School Business Administrator foresee a likely “fiscal challenge” coming in FY25 relative to net school spending requirements in state law. See the recent School Department Budget flier as an issue of significant takeaways.

●       MECC. The full assessment for the MECC Regional Dispatch Center comes back on in FY25. While there are reserves set aside for the transition back to a full assessment, this is expected to last only 1-2 fiscal years depending on cost drivers to the regional district. By the time FY25 arrives, the Town assessment will be anticipated at approximately $1.5 million.

●       Stormwater Utility. July 1, 2023, or FY24, the stormwater utility implementation will be a tremendous amount of work and will require a 1-3 year transition out of the operating budget and into the utility. The start of this process in FY24 will be exhausting and time consuming for Finance, HR and DPW.

●       Inflation will be a factor as wages, petroleum and costs are increasing across the board for materials, goods and services, which will increase town budgets especially for departments such as Facilities and Public Works.

 

●       Debt & Interest. The next three fiscal years will see a demand for increased share of debt and interest with projects that are in the pipeline or are anticipated to start within the next year. Projects that will require borrowing, debt and interest are Police Station, Remington-Jefferson Rehabilitation, the Beaver Street Interceptor, Davis-Thayer School and potential open space investments. While some outside the operating budget sources will pay for these projects, it is a reminder costs will continue to rise due to projects that are badly needed or will have significant community interest.

●       Recruitment and Retention. Maintaining Franklin as an attractive place to work as employment markets shift as we adapt to the pandemic. A Compensation and Classification Study to analyze market competitiveness in the current environment for nonunion Municipal Departments and the Technology Department. The Town has an exceptional work culture. The Town has invested heavily in facilities, gear, apparatus and equipment that make Franklin an attractive place to work by getting our staff the gear they need to do their jobs.

Revenue trends. As in any year, monitoring revenue trends is important. However, FY23 will give the Town a greater sense of where the economy is post-COVID-19 pandemic, with rising inflation, petroleum costs, interest rates, consumer shopping trends and global finance markets. These dynamics are critical to the Town’s new growth and local receipts revenue sources. 

Find the full set of docs for the FY 2023 budget online

https://www.franklinma.gov/town-budget/webforms/fy-23-budget-materials

Town of Franklin - FY 2023 Budget Narrative - the high level view of what's in this year's proposed budget