Town of NorwellBoard of Selectmen

Fiscal 2007BUDGET PRESENTATION

Monday, April 24, 2006

HOW DID WE GET HERE?

Increase in Fixed Costs

-Health Insurance Increase $573,320

-Pension Cost Increase $113,319

$686,639

Levy Limit (2.5%) without Override $587,580

New Growth $400,000

Health Insurance Increase ($573,320)

Pension Increase ($113,319)

Debt Service ($42,664)

Available $258,277

STRUCTURAL DEFICIT = $0 Additional for Town or Schools

Fixed Costs vs. State Aid

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

FY1998 FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007(House 2)

Fiscal Year

Co

st

State Aide

Health Insurance

Pensions

Net State Aid

$2,7

33,9

65

$3,0

54,1

35

$3,3

37,5

21

$3,0

91,0

97

$2,2

55,6

51

$2,2

94,0

58

$2,3

59,6

97

$2,4

33,6

40

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Dol

lars

of

Sta

te A

id

FY00FY01

FY02FY03

FY04FY05

FY06

FY07 (H

ouse

2)

WHY NOT USE THE STABILIZATION OR OTHER FUNDS NOW TO BALANCE THE BUDGET?

• Does not make fiscal sense to continue using one time revenue to fund recurring operational costs – Only makes the problem worse

• An override without a vote• Endanger our credit rating – Would damage

our ability to borrow at a favorable rate in the future.

How does it Work

Advisory Board has presented a balanced budget for FY2007. Involves reductions in numerous departments to balance budget

Warrant has 3 additional options. Each one restores a level of services to a

particular line item. Larger options contain all items in the lesser

options ($840,953 override is contained in both the $1.5 m and $1.9 m options).

Impacts to General Government Side

Library ($126,182)

Recreation ($10,000)

Council on Aging ($12,500)

Board of Health ($10,000)

Police Department ($66,000)

Call Firefighters ($8,881)

Impacts to General Government Side

Treasurer/Collector ($3,500)

Commission on Disabilities ($1,500)

Beautification, Advisory Board, Cemetery, Historical Commission, PBMC

($5,435)

Group Insurance ($100,000)

Will have a significant impact to the level of services.

Option 1

Maintains current staff (no hire/no fire) Does not improve or restore service levels on

general government side Would result in larger class sizes Restores cuts outlined in 2007 Balanced

budget column

Option 2

Contains all of the provisions of Option 1 Adds 7 additional classroom teachers for

$357,000 to help meet classroom educational guidelines.

$165,000 for text book adoption in Schools Restores some clerical assistance at Town

Hall cut in FY2006 Restores position in Tree & Grounds

Department cut in FY2006 for field & grounds maintenance.

Option 3

Contains all of the provisions of Options 1 & 2 Restores clerical positions cut in FY06 Restores Library hours cut in FY06 Adds weekend Library hours in the summer “Partial Full Restoration” in School

Department

Ballot Questions

3 Options on the Ballot Option 1 - $840,953 Option 2 - $1,534,550 Option 3 - $1,950,409

The question with the highest dollar amount that passes is the question that goes into effect.

Funds those lines specified in the Warrant for that option. Does not require a further Town Meeting vote.

What should you do?

Review the Warrant Check Advisory Board Balanced Budget

column and various override options Know what your choices are

Attend Town Meeting May 8, 2006 Vote – This is your chance to decide what

services you want and what taxes you want to pay. Vote for one option, all options or against all options but exercise your right and VOTE on May 20, 2006

The FY07 Budget

and

Town Meeting Presentation

Town of NorwellAdvisory Board

The Role of the Advisory Board

To Receive Budget Requests from All Departments

To Organize a balanced Budget and recommend such to Town Meeting

To investigate and consider all articles in the Warrant to be brought before the Town and to report and advise...

Has the vested authority to examine the books and records of any Town Board or official…

FY07 New Revenue Summary

2 ½ Percent Increase $ 587,580 New Growth $

400,000 Net State Aid* $

73,943 Total $1,061,523

*Note: Net State Aid is Estimated

Net State Aid (Aid less Assessments) FY06 State Aid $ 2,359,697 FY07 Governor’s Proposed $ 2,433,640

Net Increase $ 73,943

FY07 House Proposed $ 2,275,061

Net Decrease $ 84,636

Note: FY07 Budget developed with Governor’s numbers - ($158,579) difference

FY07 Cost Increase Summary

Pension Costs $ 113,319 Health Insurance $ 573,320 Debt Service (under Levy) $ 42,664 Schools $ 786,201 Departmental Requests $ 613,610

Total $1,902,476

Note: Energy costs excluded

FY07 Available Funds

Sources: Free Cash $ 316,816 Overlay Surplus $ 1,000,000 Stabilization $ 1,400,000

Uses: Special Town Meeting Articles $ 320,000 Capital and Other Articles $ 836,889 Reduce Tax Rate (Article 46)$ 400,000

Advisory Board Actions

Considered all departmental budgets and all Articles for Town Meeting

Voted to Recommend budgets that included an override of $ 840,953 and $1,534,550

Voted not to Recommend budgets that included a $1,950,407 override, or no override at all

Voted to Recommend cuts for a balanced, no override budget

FY07 Reductions if No Override

School Department $ 497,651 Beautification Committee $ 500 Commission on Disabilities $ 1,500 Advisory Board $ 1,485 PBMC $ 700 Treasurer Collector $ 3,500 Police Department $ 66,000

FY07 Reductions if No Override

Call Fire $ 8,881 Council On Aging $ 12,500 Board of Health $ 10,000 Cemetery $ 1,000 Historical Commission $ 1,750 Library $ 126,182 Recreation $ 10,000 Group Insurance $ 100,000

Where does the money go?

Schools51%

Public Works3%

Public Safety12%

General Govt5%

Fixed Costs24%

Recreation2%

Board of Health3%

Based on FY06 Budget

Property Tax Impact Impact

Based on NO

Override

Impact Based on $840,953 Override

Net Impact of $840,953

Alone

Impact Based on $1.534m Override

Net Impact of $1.534m

Alone

Impact Based on $1.950m Override

Net Impact of $1.950m

Alone

Projected Tax Rate

$11.04 $11.40 $0.36 $11.70 $0.66 $11.88 $0.83

Projected Tax Increase

$0.11 $0.47 $0.36 $0.77 $0.66 $0.95 $0.83

Projected % Increase in Tax Rate

1.02% 4.31% 3.29% 7.03% 6.01% 8.66% 7.64%

Projected Impact on Property Valued at $250,000

$28 $118 $90 $192 $164 $236 $209

Projected Impact on Property Valued at $580,948*

$65 $274 $209 $446 $381 $549 $485

Projected Impact on Property Valued at $750,000

$83 $353 $270 $576 $492 $709 $626

Projected Impact on Property Valued at $1,000,000

$111 $471 $360 $768 $657 $946 $834

Impact of School Building Loan:

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

2005 2006 2007 2008 2009 2010

Per

Tho

usan

d

IMPORTANT DATES

Town Meeting May 8 (9), 2006

Special Town Election May 20, 2006

Town Meeting May 22, 2006

Town of NorwellBoard of Library Trustees

Impact of No Override

A Reduction of $126,000 Means:

Loss of ¼ of annual budget Reduction of 1/3 of library staff Loss of 1/3 of book budget Library is closed one additional day Fewer programs offered

Longer wait time for requested materials Reduction in state library aid Certification jeopardized Eligibility for grants jeopardized

A Reduction of $126,000 Means:

Override Option 1: Retains 46 hours of operating schedule Allows library to remain open 6 days per

week during school year Retains staff and services Allows library to remain eligible for state aid,

certification and grants

Restores 5 hours to operating schedule Returns operating schedule to 2005 level May add Saturday hours to summer schedule Continues all services in Option 1

Override Option 3: