Financial Forecast 12-04-24 City of Beverly Financial Forecast Committee December 4, 2024 Meeting Minutes Board or Commission: City of Beverly Financial Forecast Committee Date: December 4, 2024 Location: Beverly City Hall, 191 Cabot Street, Beverly Third Floor Conference Room A City Council Appointees: Chair Kathleen Feldman City Council Appointee Scott Houseman City Council Appointee Karen Fogarty School Committee Appointees: Lorinda Visnick Dr. Jeff Silva Dominic Copeland Mayoral Appointee: Paul A. Manzo By Ordinance: City of Beverly Director of Finance Bryant Ayles 2�,;' Ex Officio: Gerard Perry rE�1 'f Others Present: Councilor at Large Hannah Bowen Councilor at Large Brendan Sweeney Councilor Todd Rotundo Beverly Public Schools Superintendent Dr. Suzanne Charochak Beverly Public Schools Finance Director Emma Puglisi Erin Brown 1. Opening Comments by the Chairperson and General Committee Discussion Chair Kathleen Feldman called the meeting to order at 6:30 pm and reminded the committee tonight's meeting would cover School Funding. The committee agreed to meet on Thursday, December 12 for the final meeting of the year at 6:30 pm, at which time the group will vote to approve the report in time for submission prior to the 12/31/2024 deadline as per city ordinance. 2. Approval of Minutes Members reviewed the November 13, 2024 draft meeting minutes. Bryant Ayles made several corrections. Ms. Fogerty made a motion to accept the meeting minutes as proposed with Mr. Manzo seconding. (Councilors Scott Houseman and Dr. Jeff Silva abstained, as they were not present at the 11/13 meeting.)The motion carried, 7-0. 1 City of Beverly Financial Forecast Committee December 4, 2024 Meeting Minutes 3. Presentation by Emma Puglisl Proposed Beverly Public School Expenditures Ms. Puglisi outlined the proposed expenditures, emphasizing that costs associated with Special Education and out of district pupils are a challenge and not easy to predict. Because the school budget is tight, she said, it is prudent to estimate higher in case schools have a higher influx of students than predicted. Ms. Puglisi estimated 70% of eligible full time school employees (not all of the 860 are eligible) are enrolled in the health insurance plan.An assumed 6% COLA increase figures into the Health Insurance forecast. Most of the school transportation provided is within the district.A 5% increase is projected. The schools share building and grounds maintenance with the city. Discussion centered on the vacancy of the plumber/HVAC position as the costs for related repairs in this area have proven expensive.Attempts to hire an apprentice from one of the local vocational schools or job fairs have fallen short as we cannot compete with private industry salaries. Additionally, union rules prohibit offering the position at a higher pay rate. School Appointee Lorinda Visnick pointed out that the purpose for consolidation with the city was to avoid this situation. She questioned whether we should un-consolidate. Councilor Scott Houseman asked if it would save the schools money to un-consolidate, and whether a cost-benefit analysis should take place. Ms. Puglisi said that the forecast takes these expenses into account. The circuit breaker allocation goes back into the revolving fund to apply to next year.A 4.5% average increase in annual tuitions assumes that the school will return to using the prior year's allocation of Circuit Breaker Funding as a budget offset. Next year's tuitions are not easily predictable and we need to be able to absorb that. Two years ago, there was a 14 % increase in OOD collaborative tuitions. Ms. Fogarty questioned why the school department has to foot the entire cost for medical-or mental health-related placements. Beverly Public Schools Superintendent Dr. Suzanne Charochak added that these costs can uproot an entire budget. The goal is to replenish the circuit breaker account, Ms. Puglisi said. Dr. Charochak pointed out that state funding also came in at lower levels. Transportation this year was funded at 44% of expected costs which translated to $300,000 less in aid. With these factors in mind, the expenditures side has changed with revenues remaining the same for the forecast. Ms. Puglisi explained that the total projection does not include the circuit breaker but is a net of what is needed. If the recent election results in disbanding the Department of Education, $2.5M in federal entitlement grants could be at stake. Ms. Puglisi added that these grants are an essential part of the operating school budget. Presentation of Revenues, Bryant Ayles The FY26 forecast assumes annual growth and the goal of recapturing the remaining $750K. State aid projections assume a 3% annual growth and Chapter 70 2% growth. Every other category Is level funded. 2 City of Beverly Financial Forecast Committee December 4, 2024 Meeting Minutes With the prospect of a larger deficit, discussion turned to how to raise additional funds for the schools. The amount needed was discussed, with Ex Officio Gerry Perry estimating a target of$3,5M.An override was discussed but the consensus was that voters wouldn't approve such a measure. Mr, Houseman agreed, adding that, last time around, even with the potential loss of a school, an override was not approved. The idea of packaging the schools with the roads and sidewalks improvements was discussed -- Medford recently passed such a measure. Mr, Perry was asked to include the narrative in his report, that additional revenue streams were discussed and researched to help close the gap. Other items under consideration during the meeting were trash fee increases and potential school fees. Ms. Fogarty discussed the impacticity's loss of tax income from exempt institutions, namely Endicott College. The city loses on the taxation of that property, but as Mr. Perry pointed out, there are countless schools, veterans'facilities, the hospital, and others who benefit from tax exempt status. The group also discussed reactivating the PILOT committee. Mr.Ayles outlined revenue streams such as land and building rentals, lease payments for the solar fields and Verizon's rental of the city's cell phone towers along with the proceeds from the sale of the Briscoe School, (which will be exhausted at the end of FY28.) Ms. Feldman asked for a vote on approving all revenues and expenditures (with a reduction of$25-30K which was in error and will be corrected by Mr.Ayles) The motion was made by Mr. Houseman and seconded by Ms. Fogarty. 4. General Discussion on the Final Report The Financial Forecasting Committee will be meeting and voting to approve the final report during the final meeting of the year on Thursday, December 12, location to be announced, at City Hall at 6:30 pm. Mr. Perry asked that any specific language revisions be sent to him by Friday so that he has ample time to draft the report. 5. Adjournment Ms. Feldman asked for a motion to adjourn. Ms. Fogarty made a motion, seconded by Mr. Silva, which carried 9-0. 3