FFC MinutesFinancial Forecasting Committee
Minutes
Meeting of March February 22, 2016
6:30 PM
City Hall
Members Present: Jim Latter, Estelle Rand, Paul Manzo, Lorinda Visnick, Medley Long, Karen Fogarty,
Bryant Ayles, Jean Sherburne, Kathy Griffin
Jim Latter, Chair, called the meeting to order at 6.30 PM_ Jim had members introduce themselves since
this was the first meeting of the newly appointed committee_ Jim indicated that he would like the
committee to have only two or three additional meetings and to finalize the forecast by late March or early
April for distribution to the council and the school committee_
Jim distributed copies of recent forecasts to committee members and reviewed the June 2014 Forecast
document with the committee_ He indicated that for example, in a given year if expenditures were
forecasted in excess of revenues that it forced policy decisions as there would always be a balanced
budget each year_
He mentioned that generally the forecast assumptions should be a continuation of current services_
It was decided that Bryant Ayles and Kathy Griffin would work together to prepare the draft revenue
forecast and the draft city expenditure forecast_ It was decided that they would have these documents
done by March 14'_
It was decided that Jean Sherburne would prepare the school expenditure forecast with the superintendent_
She requested until late March to complete the school forecast_
It was agreed that the next meeting would be on March 14 at 6PM
The meeting adjourned at 7 :00 PM_
Financial Forecasting Committee
Minutes
Meeting of March 14, 2016
6:00 PM
City Hall
Members Present: Jim Latter, Estelle Rand, Paul Manzo, Lorinda Visnick, Medley Long, Karen Fogarty,
Bryant Ayles, Kathy Griffin
Members Absent: Jean Sherburne
Jim Latter, Chair, called the meeting to order at 6 :00 PM_ Jim said that per the Agenda we would
discuss the draft Revenue Forecast for FY 17 to FY 20 and the City Expenditure Forecast for FY 17 to FY
20_
Kathy Griffin and Bryant Ayles walked the committee members through the Revenue Forecast_ They
explained that Property taxes were increased each year to the full 2.5% as allowed by Massachusetts
General Law as that has consistently been the City's policy_ Kathy Griffin explained that the assumption
is that New Growth will increase by $930,000 each year through FY 20 which is greater than FY 16's
New Growth but somewhat lower than the ten year average for New Growth_ She explained that the
deduction to the Levy is for an Overlay Reserve (for abatements and exemptions) at _0087 of the Levy
each year_ Bryant Ayles indicated that this would be sound to provide for an appropriate reserve so as to
prevent overlay deficits_ The committee members agreed with those assumptions_
Kathy Griffin explained that the FY 17 state aid amount is per the Governor's Budget and that future
years increase Veterans Benefits at 8% based on the increasing utilization and the state's responsibility to
reimburse_ She indicated that the only other increase for FY 17 to FY 20 is an increase of $50 per each
student each year in Chapter 70 Education Aid_
Karen Fogarty asked what the risk, if due to economic downturns is, there is a loss of state aid_ Bryant
Ayles explained that now the City has Stabilization Fund reserves that could be used if there was a decline
in state aid_ He also explained that the current budget has $1.4 Million for Roads which could be adjusted
if there was a decline in state aid_ So the City has more options to deal with losses in aid, should they
happen, than in the past_
Kathy Griffin reviewed the assumptions for other categories of revenue and that motor vehicle excise and
local receipts were adjusted upward in FY 17 based on strong activity in FY 15 and FY 16 and the
assumptions going forward_
The committee was in agreement with the overall revenue assumptions_ There was no formal vote on the
revenue forecast at the meeting_
Bryant Ayles reviewed the Expenditure Forecast with the committee members_ He explained that Salaries
and Wages are forecasted to increase at 1.5 each year from FY 18 to FY 20_ In FY 17 the increase is
larger due to the fact that unions have settled recently causing a much greater increase between FY 16 and
FY 17, but that in FY 17 and FY 18 the reserve for settlements would decrease since contracts had been
agreed to for the three year period_ He explained that the assumption is to continue to fund Capital Outlay
in the range of $730,000 to $850,000 each year_ He discussed the recent savings in property and casualty
insurance and then the forecast of 3% increases beginning in FY 18_
Kathy Griffin explained the Sanitation numbers represented the general fund subsidy to the Sanitation
Enterprise fund and it increase each based on contractual requirements, this assumption also prevents an
increase in the trash fee_
Bryant Ayles explained the need to increase health insurance on the city side to $9.5 Million for FY 17
based on costs of health care and the City's claims experience_ The committee had a general discussion of
the impact of the health insurance increases from FY 16 to FY 20 would exceed $2 Million_
Bryant Ayles explained that several items are forecasted based on existing schedules such as the existing
debt service, the retirement assessment funding schedule and the preliminary assessment from the North
Shore Technical High School_
Bryant Ayles walked the committee through all the proforma debt (debt still to be issued) for the high
school and middles school each year between FY 17 and FY 20_ Finally Bryant explained that starting in
FY 17 and each year going forward the Forecast assumption is for a contribution to an OPEB Trust Fund
starting at $135,000 in FY 17 and increasing by 3% each year_
Committee members generally agreed with the assumptions, there was no formal vote on the Expenditure
Forecast_
Kathy Griffin said that she would draft tables and narratives based on the assumptions discussed and then
Bryant Ayles would review same_ It was agreed that the School Forecast would be presented at the next
meeting and that the Forecast should be finalized in the near future before the City's bond sale so it could
be available to the rating agency_
Jim Latter asked what would be good dates for the next meeting and it was agreed that March 28 would
be a good night for most members_ Lorinda Visnick asked if it could be at 6.30 PM and it was agreed that
that was a good time_
The meeting adjourned at 7.25 PM_