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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_