A small crowd of town residents and local officials packed the Selectmen's Meeting Room at Thursday night for The State of the Town, a presentation that offered a closer look at the town budget and Marblehead's financial plans for the future.
Before Finance Director John McGinn presented those in attendance with a brief PowerPoint presentation outlining the town's plans for Fiscal '13 and beyond, Town Administrator Tony Sasso made sure to point out that it was careful planning that helped Marblehead avoid the kind of budget cuts implemented by other North Shore communities over the last few years.
"The goal is always to have a level services budget so we can provide the same services to our residents that they received the previous year," Sasso said, adding that even if state aid isn't decreased, town officials shouldn't see it as "more money to spend - we should be thinking 'now we have money to set aside for fiscal '14.'”.
The following is an excerpt from the Fiscal '13 Financial Outlook:
While the town enters the Fiscal Year 13 budget process in the black, it still faces four significant unresolved issues that could further impact the FY13 budget process. These are:
- Resolution of the FY13 State Budget and the impact on state aid.
- All collective bargaining agreements expire at end of FY12.
- The anticipated increase in the rates for the town's health insurance plans.
- Charter School enrollment from Marblehead.
Some Good News:
- Free cash will be higher than a year ago, due to: no deficits, strong budget oversight and appropriate revenue estimates.
- The town's Bond Rating was reaffirmed, making Marblehead one of 23 communities in the state with a AAA rating.
Projected FY13 Revenue:
- Property Taxes: $50.5 million
- Estimated State Aid: $5.8 million
- Local Estimated Receipts: $3.4 million
- Free Cash & Enterprise Payments: $6.6 million
- Other Available Funds: $56,000
- Total Estimated Revenue: $66.4 million
Revenue Sources for FY13 Budget:
- Property Taxes: 76 percent
- Local Receipts: 5.2 percent
- Free Cash and Enterprise Payments: 10 percent
Estimated FY13 Spending:
- Projected FY13 Budget Appropriations: $62.7 million
- Other State Charges (MBTA): $535,000
- Charter School Tuition Cost: $2.1 million
- State Offsets (from State Aid): $23,487
- Potential Deficits (Snow & Ice): $350,000
- Total Amount Needed for FY13: $66.2 million
In conclusion there will be a balanced budget for FY13, but town finance officials need to remember the following:
- State Aid needs to be monitored closely through the state budget process to ensure our estimates are conservative enough.
- The actual increase in health insurance rates should be known prior to Town Meeting.
- The goal in this budget process is to maintain the current level of service and current labor force, but this all needs to be done in the context of a balanced budget.
- Its critical that FY 13 budget decisions also be made with an evaluation of how these decisions effect the Town’s FY14 Finances and beyond.