Town of Brunswick, Maine Finance Committee Meeting joint meeting of Council & School Board members Thursday, October 19, 2017 3:30 5:00 PM 85 Union Street Council Chambers Agenda 1. Acknowledgement that meeting was properly noticed 2. Adjustments to agenda / Public comment 3. Approval of meeting minutes from 9/21/17 4. 2016 17 Audit report from RKO 5. Long term financial planning report on historical trends 6. 2018 19 planning elected officials discussion 7. Adjourn
Town of Brunswick, Maine Town Finance Committee Thursday, September 21, 2017 3:30 PM 85 Union Street Room 206 Meeting Minutes (DRAFT) Elected Officials: Staff: Alison Harris, Jane Millett, Kathy Wilson (committee members) John Eldridge, Julie Henze, Branden Perreault 1. Acknowledgement that meeting was properly noticed JH confirmed that the meeting was on the Town Calendar 2. Adjustments to agenda / Public comment Adjustments: None Public comment: Jean Powers Offered a suggestion for Town Council meeting that any financial items go first, to expose more people to the financial issues of the Town. (AH commented that there is an established protocol for the order of items. Committee discussed, and stated that this could be accomplished through adjustments to the agenda.) 3. Approval of meeting minutes from 8/17/17 JM moved, AH seconded, minutes unanimously approved with correction. 4. Long term financial projections JH reviewed the packet items, beginning with the budget development calendar for January June 2018. Council discussed how the calendar is developed, and JH described how in 2013 the CIP schedule was shifted to the fall to give the capital items attention independent of, and prior to, the annual operating budget process in the spring. Committee discussed ways to begin work on the budget earlier by identifying priorities and looking at longer term financial projections. JH presented the long term financial projection model which has been updated to allow for changes in assumptions for each year. Committee discussed the model and reviewed the major drivers, noting that the school portion of the tax rate has increased as state aid to education has decreased. This is the largest single revenue outside the property tax, and is challenging to predict. JE described how state aid to education is calculated by the state and communicated to the municipalities through the ED 279 beginning in February each year. Public comment: Jean Powers pointed out the Governor s plan to shift the responsibility for special education services for 3 to 5 year olds.. Also raised the issue of additional tuition that was mentioned in the school board meeting. Asked about how to reduce the Town s health insurance costs. Committee discussed union negotiation approach, in which the town manager is looking at the full cost of the package. If the unit wants to keep existing health benefit, this leaves less for wage increases. Council does not control the school department union negotiations. 1
Committee discussed tuition revenue, which appears in education charges for services. Looking back to 2009, this revenue was $1.2 million, and in 2016 it was $105,856. This change is primarily due to the loss of Durham students attending BHS. Also different, due to the base closure, is the loss of federal impact aid. To address questions about discretionary expenditures, JE reviewed the template priority list which was provided to facilitate discussion. Committee reviewed the list and discussed various lines, and options to re categorize differently. This is a general guide for JE to assist in identifying priorities as he makes decisions during the budget development. JH proposed to continue using the list as a tool for discussion of Council priorities, and will try to offer alternative categorization. JE framed the longterm financial planning question in terms of how a 1% municipal expenditure increase would look in the budget. Municipal expenditures at $23.4 million, 1% is $234,000 and the police union agreement just passed uses half of that, leaving very little for anything else. Committee discussed ways to determine priorities and realize efficiencies. Committee discussed the budget process, and AH expressed hope to avoid time crunch and hard feelings leading up to the budget adoption in May. Council meeting in January is on the calendar to work on communicating a goal tax rate increase. Discussion of the School/Municipal share and how the 60/40 expectation developed. Committee expressed interest to continue looking at the priority list in different ways, and the longterm model, and would like to see some of the trends illustrated graphically. October FC meeting will be a joint finance committee with the school dept, and will be an opportunity to meet with the auditors and look at some historical budget data. 5. Cash & investments report JH presented the Investment Policy which was updated in October 2016, and a listing of the Town s cash and investments as of June 30, 2017. This is the required policy review and reporting as required by the policy. The Town continues to follow the S_L Y policy, investing in instruments which are primarily safe and provide good liquidity. Investment income is considered last. Committee discussed the accounts still with Bank of America, even though primary banking operations are now with Peoples United. JH pointed out how long it takes to unravel a banking relationship. 6. Finance Report a. JH presented August 2017 budget reports. Asked if the committee still wants this to be included each month, as it is also presented to the full council. Committee directed to only include if there is something that warrants attention. Noted building permit revenues already at 30% of budget collected. b. Fund Balance presentation JH gave the committee a quick PowerPoint presentation reviewing the Council s Fund Balance Policy, and outlining the structure and status of the municipal fund balance. This included a description of the five components of fund balance going from most to least restrictive: Nonspendable, Restricted, Committed, Assigned and Unassigned. Explained the focus on the Unassigned category, and how the bond rating agencies (Moody s, S&P) look at the Town s adherence to its policy. Pointed out statements from Moody s rating of the Town s March 2017 bond issue regarding reliance on reserves to balance budgets. Also mentioned benefits of having fund balance above the target, and possible uses for noncapital projects, smaller capital projects. 7. Adjourn 2
Town of Brunswick, Maine Finance Committee & Historical Trends October 19, 2017 Longterm Financial Planning Recognize major budget drivers Revenues Expenditures Identify trends Changes in amounts Changes in ratios Understand relationships Tax rate to Taxable Valuation State Aid to Taxes
Town of Brunswick Historical Trends Actual Expenditures & Other Uses Education Municipal County Trans to other funds Thousands 40,000 35,000 30,000 31,333 31,265 30,518 30,988 31,090 32,910 33,356 33,865 35,343 25,000 20,000 16,995 16,397 16,074 16,710 17,654 18,870 19,696 19,235 19,773 15,000 10,000 5,000 3,654 2,058 2,370 2,601 2,958 3,200 1,153 1,790 1,679 1,088 1,150 1,171 1,187 1,183 1,249 1,333 1,360 1,411 Town of Brunswick Historical Trends % Actual Expenditures & Other Uses Education Municipal County Trans to other funds 70% 60% 60.9% 61.1% 60.6% 59.0% 58.8% 58.5% 60.1% 60.2% 60.7% 50% 40% 33.0% 32.0% 31.9% 31.8% 33.4% 33.6% 35.5% 34.2% 34.0% 30% 20% 10% 0% 7.0% 4.0% 4.6% 5.2% 5.6% 5.7% 2.1% 3.2% 2.9% 2.1% 2.2% 2.3% 2.3% 2.2% 2.2% 2.4% 2.4% 2.4%
Town of Brunswick Historical Trends Tax Rates ($/1,000) Education Municipal County Tax Rate 35.00 30.00 25.00 22.54 22.54 22.88 23.68 24.90 26.54 27.46 28.36 29.35 30.11 20.00 15.00 10.00 5.00 16.10 16.60 16.96 17.34 17.81 14.30 12.20 12.10 12.33 12.87 9.48 9.54 9.63 9.90 9.72 9.51 9.86 10.41 10.99 11.20 18.37 10.86 6.84 0.86 0.90 0.92 0.91 0.88 0.93 1.00 0.99 1.02 1.10 0.67 Town of Brunswick Historical Trends % of Tax Rates Education Municipal County 70% 60% 54.1% 53.7% 53.9% 54.3% 57.4% 60.7% 60.5% 59.8% 59.1% 59.1% 50% 40% 42.1% 42.3% 42.1% 41.8% 39.0% 35.8% 35.9% 36.7% 37.4% 37.2% 30% 20% 10% 3.8% 4.0% 4.0% 3.8% 3.5% 3.5% 3.6% 3.5% 3.5% 3.6% 0%
Town of Brunswick Annual State Aid and Use of Fund Balance 14,000,000 14,588,692 12,000,000 10,000,000 Education Balances 10,514,745 8,000,000 8,745,456 Municipal Fund Balance State School Subsidy 6,000,000 State Revenue Sharing 4,000,000 1,850,000 2,000,000 1,000,000 2,611,364 1,138,850 0 225,000 550,000 State Aid Town of Brunswick Annual State Aid and Tax Rates Tax Rate per 20.00 $14,000,000 $12,000,000 14,588,692 16.18 16.35 16.96 17.34 17.81 18.00 16.00 14.30 $10,000,000 $8,000,000 12.79 12.34 8,745,456 8.29 8.27 12.43 8.66 11.97 12.18 12.20 12.10 12.33 9.48 9.54 9.63 8.97 9.18 12.87 9.90 9.72 9.42 10.07 10.40 14.00 10,514,745 10.99 11.19 12.00 10.00 $6,000,000 $4,000,000 $2,000,000 1,850,000 State School Subsidy State Revenue Sharing School Tax Rate Municipal Tax Rate County Tax Rate 1,138,850 8.00 6.00 4.00 2.00 $ 0.87 0.84 0.81 0.81 0.84 0.86 0.90 0.92 0.91 0.88 0.94 0.98 0.99 1.02 1.10 0.00
Benefits 4,382,699 18.7% Town of Brunswick 2017 18 Municipal Services Expenditure categories Commodities 1,201,642 5.1% Contractual 4,367,807 18.6% Salaries & Wages 9,042,281 38.6% People Plus & Library 1,566,485 6.7% Programs 195,716 0.8% Debt Service 873,286 3.7% Capital 112,097 0.5% Transfers to other funds 1,687,703 7.2% Thousands $14,000 $12,000 $10,000 $8,000 Total 9,262 7,347 9,837 7,732 Town of Brunswick ed Municipal Salaries/Wages and Benefits 10,365 10,886 10,967 8,217 8,312 8,299 10,553 7,847 10,934 8,028 11,463 11,881 8,333 8,415 12,367 12,620 13,048 8,661 8,741 8,834 Total 13,425 9,042 $6,000 Salaries/Wages Benefits $4,000 $2,000 1,915 2,105 2,148 2,574 2,668 2,707 2,905 3,131 3,466 3,705 3,879 4,214 4,383 $0 2005 06 2006 07 2007 08 2008 09 2009 10 2010 11 2011 12 2012 13 2013 14 2014 15 2015 16 2016 17 2017 18
Town of Brunswick Municipal Expenditure Categories 10,000 Thousands 9,000 8,352 9,042 8,000 7,000 Salaries & Wages Benefits Contractual 6,000 5,000 Commodities People Plus & Library Programs Debt Service Capital Transfers to other funds 4,368 4,000 3,000 3,367 2,574 2,000 1,000 2008 09 2009 10 2010 11 2011 12 2012 13 2013 14 2014 15 2015 16 2016 17 2017 18 50.0% Town of Brunswick Municipal Expenditure Categories as % of total 45.0% 40.0% 35.0% 30.0% 43.3% 43.2% 42.3% 41.5% 41.7% 40.5% 41.1% 40.3% 39.5% Personnel Benefits Contractual Commodities People Plus & Library Programs 38.6% 25.0% Debt Service Capital Transfers to other funds 20.0% 15.0% 10.0% 17.4% 17.5% 17.4% 17.3% 17.6% 17.8% 18.0% 18.5% 18.5% 18.6% 18.8% 18.7% 17.6% 17.9% 16.7% 15.3% 15.7% 13.3% 13.9% 14.3% 5.0% 0.0% 2008 09 2009 10 2010 11 2011 12 2012 13 2013 14 2014 15 2015 16 2016 17 2017 18
January 2018 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 3 4 5 6 New Year s Day 2 School Board Meeting 7 8 9 10 11 TC/SB Finance Committee Meeting Audit & 12 13 14 15 16 17 18 19 20 Munic Dept Martin Luther King, Jr. Day Set tax rate Personnel target/share s due 21 22 23 24 25 26 27 28 29 30 31
February 2018 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 3 4 5 6 7 School Board Meeting (?) 11 12 13 14 SB Workshop 18 19 20 1 Finance Committee Workshop CIP 2 Munic dept budgets due 8 9 10 15 Finance Committee Meeting 16 17 21 22 23 24 President s Day 25 26 27 28 SB Workshop
March 2018 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 2 3 4 5 Mgr s CIP 11 Daylight Savings Begins 18 19 6 7 SB Public Forum 12 13 14 School Board Meeting Finalize 1 TC budget workshop Mgr s prelim budget 8 TC budget workshop Dept presentations 15 TC Finance Committee Meeting 20 21 22 TC budget workshop Dept presentations 25 26 27 28 29 TC budget workshop Mgr s budget 9 10 16 17 23 24 30 Passover 31
1 April 2018 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 6 7 April Fool s Day Easter Sunday 2 8 9 10 11 15 16 17 Set /CIP Public Hearing 3 4 5 /CIP Workshop School School Board Meeting 12 /CIP Workshop 18 19 TC Finance Committee Meeting /CIP Workshop (if needed) 22 23 24 25 26 /CIP Workshop 29 30 13 14 20 21 27 28
May 2018 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 4 5 6 7 13 14 /CIP Adoption 20 21 1 2 SB Meeting (if needed) 8 9 School Board Meeting 3 /CIP Pub Hearing 10 /CIP Workshop (if needed) 15 16 17 TC Finance Committee Meeting 11 12 18 19 22 23 24 25 26 27 28 29 30 31 Memorial Day
June 2018 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 8 9 10 11 12 Sch Referendum 17 18 13 School Board Meeting 14 TC Finance Committee Meeting 15 16 19 20 21 22 23 24 25 26 27 28 29 30