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APPROPRIATION COMMITTEE-2.020 ATM 25 March 2020
<br /> and the amount by which actual expenses are less than budgeted. The "other" shared expenses are domi-
<br /> nated by employee benefits,the largest component of which is Health Insurance costs.
<br /> Table A-5a. Expense Projections Aggregated
<br /> FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025
<br /> Expense Cateor Actual Actual Revised Proposed Projection Projection Projection Projection
<br /> Education $103,922 $108,677 $116,024 $121,221 $128,812 $133,965 $139,297 $145,570
<br /> LPS $102,252 $106,551 $113,554 $118,358 $125,662 $130,500 $135,486 $141,378
<br /> Minuteman $1,670 $2,126 $2,470 $2,863 $3,149 $3,464 $3,811 $4,192
<br /> Municipal $46,452 $48,216 $52,217 $53,792 $55,732 $57,484 $59,293 $61,071
<br /> Shared Expenses $57,973 $57,109 $61,096 $62,608 $65,172 $67,531 $70,964 $70,010
<br /> OPEB $1,830 $1,830 $1,880 $1,930 $1,980 $2,030 $2,080 $2,130
<br /> Capital $6,422 $7,549 $8,137 $7,744 $8,466 $9,190 $9,914 $9,939
<br /> Capital Stabilization Fund $7,690 $3,560 $2,269 $1,773 $1,500 $3,000 $4,500 $6,000
<br /> Other w 542,032 544,169 548,809 551,162 553,226 553,312 554,470 $51,941
<br /> $208,347 $214,002 $229,337 $237,621 $249,716 $258,980 $269,554 $276,650
<br /> �Gr.andtotal
<br /> italics are subtotals and are not included in total
<br /> e ation of values in Table 4a.
<br /> Table A-5b shows the year-to-year percentage increases in the various aggregated categories. Education
<br /> expenses are projected to grow more rapidly than municipal expenses.Within education,the Town's con-
<br /> tribution to Minuteman is projected to rise substantially more rapidly than the budgets for LPS. The Town
<br /> plans to increase OPEB contributions at$50,000 per year, a modest annual rate of about 2.5%.
<br /> Table A-5b. Annual Rates of Increase in Expenses
<br /> FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025
<br /> Expense Cateor Actual Revised Budget Projection Projection Projection Projection
<br /> Education 4.6% 6.8% 4.5% 6.3% 4.0% 4.0% 4.5%
<br /> LPS 4.2% 6.6% 4.2% 6.2% 3.9% 3.8% 4.3%
<br /> Minuteman 27.3% 16.2% 15.9% 10.0% 10.0% 10.0% 10.0%
<br /> Municipal 3.8% 8.3% 3.0% 3.6% 3.1% 3.1% 3.0%
<br /> Shared Expenses V 3.8%r 8.3%P' 3.0%p' 3.6%r 3.1%r 3.1%r 3.0%
<br /> OPEB 0.0% 2.7% 2.7% 2.6% 2.5% 2.5% 2.4%
<br /> Capital 17.6°/% 7.8% -4.8% 9.3% 8.5% 7.9% 0.2%
<br /> Capital Stabilization Fund -53.7% -36.3% -21.9% -15.4% 100.0% 50.0% 33.3%
<br /> Other 5.1% 10.5% 4.8% 4.0% 0.2% 2.2% -4.6%
<br /> Grand total 2.7% 7.2% 3.6% 5.1% 3.7% 4.1% 2.6%
<br /> Note:Each entry shows the percentage change from the evious year,calculated from Table A-5.
<br /> Planned contributions to the Capital Stabilization Fund to reduce the future impacts on taxes of the High
<br /> School project show the greatest volatility, continuing to fall through FY2022 and then rising for the re-
<br /> maining three years.Even in FY2025,however,the planned contribution is lower than the actual in FY2018
<br /> (and the actuals in FY2016-18, not shown in the tables). Other shared expenses are projected to rise at
<br /> relatively low rates and to actually decline in FY2025, reflecting primarily two factors: (1) the land-pur-
<br /> chase notes are expected to be fully retired in FY2022, dropping projected payments to zero in FY2023-
<br /> FY2025, and(2)the Town expects to complete the retirement of its unfunded liability for pension funds in
<br /> FY2024,allowing contributions to fall to the level needed to cover liabilities incurred from each additional
<br /> year of employment starting in FY2025.
<br /> Concluding Remarks
<br /> The Finance Department's projections appear to suggest that over the next half-decade,the Town will have
<br /> to find ways to reduce expenses or increase revenues to maintain a balanced budget as required by state
<br /> law.However,our review suggests that the problems may be less severe than they appear because the Town
<br /> follows a fairly conservative approach in forecasting revenues.
<br /> To address the financial strains suggested by the projections, some combination of actions may be needed
<br /> to meet balanced budget requirements, such as:
<br /> 1. Improving efficiency so that the same services can be provided with fewer resources. Such
<br /> opportunities may well prove elusive.
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