1. FY2007 Budget Presentation Annual Town Meeting April 24, 2006

2. Budget Development Process  Joint Meeting on Town Finances- June 9, 2005 Analysis of Financial Trends Presentation of 5 Year Financial Forecast Budget Model- funding allocation Original Projected Deficit for FY2007 was $2.6M

3. Budget Development Process  Series of Joint Meetings to update revenue/ expenditure projections October 6, 2005 November 29, 2005 January 18, 2006 March 8, 2006

4. Budget Model

5. Revenue History

6. Revenue Highlights  State Aid increase of $1,256,143 $589K due to uncapping of Lottery 2 years ahead of schedule $464K increase in Chapter 70 $145K increase in Charter Tuition Reimbursement (offset by higher assessment) Other minor increases in Quinn Bill, Exemptions & Library Offset

7. Revenue Distribution

8. Local Taxes

9. State Aid History

10. State Aid

11. Available Funds

12. Local Receipts

13. Expenditure History

14. Expenditure Highlights  Total budgetary increase $2,086,895, or 2.3% over FY2006  Largest increases in employee benefits +$1,378,971 Health Insurance +$798K Retirement Assessment +$497K

15.  Employee Benefits  Utility & Gasoline cost increases  Limited Revenue Growth Chapter 70 Inequities Lower than expected growth in Building Permit Fees Budget Busters

16. Expenditure Summary

17. Expenditure Distribution

18. Municipal Administration Highlights: Legal Services have been increased by $55K to reflect actual need Revaluation +$25K New Tax Collection Software +$36.5K Legal Services for delinquent tax collection +$13K Offset by functional consolidation of Assessor & Tax Collector’s Offices

19. Public Education Highlights: Nashoba Assessment +$328K increase of 9 students (increases minimum contribution) increase in minimum contribution of $45K capital equipment $26K student transportation $91K

20. Police Department/ Dog Officer Highlights: FTE reduction of 2 patrol officers large increase in personnel costs due to contract settlement (FY04 – 06) Gasoline +$41K (59% increase) utilities +$23K (32% increase)

21. Fire Department Highlights: total increase in utilities & gasoline +$11,570 (28%) FTE reduction of 1 firefighter large increase in personnel costs due to contract settlement (FY04 – 06)

22. Inspections Highlights: minor increases in expenses to reflect inflation

23. Public Works Highlights: 1 FTE reduction in Highway will result in a layoff Street lighting +$25K 5% increases in solid waste disposal & hauling contracts elimination of leaf pick up program Snow & Ice budget increased $40K to more closely reflect expenditure trends

24. Cemetery Commission Highlights: change in fee split to have department fully fund expense budget. minor increases in expenses to reflect inflation

25. Municipal Facilities Highlights: proposal does not include funding for 3 new positions (2 HVAC & 1 Groundskeeper) as called for in plan HVAC maintenance will continue to be provided by contract funds to purchase 3 used vans

26. Human Services Highlights: Veteran’s Benefits increased by $13.5K to more accurately reflect current costs

27. Community Enrichment Highlights: no changes programs continue to be generally supported by user fees

28. Board of Health Highlights: no changes

29. Library Highlights: proposal includes minimum funding to qualify for state funding

30. Undistributed Highlights: proposal includes: 12.2% increase in health insurance 13 % increase in retirement assessment $19K increase in Unemployment Benefits to cover increased costs as a result of layoffs

32. Debt Service Highlights: funds all existing long-term debt services funds 2005 Capital Improvement Plan temporary funding for school construction & renovation projects per project manager’s cash flow projections

33. Debt Service- Overview

34. Debt Projection

35. Non-Appropriated Highlights: 35% increase in charter school tuition, 50% offset by increase in Cherry Sheet

36. Issues of Concern Collective Bargaining Employee Benefits  Rising costs  Increased enrollment/ change in enrollment during the Fiscal Year Ability to sustain service levels State Aid FY2006 Close Out  Effect on Free Cash  Effect on Revenue Projections for Tax Recap

37. Article 9 Sewer Enterprise Fund

38. Sewer Enterprise Highlights: fees cover the full cost of providing the service plus the indirect costs such as employee benefits & administrative overhead.