1. MIDDLEBOROUGH FY16 OPERATING BUDGET February 12 th, 2015 Robert G. Nunes Town Manager

2. FY16 HIGHLIGHTS Strong financial policies and procedures Conservative revenue projections Consistent monitoring of revenues and expenditures Nonuse of one-time reserves on recurring expenses No causes for structural deficit in FY17 Stabilize workforce hours Exceed state requirements for education spending Improved Technology $1.3 in capital improvements throughout town government Implementation of a five year pavement management program $25m capital upgrade at the water pollution control facility Implementation of automated town wide curbside trash program New water treatment plant on East Main Street

3. REVENUES BY SOURCE $70,732,094.26

4. REVENUES Projected Revenues: Levy 35,585,189.00 2.5% Increase 889,630.00 New Growth 400,000.00 Debt Exclusions 144,699.00 Total Tax Levy 37,019,518.00 Other Projected Revenues: State Aid 20,511,000.00 SBAB Reimbursement 1,313,437.00 Local Receipts 5,457,000.00 High Point Pilot 136,875.00 Debt Stabilization 200,000.00 Prior Year Overlay Surplus 180,419.26 27,798,731.26

5. PROPERTY TAX LEVY The property tax is: A statutory mechanism to fund local government operations Administered by local government Largest source of local government revenue The average single family FY15 tax bill is $4,126. The average statewide single family FY15 tax bill is $5,230. The average FY15 single family residential value is $261,491. FY16 : 37,019,518* *Includes levy, 2.5% increase, new growth and debt exclusions New Growth: FY16 Projection: $400,000 FY15 Certified: $452,079 FY14 Certified: $608,939

6. STATE AID The two largest forms of state aid are Chapter 70 and Unrestricted General Aid. FY15: $20,511,000 Chapter 70: $17,459,284 Unrestricted Aid: $2,193,849 FY16 Level Funded at $20,511,000 School Building Reimbursement on the Nichols Middle School $1,313,437* *Reimbursement until 2020

7. REVENUES Offsets from Enterprise Funds : Health and Life1,190,539.00 Retirement 1,585,020.00 FICA 85,135.00 Workers Comp 66,345.00 Debt 1,228,704.00 Unclassified 130,316.00 Administration 535,031.00 4,821,090.00 Other: G&E Pilot 650,000.00 Council on Aging 300,000.00 WPAT Reserve 142,755.00 Total Offsets & Other 5,913,845.00

8. LOCAL RECEIPTS Examples of local receipts include motor vehicle excise, meals and rooms excises, penalties, medicaid reimbursements, fees, licenses & permits, fines, investment income, charge for service FY16 Projection: $5,457,000.00 FY15 Projection: $5,350.000.00 FY14 Actual: $6,197,492.00 Motor Vehicle Excise: FY15 February Commitment: $2,179,905.00 or $117,518 over last year’s commitment FY 14 Collected: $2,850,057* FY13 Collected: $2,429,596* * Includes prior years

9. LOCAL RECEIPTS Local Option on Meals and Rooms: Rooms: Local communities may levy a tax up to 6% FY15 Collections ahead of FY14 after two distributions FY14 Collected: $305,352 FY13 Collected: $331,850 Meals: Communities may impose a levy on restaurant meals at the rate of.75% on the gross bill FY15 Collections ahead of FY14 after two distributions FY14 Collected: $325,191 FY13 Collected: $300,647

10. FREE CASH Free Cash is defined as unrestricted and available funds for appropriation by town meeting. Free Cash is certified as of July 1 based on the June 30th balance sheet which reflects results from the prior year. Free Cash should be considered as non recurring revenue. In October, town meeting voted several free cash transfers to the general and stabilization funds. 7/1/2015 free cash will be certified in the fall of 2015 and will be used for non recurring expenses in FY16 and to be voted at special town meeting 7/1/2014 Free Cash: $1,728,727 7/1/2013 Free Cash: $690,623 7/1/2012 Free Cash: $1,741,758

11. STABILIZATION FUND A stabilization “rainy day” fund is a special reserve fund into which monies may be appropriated and reserved for a later appropriation. Stabilization Fund balances carry forward form one fiscal year to another. Interest earned on investment of the balance in this fund remains with the fund. A two-thirds vote of town meeting is required to appropriate into or from the fund, and to amend the purpose of the fund. Current balance in the stabilization fund is $2,338,403.59

12. FY16 GENERAL FUND APPROPRIATION $69,445,013.26

13. PERCENTAGE OF FY16 GENERAL FUND APPROPRIATION General Government 2,497,044.813.60% Public Safety7,266,516.0510.46% Education 28,894,643.0041.61% DPW1,072,411.001.54% Human Services1,560,527.312.25% Culture 887,192.001.28% Debt4,804,315.006.92% Transportation2,761,908.003.98% Employee Benefits 16,098,983.0923.18% Unclassified3,601,473.005.19% 69,445,013.26 100.00%

14. EXPENDITURES FY16 Budget Requests: $71,899,508.70 $2,454,495.44 in cuts were made Restored clerical hours in the following departments: Accountant’s Office2.25 hours Clerk’s Office15 hours Conservation Office5 hours Planning Board7 hours Clerical Pool Veterans 10 hours Building 9 hours Increase Conservation Agent’s hours from 37 to 40 Increase Youth Services Librarian duties by 7 hours

15. EXPENDITURES Office of Community and Economic Development (OECD) As of July 1, grant funding will run out, which will leave the town without an Economic Development Director. This appropriation funds the Director’s position and 10 hours of clerical support. Police 2 civilian dispatchers Increase in hours in patrol Fire Current staffing levels Information Technology Funding for: Online Permitting Codification of Bylaws

16. HEALTH INSURANCE Group Insurance Commission (GIC) Middleborough joined in July of 2014 3 year contract GIC offers health insurance to all state employees and 65 cities, towns, regional school districts, charter schools and planning councils. GIC is currently facing a $120m deficit that could grow to $150-190m. Subscribers to GIC could see increases in premiums, copayments and deductibles to close the budget gap. GIC commission members will vote in mid-February on FY16 rates. The FY16 health insurance appropriation will be fully funded to provide health insurance to employees in the town’s health program. The FY16 health insurance appropriation is $9,329,199.09.

17. PENSION Middleborough is a member of the Plymouth County Retirement Association 23 communities Housing Authorities Special Districts FY15 Appropriation: $5,233,794 FY16 Appropriation: $5,660,784 Increase: $426,990 The appropriation is fully funded in FY16 A $200,000 transfer will be made at the fall town meeting to the Other Post- Employment Benefits Stabilization Fund (OPEB).

18. DEBT SERVICE The FY16 Appropriation is $4,804,315* * A decrease of $334,399 over FY15 The Capital Planning Committee (CPC) received more than $5.4m in capital requests for FY16. The town’s financial position is strong which will allow town meeting to authorize up to $1.3m in borrowing in FY16. The CPC will present a capital plan to annual town meeting for approval.

19. SNOW AND ICE Blizzard of 2015 Snow Removal Costs $110,277.75 A snow emergency was declared by the Board of Selectmen. Reimbursement for storm costs from MEMA will be sought. Initial Damage Assessment Report (IDA) was filed in the amount of $173,632.79. The FY15 shortfall will be closed at annual town meeting. Free Cash will used to supplement the FY16 appropriation at special town meeting. The FY16 appropriation base was increased by $40,000. The appropriation is underfunded. Future annual appropriation increases will occur in the snow and ice line item. The DPW is responsible for plowing 170 miles of roads and 20 miles of sidewalks.

20. COLLECTIVE BARGAINING Collective Bargaining Agreements are in place until June 30 th with the exception of the two police unions. The police have been working without a contract for the past two years. Funding will be in place to fund the police contract award that will be issued by the Joint Management Labor Committee (JLMC). Negotiations will commence shortly with all town unions. The FY16 Budget funds collective bargaining agreements on the school side.

21. ENTERPRISE FUNDS Enterprise accounting allows for a separate accounting and financial reporting mechanism for municipal services for which a fee is charged. Retained earnings stay with the fund and are certified similar to free cash. Indirect costs/offsets are costs for various administrative overhead. FY16 $4,821,090 Enterprise Funds: Sanitation Wastewater Water

22. SANITATION FY16 Appropriation: $1,038,975.00 A transfer from retained earnings will not be sought to balance the fund. Current balance in retained earnings: $200,506.96 Automated trash pickup starts July 2015 4 new trucks purchased $1,014,252 6600 96 gallon recycling carts $307,560 5500 64 gallon carts $216,370 1000 32 gallon carts $32,340 Town Meeting authorized the borrowing for the procurement of trucks and recycling carts. The town will receive a $74,000 DEP Grant to offset the costs of the carts.

23. WASTEWATER FY16 appropriation : $1,839,189 Current balance in retained earnings: $1,331,100.44 A transfer from retained earnings will not be sought to balance the fund. The DPW will seek authorization to purchase capital equipment at annual town meeting. The 25m upgrade at the Water Pollution Control Facility is ongoing. The General Contractor (GC) contract will be signed by April 1 st.

24. WATER FY16 Appropriation: $3,664,595.00 Current balance in retained earnings: $2,318,625.02 A transfer from retained earnings will not be sought to balance the fund. DPW will seek authorization to purchase capital equipment at annual town meeting.

25. CONTACT For additional information please feel free to contact: Robert G. Nunes Town Manager rnunes@middleborough.com 508-947-0928