Everything You Ever Wanted toKnow About Lenox Finances and       Were Afraid to Ask  Presented by the Town of Lenox Financ...
Objectives of This Presentation• Background for May 3 town meeting budget  vote• Informed participation in addressing long...
Property         Taxes Biggest Revenue Source          From Reserve           Other Fees              4%                  ...
2013 Fiscal Year Projected Revenue in                $MM            From Fund All Other $1.1               $0.8 Income fro...
...And Property         Taxes Increasingly Important$25,000,000.00$20,000,000.00                      Other Sources of Rev...
State Law Caps the Allowable Revenue              Increases• 2.5% Levy Limit on property tax caps year over  year growth i...
Lenox Property Tax Rate Compares             Favorably• Lenox 2013 FY $11.45/thousand in residential  assessed value; $15....
Capital Investments• Examples – Buildings, fire trucks, water and  sewer, roads• Funded by  – Annual operating budget  – S...
Approx. $29MM Borrowed;                     $2.7MM/YRBorrowing for          Total $(MM)   Annual Debt and   Year Paid Off ...
Restrictions on How Much Localities              Can Borrow• Formula based on borrowing as a % of assets• Lenox has suffic...
How Can Revenue be Increased?• Raise fees  (water, sewer, ambulance, inspections)• Increase room and dining tax income  – ...
Largest % Expense Budget = Schools                     Lifestyle and Culture 3%   Water and Sewer         12%             ...
Proposed 2013 FY Expenses in $MM        Water and   Lifestyle and                                    Gen Govt.       Sewer...
Much Debate Focused on Smallest %           of Budget                         Lifestyle and Culture                       ...
Across Departments – Capital Costs   and Personnel Dominate (%)         Capital Exp.   All Other            13%           ...
Across Departments – Capital Costs and Personnel Dominate ($MM)           Capital Exp. All Other $0.5              $3.1   ...
Other Comments on ExpensesPersonnel Costs• Health insurance costs rising faster than other  costs, revenue  – Liability fo...
Budget Choices Voters Will Be Asked            To Consider• 2013 Warrant for May 3 Town Meeting  – Budget reflected in art...
Long Term Planning Considerations• 2.5% cap on primary revenue source vs. %  increase in  – Health insurance costs  – Fuel...
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Everything you ever wanted to know about lenox v5

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Everything you ever wanted to know about lenox v5

  1. 1. Everything You Ever Wanted toKnow About Lenox Finances and Were Afraid to Ask Presented by the Town of Lenox Finance Committee Spring 2012 1
  2. 2. Objectives of This Presentation• Background for May 3 town meeting budget vote• Informed participation in addressing long term challenges• Will cover – Revenue and expenses – Planning issues 2
  3. 3. Property Taxes Biggest Revenue Source From Reserve Other Fees 4% 5% Water, Sewer,Ambulance 14% $23MMHotel-Meal Tax Budget 6% Property Tax 58% State Funds 14% 3
  4. 4. 2013 Fiscal Year Projected Revenue in $MM From Fund All Other $1.1 $0.8 Income from Water, Sewer, Amb.$3.2 Hotel, Meal, $ 1.4 Property Tax $13.6 State Funds, $3.2
  5. 5. ...And Property Taxes Increasingly Important$25,000,000.00$20,000,000.00 Other Sources of Revenue Down Since 2001$15,000,000.00 2012$10,000,000.00 2001 $5,000,000.00 $0.00 Total Property Tax All Other Sources 5
  6. 6. State Law Caps the Allowable Revenue Increases• 2.5% Levy Limit on property tax caps year over year growth in important revenue source – To increase property taxes by a greater %, override vote at town meeting required• Localities can’t charge sales, income, etc. taxes• State sets amount of reimbursement for school choice 6
  7. 7. Lenox Property Tax Rate Compares Favorably• Lenox 2013 FY $11.45/thousand in residential assessed value; $15.16/thousand commercial• State average (2011) for residential $11.75• State average increase 3.3% (2.5% Lenox)• Lenox in middle third for all MA cities and towns 7
  8. 8. Capital Investments• Examples – Buildings, fire trucks, water and sewer, roads• Funded by – Annual operating budget – Setting aside an amount (reserve) each year for future major expense – Borrowing and paying off year by year 8
  9. 9. Approx. $29MM Borrowed; $2.7MM/YRBorrowing for Total $(MM) Annual Debt and Year Paid Off Interest $000*Water Source Funding 3.3 344 2015Morris 3.8 383 2015LMHS 6.2 661 2016Sewer Plant 3.1 268 2017Town Hall 1.0 75 2017DPW 2.9 366 2018Bertoni Property 0.6 134 2018Reservoir Repair 1.7 85 2022Library 1.5 135 2023Sewer System 3.6 205 2028Water System 1.3 98 2028 9
  10. 10. Restrictions on How Much Localities Can Borrow• Formula based on borrowing as a % of assets• Lenox has sufficient assets to be able to borrow more – But limited by having revenue to cover annual principle and interest payments 10
  11. 11. How Can Revenue be Increased?• Raise fees (water, sewer, ambulance, inspections)• Increase room and dining tax income – Marketing and Events Committee and Chamber of Commerce• Add to existing base with new construction – Commercial examples: Price Chopper, CVS – Considerable open land zoned residential 11
  12. 12. Largest % Expense Budget = Schools Lifestyle and Culture 3% Water and Sewer 12% General Government 10% Fire and Safety $23 MM 9% Budget DPW 14% School 52% 12
  13. 13. Proposed 2013 FY Expenses in $MM Water and Lifestyle and Gen Govt. Sewer $2.8 Culture $0.8 $2.3 Fire and Safety $2.1 DPW $3.1 School, $12.0 13
  14. 14. Much Debate Focused on Smallest % of Budget Lifestyle and Culture ~3% of $23MM Budget -Community Center -Library -Other 14
  15. 15. Across Departments – Capital Costs and Personnel Dominate (%) Capital Exp. All Other 13% 2% Direct Debt Service Personnel 12% 43% Utilities 2% Supplies $23MM 5% Budget Services Benefits 9% 14% 15
  16. 16. Across Departments – Capital Costs and Personnel Dominate ($MM) Capital Exp. All Other $0.5 $3.1 Direct Debt Service Personnel $2.7 $9.9Utilities $0.4 FY 2013 Supplies $1.2 Proposed Budget Services $2.1 Benefits $3.2
  17. 17. Other Comments on ExpensesPersonnel Costs• Health insurance costs rising faster than other costs, revenue – Liability for retiree health insurance costs – Has gone from approximately 7% of budget to 14%Possible Cost Reductions• Alternative energy sourcing from solar for town/ school electricity• Combining services with other towns 17
  18. 18. Budget Choices Voters Will Be Asked To Consider• 2013 Warrant for May 3 Town Meeting – Budget reflected in articles 3-10 and 16-18--- basis for this presentation – Warrant separates operating, capital, debt – Beware of optics -- % of space on warrant vs. % of budget 18
  19. 19. Long Term Planning Considerations• 2.5% cap on primary revenue source vs. % increase in – Health insurance costs – Fuel oil, supplies, utilities• Infrastructure needs – Water and sewer – Cultural and historic assets• Predicting and planning new growth – When economic situation improves, what are our views about use of open land?• Inexorable demographics – Over 65 fastest growing age group in Berkshire County 19
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