The document provides an overview of Lenox town finances, including sources of revenue and expenses. Property taxes make up the largest source of revenue at 58% of the budget, but are increasingly important as other sources decline. Expenses are dominated by personnel costs at 43% and capital projects at 13% of the budget. The town faces long-term challenges balancing a 2.5% cap on revenue growth with rising costs, while planning for infrastructure needs and future development. The upcoming town meeting will consider budget and spending proposals to address these issues.

1. Everything You Ever Wanted to
Know About Lenox Finances and
Were Afraid to Ask
Presented by the Town of Lenox Finance Committee
Spring 2012
1

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. Property
Taxes Biggest Revenue Source
From Reserve Other Fees
4% 5%
Water, Sewer,
Ambulance 14%
$23MM
Hotel-Meal Tax
Budget
6%
Property Tax
58%
State Funds
14%
3

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. ...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. 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
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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
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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. Approx. $29MM Borrowed;
$2.7MM/YR
Borrowing for Total $(MM) Annual Debt and Year Paid Off
Interest $000*
Water Source Funding 3.3 344 2015
Morris 3.8 383 2015
LMHS 6.2 661 2016
Sewer Plant 3.1 268 2017
Town Hall 1.0 75 2017
DPW 2.9 366 2018
Bertoni Property 0.6 134 2018
Reservoir Repair 1.7 85 2022
Library 1.5 135 2023
Sewer System 3.6 205 2028
Water System 1.3 98 2028
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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. 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
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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%
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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. Much Debate Focused on Smallest %
of Budget
Lifestyle and Culture
~3% of $23MM Budget
-Community Center
-Library
-Other
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15. Across Departments – Capital Costs
and Personnel Dominate (%)
Capital Exp. All Other
13% 2%
Direct
Debt Service Personnel
12% 43%
Utilities
2%
Supplies $23MM
5% Budget
Services
Benefits
9%
14%
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16. Across Departments – Capital Costs
and Personnel Dominate ($MM)
Capital Exp. All Other $0.5
$3.1
Direct
Debt Service Personnel
$2.7 $9.9
Utilities $0.4
FY 2013
Supplies $1.2 Proposed
Budget
Services $2.1
Benefits $3.2

17. Other Comments on Expenses
Personnel 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
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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
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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
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