2002-Annual Town Report - Laserfiche WebLink

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is COST OF BENEFITS ($000) d, Report of the BENEFIT FY02 FY03 FY04 (est.) in Finance Committee County retirement $913 $954 $1,084 le Medical Insurance $2,408 $2,798 $3,078 of Medicare $253 $266 $266 To the Honorable Board of Selectmen Unemployment $15 $15 $40. and the Citizens of the Town of Mashpee: Group Insurance $12 $12 $12 TOTALS $3,601 $4,045 $4,480 The Cost of Town Government The cost of town government continued to grow Stabilization Fund in 2002(FY2002-2003)in spite of efforts to level fund In recent years, through a combination of gener- operating expenses. This measure, combined with a ous state aid, refunds of excess county assessments, low rate of inflation and minimal population growth and sound financial management, the town has did slow spending growth somewhat,but not apprecia- enjoyed budget surpluses. (See the following table) (4) bly. (See the following below) TOTAL APPROVED BUDGETSM BUDGET SURPLUSES ($000) FY Millions %Increase EgUi lationM % Growth FY01 FY02 FY03 FY04 (est) 01 33.4 - 13,400 - $1,090 $434 $19 ($1.15) 02 35.3 5.8 13,918 a3.5 (To deal with the potential FY04 deficit, the only 03 37.1 5.0 14,079 1.1 04(est) 38.2 3.0 - _ remaining variable is sound financial management) For the same period, various government reports These surpluses(also known as"free cash")have have shown the national inflation rate maintained been allocated to the town's stabilization fund. The around 2%. Simultaneously, our town's growth rate salutary effects of maintaining a healthy stabilization appears to have abated, albeit temporarily, which fund are many, but the two most important are: (1) should also predict somewhat less demand on the adequate reserves will be available to recover costs of town's delivery of services. With these factors consid- unexpected, dire emergencies (e.g., The Blizzard of ered, the expected result would be a much lower rate `78 and Hurricane Bob) and(2)maintenance of a pos- of spending growth than actually experienced. itive bond rating which makes it easier and less expen- sive to borrow money for major capital projects (e.g., The FY04 estimate includes funding depart- building a new Senior Center). A healthy stabilization mental expenditures at the FY03 level, but, although fund is one which is maintained at no less than 5% of a decrease in percentage of growth is anticipated, anticipated town revenues. The town's current stabi- taxpayers will still be asked to spend $1.1 million lization fund is approximately 3.3 million. more. The stabilization fund may and should be tapped The reason for the increase in the overall cost of to help offset deficits such as that which may poten- government is undoubtedly the increasing cost of the tially occur in FY04. That action should only be taken work force, which includes full-time, part-time, and if all other reasonable efforts, including reduction or temporary positions in all town departments as well as curtailment of low priority services, have failed to schools' staffs.Excluding indirect benefits,the total of achieve a budget in balance. A combination of reduc- all salaries, wages, and compensation as a function of tion of services, reduction of work force, and drawing the total discretionary budget in FY03 is 73%. For down the stabilization fund would constitute sound FY04, assuming expenses are once again level funded financial management in such an emergency situation. and staffing does not increase,the ratio will increase to The data and recommendations in the foregoing 75%.These values do not reflect indirect benefits paid analysis are generalized and conclusions reached may by the town on behalf employees.The increase cost of be generalizations at best. However, it is glaringly these obligations, a 24% rise within two years, should be alarming. (See the following table) f3> apparent that,if town residents wish to reduce the con- stantly escalating costs of government, fair and rea- sonable reductions in the work force must be included in that effort. 9