THE FINANCE DEPARTMENT

Presented to the Amherst Town Council, Wednesday, January 16, 2019

FINANCE TEAM:OVERVIEW

Collector

Assessor

Treasurer Accounting

Finance Director

FINANCE PROCESS FLOW

• Sets tax rates• Values property

Assessor

• Sends bills• Receives

payments

Collector• Deposits money• Invests

Treasurer

• Monitors funds• Controls spend• Procures• Pays bills

Accounting• Forecasts• Budgets• Capital planning• Analyzes

Finance Director

ASSESSOR

ASSESSOR:DUTIES

• Values all real estate and personal property in Town on a yearly basis. (Every five years, values recertified by Department of Revenue.)

• Commits and abates motor vehicle excise.

• Handles all personal exemptions for seniors, the blind, veterans and surviving spouses.

• Meets with Council for annual tax classification hearing.

• Sets annual tax rate.

• Also serves Town of Pelham with same responsibilities.

• Calculates Business Improvement District bills.

• Serves Central Counter.

• Staffs Board of Assessors.

TREASURER/COLLECTOR

MASSACHUSETTS GENERAL LAW BILLING

• Real Estate Tax (c. 59)

• Personal Property Tax (c. 59)

• Motor Vehicle Excise Tax (c. 60)

• Parking Tickets (c. 90)

Utilities (Water and Sewer)

General Billing

• Refuse (Landfill)

• Outside Detail

• False Alarm

• Business Improvement District

• UMass Strategic Partnership

OTHERBILLING

COLLECTOR:BILLING

T H E C O L L E CTOR ' S O F F I C E H A S A 9 8 % C O L L E CT I O N R AT E .

COLLECTOR:OTHER DUTIES

• First point of contact for visitors to Town Hall

• Customer service for bill payments

• Timely billing and posting of payments

• Parking permits and parking ticket appeals

• Monthly balancing

• Daily deposits and turnover to Accounting

• Tax title process

• Ambulance collections

TREASURER:DUTIES

Monitors and Administers:

• Investments (M.G.L. c. 44)

• Debt (c. 44)

• Bond rating (AA+)

• Bank accounts, trust funds, and performance deposits

• Monthly cash balancing

• Departmental audits

• Tax title records (c. 60)

• Deferred taxes (c. 59)

Other Duties:

• Files and checks for payroll and accounts payable

• Returned and unclaimed checks

• Unemployment, state and federal taxes

• Direct debit service for customers

• Coin deposits from parking meters

• General ledger charge codes

• Regional Veteran's Services coordination

"We believe that Amherst's continued strong management will allow the Town to maintain strong budgetary flexibility commensurate with its formal policies and practices throughout the economic cycle. Moreover, the Town's strong economy and diverse property tax base should allow for revenues to remain strong and consistent."

- Standard & Poor's 500 Bond Rating, February 2015

ACCOUNTING

ACCOUNTING:DUTIES

• Payroll & Benefits, including review and compliance with federal laws, W-2s and ACA

• Accounts Payable, including processing and review of all invoices, vendor maintenance and 1099s

• Procurement, including supplies and services (M.G.L. c. 30B), public works construction (c. 30), building construction (c. 149), and design services (c. 7C)

• Monitoring and maintaining grants, especially financial reporting to awarding authority

• Oversight of annual independent audit

• Commercial property and casualty insurance, including risk management and claims processing

• General Ledger oversight and reconciliation

• Administration of general services budget and supplies

• Annual financial statements and all State reporting, including Recap, Schedule A, Free Cash, Statement of Indebtedness, etc.

• Year end balancing and closing of books

ACCOUNTING& FINANCE

• Budget, including the creation of the annual budget, forecasting, monitoring, budgetary controls, etc.

• Community Preservation Act (CPA)

• Finance Committee

• Joint Capital Planning Committee

• Assistance with debt and short and long term capital planning

THE BUDGETING PROCESS

Forecast Allocate Meet & Refine

Finalize Present Adopt

Monitor

Today!

PROJECTION SHEET, REVENUERevenueProperty Taxes

Expenditures

Local Receipts

State Aid

Other

REVENUE SOURCES

FY19: $80,788,655

PROPERTY TAX65%

LOCAL RECEIPTS9%

STATE AID20%

OTHER6%

General Fund Revenues FY19$80,788,655

PROPERTY TAXES

STATE AID

• Cherry Sheets• Receipts (Revenue)

• Chapter 70

• Unrestricted General Government Aid (UGGA)

• Other: veterans' benefits, elderly exemptions, charter and school choice aid, etc.

• Assessments (Charges)

• Regional transit (PVTA)

• School-related, e.g., charter or school choice

• Net state aid = receipts – assessments

ECONOMICALLY-DRIVEN SOURCES

• Investment income

• Licenses and permits (building, plumbing, electrical, alcohol)

• Hotel/motel tax

• Meals tax

• Motor vehicle excise

• Fees and charges: municipal lien certificates, copying charges, Clerk’s fees (vital records), swimming, copies, maps

• Fines: moving violations, library late fees, open containers

• Rental income

• Interest and penalties on taxes (late fees from delinquent taxpayers)

RELIABLE SOURCES

LOCAL RECEIPTS

OTHER FINANCING SOURCES

• Free Cash and Stabilization Fund

• Transfers from other funds

• e.g. ambulance receipts

• overlay surplus

• Administrative overhead from other funds (e.g. Water and Sewer Funds)

PROJECTION SHEET, EXPENDITURESRevenue

Expenditures

Operating Budgets

Capital

Fixed and Miscellaneous

Unappropriated

EXPENDITURES

TOWN30%

ELEMENTARY SCHOOLS

29%A-P REGIONAL SCHOOL DISTRICT

20%

JONES LIBRARY (Tax Support)

2%

CAPITAL6%

MISCELLANEOUS8%

UNAPPROPRIATED USES

5%

General Fund Expenditures FY19$80,788,655

OPERATING BUDGETS

• Town

• Elementary Schools

• Regional School District (assessment)

• Jones Library (tax support)

CAPITAL

• Capital for FY20 (currently projected at 9.5% of tax levy)

• Debt service

• Cash capital (tax support)

• Other Sources

• Bonds (debt service)

• Reserves

• State and federal grants

• Other, e.g., ambulance receipts, gifts

FIXED AND MISCELLANEOUS COSTS

• Retirement

• Other Post-Employment Benefits (OPEB)

UNAPPROPRIATED COSTS

• State assessments

• Reserve for abatements and exemptions (overlay)

• Other amounts to be raised

ENTERPRISE FUNDS

• Water, sewer, solid waste, and transportation

• Fee based, fully self-supporting

• Not limited by Proposition 2½

• Pay administrative fees to General Fund

PROPOSITION 2½:BASICS

• Proposition 2½ limits the annual growth in the tax levy.

• The tax levy is the total amount raised in property tax from all sources: residential, commercial, industrial, and personal property (business inventory).

• The limit is on the levy, not the rate, individual tax bills, or assessments.

• Overrides:

• Operating (permanent)

• Capital (one-year)

• Debt Exclusion (life of borrowing)

• Proposition 2½ Primer: https://www.amherstma.gov/DocumentView.asp?DID=210

PROPOSITION 2½:FORMULA

• Take prior year tax levy limit.

• Multiply by 2.5% and add to prior year.

• Add new growth as determined by Assessor (i.e. new construction and renovation).

• This is the new levy limit.

• Ten-year average annual new growth is $606,000.

• Determine whether to tax the levy limit. Generally: yes.

NEW GROWTH IMPACTON PROPERTY TAXES

FY16 FY17 Change % FY18 Change %

Prior levy limit 44,828,489 46,573,832 1,745,343 3.89 48,750,452 2,176,620 4.67

2.5% increase 1,120,712 1,164,346 43,634 3.89 1,218,761 54,516 4.67

New growth 624,631 1,012,274 387,643 62.06 730,933 (281,341) (27.79)

Levy limit 46,573,832 48,750,452 2,176,620 4.67 50,700,146 1,946,695 4.00

New growth % 1.39 2.17 1.50

INFORMATION RESOURCES

• FY19 Town Budget https://www.amherstma.gov/3434/

• School Budgets http://www.arps.org/district/business-office

• Library Budget https://joneslibrary.org/Budget

• Open Government https://www.amherstma.gov/1356/

• Audit https://www.amherstma.gov/93/

• Bond Ratings and Offering Statements https://www.amherstma.gov/122/

• Finance Committee Book https://www.amherstma.gov/DocumentCenter/View/36203/

• Joint Capital Planning Committee Report https://www.amherstma.gov/195/

• Municipal Databank http://www.mass.gov/dor/local-officials/

• Department of Elementary and Secondary Education http://www.doe.mass.edu/

QUESTIONS?