Maylor offers financial forecast for Swampscott

SWAMPSCOTT – A sustainable budget is necessary to prevent layoffs and erosion of services, according to Town Administrator Andrew Maylor.The town charter requires an annual financial forecast be presented on or before Nov. 15 so Maylor gave the forecast at the special Town Meeting on Tuesday evening.Maylor said the town has worked to make its budget sustainable. He said in the past several years the town laid off 10 percent of its employees, closed the Machon Elementary School and reduced some town services in an effort to make a sustainable budget, which does not rely on one-time sources of revenue. He added the growing state deficit and cuts in local aid could make for lean times.Maylor said the $2 billion structural deficit in the state budget would lead to further cuts in local aid to towns and cities. Maylor said he expects the town deficit to increase by approximately $500,000 annually now through fiscal year 2016, with a deficit of approximately $2.1 million in FY16.In preparing the forecast, Maylor said he assumed salaries and operational expenses would increase by 2.5 percent for FY12. Maylor also said he is assuming there would be a 10 percent increase in health insurance costs for the upcoming fiscal year, which starts July 1, 2011. Maylor said he also expects the fees charged by the state and county for services to the town would increase by 5 percent annually.?I believe we can do enough to balance the budget without laying off staff,” Maylor said on Thursday. “I am hopeful that everything we have to done to make our budget sustainable will allow us to continue providing the same level of services we offer today.”The budget adopted by Town Meeting for this fiscal year was $49.9 million, with almost $37 million of it derived from property tax revenue.Maylor said the town has approximately $2.5 million in free cash and he only expects to use $200,000 in free cash to balance the budget for the upcoming fiscal year. Maylor said the town currently has a Moody Bond Rating of Aa3, which is a favorable rating and having adequate free cash is one of the factors that goes into the bond rating.Maylor pointed out in FY02, 68 percent of the town budget was derived from local tax revenue and in FY10 82.3 percent of the total budget was from local tax revenue. He said the town has the 25th highest single family tax rate in the state and in recent years residents have made it clear they are opposed to operational overrides. Maylor added operational overrides are a one-time source of revenue and as such are not part of a sustainable budget.