EagleTribune.com, North Andover, MA

November 21, 2012

Maylor presents 5-year financial plan for town

By Paul Tennant
ptennant@eagletribune.com

---- — NORTH ANDOVER — Town Manager Andrew Maylor has proposed a plan he said will promote fiscal stability for the next few years.

The plan, presented to the selectmen Monday night, calls for controlling to costs of health insurance and other employee benefits; building financial reserves; developing strategic partnerships; maintaining the town’s infrastructure; reducing energy costs; controlling debt service costs; and using technology to lower the cost of providing services.

Maylor suggested the town consider purchasing vehicles powered by natural gas as a means of lowering energy costs.

During the last several years, the cost of health insurance for town employees has risen steeply — four or times the rate of inflation, according to Maylor. He told the selectmen Monday night he is confident health insurance costs will not increase during the next fiscal year, “based on the negotiations we’re having.”

Earlier this year, the selectmen voted to have town employees covered by the Group Insurance Commission.

Revenue from new growth — new homes and businesses — will likely hold steady at $600,000 annually for the next five years, Maylor forecast. Local receipts, which include auto excise payments, will likely climb by slightly more than 1 percent during the next fiscal year, which ends June 30, 2014, then rise by 2.5 percent annually for the four years thereafter, he said.

“People are holding on to their cars longer,” Maylor noted, and that has helped slow the growth in revenue from auto excise payments.

While state aid was greater than expected this year, the town manager said it will likely remain the same next year. For the four years thereafter, financial help from the state will probably rise by 2.5 percent annually, he said.

The share of the town budget provided by state aid has dropped steadily over the last few years, Maylor noted. State assistance covered 13 percent of town spending for fiscal year 2005, according to Maylor’s numbers. By the current fiscal year, the state share had fallen to 11 percent.

While health insurance costs are expected to hold steady for the 2014 and 2016 fiscal years, those costs will probably rise by 7.5 percent for the 2015, 2017 and 2018 fiscal years, according to Maylor.

The manager forecast a 3.75 percent increase in school costs over the next five years. Public safety costs are expected to climb at the same rate, he said.

Maylor projected annual increases of 3.5 percent for public works spending during the next five years.

Maylor reiterated his goal of pruning debt service costs to 4.5 percent of the operating budget. Capital costs, he said, cannot be allowed to “strangle our budget.”