Financial Policies and Multi-Year Forecast

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In July 2020, the Town engaged the University of Massachusetts' Collins Center to assist with two special projects:

1. Developing an FY2022 – FY2026 financial forecast. This forecast will help the Town Administrator, financial team, and the Selectboard take a holistic view of the Town’s finances, anticipate and prepare for any future budgetary challenges, and analyze the financial implications of, for example, proposed projects requiring long-term debt or labor negotiations.

In addition, the Town sought support and expertise from the Collins Center for FY2021 budget scenario planning, specifically projecting revenues, developing strategies to address any projected budget uncertainty and/or deficits, tax rate impacts, and any other financial management topics.

This project resulted in two products:

• a spreadsheet that uses historical data to provide a multi-year financial forecast of revenue and expenses through 2026.
• a user's manual that explains the assumptions upon which the spreadsheet is built and how to keep it up-to-date.

2. Updating the Town's financial management policies. This project involved a review of the financial management policies the Town adopted in 2014, the development of additional policies that align with best practices (including consideration of temporary emergency policies), as well as supportive professional development around select policies and topics, including revenue forecasting, tax rate impact analysis, projection of adequate user fees, budget management, and debt management.

This project resulted in eighteen draft financial management and operations policies, which the Finance Committee reviewed in July-August 2021. The Finance Committee finalized and presented 15 of those policies to the Selectboard and recommended their adoption before the start of the FY23 budget season in October; they held back three draft polcies (Annual Budget Process, Capital Planning, Use of Reserves) for further consideration, but intend to bring them to the Selectboard for approval by the end of FY22.

The files below are documents related to the process of developing the financial forecast and updating the Town's financial management polcies. A comprehensive Financial Policy Manual was endorsed by the Selectboard in November 2022 and was updated to include a new DPW Discretionary Capital Spending policy on January 30, 2023.