FINANCIAL HIGHLIGHTS OF THE 2023 BUDGET (cont)

• The Parks, Forestry and Open Space increase of $1.0 million is due to an increased level of repairs and maintenance and increased personnel costs.

• The Police Department shows an increase of $3.3 million, of which $1.2 million is related to the step increases and structural changes to the compensation plan for sworn officers. It also accounts for positions that were vacant in 2021 but fully budgeted in 2022. Performance increases for civilian staff and a taser maintenance plan make up the rest of the difference.

• The Public Works Department increase of $1.7 million is split between personnel and increased repair and maintenance costs. The Department is adding four positions to account for the increased lane miles and new infrastructure projects. Labor and materials cost increases are also impacting the budget for street maintenance and snow removal.

Individual departmental summaries with more detail are presented in the Budget Detail section

* The Ending Fund Balance to Total Expenditures for the 2022 Amended Budget indicates a 16% ratio. The 2022 Budget has been amended for expense revisions approved by Town Council. It does not reflect revenue increases that have occurred.

General Fund Balance

General Fund expenditures are lower than revenue for the 2023 Budget, which results in a increase to the ending fund balance of $6.2 million (12.8% increase) from 2022 projected actuals. Responsible fiscal policy dictates that the use of cash balances should be limited to one-time expenditures, and this is the case for 2023. A one-time transfer of $8.2 million to the Capital Renewal and Replacement Reserve Fund is being made with excess cash reserves. The Town Charter requires the General Fund maintain a ratio of 25% of cash to total expense; the ratio for the 2023 Budget is 38% after this one-time transfer.

The additional cash being maintained in the General Fund will be utilized to offset increased inflationary impacts above what was budgeted. Project bids opened in fall 2022 indicated a need to provide potential funding for bid overruns. Budget amendments will be presented to Council for their approval as projects require additional funding.