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Q4 2017TOWN OF NANTUCKET Quarterly Financial ReportQuarterly Financial Report Fourth Fiscal Quarter Ended June 30 2017June 30, 2017 Table of Contents Financial Highlights..........1 General Fund Revenues..........2 Results for most recent quarter..........3 Results for year-to-date period..........4 Gl Fd E 5General Fund Expenses..........5 Results for most recent quarter..........6 Results for year-to-date period..........7 Capital Investments..........8 Financing Activity..........9 Investment Report..........10 Outlook: Muni Watch 11Outlook: Muni Watch..........11 Financial Highlights The Town of Nantucket ended fiscal year 2017 on a largely positive note. Economic activity on the island remains  strong with tourism real estate and building industries leading the way although local receipts are signaling astrong with tourism, real estate and building industries leading the way, although local receipts are signaling a  slowdown in the rate of increase experienced in the last few years.  Although expenses can be difficult to contain, efforts were made to limit the number of new staff positions. In  addition, the Town rebid its general insurance policies and realized significant savings as a result.  General Fund Revenues Fourth quarter General Fund (1)revenues were $22.3M, representing a $2.4M increase (+12%) over the fourth  quarter last year. Real estate and personal property taxes collected were the main drivers behind the quarter‐over‐ quarter increase (+14%). Penalties & Interest on Tax Liens collected were also up compared to the same period last  year (+$56K).  The results for the entire FY2017 fiscal year show the Town collected $90.1M, equivalent to a $86.0M  increase (+5%) compared to FY2016. The year‐end results for nearly all local receipts categories exceeded the  budgeted goal. However, there growth trend seen in recent years appears to be slowing. The double‐digit increases  in local Excise Taxes have slowed to low single‐digit. Building Permits, for instance, we essentially flat compared to  the prior year. In FY2016, the Town received a $836,305 refund for emergency repairs to the Town pier related to  Storm Juno Excluding this one‐time revenue the Town is ahead by $5 0M (+6%)for FY2017 compared to FY2016Storm Juno. Excluding this one time revenue, the Town is ahead by $5.0M (+6%) for FY2017 compared to FY2016. General Fund Expenses General Fund expenses ended the quarter at $19.0M, equivalent to a $2.6M increase (+16%) over the same quarter  in FY2016. The General Fund transfer from Free Cash to Solid Waste Enterprise Fund of $1.5M to ensure there  would be no operational deficit at year‐end was behind most of the increase. School spending made up another  good portion ($1.0M). Over the entire fiscal year, General Fund expenses totaled $80.7M, representing an increase  of $5.3M (+7%) over the same nine months last year. The rise in year‐over‐year expenses was due to higher health  insurance and pension costs as well as continued financial support to the operations of two enterprise funds: Our  Island Home and Solid Waste. As mentioned above, the Town did benefit from approx. $300,000 in savings from  lower General Insurance costs. General Fund Revenues General Fund Expenditures (2) 5‐Yr History (in millions of dollars) 5‐Yr History (in millions of dollars) $8.3M $9.8M $10.7M $12.7M $12.0M $2.1M $3.8M $3.0M $3.2M $3.9M  $7 2M $6.7M $6.9M $10.3M $9.4M $8.6M $10.5M $11.0M  $63.7M $64.0M $66.8M $69.3M $74.2M  $24.8M $26.6M $27.7M $29.2M $31.0M  $5.8M $6.1M $6.8M $6.9M $7.3M $7.3M $7.2M $7.2M  (1) General Fund: general government, safety & protection, marine department, maintenance, human services, culture & recreation,  and contractual obligations.  (2) Excludes school spending which was $58.4M in FY2017 (see next page). FY13 FY14 FY15 FY16 FY17 Real Estate & Property Taxes Local Receipts State Aid & Other FY13 FY14 FY15 FY16 FY17 Salaries & Benefits Operational Expenses Debt Service Transfers & Other Sources General Fund Revenues Where does the money come from? General Fund Revenues (1) For Fiscal Quarter Ended June 30, 2017 15% 4% 1% 12% Motor Vehicle Excise Tax Local Rooms Tax Local Meals & Other Excise 12% 12% 18% 27% Fees & Rentals License & Permits State Local Aid Fines & Forfeits Fourth Quarter Rooms Tax (in thousands of dollars) Fourth Quarter Motor Vehicle Excise Tax (in millions of dollars) Other $175K $705K$175K  $79K $85K  $113K $107K $428K  $568K  $705K  $575K  $445K  Fourth Quarter Meals Tax (in thousands of dollars) Fourth Quarter Building Permits (in thousands of dollars) (2)    Q4/FY13 Q4/FY14 Q4/FY15 Q4/FY16 Q4/FY17 Q4/FY13 Q4/FY14 Q4/FY15 Q4/FY16 Q4/FY17 $116K  $75K  $64K $71K $75K $188K  $297K  $242K  $332K $315K  (1) Excludes real estate and personal property tax revenue, which equals approx. 81% of total revenues collected in Q3/FY17. (2) Prior to FY2014, the Town of Nantucket collected Room Excise Tax semi‐annually instead of quarterly. (2)   Q4/FY13 Q4/FY14 Q4/FY15 Q4/FY16 Q4/FY17 Q4/FY13 Q4/FY14 Q4/FY15 Q4/FY16 Q4/FY17 General Fund Revenues Results for most recent quarter Three Months Ended June 30, QTR/QTR FY2017 FY2017 Actuals FY2016 Actuals % Change $ Change Budget Real Estate Taxes 18,950,880$        16,694,605$        14% 2,256,274$        72,568,546$      Personal Property Taxes 315,476                306,799               3% 8,677                   1,632,421         Excise Taxes Motor Vehicle Excise Tax 445,051                574,697               (23%) (129,647)            2,150,000         Local Rooms Tax 106,521                113,120               (6%) (6,599)                 2,566,000         LlMlT 75 400 70 581 7%4 818 900 000Local Meals Tax 75,400                  70,581                 7%4,818                   900,000             Other ‐ Includes Penalties & Interest 276,021                219,355               26% 56,666                640,470             Subtotal ‐ Excise Taxes 902,992                977,754               (8%) (74,762)               6,256,470         Charges for Services 5,049                     5,305                    (5%) (256)                     44,600               Fees & Rentals Planning Board Filing Fees 28,478                  32,628                 (13%) (4,150)                 84,500               Plumbing & Wiring Inspection Fees 103,130                98,861                 4% 4,269                   226,000             HDC Filing Fees 80,053                  42,388                 89% 37,665                202,500             Concession Rental Fees 195                         ‐                             na 195                      600                     Marine Mooring Rentals & Docking Fees 42,525                  54,907                 (23%) (12,382)               180,300             Other 101,051                93,621                 8% 7,429                   438,535             Subtotal ‐ Fees & Rentals 355,432                322,405               10% 33,026                1,132,435         License & Permits Building Permits 315,122                331,597               (5%) (16,475)               1,010,000         Li Li 109 400 73 350 49%36 050 230 300Liquor Licenses 109,400                73,350                 49%36,050                230,300             Other 121,509                118,584               2% 2,925                   216,750             Subtotal ‐ License & Permits 546,031                523,531               4% 22,500                1,457,050         State Local Aid School Aid 766,769                993,648               (23%) (226,879)            3,067,074         Other 55,398                  53,976                 3% 1,422                   204,082             Subtotal ‐ State Local Aid 822,167                1,047,624           (22%) (225,457)            3,271,156         Fines & Forfeits Parking Fines 31,398                  24,235                 30% 7,163                   230,000             Other 14,038                  3,000                    368% 11,038                14,800               Subtotal ‐ Fines & Forfeits 45,435                  27,235                 67% 18,200                244,800             Investment Income 54,605                  48,898                 12% 5,708                   110,500             Other Departmental Revenue Town Gas Sales 11,569 10,567 9%1,002 69,500Town Gas Sales 11,569                  10,567                 9%1,002                   69,500               Off Duty Police and Fire Personnel 18,992                  10,865                 75% 8,128                   60,000               Other 105,264                (72,703)                (245%) 177,967              53,290               Subtotal ‐ Other Dept'l Revenue 135,825                (51,272)                (365%) 187,097              182,790             Miscellaneous ‐                               ‐                             na ‐                           49,245               Transfer & Other Sources Debt Premium 10,465                   ‐                             na 10,465                 ‐                           Indirect Costs 154 825 na 154 825Indirect Costs 154,825                 ‐                             na 154,825               ‐                           Subtotal ‐ Transfer & Other Sources 165,290                679                       24,243% 164,611               ‐                           Total General Fund Revenue 22,299,182$         19,903,564$           12% 2,395,619$        86,950,013$       General Fund Revenues Results for year-to-date period Twelve Months Ended June 30,YTD/YTD FY2017 Variance to FY2017 Actuals FY2016 Actuals % Change $ Change Budget Budget Real Estate Taxes 72,764,573$         67,913,164$        7% 4,851,409$       72,568,546$      0% Personal Property Taxes 1,402,156              1,374,947            2% 27,209               1,632,421          (14%) Excise Taxes Motor Vehicle Excise Tax 2,753,546              2,674,907            3% 78,639               2,150,000          28% Local Rooms Tax 3,498,400              3,428,604            2% 69,796               2,566,000          36% Local Meals Tax 1,061,396              997,903                6% 63,493               900,000              18% Other ‐ Includes Penalties & Interest 734,427                  726,665                1% 7,762                  640,470              15% Subtotal ‐ Excise Taxes 8,047,770              7,828,078            3% 219,691            6,256,470          29% Charges for Services 35,871                   35,103                  2% 769                     44,600               (20%) Fees & Rentals Planning Board Filing Fees 112,763                  94,896                  19% 17,868               84,500               33% Plumbing & Wiring Inspection Fees 368,913                  381,200                (3%) (12,287)             226,000              63% HDC Filing Fees 295,042                  182,859                61% 112,183            202,500              46% Concession Rental Fees 130 703 206 075 (37%)(75 372)600 naConcession Rental Fees 130,703                  206,075                (37%)(75,372)             600                     na Marine Mooring Rentals & Docking Fees 198,387                  317,535                (38%) (119,148)          180,300              10% Other 446,141                  514,384                (13%) (68,242)             438,535              2% Subtotal ‐ Fees & Rentals 1,551,949              1,696,948            (9%) (144,999)          1,132,435          37% License & Permits Building Permits 1,222,855              1,219,361            0% 3,494                  1,010,000          21% Liquor Licenses 223,700                  214,900                4% 8,800                  230,300              (3%) Other 252,026                  278,246                (9%) (26,220)             216,750              16% Subtotal ‐License &Permits 1,698,581 1,712,508 (1%)(13,926)1,457,050 17%Subtotal  License & Permits 1,698,581              1,712,508            (1%)(13,926)             1,457,050          17% State Local Aid School Aid 3,067,074              2,980,944            3% 86,130               3,067,074           ‐ Other 220,249                  207,778                6% 12,471               204,082              8% Subtotal ‐ State Local Aid 3,287,323              3,188,722            3% 98,601               3,271,156          0% Fines & Forfeits Parking Fines 271,074                  223,712                30% 7,163                  230,000              18% Other 28,163                   14,675                  368% 11,038               14,800               90% Sb l Fi &Ffi 299 237 238 387 26%60 850 244 800 22%Subtotal ‐ Fines & Forfeits 299,237                  238,387                26%60,850               244,800              22% Investment Income 135,292                  195,484                (31%) (60,192)             110,500              22% Other Departmental Revenue Town Gas Sales 43,410                   54,074                  (20%) (10,665)             69,500               (38%) Off Duty Police and Fire Personnel 54,227                   31,379                  73% 22,848               60,000               (10%) Other (1) 147,748                  980,088                (85%) (832,340)          53,290               177% Subtotal ‐ Other Dept'l Revenue 245,385                  1,065,541            (77%) (820,157)          182,790              34% Miscellaneous ‐                              11,388                  na ‐                           49,245               (100%) Transfer & Other Sources Debt Premium 10,465                   35,307                  (70%) (24,842)              ‐                           na Indirect Costs 619,300                  700,519                (12%) (81,219)              ‐                           na Subtotal ‐ Transfer & Other Sources 629,765                  735,826                (14%) (106,061)           ‐                           na Total General Fund Revenue 90,097,901$         85,996,095$           5% 4,101,805$        86,950,013$        4% (1) In FY16 $845 645 was received as part of emergency funding for the Town Pier damage from Storm Juno(1) In FY16, $845,645 was received as part of emergency funding for the Town Pier damage from Storm Juno. General Fund Expenses Where does the money go? General Fund ExpensesGeneral Fund Expenses For Fiscal Quarter Ended June 30, 2017 9% 6%3% Education Group & General Insurance Safety &Protection 44% 17% 11% 10% Safety & Protection General Gov't Debt Service Maintenance Fourth Quarter Operational Expenses (1) (in millions of dollars) Fourth Quarter Salary Expenses (2) (in millions of dollars) All Others $1.6M $1.7M  $2.1M  $1.5M  $1.9M  $4.0M  $4.1M  $4.3M  $4.1M  $4.4M  Fourth Quarter Health & Other Group Insurance (in millions of dollars) Fourth Quarter Debt Service (P&I) (in millions of dollars) Q4/FY13 Q4/FY14 Q4/FY15 Q4/FY16 Q4/FY17 Q4/FY13 Q4/FY14 Q4/FY15 Q4/FY16 Q4/FY17 $1.6M  $1.9M $2.1M  $2.9M $3.1M $0.5M  $0.2M $0.2M  (1) Excludes Debt Service, Transfers and State Assessments, which are subject to timing differences (2)Excludes Health Insurance & Other Group Insurance, Pension Costs and Contractual Obligations. Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17 ($0.1M)($0.2M) Q4/FY13 Q4/FY14 Q4/FY15 Q4/FY16 Q4/FY17 General Fund Expenses Results for most recent quarter Three Months Ended June 30, QTR/QTR FY2017 FY2017 FY2016 % Change $ Change Budget (1) General Government Finance Committee 2,536$                   15,132$                 (83%) (12,596)$            18,680$                  Finance & Operations 460,694                  516,333                (11%) (55,638)             2,357,432              Human Resources 80,365                    52,579                  53% 27,785               271,831                  Information Systems / GIS 236,169                  210,654                12% 25,516               953,524                  Legal / Town Counsel 111,399                  127,753                (13%) (16,353)             464,964                  ()()Moderator 2                              178                        (99%)(175)                   1,680                      Planning & Land Use Services 568,369                  438,132                30% 130,237            1,878,232              Town Administration 358,091                  254,915                40% 103,176            1,590,004              Natural Resources 201,676                  147,887                36% 53,789               653,518                  Town Clerk 100,247                  88,870                  13% 11,376               340,199                  Subtotal 2,119,549$            1,852,432$           14%267,117$           8,530,064$            Safety & Protection Emergency Management 3,667$                    ‐$                            na 3,667                 7,075                     mergency Management 3,667$$na 3,667 7,075 Fire Department 671,346                  780,704                (14%) (109,358)           2,985,749              Police & Animal Control 1,765,811              1,331,092            33% 434,719            6,061,917              Street Lighting 24,994                    80,334                  (69%) (55,339)             165,000                  Subtotal 2,465,818$            2,192,130$           12%273,688$           9,219,741$            Marine & Coastal Resources Marine Department 187,445$               174,651$              7% 12,794               819,300                  Subtotal 187,445$               174,651$              7%12,794$             819,300$               Maintenance Gas / Town Vehicles 66,686$                  86,414$                 (23%) (19,728)             375,000                  Mosquito Control 26,094                    15,898                  64% 10,196               140,063                  Public Buildings 251,619                  281,187                (11%) (29,568)             1,106,287              Public Works 833,713                  680,756                22% 152,956            2,951,359              Snow & Ice Removal 43,491                    525                        8,185% 42,966               82,600                    Subtotal 1,221,604$            1,064,781$           15%156,823$           4,655,310$            Human ServicesHuman Services Human Services 74,465$                  73,890$                 1% 576                     436,672                  Subtotal 74,465$                  73,890$                 1%576$                   436,672$               Culture & Recreation Atheneum 175,541$                ‐$                            na 175,541            702,165                  Town Clock 1,336                     1,169                    14% 167                     4,742                      Visitor Services 91,346                    106,840                (15%) (15,494)             470,361                  Subtotal 268,223$               108,009$              148%160,214$           1,177,268$            Other Expenditures Debt Service Principal (305,325)$               ‐$                            na (305,325)           5,316,241              Debt Service Interest 152,426                  186,273                (18%) (33,846)             1,763,824              Group Insurance 2,624,359              2,451,459            7% 172,900            12,052,110            General Insurance (318,692)                34,903                  (1,013%) (353,596)           1,509,588              Retirement Assessment (894)                        ‐                             na (894)                   3,921,257              Cherry Sheet Assessments 127,120                  373,255                (66%) (246,135)           427,300                  Contractual Obligations 113,279                  141,498                (20%)(28,218)             386,611                  (1) Budget includes prior year encumbrances, enterprise fund transfers and trust fund transfers. (2) Includes annual transfer to Community School. g ,,()(, ), Intergovernmental 1,500,000               ‐                             na 1,500,000         9,192,785              Education (2) 8,768,235              7,750,891            13% 1,017,344         27,348,866            Subtotal 12,660,508$         10,938,278$        16%1,722,229$       61,918,581$         Total General Fund Expenses 18,997,612$         16,404,170$           16% 2,593,442$       86,756,935$          General Fund Expenses Results for year-to-date period Twelve Months Ended June 30,YTD/YTD FY2017 Variance FY2017 FY2016 % Change $ Change Budget (1)to Budget General Government Finance Committee 18,246$                   17,675$                3% 571$                  18,680$                  98% Finance & Operations 1,855,263               1,989,381           (7%) (134,118)          2,357,432              79% Human Resources 247,980                   204,795               21% 43,186              271,831                  91% Information Systems / GIS 886,565                   789,350               12% 97,214              953,524                  93% Legal / Town Counsel 394,034                   383,200               3% 10,834              464,964                  85% Moderator 180 178 1%2 1680 11%Moderator 180                           178                       1%2                         1,680                     11% Planning & Land Use Services 1,815,936               1,659,423           9% 156,513           1,878,232              97% Town Administration 1,387,049               1,039,598           33% 347,451           1,590,004              87% Natural Resources 597,266                   532,143               12% 65,123              653,518                  91% Town Clerk 361,114                   306,204               18% 54,911              340,199                  106% Subtotal 7,563,631$             6,921,945$          9%641,686$          8,530,064$            89% Safety & Protection Emergency Management 5,034                       1,859                   171% 3,175                7,075                     71% Fi Dtt 2 617 946 2 728 648 (4%)(110 702)2 985 749 88%Fire Department 2,617,946               2,728,648           (4%)(110,702)          2,985,749              88% Police & Animal Control 5,824,623               5,484,323           6% 340,300           6,061,917              96% Street Lighting 84,126                     150,909               (44%) (66,783)            165,000                  51% Subtotal 8,531,728$             8,365,739$          2%165,989$          9,219,741$            93% Marine & Coastal Resources Marine Department 738,923                   720,080               3% 18,843              819,300                  90% Subtotal 738,923$                 720,080$             3%18,843$            819,300$               90% Maintenanceateace Gas / Town Vehicles 237,204                   237,191               0% 12                       375,000                  63% Mosquito Control 91,480                     89,662                 2% 1,819                140,063                  65% Public Buildings 812,627                   820,829               (1%) (8,202)              1,106,287              73% Public Works 2,704,401               2,610,165           4% 94,236              2,951,359              92% Snow & Ice Removal 288,638                   231,888               24% 56,750              82,600                    349% Subtotal 4,134,350$             3,989,735$          4%144,615$          4,655,310$            89% Human Services Human Services 276,623 274,084 1%2,539 436,672 63%Human Services 276,623                   274,084               1%2,539                436,672                  63% Subtotal 276,623$                 274,084$             1%2,539$               436,672$               63% Culture & Recreation Atheneum 702,165                   693,439               1% 8,726                702,165                  100% Town Clock 2,961                       1,486                   99% 1,474                4,742                     62% Visitor Services 419,866                   435,335               (4%) (15,469)            470,361                  89% Subtotal 1,124,991$             1,130,260$          (0%)(5,269)$             1,177,268$            96% Other Expenditures DbSiPi i l 5 336 591 5 273 997 1%62 594 5 316 241 100%Debt Service Principal 5,336,591               5,273,997           1%62,594              5,316,241              100% Debt Service Interest 1,557,941               1,473,061           6% 84,880              1,763,824              88% Group Insurance 10,582,668             9,637,517           10% 945,151           12,052,110            88% General Insurance 971,495                   1,258,636           (23%) (287,141)          1,509,588              64% Retirement Assessment 3,921,256               3,567,128           10% 354,128           3,921,257              100% Cherry Sheet Assessments 433,373                   421,335               3% 12,038              427,300                   Contractual Obligations 117,457                   141,498               (17%) (24,041)            386,611                  30% Intergovernmental 10,053,838             7,105,000           42% 2,948,838        9,192,785              109% Education (2)25 389 321 25 189 584 1%199 737 27 348 866 93% (1)Budget includes prior year encumbrances, transfers to enterprise funds and transfers to trust funds. (2) Includes annual transfer to Community School. Education (2)25,389,321             25,189,584         1%199,737           27,348,866            93% Subtotal 58,363,941$           54,067,756$       8%4,296,185$      61,918,581$         94% Total General Fund Expenses 80,734,188$           75,469,600$          7% 5,264,588$       86,756,935$         93% Capital Investments Maintaining and improving the infrastructure FY2017 Top 10 Capital Projects Expenditures for the Year 1. New Intermediate School Construction $31,319,173 2. Boulevarde / Lovers Ln Reconstruction $1,716,051 3. Easy Street Bulkhead Reconstruction $1,107,047 4. Brant Point Propagation Facility Construction $820,995 5. Other Road Repairs (Island‐Wide) $801,504 6. Other School Improvements $685,571p$, 7. Heavy Machinery & Vehicles $721,573 8. Fire Station (New Facility) $373,937 9. Technology (Hardware & Security) $271,445 10. Fields, Parks & Parking Improvements $172,777 New Intermediate School and reconstruction of the Easy Street bulkhead were specific projects that were  ltdi FY2017 Total $37,990,072 completed in FY2017. Brant Point Hatchery is very near completion with small punch list items outstanding. Other Road Repairs includes: Easy Street, Surfside guardrails, Candle Street, New Whale Street and others Other School Improvements includes: NHS parking paving, NES parking paving, repairs to the NHS/CPS  facades Heavy Machinery & Vehicles includes:  ambulance, fire tanker, asphalt recycler, two trucks with plow and a  van for the DPW. Other vehicles were purchased as part of departments’ regular operating budgets as directed  by the Administration. Fire Station facility has been rebid and voters will be asked to increase the funding authorization at Special  Town Meeting Technology includes: implementation of e‐permitting, computers and related hardware, upgrades to the  network servers and facility security improvements Fields, Parks & Parking Improvements includes: paving for 2 and 4 Fairgrounds Road parking lots and trash  barrels Financing Activity How much do we owe? The General Fund’s total outstanding debt obligation was $91.6M as of the end of the fiscal year This total includes  $74.1M in principal payments and $17.5M in interest payments Approximately 57% of General Fund debt is scheduled to be amortized over the next 10 years Principal and interest payments due in FY2017: $6.9M Principal and interest payments due through the next 5 years (FY18‐FY22): $35.9M The Town monitors borrowings and other performance measures against Financial Policies adopted in  FY2017 to ensure continued stability and prudence The Town’s Credit Rating External credit ratings have a direct influence on the Town’s ability to: Minimize borrowing costs Successfully borrow funds to complete the improvement and construction of long‐term assets and  the Town’s infrastructure In October 2016, Moody’s affirmed the Town’s rating of Aa2 During the same period, Standard & Poor’s initiated coverage on the Town of Nantucket’s general obligation  debt in a report establishing a AA rating Both ratings represent the second highest rating on the agencies’ municipal credit rating scale The Town is expecting a visit from Moody’s in October 2017 as it prepares to raise long‐term debt to pay for  projects such as the new intermediate school, airport projects, and other capital projects currently underway Type of Bond Issued Moody’s Rating Standard & Poor’s Rating General Obligation Aa2 AA Outlook The Muni Watch Periods based on fiscal calendar (1)Trend (2) Local Receipts Last Qtr Qtr/Qtr LTM Yr/Yr 3 Mo LTM DetailsLocal Receipts Last Qtr Qtr/Qtr LTM Yr/Yr 3‐Mo LTM Details Building Permits $315,122 (5%) $1.2M 7% Rooms Tax $106,521 (6%) $3.5M 3% Meals Tax $75,400 7% $1.1M 7%‐ Yellow if trend is between +5% and ‐10% Motor Excise Tax $445,051 (23%) $2.7M (3%)‐ Red if trend is below ‐10% Local Indicators For Local Receipts categories: ‐ Green if trend is 5% or above Real Estate ‐ Sales ($M) $240M 15% $1,026M 8% Real Estate ‐ Transactions 118 (3%) 507 (6%) SSA Freight Revenue ($M) $8.7M 5% $27M 6% SSA Nantucket Passengers 162,645 34% 648,004 0% GA Airport Landings 601 8% 13,917 11% between 0% and ‐3%, Red if trend is < 3% Airport: Private aircraft activity. SSA categories: ‐ Green if trend ≥ 0%, Yellow if Green if trend ≥ 5%, Yellow if 0% to 5%, Red if < 0% Real Estate categories: ‐ Green if trend ≥ 0%, Yellow if between 0% and ‐10%, Red if trend is < 10% Nat'l Leading Indicators Current 3‐Mo 12‐Mo 3‐Mo LTM LIBOR T‐Bill Yield Spread 0.28% 0.39% 0.39% Sr Loan Officer Survey ‐3.9%‐2.8% (7%) S&P 500 Performance 2,423 2,363 2,102 Weekly Initial Claims 250 250 242 000 261 250 ‐ Difference between 3mth LIBOR & 3 mth treasury bill  (< 0.5% signals stability). ‐ Fed Reserve: % of loan officers seeing loan standards  tightening for med/large firms (< 10% is positive). ‐ S&P 500 index as proxy of performance of risky  equity assets. Level > 1950 is positive. ‐ 4‐wk average of unemployment insurance initial  Quarterly Building Permits (in thousands of dollars) Quarterly Real Estate Sales (in millions of dollars) Weekly Initial Claims 250,250 242,000 261,250 claims, < 300,000 is positive. Quarterly Building Permits 4 QTR Moving Average Quarterly Real Estate Sales 4 QTR Moving Average $297K$272K$238K$262K$242K$310K$257K$322K$332K$274K$340K$277K$315K$211M$274M$343M$163M$156M$251M$289M$200M$209M$317M$287M$182M$240M$382K$383K $424K $418K $432K $460K $1.30M $1.56M $1.56M $1.65M $1.55M $1.71M $1.38M $0 70M $1.66M $1.75M Quarterly Motor Excise Tax (in millions of dollars) Quarterly Meals Tax (in thousands of dollars) Quarterly Rooms Tax (in millions of dollars) $75K $79K $64K $86K $71K $94K $75K$0.08M$0.09M $0.08M $0.10M$0.11M $0.13M$0.11M $0.57M $0.29M$0.14M $0.70M $0.27M$0.17M $0.57M $0.39M $0.14M $0.45M (1) Local receipt and local indicator data comparisons are based on the Town’s fiscal year (ex: Q1 = 7/1‐9/30).(2)LTM refers to “last twelve months”. Investment Report How safe is our money? The following is a report prepared by the Town’s investment manager, Morgan Stanley: Trust Funds Account balance: $9.192.598 Asset Allocation: 10% Equity, 89% Fixed Income, 1% Cash Feb 2017 – made initial 10% allocation to Equities. While maintaining a liquid, conservative allocation, we believe  having a small equity exposure will help overall returns while providing dividend income and a hedge against risinghaving a small equity exposure will help overall returns, while providing dividend income and a hedge against rising  interest rates. Equities are comprised of the 21 companies on the MA Legal List of Investments. Fixed income investments are comprised of investment grade Corporate bonds, US Gov’t Agency bonds, and CDs. Over the past 3 years, the Trust Funds have averaged an annual return of 1.6% based on its conservative allocation. OPEB Fund Account balance: $1,899,930 Asset Allocation: 51% Equity, 48% Fixed Income, 1% Cash Feb 2017 –Given the long‐term nature of OPEB funds and the favorable equity environment, we increased the  equity allocation to 50%. Fixed Income investments are comprised of investment grade corporates and CDs. Over the past 3 years, the OPEB has returned an average of 4.49% annually. Equity Portfolio Overview During the past Fiscal Year global equity markets experienced an extended period of lower volatility and aboveDuring the past Fiscal Year, global equity markets experienced an extended period of lower volatility and above  average stock market returns. While political uncertainty within the US and globally remained a constant concern for  investors, stock market returns focused on the improving fundamentals in the economic and corporate  landscape. Over the past Fiscal Year, the S&P 500 had a total return of 17.9%, an equally‐weighted portfolio of the  MA Legal List Equities has returned 13.2% Fixed Income Market On 6/30/16, the 10 Year US Treasury yield closed at 1.49%, following a year of global volatility among equity prices,  currencies, and commodities. As US economic data improved, Treasury bonds began to selloff in August 2016 and  interest rates experienced a significant jump following the US Presidential Election of Donald Trump. By December  2016, the 10 Year Treasury bond had risen to 2.45%. The Federal Reserve has followed through on its goal to  “normalize” interest rates, with 3 interest rate increase over the past fiscal year. The 10 Year Treasury ended June  2017 at 2.3%. Strategy Outlook We believe that as the US economy continues to expand US equity markets will move higher with periods ofWe believe that as the US economy continues to expand, US equity markets will move higher with periods of  volatility based on concerns over stock market valuation, economic progress, and other geopolitical concerns. We  feel the Federal Reserve will continue to raise interest rates, and would continue to recommend shorter bond  maturities in the 3 –5 year range. Fees Fess are commission‐based and are as follows for the full FY2017 year: Trust Funds: $24,168 OPEB: $7,615