Analysis of Budget and Metrics (FY2026) — Fire Department

It is important to compile an appropriate budget recommendation, the members of the Budget and Financial Review Board must review several historical records.  The Town's spreadsheet has several previous fiscal years (actual) as well as the current fiscal year (recommended, approved, and actual spending).  The spreadsheet is very dense with hundreds of values by general ledger account number within Department.  BTW, this also includes the School Department (as a Department).

While previous accounting numbers and percentage comparisons are important, other data is needed.  Specifically, metrics and other drivers of the budget process.

What's a driver?  An example.  If a company manufactures widgets.  Each widget requires 3 hours of labor and $40 of materials.  If the company is attempting to project the budget resources for next quarter (labor and materials), the forecasting must start with the drivers.  In this case, how many widgets are estimated for the next quarter.  The estimate is an additional 100 units per week for 10 weeks with $20/hour (base rate including full-time employee benefits).

Additional Resources
Materials: 100x$40 = $4,000 cash required per week, $40,000 of cash for materials for the 10-week period.
Labor: 100x2 hours = 200/week, 200/5 days = 40 additional labor hours a day, 5 full-time equivalents
Labor Expense A: $20x200 hours = $4,000 per week (temporary employees with temporary benefit cost)
Labor Expense B: $15x200 hours x 1.5 = $4,500 (using 25 employees on a Saturday, without benefits loaded).

While there is a 50% incremental for overtime, there is no additional for benefits (health care, etc) because it is fixed for the employee.

The drivers in the previous example:

• 100 additional units per week.
• 8 hour shift, Monday -- Friday.
• No overtime, new employees for a temporary period.

The metrics are:

• Labor required per unit (for labor requirements).
• Material cost per unit (for cash flow requirements).
• 8 hour shift, Monday -- Friday.

For a town, the metrics and drivers are:

• Metric: Time to process a deed; Driver: Number of deeds processed (day/week/month).
• Metric: Time to mow the turf/grass on a field per square foot; Driver: Number of square feet per field.

If there is a significant increase in deeds processed over the last few years and/or additional fields to be mowed ... then the labor required needs to be reviewed against overtime or a new employee (FTE, or part-time).