We had a bit of discussion on Monday at the Select Board Meeting about overrides and department budgets. I expressed my desire that the town and school departments prepare a financial forecast and plan that sets out what our likely revenue and expenses will be and how we plan to reconcile revenue and expenses. Until such a plan exists, I will not vote for any override request. We have data which tells us the rate at which our expenses and revenue have grown historically. Therefore we can make a few assumptions and ...
...predict what our fiscal situation will be over the next few years. Once we have those numbers, our administrators must formulate a plan on how the town and schools are going to provide services within the revenue available. Our forecast is likely to show that we are going to have shortfalls in our revenue. From that point, we must set priorities and decide what will be cut and what will be kept. If they feel an override will be necessary to sustain operations, we should know about that now. What amount of override will be needed and when. Rather than going from one crisis to the other, we need to get a forward looking plan together and manage rather than react. I have posted previously about overrides and plans here and here. So what do you think, have you had enough of the continuing crisis mode? Leave your thoughts in comments below.
Wednesday, August 6, 2008
Budgets, plans and overrides
Subscribe to:
Post Comments (Atom)
Posts
31 comments:
While I appreciate the need to plan and do not disagree that more and better planning needs to be done, even the best laid plans go awry when utility costs explode by double digits over the course of a couple years. Diesel heating oil had been less than $2/gallon not very long ago it is now over $4.50 for the same gallon. How to plan for that? An officer was tragically injured in an auto wreck. The cost to properly care for him exceeds $500k/year. How to plan for that? The state decided to re-jigger the formula concerning the cost to send kids to the voc/tech so Dartmouth all of a sudden had their portion increase drastically. A special needs student moved into the town shortly before the yearly deadline expired and requires upwards of $200k/year in special ed. How does one plan for these things? While many things can be anticpated and should be planned for, there are also many things that cannot be anticipated and that is where I think all this talk of precise multi-year plans begin to come apart.
I would also argue that the schools have presented at least one comprehensive plan that did not fly this past year. Was it the best plan? Probably not. But it was in fact a plan and took a considerable amount of thought to put together. I won't argue that it was defeated, that's a fact. I will argue that there have been 'no plans'. Too loose of a generalization in my opinion. And disagreeing on the content of a 'plan' does not mean one did not exist.
In addition you open yourself up to unfair labor practices if you state planned wage increases or cuts in your plan. Accusations of bad faith bargaining happen quite often.
A 'plan' is always better than 'no plan'and financial directors know how to adjust for increases. The cost of fuel has been climbing for some time. It would be in the budget as would emergency expenses. The fact that the town did not have insurance for the police officer is just 'shame on Dartmouth'. We know better now. Financial planners take all these things into consideration when 5-10 yr plans are done. Multi-year plans are everywhere. They can be adjusted with change. Other town's have 10 year plans. It makes sense.
As you probably know, the current insurance the Town has would still not come close to covering the catastrophic medical bills of the injured officer-to buy such coverage would 'break the bank' so to speak. As far as fuel proces increasing for 'some time', one has only to look at a newspaper to see the recent spike in prices is nothing like this country has ever faced before so it is a factor in throwing off any budget forecast. And once again, the school end did present a comprehensive 'plan' prior to the last vote. Continually saying otherwise does not make it so. One way to 'plan' for unexpected cost increases is to carry extra money in the budget each year and turn it back to the citizen's at years end as 'free cash', something most voters I think would frown on - 'why should the town sit on my money?' Anothre is to use rainy day money from the reserve or stabilization fund - another practice that is recommended and in fact had been done in the past and now has been curtailed. So assuming the governement is being well run - the DOR report said this was the case and very little has been unearthed to counter this - then the budget presented are pretty lean without too much 'fat' to absorb unexpected 'surprises' and the gov't then must come back to the voters when these 'surprises' come up.
As far as other town's having 10 year plans, I'd love to know what town's those are as I'd like to see how they do it. At this point I'm a bit skeptical that any town can plan out 10 years but I'm willing to listen with some proof.
meant to say using the stabilization or reserve funds is NOT recommended. Left out the word NOT.....
Check out the Town of Barnstable's web site. They have a plan for several years (I think 10 or more).
Mr. Trimble has mentioned Barnstable before and I checked out their site. It is impressive.
Good for Ellen H., I read her letter in the ST today and I agree. She is a true advocate for children.
Thanks 'a plan'. I had seen Barnastable's site previously and it is impressive. They do have a financial forcast for 10 years out - here's the link:
http://town.barnstable.ma.us/TownManager/08Bud/08budget.pdf
I won't pretend to have read all 84pages of it but it is a good document from what I did read of it. It would be a good exercise to have Dartmouth come up with something similar. They are clearin the intro that they include many assumptions in their revenue and spending projections but that's a reasonable thing I suppose. It's also interesting they chose to include an image of a crystal ball reader on the cover!
It's also clear to me that Barnstable has revenue streams that Dartmouth can only dream of whihch to some degree allows for this type of planning and for such an impressive web presence, such as a much higher tax base and sources of revenue like the Cape Cod Environmental Tax and a Hotel/Motel tax sending much money into their coffers besides the old stand by of property taxes. Also interesting is their student population is projected to decrease by a significant amount taking a large burden off their school infra structure - something Dartmouth is not experiencing, and yet their per cent of budget devoted to education is 60% - about 3% more than Dartmouth's.
ANyway, thanks for the heads up on the B'stable site-lot to learn from there.
Barnstable has had a series of failed override requests over the past few years. I think that the last one was approved however. So they have had much the same history. An interesting note about their school system is that they have a fair number of charter schools. One reason that they have a declining school population is that homes are so expensive there, and hence property revenue high, that young families cannot afford to live there.
To say that the DOR report stated that Dartmouth is "well run" is just not the case. They found no deficiency in the day to day operations but concluded,
"Greater attention is warranted to policies that guide higher level decision making, and to practices that foster forward looking analyses."
I think they are saying we need a plan and don't have one. That's why the so-called 'surprises' keep coming up. The town has not forecast the problem and formulated a plan to deal with it.
They also did not recommend against the use of reserve and stabilization funds for unexpected increases in expenditures. Their recommendation was,
"Reserves in a municipal context typically include free cash and stabilization fund balances. A formal reserve policy should reflect a consensus among select board and finance committee members that defines target reserve levels in the context of a broader financial plan.
Once again, notice that word, plan.
They also said,
"By using non-recurring (or one-time) revenue to fund operations, communities effectively postpone making difficult decisions on service and taxation levels. As a result, the community is continually faced with the same dilemmas each year because ongoing costs are built into the budget’s base while the offsetting revenue source is no longer available (because it was spent in the previous year)."
Which goes to my point that we are careening from crisis to crisis without a plan.
To say the school department presented a comprehensive plan before the last vote is also a stretch. Where is this plan? Can you direct me to a published version of this plan anywhere? I am not talking about a Power Point presentation with a list of needs and some cooked up numbers. I mean a spreadsheet showing the rates of increase in revenue and expense for the last five years and a forecast for the next five, along with measures to make sure the two are equal in that period. This plan should be public and accessible like the Barnstable plan is.
When reading the DOR report, you will acknowledge the numerous instances that state that the various departments are in fact well run and professional no? I do agree with your clarification on DOR's recommendations for the use of stab funds. One could argue that the town is still not adhereing to this recomendation as various town departments requested additional monies from the reserve fund within a month of this past spring town meeting. There needs to be work done still in this regard.
On to the school issue, Mr. Trimble, in addition to numerous Powerpoint presentations, there was a 30-40 (?) page document that presented if I remember correctly the past 2 years expenditures and projections for forward for 2, maybe 3 years. Its been a while since I have looked at it but will see if I kept a copy of it to refrresh my memory. This document was available at numerous public forums held in the run up to the last vote. It was even posted on the admittedly antique web site. Unfortunately even with the unprecedented number of public forums held by the school department (evening meetings at each school building plus 2 opportunities to tour each facility and get a copy) I want to say maybe a dozen people availed themselves of the opportunity to get the information. Really too bad.
Was the document presented the 'end all be all'? Certainly not, and some have argued that the numbers contained within the document were not accurate. But those that bothered to look at it in any depth could be counted on 2 hands and maybe a foot. So in my opinion there was a plan, but nobody bothered to read it.
Would I like to see one as comprehensive and far reaching as Barnstable's? Sure. Do we have even 50% of the staffing or budget that a town with the resources that Barnstable does? ($69m budget for Dartmouth - $181m for B'stable.)I think not, so is it realistic to expect the same results with a fraction of the manpower?
It may not be a popular opinion but I recognize that it is simply not realistic to expect the same product (in this instance a 10 year plan) from an organization that has only a portion of the resources that another organization has. There are middle grounds in my opinion and the insistence that the schools do not present 'plans' is just not accurate.
If the school has a plan, it should be on their website. A power point presentation is NOT a plan. Most financial people would agree that spread sheets with projections into future are part of a plan. They are also, ever changing when fuel, insurance, etc. changes.
Is the school plan on the website? I think not.
If the school department had a real plan, it would not be a distant memory because they would refer to it all the time.
A plan is the first thing needed in managing. If you don't know where you are going, you are just reacting.
The Acushnet town managers have a plan and a smaller staff than Dartmouth. Failure to plan is a failure to manage.
In regard to Barnstable. Dover MA has a huge budget as well. Many services are available to the residents. However Dover town employees do not live in Dover. They can't afford to. Dartmouth is very unique. You have all factions of society living here but this may not always be the case if our budget is not brought under control.
As far as not having a plan due to the lack of manpower, HOGWASH! I have seen the smallest of non-profit organizations with extensive plans. These people are dealing with practically nonexistent budgets and unskilled volunteer help. Other towns manage to do it and the DOR has help available.
Gee you're all right of course. Nothing's any good if it is not what you say is as it should be. I get a kick out of the comments about the web site not being up to date! That's rich. Eveyone wants something for nothing in Dartmouth. But now that Bill is on the case - the town's plan will be looking like Dover's and Barnstable's in no time! When Gagne's done chasing strray animals and listening to people bitch about their street light not getting turned back on fast enough he'll get right on it. Let me know when it's ready.
Bill continues to praise the Barnstable ten year plan as a basis for our spending planning yet in the first paragraph it clearly states "this document should not be interpreted as a spending plan" and such language as "expenditure projections were made based on a variety of assumptions which allow them to fall within available resources" "variety of assumptions??????"this tells me they fudged the numbers to get them to fit yet Bill keeps calling for this style of plan.
If you read the Barnstable plan, the assumptions are clearly laid out and available. With any future event, you are going to have to make some assumptions, such as the level of new growth or state funding. If you base these on historical trends and current forecasts, it is likely, but not assured, that you will be in the ball park. In Dartmouth, we know from historical data that our revenue will not cover our expenses going forward. I don't think there is any disagreement on that point. Therefore it seems prudent to plan on how we are going to resolve that gap. If we have no plan, then we will continue to find ourselves in a crisis at the beginning of each budget cycle. I would rather not continue in that vein. Decisions are rushed and priorities are not addressed. Closure of the Gidley and Cushman schools falls in that category I think. Good managers plan for the future, don't you think?
yes the assumptions are laid out and available but with language that includes"this document should not be interpreted as a spending plan" and "expenditure projections were made based on a variety of assumptions which allow them to fall within available resources" this says they used assumptions that fit the resources available not necessarily correct or accurate ones. I believe a three year plan to be much more worthwile. There are too many variables in a ten year plan.
So you agree that a plan is needed and it is a good idea to refer to it when making decisions on spending, is that right?
Three years, ten years....
We need a plan! Dartmouth has not had a plan and that was one of the first items mentioned in the DOR report.
Let's go Dartmouth. Instead of always being reactive, why not be proactive for a change.
yes I agree but a plan cannot be cast in stone. Flexibility must be maintained. But just having a plan or a DOR report doesnt solve the problems. to balance expenses and revenue means we also need more revenue. the cuts alone wont fix everything.
I think it has been stated several times that cuts and changes may not be enough. However Dartmouth must make every attempt to rectify the situation before going to the voters for more money. Call it an act of good faith. And gee, a plan would be nice.
A plan that is based on projected revenues with each department being assigned a percentage of that revenue and balancing their own individual budgets out five years based on it, is needed. That being said, it is also crucial to improve the execution of providing the necessary services provided by our tax dollars.
Here's an idea, Mr. Trimble. Instead of constantly whining about the need for a "plan", get off your butt and develop one!
It's simple. If a plan is as important as you say, do it. Otherwise, go away. The last thing this Town needs is another chatty pol who lacks substance.
Exactly.Instead of complaining that we dont have a plan I would think as a selectman you would be doing something about it. The constant complaint that we dont have one as your basis for no supporting anything is getting old.
The Town of Dartmouth (taxpayers) pays someone approx. $120,000. to form a plan for the town. That is a full time job. The SB's job is to direct the Admin., not form the plan. He(town admin.) is supposed to be trained in that field, as is our Fin Dir. They should work together and provide the finished plan to the SB. The SB does not design the plan.
Perhaps you need to study the town by-laws.
Since when are Selectman responsible for a town plan? Never, that I can remember. A plan is not a wish list, or a power point presentation. It is a carefully designed plan for the future of the town. It can change as time goes along, but it is still important and necessary, NOW. DOR recommendation.
Where's the plan????
Exactly direct the admin to produce the plan. Not stand(or sit there) complaining we dont have one then use that as a basis for not supporting anything. As for 120,000 to form a plan and thats his full time job. All the other work he does is for free? what a bargain.
If this plan is so almighty important that every other aspect of town funding comes to a standstill without it I would hope Mr Trimble would use his position and powers of pursuasion to insist the plan become THE top priority of our town administrator. He should request it be complted and set the parameters of what it should include along with a date cerain for its completion.
As part of this 're-prioritization' of tasks based on their importance I would expect the administrator to list those things that WILL NOT be accomplished so that the plan can be assembled. He can not be expected to do all things, and all things cannot be a top priority, I'm sure Mr Trimble would agree with that.
While I do not expect the select board to write this plan I do expect them to direct that it get done so we can move forward. Is'nt this what we elect these people for? Talk is cheap, results are what matters.
Neither the Select Board members nor the executive director can write a five-year plan. The Select Board, whom we elect, is the "chief executive office" (Town Charter, Article 3, Section 3-2) and is the "boss" of the executive administrator. It is its responsibility to see that he is undertaking the job responsibilities that we are paying him for.
One of those responsibilities is to require the director of budget and finance/treasurer to draft a five-year plan, one of the job responsibilities the director is getting paid for. He then gives his completed plan to the executive director who should notify the Select Board of the completed project. It then goes to the Finance Committee.
All this information can be found in the Town Charter, Article 4, Section 4-4 and Article 5, Sections 5-3 through 5-5. Check Bill's Useful Links in the left-hand margin of his Web pages.
Apparently over the years, the SB has not seen to it that a five-year plan is drafted, as it has never questioned where one is, or one would be in existence now and this issue would be moot. The executive administrator has not instructed his director of budget and finance/treasurer to draft one, and the director of budget and finance/treasurer has not completed the various plans he does draw up to incorporate them into a final, complete five-year plan. In the above Articles and Sections, the Charter also states what information must be included in this plan.
It is not that we don't have "plans" drawn up. It is that none of these individual "plans," lacking the Charter-mandated information, constitutes a complete, five-year plan.
The SB, executive director, and director of budget and finance/treasurer share in the responsibility of the drafting of a five-year plan. In asking for a five-year plan, Bill is following the mandates of the Town Charter in requiring that a plan be drawn up. To suggest that he stop "constantly whining" and "get off his butt and develop one" is way off the mark. He is just one of five Board members. The SB members must all present a unified front and demand that their "employee" (executive administrator)fulfill his job obligations. And the "employee" (ex. ad.) must demand his "staff" (director of budget and finance/treasurer) to draft a five-year plan.
The FinCom has been asking for a five-year plan over the years and has not received one. They can only ask, however. It is first up to the SB to see to it that the executive director carry out the Charter's mandates.
Thus, without the full documentation and information that would be found in a five-year plan, FinCom's hands are tied in seeing the big picture and making financial recommendations that will benefit the Town in the future. They can only go by the financial information they get.
Anon 11:53, well said, but the problem is even deeper than that. We also run into the definition of exactly what a plan is.
Our (paid) financial leaders only recently started down the path of putting together what the expected revenues and expenses will be for the next 3 years. This is a new experience for them, and I have seen them "thrilled" that they got this accomplished.
While I agree that this is clearly a step in the right direction, the problem is that the FinCom has had a 5-year projection all along, and the BRTF did one for 5 years last year. What has been asked for is the next step.
To make these simple lists a proper plan would now include just what we need to do to close the clear deficits shown each year, including what the repercussions are for the actions needed. This is what the FinCom has been asking for all along, and what the BRTF recommended.
Based on what I saw and experienced during my BRTF tenure, them getting the 3-year lists really is a big deal because doing estimates is really difficult for them. We had a hard time getting projections for the next quarter let alone 3 years.
They were/are adverse to doing estimates that could, and probably would be, wrong, but we tried to convey that having an estimate that just needs to be tweaked as reality comes along is certainly better than having nothing and getting a big surprise, which is how we have been doing it. We also explained that these estimates are expected to be wrong, but at least close, for "planning" purposes. Educated guesses if you will.
We are making progress and the next step is really the hard part, but needs to be done. Otherwise we are traveling troubled waters without a real map, and this makes us reactive instead of proactive.
Right on Frank. As I posted before "A plan that is based on projected revenues with each department being assigned a percentage of that revenue and balancing their own individual budgets out five years based on it, is needed." I believe that this would be the next step to create a real plan so we can put this issue to rest. Once we have this, it will be much easier to see what we will have to give up in services going forward if we don't want to pass overrides. Make no mistake about it, we will have to make cuts to balance the books going forward.
Post a Comment