At a joint meeting of the Select Board and School Committee on Monday, the Finance Director presented projections for revenue and expenditures which show the town will fall $833K short of a balanced budget next year. One of the assumptions of that projection was that no town department would receive a pay increase for FY10. The school department does receive an increase in the minimum required spending and they may elect to use that for salaries (the School Committee has sole discretion in that) but no other department had increases according to the projection. Realistically, some or all the town employees may get an increase, so the actual shortfall is probably going to be well over a million dollars. Add to that scenario the likelihood of state government cuts to aid for cities and towns and we are facing yet another fiscal crisis in Dartmouth.
While the current economic situation in the country and state has worsened, the Governor Patrick has moved aggressively to cut costs and trim spending. Other towns facing the same prospects as ours have moved to reduce spending, consolidate departments, and contract out services. New Bedford reorganized departments, creating the Department of Infrastructure, to reduce management costs, Acushnet has consolidated the fire and ambulance services, and other towns are looking to consolidate, privatize or regionalize services. Dartmouth should be at the forefront of these changes because our fiscal woes have been evident for some time now. We are not.
First, the town spent most of the money in the reserve accounts, then we moved $1.8 million off the budget and charged fees for trash collection, last year we passed an override for over $2 million dollars. Yet we continue to fall short year after year. Why? The answer is that the rate of growth of spending is higher than the rate of growth of revenue. I wrote about that here and here. Until the rates of growth of revenue and spending are reconciled, no override, fee increase or other revenue measure will return us to financial health. This post from February lays out the course of action that must be taken. (Please excuse the snark in the Feb post).
What is needed and right now is a plan (see here and here) to reduce our expenditures. This plan should prioritize spending and make cuts to that spending. These reductions should start immediately. Reducing spending and services in low priority areas now will allow the town to continue essential services while making the necessary changes to reduce the rate of growth of spending.
Friday, November 14, 2008
Dartmouth continues to founder
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13 comments:
It seems past Select Boards have not pursued the formulation of a long-term financial plan, even though it is mandated in the Charter. A plan is the responsibility of the Select Board, the executive administrator, and the director of budget and finance/treasurer, again mandated in the Charter.
We have always had financial reports given to the SB and the townspeople; however none has ever reached the level of completion as required by the Charter, and as spelled out in the Charter with regard to the information to be included in the plan. Some Select Board members have clung to the opinion that these reports constitute a plan. They do not, not as identified in the language of the Dartmouth Town Charter.
What's it going to take to get the individuals involved in the plan process to fulfill their obligations and do their job? There's a lot of our money at stake when we pay people who are not even doing their job as written.
No one will dispute the fact that it's tough to hand someone a pink slip, or tell them they have to be laid off. But it happens everyday, in both the public and private sector. You have to have your head in the sand or be in denial if you do not realize that extreme times warrant extreme measures, even when those measures directly affect an employee's life. Private business has no problem laying off workers when the financial going gets tough. Dartmouth is still playing "the good guy" on the backs of the entire Town's residents.
Bill,
It seems to me that no one is 'Paying the piper' for want of a better analogy. We can talk about deficits, too much spending, no plan to reconcile the difference in revenue vs expenditures but we've been talking for years now about this. When will there be a price to pay for inaction? Why have the various Deprt heads not come forward with their 'plans' to cut costs in each of their departments? None of this has been a secret. Who gives the directives and the timelines? Who is held accountable for not meeting any sort of goal? Is anyone responsible or do we continue to run in circles?
Bill, in fact other departments did get a 'raise' by virtue of last April's override. That small 'bump' up carries over from year to year so it's not entirely accurate to state the school department is the only department thatt saw an increase in revenue for FY '10.
What I was referring to was that the school department will be mandated to receive a 4 to 5% increase in minimum net school spending. As is unfortunately common in talking about government spending, when I say "cut" I really mean that the increases will be be less than needed to maintain level services.
I also need to point out that the raise provided by the override is gone. It has been consumed by the increase in expenditures. Expenditures are rising faster than our revenue and have in effect swamped the $2+million override in one year.
Of course, taxpayers will see the normal 2-1/2% increase in their tax bill now made larger due to the override passed last year.
No town department should count any money that resulted from the override last year. That money is earmarked for the purpose of the override for the first year only. after that it is a part of the General Fund to be allocated as needed. What is needed is a prioritization of town expenditures. Some are mandated (schools, Veteran's Agent), some are public safety related (police, Health Dep't, clearing the streets of snow), some are unavoidable costs of running the government (Assessors, tax collector, accountant). As I see it everything else is an optional expense. We can fund it or not. Obviously that has consequences on services. The discussion we need to have is which of those remaining services are going to be curtailed or eliminated and to what extent.
That is just the start of the process. Going forward we need to evaluate whether a function is inherently governmental (police) or if it can be carried out by a regional body, contracted to private industry, or consolidated into another department.
A lot of people having been calling for action over the course of this blog. For that matter, some officials have been, as well.
What can the average Dartmouth resident do to make our voices heard? It seems a lot of lip service has been given us since the severity of the financial crisis we are in first came to light in 2006-2007.
Maybe it's just as much our time to take action to get the action we are asking from the Town and school officials and administrators. Maybe we, too, should be proactive, just as we are calling for our leaders to be so.
Anonymous 2:11
Accountability for no long-term financial plan: Select Board, executive director, and director of budget and finance/treasurer.
A simple to understand matrix of some sort would help the town better understand the priorities for funding. If the town has a budget of 'X', it is broken down as follows:
65% of 'X' is governed by State/federal mandates, i.e. school costs dictated by the state MNRSS formula
15% of 'X' is governed by fixed costs, i.e. pensions, health care, utility
10% of 'X' is dictated by priorities set by the slect board, i.e. Police Department
That leaves 10% of 'X' or roughly $7,000,000 in discretionary spending. THose funds go to the various departments such as DPW, library, health, building etc... In order to close the +-$1m budget gap we will need to identify +-12% from that $7m of discretionary spending.
Why cant we hear about this shortfall in those simple to understand terms?
None of this should come as a surprise to anyone that has followed this saga. When any of the overrides were discussed it was clearly stated that overrides alone would not solve the fiscal problems. The override that was called the 'sustainability' override was described as one which would allow the various other overrides to 'work' for 2 -3 years while other measures where put in place to control expenditures. So the passage of any of the overrides (without the passage of the 'sustainability' override portion by the way) does not in and of itself mean the overrides were a failure-they could never be the whole solution and never were 'sold' that way. What has failed is the town's leadership to put in place any other of the things that go hand in hand with the passage of the override piece of the puzzle. And of course the continued tanking of the overall economy has not helped matters any.
Bill, Someone on the select board needs to make a motion to direct Mike and Mr Ed to formulate this plan with specific goals and objectives. Otherwise, the select board is just as guilty as they are of not getting this done.
The schools need a one year wage freeze so we can get education dollars in much needed areas.
Wally, there shouldn't even have to BE a motion. This is spelled out in the Charter which we should be able to assume all involved knew the language of. If they did not, shame on them. If they did, shame on them for not following its mandate.
Just a question regarding the executive session post. If these sessions are not for public dissemination until resolved, how is it a town employee knew the subject matter and is now circulating this information when the public cannot even gain access to the executive session minutes that pertain to matters that have been resolved?
Sorry, forgot to say that I respect your regard for protocol pertaining to this issue and your refusal to comment on this subject Bill. I am not challenging this. I am however concerned about how a town employee not involved in the matter obtained this information.
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