Finance Committee year end transfers

The Finance Committee met this evening and transferred Reserve Fund monies to cover various shortfalls in the FY08 budgets of town departments. Transfers are customary following the end of the fiscal year(which ended June 30). The final transfer was not of this customary sort, but fulfilled the Finance Committee's desire to transfer some of the reserve fund to the school department for textbooks. This transfer was endorsed in a sense of the Town Meeting vote at the Spring Town Meeting. After voting to approve transfers for departmental year end shortfalls,...

...the balance in the Reserve Fund stood at just over $305K. The Finance Committee chair read a transfer request for $275K for the schools. I am not sure who that came from. After some discussion, the Finance Committee voted to transfer $300K to the school department for textbooks. The remaining $5K will be held over for any unidentified costs that may come up before the books are closed for Fy08 on July 15.
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Lincoln Park project

The developers for Lincoln Park have been granted approval to construct commercial buildings on the site as Phase I of the project. Five commercial buildings will be built along Route 6. As part of the project, the developers will have to make improvements to Route 6 and other roadways around the parcel. These include ...

... turn lanes in the east and west bound directions of Route 6, curbs and other improvements. The new entrance will be directly across from the entrance to the golf driving range on the opposite side. Eventually, there will be a traffic light installed at the location.
Drainage and retention ponds will also be required in this phase of the project. I will post more about the project over the next few days.
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Nitrogen Pollutant Committee formed

At last night's Select Board meeting, the Board upon recommendation by the Conservation agent and others, voted to form a committee to advise the town on measures to control and reduce pollution caused by nitrogen in our waters. Nitrogen pollution causes increased algae growth. The algae saps the oxygen from the water..

...which kills or drives out other species. Entire streams, bays and even the Gulf of Mexico suffer from dead zones caused by nitrogen loading. Much of the nitrogen in our waters comes from fertilizers used on lawns and crops. Many in our community depend on the bay and its sea life for their livelihood, not to mention recreational uses. A Buzzard's Bay without stripers, quahogs and lobster would diminish our lives in many ways. If you would like to serve on this committee, contact the Select Board office at town hall here or apply online here
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Back again

Sorry for the paucity of posting lately. I have been away on vacation and did not have access to a computer as much as I usually do. Also being away, (I went to Washington DC, great fireworks on the National Mall!) I was not in touch with local news. I see that the Select Board meeting is at least posted on the town website but ...

... the agenda is not. There will be an Executive session at 5:30PM followed by the public meeting at 6:30PM in Room 304 of the Town Hall.

Items on the agenda are

- Application by Thai Taste to move a victualers license from 387 to 634 State Road.

- Appointment with the Harbormaster re: appointment of a new ass't harbormaster

- Application of Lloyd Center for a 1 day liquor license

- Appointment with the Budget Director on Group Health insurance for employees and the new lockbox service for the town collector

-Appointment with the Executive Administrator on upcoming appointments to boards and commissions and overview of a new on line volunteer application process

- Renewal of a Constable License for Mr. Wayne Vandal

- Renewal of a Taxi License for Mr. Ronald Reis

- Renewal of Surety Bond for the Ass't town treasurer

- Petition of NStar to obstruct and disturb various streets

- Letter fro the Conservation Agent re: Nitrogen pollution in Dartmouth
-Approval of minutes

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Why is a plan needed?

We have been having a little discussion here about what plans are required and which are being worked on at present. I would like to take a step back and address why I believe this fiscal plan is needed. Up to this date, the town has been reacting to shortfalls in the yearly budget. First, we took our reserves and spent them to fund on-going operations of the town. When the reserves were gone, we starting asking the voters for overrides, warning that services would be deeply cut if the override failed. It did and some cuts were made. A large part of the DPW expense was moved to the Solid Waste Enterprise fund. Fees for that service and others in the schools and town were introduced. Finally, other overrides were put forward amid the same warnings of deep cuts to services. This spring, a modest override passed and the town has a few months of breathing space ...

...before next year when we will face another shortfall. All these activities share a common feature. They are reactive. The shortfalls are at hand and measures are taken that react in the short term. But our fiscal problem is not a temporary situation, it is due to the fact that our expense growth is exceeding our revenue growth year after year. For reasons which I have written about here and here, it is difficult to raise revenue to meet the expenses. The solution is to cut the rate of growth of expense to within that of revenue. If you will concede that point for the sake of argument, then the next question is how much do we need to cut the rate of growth of expense? What is does that reduction of the rate of expense growth equal in dollars and where can we find that in the budget? That's where a forward looking plan is crucial. By estimating our revenues and expenses right now, we can begin to proactively make changes to our spending in order to avoid future shortfalls. It will tell us how much of a deficit to expect and where we can focus our efforts to eliminate it. For example, changing to biweekly payroll can save the town some expense. That savings will be modest and should be pursued but it will not cover our FY10 shortfall. Negotiating a less expensive health care package could save a lot. So when making decisions for collective bargaining, a fiscal forecast can inform what we ask for. (Let me caution that, to my knowledge, these are examples and not a position that the town is taking in current contract negotiations) In a few short months, the Fall Town Meeting will be upon us and I think that there will be requests to use reserved funds and departmental turn backs for on going operational expenses. Back to the reactive mode! A fiscal forecast will allow us to take a longer perspective on the use of those funds. How does spending that money this year affect the next? Will we need those funds for FY10? I can't tell you right now because that information is not readily available. A multi-year fiscal forecast is needed to answer these questions and that is why it must be completed as soon as possible.
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A beginning

Three members of the Select Board met briefly today in order to approve and sign $2,186,000 in short term notes at an interest rate of 2.5%. These notes will provide capital primarily for sewer and water projects. The meeting lasted about 10 minutes. The bond issue was the only motion entertained. I did ask about the financial forecast that has been mentioned here. The Executive Administrator gave me a copy of the current draft. While it is a start, ...

... it is still obviously incomplete. I am told that the forecast will be worked on with completion sometime this fall. There is an introduction which contains a few items of note. First, "No new services have been incorporated into this forecast", and "Annual cost increases for the town's general fund averaged seven percent per year while total general fund resources grew at four percent." and "Net school spending requirements of the State Department of Education (DOE) is a major cause of concern for the Town of Dartmouth. It is also projected that spending requirements per student from the DOE will continue to grow, coupled with the enrollment, the projected school department appropriation levels could reasonably be above our estimated available resources."
After the introduction, there are revenue projections and assumptions, followed by expenditure projections and assumptions. This is where the report starts to get sketchy. More work is needed in these sections. This was given to me with the caveat that it is an incomplete work. The final couple pages are where the rub is. They show that the projected revenue is less than the projected expenses from FY09 on out to FY17. In FY17, the projected shortfall is $22 million. Actions needed to close this gap are not developed yet.
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What would a plan look like?

I have been looking around at different town websites and I have come across a financial forecast on the Town of Barnstable site that contains the elements that I think the financial plan mentioned in the Town Charter and DOR report envision. The link to...

... that report is here. Obviously something like this takes a good deal of time to prepare. However once done, it can be updated with much less work. I would like to emphasize that having this plan does not solve any problems. It just allows us to recognize and react to issues that the forecasts seem to present. As with any plan, the reality of what actually happens is changing and so then the plan must change. This is not a failing. A financial forecast is a tool, not an end in itself.
By the way, the Town of Barnstable website is great and is a model for what I would like the Town of Dartmouth site to be. Take a look at it here. It has a wealth of information, even video of all the various meetings under the Video on Demand tab at the left.
When I first was in charge of starting up power plants, the schedule was a huge document that took many weeks to compile and revise. But half way through the project, due to late delivery of components and construction delays, the original plan bore no resemblance to what had actually happened or was going to happen. But because it took so long to revise and produce, it wasn't changed. Computers and software changed all that. By linking tasks to their precedents and antecedents, we could input the delays and see how that affected the overall plan. Then we were able to come up with work arounds for some issues that helped to return us to our schedule. The same thing is possible with a financial plan. Some items will increase more than expected, some less, and by inputting that into our plan, we can see the impacts and try to find ways to accommodate them.
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What IS a plan?

Our town administrator, Mr. Gagne, has responded to the opinion letter from Ms. Days about a week ago. You can find his response at this link. In reading the two letters, I am struck that they don't seem to be...

..talking about the same thing. Ms. Days talks about the requirements of the town charter (Section 5-3) which says,

The budget message of the executive administrator shall, include, specifically, projection of the fiscal and financial needs of the town for at least the next five fiscal years, or such longer period as may be deemed appropriate, both as to income and expenses, as well as any substantial financial expenditures contemplated by any department, committee, or board during such period, including budget programs related to infrastructure maintenance, improvement and expansion. The message shall also include a forecast of any fiscal trends which the executive administrator believes are likely to have an affect on the town’s revenues or expenses.

The charter says that the budget message will be an annual submission by the Executive Administrator to the Finance Committee and town.
Mr, Gagne's response, while listing a variety of planning documents and reports, does not mention the budget message as it seems to be envisioned in the Dartmouth town charter. It is this budget message about which Ms. Days was inquiring, "Neither our long-term revenue projection (which we do have) nor a complete long-term financial projection, the budget message, (which we don't have) constitutes the entire five-year plan". I wrote in this post that the plan, as envisioned in the charter, is being worked on but still incomplete. After reading Mr Gagne's letter, I am not sure we were talking about the same thing. I will continue to inquire about it and let you know here what I find out.
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Contracts and costs

There have been a couple of opinion letters in the Standard Times recently addressing issues of collective bargaining. Selectman Joe Michaud wrote here and Police Brotherhood president Mr McGuire responded here. School Committeeman Phil Lenz weighed in at his blog here. Since these issues are being brought forward,...

...I will chime in as well.
On the issue of leap year overtime pay, the total amount involved is small, a few thousand dollars. As I understand it, the issue is that the additional day changes the overtime pay because of the added hours in the regular salary calculation. I feel that the issue was settled equitably by agreeing to keep the overtime compensation the same as that for a non leap year. I may have stated this incorrectly and if so, please set me straight in comments.
The biweekly payroll issue is an opportunity for the town to save money and, as I see it, does not have a significant impact on the employees. Here is the issue. Most payroll companies, like ADP for example, can do payroll for the town but they cannot do it weekly. These companies are set up to do biweekly payroll. The town could save money by having fewer employees and spending less time in processing payroll if they went to one of these outside companies. The employees would have to change the way that they budget but would get the exact same pay as they do now. Changing the payroll timing for some employees but not all employees results in higher costs since we have to maintain the current system while partially implementing the new system. So in order to make the transition, the town needs all employees to agree to the biweekly payroll at the same time. This change could be made when each contract is up for negotiation or at any time by mutual agreement. I don't know if this has been formally presented to the represented employees, but as I said, it will result in significant saving to the town and that means funds are freed up for other uses. I agree with Mr. Michaud on this one. We need to move to a biweekly payroll and there is no compelling reason not to do so.
I think Mr. Michaud understates the influence that the Select Board has with the School Committee. The Select Board, through the Executive Administrator, sets the funding for town departments. While we are limited to maintaining required net school spending, the Select Board can and does have a say in how much funding the schools get. That is a powerful tool. The Select Board is also charged with deciding to put override questions to the voters. This is another powerful tool. Last year at Select Board workshop sessions, Diane Gilbert raised reservations as to the form of the override question put forward by the school department. She wanted to propose a lower amount or break up the question into parts. Mr. Michaud and the rest of the board declined to do that. I think many now feel that Ms. Gilbert's approach may have been better. We will never know. I suspect that the Select Board may see override requests from the school department in the future. How those requests are handled will have a impact on the influence that the Select Board has on School Committee decisions.
Collective bargaining is a fact of life and, at present, I think that the benefits that have been afforded to our public employees are out of line. The town cannot continue as before and I have called for shared sacrifice by all the stakeholders in town. That includes the town employees. If there are no funds to pay workers, we will have layoffs. Another form of government won't change that fact and whether the workers have collective bargaining agreements won't change that fact. This will have to be addressed as the contract come up. The results of those negotiations will determine how the town staffs departments, whether some services are dropped, and whether some tasks are outsourced or privatized.
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Broadband connection correction

Frankg has written to me to correct my statement at the Select Board meeting tonight.
Here is what he forwarded to me

Q: Does this have anything to do with the Digital Broadcast Transition?
A: No, and it´s important to understand the difference between this change and the Digital Broadcast Transition. These are two unrelated events. This change to your service is driven by a desire to strike an appropriate balance between the interests of our digital cable customers and our remaining analog customers. The federally mandated Digital Broadcast Transition in February 2009 impacts over-the-air broadcasters, but not cable companies. Every television connected to Comcast cable will continue to work after this change to the way broadcasters transmit their signals. Because we´ve pledged to continue serving both analog and digital customers, only those using an antenna to receive over-the-air signals will be impacted

Thanks to frankg for the info. I'll look into the ...

... future impact of this transition and update you in future posts
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