The Wrentham Times

A Letter from Finance Committee Chair About Town Meeting

Dear Wrentham Neighbors,

The process of finalizing the Town of Wrentham operating budget for FY 2012 is nearing completion. The only thing left to do is for our voters to review and discuss the Finance Committee’s recommendations and take the vote at Town Meeting on Monday, 13 June. Town Meeting will be in the KP High School auditorium starting at 7:30. As chair of the FINCOM, I had hoped to get this final information article out a couple of days ago via our usual collaborative committee effort. But an out of town business requirement upset those plans. Even so, there are a couple of key information points to be made, and it’s a rainy Saturday afternoon, so those points will be made in the first person narrative.

The warrant for Monday night is relatively short. There are just eight articles to be moved. All of them will be moved by the Finance Committee. Six of the articles are fairly routine annual requirements such as setting the salaries of elected officials and renewing revolving accounts. The primary focus will be on Article 3 which is the budget that will go into effect on 1 July. The Finance Committee’s recommendations, to include the budget numbers to be voted on are in our draft report currently posted on Wrentham’s web site.

The basic numbers regarding our recommendations are in Figure 1 below.

Figure 1

 

A few key points regarding this budget: 

• As shown in the figure, the change in the operating budget is 1.22% and is the smallest in the past 10 years (and possibly the smallest going back to the adoption of Prop 2 ½ in 1982).  The primary reason that it has an increase at all is due to an 8.3% increase in insurance and benefits.  Without that, the rest of the budget is 0.45% below this year’s current budget.  (I know that most would say such a small increase is a good thing.  But the reality is that the Town has to make cuts to operational services stay within this rate of growth.)
• The budget reflects the outcome of the debt exclusion vote.  Despite numerous insinuations, the debt exclusion was not a shell game.  In our previous article we described what would be cut if the exclusion did not pass.    There are no changes to what we previously described.  The specifics can be found in Table B-1 of our report and are highlighted in Figure 2 below.  As shown in Figure 2, there are significant cuts required even with a 1.22% growth.
• To balance this budget, the Finance Committee is recommending using the entire remainder of our Free Cash, a total of $245,245.  We are painfully aware that this is contrary to best practices.  As we previously wrote, if the debt exclusion passed we were intending to carry this amount over to the next fiscal year in order to address important capital requirements.  Alas, this will not be.  But to not use it would mean that the cuts depicted in Figure 2 would be increased by another $245,245. 

Based on the occurrences of the past two years, we are expecting that there will be amendments made on the floor of Town Meeting to our recommended budget.  So I offer a couple of key points in that regard: 

• Any amendment made to add funding to a specific budget line requires that the motion include the source of funding.
• As just mentioned, there will be no Free Cash available to use as a funding source towards an amendment.
• If Stabilization is to be proposed as a funding source, it requires a two thirds approval.  I will not have the final numbers regarding Stabilization until Monday morning.  My expectation is that it will be in the neighborhood of $100,000 above our threshold of 5%.  I will personally strongly advocate against using any of this.  As we will be going into a budget that will have significant challenges in execution, one that has no Free Cash being carried over, and one that will also have $350,000 less Free Cash than this current year (as that was contributed by a onetime sale of tax property), I believe it would be very short sighted and risky to add to our challenges by reducing Stabilization.
• The only other option is to take funding from one budget line in order to add to another.  I am aware of at least one potential amendment that may propose this.  The key caution here is that the state of this budget would require that any line that is reduced now would almost certainly need to be reimbursed at the November Special Town Meeting.  The most likely source at that time would be Free Cash.  Because we are using all of this year’s Free Cash and we will not have a bump up from the sale of tax property, once the books are closed on FY11 next year’s Free Cash will likely be in the neighborhood of $700,000 (or about $400,000 less than this year).  For this current year we used $331,000 just for Snow and Ice.  So using this option doesn’t necessarily solve anything.  More importantly, it has the potential of making things worse.

One final note – during the run up to the debt exclusion vote the Finance Committee and the Board of Selectmen continuously stressed that the exclusion was not a singular, long term solution to our challenges.  Rather, it was to be the first step to a long term strategy to meet our financial challenges.  The outcome of the vote doesn’t change that.  In fact, it makes it even more imperative that the Town quickly develops and implements such a strategy.  I believe this strategy needs to provide a three pronged approach that addresses economic development and revenue planning, modernized business practices (shared services, consolidations, improved processes), and compensation policies that integrate fiscal realities with operational objectives.

Stay tuned.  And even though the Bruins are playing Monday night, please come to Town Meeting. 

Figure 2

 Jerry McGovern

Chair, Finance Committee

 

Letter to the Editor: Debt Exclusion Aftermath

From Ed Goddard, Wrentham

I wish to thank the many volunteers and supporters of the failed Debt Exclusion ballot question. The results were disappointing to those concerned about our elementary education system, Town services, and to our property values. In the end, Town residents spoke clearly that they are willing to receive reduced Town services across the board in lieu of incurring additional taxes. I disagree with that approach in this instance but it certainly is not one without merit.

As Chairman of the Wrentham Elementary School Committee, I want to assure all Town residents that the Schools will continue to use our best efforts to provide our children with an excellent education. The disappointment emanating from last week’s vote does not relieve us from this obligation nor will it dampen the spirit of our Administrators and educators in this regard. We remain committed to the kids and our community. This commitment remains an immutable hallmark of the Wrentham Public Schools.

In lieu of the Debt Exclusion failure, I will work with the School Committee to review all available funding sources, which almost certainly will include new and increased fees in several areas. If these fees are implemented, they too will be disappointing to the affected parents but, as we will show, these are the same types of fees charged by surrounding communities. Regrettably, nothing is free anymore.

Please keep informed and involved as we continue to work together to provide the best education and Town services possible with the dwindling resources available for use.

Ed Goddard Chair, Wrentham Elementary School Committee

Town Votes "no" to Debt Exclusion in Special Election

By Laura Finaldi

After much debate, many signs showing up on lawns all over town and several letters to the editor, the people of Wrentham voted against a proposed debt exclusion in a special election held yesterday in the Gibbons Gymnasium at the Delaney School.

The election, which was the first Saturday election held in Wrentham, brought 40.6 percent of town residents registered to vote to the polls. Of the 3028 residents who voted, 1142 voted for and 1886 voted against the debt exclusion.

The "no" vote will force the town selectmen to re-evaluate and potentially make cuts in several different departments. The debt exclusion, which would have raised taxes by 4.1 percent in 2012, was proposed to provide funds for those and other government-run organizations in Wrentham. It was also proposed in an effort to help fix Wrentham’s financial problems, including three years of declining revenue.

Joe Botaish, chairman of the Wrentham board of selectmen, said a “yes” vote would have helped Wrentham begin to come out of its financial troubles. He said he is worried financial troubles will force the town to cut important programs in schools and in public health and safety.

“There’s only so much you can cut for a town before you start losing, and we’re at that point where we’re losing,” Botaish said. “We needed something to help us get over the hurdle and the debt exclusion was the thing to get out of the hurdle so we could straighten this out.”

Botaish said he thinks the “no” vote was partially a result of signs put up around town that said the tax increase would be seven percent of property owner taxes, when it actually would be a little over four percent. He said he thinks these signs scared people into voting “no.”

“I think that there was a need for this [vote],” he said. “I think people thought that this was a joke, that this debt exclusion was a scare tactic and it really wasn’t.”

John Zizza, a former selectman who created vote “no” signs Botaish partially blames for the election result, said although his signs said taxes would be raised by seven percent–almost three percent greater than what Botaish said people would be paying–he felt his efforts helped inform the public about what the special election was really about, something he feels the town government failed to do.

“I’m not happy or sad about the vote either way. The way it was done and the way the rest of the people found out were wrong. I was happy when I saw the vote ‘yes’ signs go up because it helped people become informed,” he said. “If you only go out of your way to notify the people that are most likely to say yes, that’s a problem, and that’s what the town did.”  

Zizza said he understands the town has financial needs, but the priority should be what the people themselves can afford.

“It’s not that I’m not sympathetic [to the town’s needs] but people need to buy food and pay their mortgage,” he said. “People are hurting for money. That’s really what it’s all about.”

At the polls, voter traffic seemed consistently heavy to Susan Martisius, a retired Wrentham resident who has been volunteering to work elections for years. Martisius said she was pleased with the results of the election because many cannot afford to pay higher taxes.

"You can't spend what you don't have. I have to balance my budget at home and I only buy what I can afford." she said.

A town meeting will be held on June 13 to discuss alternative ways to tackle financial issues. Ellen Wojcik, Wrentham's assistant town clerk, said the debt exclusion was Wrentham’s big attempt to bring itself out of financial trouble, and she is uncertain as to what may happen in the future.

“This was it. I don’t know what they’ll do at this point. [The board] will probably look at the budget and make suggestions.” she said. “The town did the very best that it could to get the information out. If it’s lack of knowledge [that swayed the results], it’s not the fault of the town.”

 

Laura Finaldi is a Boston-based writer currently pursuing a degree in journalism at Northeastern University. 

Letter to the Editor: Vote Yes on June 4, 2011

from Bob Cohen, Wrentham

Today, June 4, 2011, the people of Wrentham have an opportunity to vote on a financial measure that will provide the necessary funds to operate the schools, public safety, and other municipal departments at the current level of service. 

Having served as a Selectman for the last three years, I have participated in developing the last three budgets and have observed first hand the objective effects of steadily declining revenue and shrinking resources.

School and municipal staff have risen to the occasion with dedication and financial concessions.  They have shown an exemplary respect for our money and have gone above and beyond the call of duty to serve the public and preserve the quality of our children’s education, public safety, and our other services.

Hard work and dedication only go so far. The Elementary school has already cut Spanish and General Music. Gym and Art have been reduced to half-year courses. On the chopping block for this year are busses within two miles of the school, the Instrumental Music program, Art, Gym, Computer Classes, smaller class size, and many other services.  Some might argue that providing the three “Rs” will be enough.  It won’t be. The world our kids are inheriting is different from the one in which we grew up.

The Police and fire departments have been understaffed for years. Town meeting finally understood the operational necessity for adding new officers and fire fighters.

There’s no one to turn to except each other to fix our situation.  Regardless of whether you’re a Democrat or a Republican, a Conservative or a Liberal, a Townie or a Transplant, a senior household or a young family, the common ground we share is that we agree it is in everyone’s best interest to pool our money and entrust our local government to provide us with the necessary services—especially since we are governed by direct democracy. The essence of that social contract is that we share the costs in good times and bad, regardless of whether we benefit from each and every service.

What will you see in the mirror at the end of the day on June 4th?  Vote Yes and you will see a person who embraced his or her role as a responsible citizen of Wrentham.

More Thoughts on the Debt Exclusion

In addition to the letters The Wrentham Times has received regarding the debt exclusion, several interesting opinions have been submitted to The Sun Chronicle. In particular, two letters appeared on both sides of the issue this week. One from former selectman Bob Cohen in favor of the debt exclusion and another from resident Chuck Woodhams who questions the impact of a tax increased. To read both pieces, visit The Sun Chronicle's "Opinion" section.

Letter to the Editor: Why a 'YES' Vote on June 4th is Wrentham’s Only Option

From Deirdre Foley, Wrentham

I would like to thank Mr. John Zizza, the former selectman, for calling attention to the June 4^th debt exclusion vote.  The flashy red signs claiming the town is seeking a 7% tax increase have generated questions, opening a healthy debate regarding Wrentham’s financial issues.

I have lived in Wrentham for almost 12 years and have witnessed the propaganda and half truths some feel comfortable telling.  It has been frustrating.  The 7% signs in town are once again that of propaganda.  Our taxes go up every year because of Proposition 2 ½.  What this means is the total pool of real estate tax revenue is capped at 2.5% and can only go up that much every year.  The point is Wrentham has been working within its budget.  However, this has become increasingly more difficult.  Property tax is Wrentham’s primary source of income.  Specifically, Wrentham has faced a $2.3 million decrease in new growth, state aid, and local receipts since a peak in 2009.  These sources of revenue are projected to decline further while the cost of running our town is increasing.  Wrentham needs an increase in revenue to maintain services that have been hammered with cuts for three years straight.

On June 4^th, we are voting on a temporary 4.1% increase which will decrease each year until the debt is paid off in 2019.  Where the signs come in is they are adding the usual 2.5% plus 4.1% coming up with 6.7% and from there simply rounding up.  So if people vote no and think that action is saving 7%, they are misinformed.

The debt exclusion vote is by far the cheapest way for Wrentham to maintain services.  The proposed plan will add less than $20 a month based on the average priced home in Wrentham which is approximately $400,000.  The $20 a month goes down year after year until the debt is paid off in 2019.  Businesses will be paying as well.  This means the Wrentham Outlets will have to pay additional real estate taxes also.  If you use any level of services from the town, be it the schools, buses, senior center, senior transportation, police, ambulance, recreational fields, the pay as you go fee will be applied if the vote does not pass will far exceed the proposed plan and will likely be permanent.  We cannot afford not to pass this vote. 

The $244,500 for {Wrentham Public Schools] will allow the school system to maintain services.  The WPS has been financially cut for many years.  Each year, WPS superintendent, Dr. Jeffery Marsden, has met with Wrentham’s Board of Selectmen and Finance Committee detailing his predictions if his budget was not met.  Dr. Marsden has never made false predictions to produce fear as some would like to lead voters to believe.  His predictions have simply been the reality of our schools financial situation.  His prediction if this vote does not pass and, therefore, the current level of services are not maintained is there will be elimination or an out of pocket fee of some bus service, elimination of health, music and/or library, and at least one classroom teacher.  This is on top of the cuts WPS has already suffered.  WPS has been forced to eliminate 31 positions in 3 years resulting in increased class size, eliminated programs and reduced level of services for Wrentham’s children.  Now we are facing the reality of more cuts or making the choice to maintain our current level of service.  There is literally nowhere else to cut in the WPS’s budget.  We have 24 kids in our classrooms, special education teachers with caseloads of 33 children compared to our neighboring communities of 14-16 children caseloads.  WPS spends $2,000 less per pupil than our neighboring communities.  With 397 schools reporting in, Wrentham is in the bottom 3% in the entire state.  Some would lead you to believe, that given our competitive MCAS scores WPS is more efficient with their spending.  Is that to say 97% of the schools spend recklessly?  Really?  It has been repeated by the "no" vote that the schools should simply cut the teacher aides.  The teacher aides are special education teachers.  Why the repeated calls to cut the very teachers that help the students with unique needs?  We need to start listening to the educational experts in charge who know the true needs of our school.  The opposition knows nothing of those needs.  If this vote does not pass, we will see less educational services for our children.  How will MCAS scores be maintained?  This is outrageous.

Other services will also be affected. To read the entire letter click here. 

 

Open Forum Postponed

The Wrentham Board of Selectmen and Finance Committee have decided to postpone the Information Forum scheduled for this evening on the Town Common.  The Forum will be conducted on the Common tomorrow, Thursday June 2, from 7 – 8:30 pm.  The original plan was to move the forum to the Public Safety building in case of inclement weather but because of a Tornado Watch, the event was  postpone.

Zizza Leads “Vote No” Campaign

He describes himself as a "no nonsense, shoot it out, and die in the streets type." The issue John Zizza, the former selectman, wants to fight over is the upcoming June 4 special election to decide on a debt exclusion. He printed up the 100 red "Vote No" signs which can be seen throughout the town. He filmed a segment of the Grapevine on Wrentham Cable Access and he filmed a second show entitled "Override: 'The Debt Exclusion - Illusion'" explaining why he is opposed to the debt exclusion.

(To view the "Override" show click here. He also penned a letter to the editor, published in The Sun Chronicle, "Beware of credit card solution.")

The June 4 Special Election will decide if the debt payments on the Public Service Building and Town Hall, which have a collective hit of $1,005,943 next year, would be removed from the Town’s operational expenses. The payments would then be funded by a new tax that would be in place until the debt is paid off in eight years. This option is being presented as a way to bridge a projected budget gap.

Read "Key Consideration for the Debt Exclusion Vote" written by the Finance Committee detailing the planned budget cuts if the debt exclusion does not pass. 

It's these potential cuts that Zizza isn't convinced will happen, and if they do, he still believes the town will remain functional. "When budgets are tight the department heads claim they will lose personnel and services," he says. "But they find a way to survive." 

In addition to questioning the need for the added revenue Zizza doesn't like how the special election was put forth and how information was presented to the community. He takes issue that emails were sent to the Wrentham Elementary School parents about the FY12 budget and feels it was an attempt to solicit support for the debt exclusion by scaring parents with the potential loss of services. Zizza believes if it wasn't for his signs the rest of the community wouldn't even know about the special election. "The remainder of the town had to find out about the vote from my signs," he says. "If they [board of selectmen] voted for an override, it would have been brought to town meeting and everyone would have known."

Dr. Jeff Marsden, superintendent for Wrentham Elementary Schools says the email to parents was just part of the schools regular communications. Four years ago the school transitioned to paperless communications to parents as a cost saving measure. "We communicate constantly to parents," says Marsden. "Each spring, budget scenarios are always sent home to parents via email; vote or no vote. It is our responsibility to provide parents any information that could affect their child's education. We are providing information as we always do, not soliciting votes."

Marsden added that the proposed budget cuts are real. "If you look back on the past four budget seasons, what we said was going to happen...happened. That is how you have 31 positions eliminated in 3 years. Those are not scare tactics, but fact." Marsden also said, "I have a lot of respect for Mr. Zizza. He has given countless hours of service to the Town of Wrentham. I have always found him to be fair and respectful. He and I probably agree on a lot of issues; just not this one."

Click here to see breakdown of staff cuts to the Wrentham Elementary School budget over the past 3 years.

When asked about the 31 positions the Wrentham Elementary School has cut since FY 2009, which has included four classroom teachers, a library assistant, teacher aides, and a custodian, Zizza says, "First of all a library assistant isn't a teacher. A custodian isn't a teacher.” He believes the "stuff that means something" like math and English is in tact and he points to the success the Wrentham Elementary School has with its MCAS scores. He also believes there is more savings in the school particularly around its use of teacher aides.  If you reduce their hours to under 20 a week, he explains, they would no longer be eligible for the town's health insurance program. "If they go to 19 hours a week, you save over $200,000 in health insurance," he says.

Another issue Zizza has is with people's contention that his signs are not accurate by stating the debt exclusion is a 7 percent tax increase. The debt exclusion would increase the property tax rate $0.58 per $1,000 of valuation. This is a 4.1 percent increase to the residential tax rate. But Zizza says that isn't the whole story. He says the debt exclusion would increase the town's tax base by $1 million dollars. This is a 4.4 percent increase over the current tax base of $22.5 million. He then includes the 2 1/2 percent increase already locked in through Proposition 2 1/2. He  came up with the 7 % number by adding the 4.44 to 2.5 and came out with 6.94 and then rounded up. "If people are complaining that 7 percent is a fraud, I could have carried out to the tenth decimal," he said. "The signs are just a sound bite."

He quickly adds, "That’s what it’s all about. It is about 7 percent of people’s monies and can they afford it? When they vote for the 4 ½ percent they sure as heck better be aware of the fact the 2 ½ is in play too or else they’re going to bankrupt themselves."

Zizza believes the Town operates with a credit card mentality, spending money before the funding is in place. He points to the vote at the November Town Meeting to hire new police and fire personnel. "They put these people on [the payroll] without the money to pay them this year," he explains. "That's exactly the problem."

"People are [financially] hurting," Zizza says. "What good are great services if you can't afford to live here anymore? The town needs to reject this."

Open Forum Planned

On June 1, 7 pm to 8:30 pm on the Town Common, an open public forum will be held. The Board of Selectmen and the Finance Committee will make a short presentation and then spend the remaining time answering questions from those in attendance on the debt exclusion. The Fire Department will be used as a rain site. The special election will be held Saturday, June 4.

Letter to the Editor: "Why I Support Wrentham's Debt Exclusion"

From Edward Goddard, Wrentham, MA

I have served Wrentham residents as a Member of the Wrentham School Committee, Board of Selectman and now as Chair of the Wrentham School Committee. I will stand toe-to-toe with any other public servant on my record of fiscal conservatism. For example, I spearheaded negotiations to increase Town employee medical premiums from 10% to 25%, worked to stop the practice of water using receiving rebates on their bills because of broken sprinklers, and insisted that Town-owned property be sold at fair-market value after the Town took ownership. I hope these and similar actions have earned me a reputation as a fiscal conservative with public funds.

Against this background, however, I am compelled this year to support the Debt Exclusion on the Saturday, June 4th ballot. Here are my reasons.

The Town and Elementary Schools need the money to provide an acceptable level of services. This is not an issue of mismanagement.

Former Selectman Zizza and present Selectman LeClair have stated that they are against the proposed Debt Exclusion because the Town (and the School) mismanage their budgets. I challenge that statement as inaccurate and call upon those opposing the Debt Exclusion to cease using Town employees as whipping boys for political purposes. The facts tell a different story: more than 31 positions lost in the Wrentham Schools during the past few years and unprecedented belt-tightening strategies employed across all Town departments. Despite Mr. Zizza and Mr. LeClair’s allegations, Town employees have worked hard during the past few years to be part of the solution. As noted, all Town and School employees now pay 25% of the cost of their medical insurance, up from 10% a few years ago. And many Town and School employees either agreed to or were given 0% increases in the past few years. Quite simply, it is factually inaccurate and mean-spirited to blame our difficult economic times on Town and School employees, many of whom are our neighbors and friends.

The real issue here is that State Aid has actually decreased year over year to the Town while our costs, particularly medical insurance, have continued to increase. For example, State Aid was in FY 2008 was 5.373,834 and 4 years later for FY 2011 will be only 4,890,939. While state Aid has declined, Wrentham (like the rest of the cities and tonws) has been saddled with rising medical insurance claims and virtually no new growth income. Again, simply put, the 2.5% annual tax increase on property owners has not been able to offset the increasing medical insurance and declining State Aid. To make matters worse, Wrentham chose a decade or so ago to place most of its capital debt inside the levy limit, meaning that we have to pay the principal and interest on things like the Town Hall and Public Safety building from operating funds instead a special assessments. Wrentham has only 17% of its capital bonding inside the levy limit, whereas most similar communities have upwards of 65% or even 70% of its debt limit outside the levy limit. At its core, the proposed Debt Exclusion is an attempt to remedy what in hindsight was a mistake made when the decisions were made to leave these capital bond obligations inside the levy limit. Of course, the Debt Exclusion could not come at a worse time.

The Debt Exclusion Opponents Should Be More Factual In Other Assertions As well

Negative emails, signs, accusations and the usual hyperbole are already circulating among our residents relating to the Debt Exclusion. Regrettably, this has become typical rather than atypical in Wrentham. I call on those opposing the Debt Exclusion to make their arguments based on facts and to stop shading the truth. For example, the Debt Exclusion will be approximately a 4% increase (on average) for the next 7-8 years – not the 7% locals signs suggest (they get this by adding the 2.5% that taxes go up every year and will do so again even if the Debt Exclusion fails). Instead of using these marketing gimmicks and attack ads, we should instead acknowledge that these tight times have been created by forces larger than Wrentham, our residents and our elected officials. Let us as sensible adults stick to the real and only issue: Does a majority of Wrentham residents want to add to their tax burden (average being about $175-$200) for the next 7-8 years to prevent an accelerating decrease in our Schools, Public Safety and other Town service?

I acknowledge that on this issue reasonable and good people will differ. Several close friends have already told me that they will not support the Debt Exclusion. While I disagree on the merits, I respect their opinions and understand that now is a difficult time to ask residents for additional resources. I believe, however, that we have cut to the bone and I am willing to pay the extra amounts to maintain our already-depleted Town services and to protect my property values in the process. And make no mistake: if our Schools decline so will our property values, and this will cost us all a lot more than the Debt Exclusion.

Recently, the School Committee directed the Superintendent to inform the parents of more than 400 children who live within 2 miles of the Schools that they may not have bus service next year if the schools do not receive additional funding. This is not a scare tactic as some have opined – it’s a reality and one fraught with many perils. Can you imagine what these parents would say if the buses are taken away and they were not informed that this could happen prior to the June 4th vote? But this is where things stand today. However, if the Debt Exclusion passes and/or if Fincom and Town Meeting on June 13th take resources from other Town Departments to give to the Schools, the Committee will revisit all of our options and determine if bus service (almost certainly with a fee absent passage of a Debt Exclusion) remains feasible. We will not know where we are until after June 13th Town Meeting when the budget is voted.

One final point. Regardless of the Wrentham Schools’ ultimate FY12 budget, rest assured that on June 14th every teacher, Administrators, Aide and Custodian will roll up his/her sleeves and immediately get back to work with a redoubled effort to provide our children with the best education possible with the resources available. Our parents and children deserve no less.

Edward Goddard is the chair of Wrentham Elementary Schools Committee and former chair, Wrentham Board of Selectmen

Key Considerations for the Debt Exclusion Vote

This is the third in a series of articles written by the Wrentham Finance Committee regarding the development of the Fiscal Year 2012 Wrentham Operating Budget.

An Update

The Debt Exclusion vote scheduled for June 4 has generated a lot of increased attention and questions in the past week.  While the questions have a fairly broad range, the fulcrum seems to be “What’s the impact if the vote passes or doesn’t pass?”  This third article will answer that question, and we will seek to answer as many of the others as possible in the space of these pages.  Before we address the impacts, a short update is necessary in order to provide context to how the potential cuts were apportioned. 

At the end of April we began actions to develop a budget that would reflect a No vote to the debt exclusion.  This budget would require an overall reduction of approximately 4% to departmental budgets.  Departments received instruction to begin developing a list of impacts that would cover the range of possibilities – from a straight, singular percentage cut to all, to a far range of 12% if no cuts were assigned to the schools.  The challenge in this is to find space that can absorb deep enough cuts to completely close the gap.  As shown in the figure below, almost 30% of our budget is fixed costs.  These are things that we cannot assign cuts to such as Solid Waste, Snow and Ice, Insurance, Debt, and our State Assessment.  Of the space that can be reduced, 86% of it is taken up by two functions:  Education and Public Safety.

 
Figure 1:  Operating Budget Percentages for FY 2011

Working with the Board of Selectmen (BOS), the Finance Committee (FINCOM) developed a total of five options for assigning cuts.  The option eventually chosen employed several variables to the others and was chosen because it provided the best fit based on the graph depicted in Figure 1 and the circumstances of each department.

At the beginning of May, another variable entered the equation. The King Philip School Committee amended their budget.  Their new budget decreased the Town’s assessment by $293,862.  This was the budget that Norfolk approved at their Town Meeting.  Because the KP budget requires approval of at least two of the three towns, this action practically assures that our new, lower assessment will not change.  Equally importantly to our assignment of cuts, it reduces our gap by $293,862. 

The Impacts

The assignment of the budget cuts affects nearly every department in Town.  The only departments that were not assigned cuts were ones that had already taken cuts in their original budget submissions.  The converse to this is that if the debt exclusion passes, it will provide relief to almost every department.  In other words, the debt exclusion is not just about the elementary school or public safety, although they have the largest budgets and therefore the largest stake in the outcome.

One of our objectives in assigning cuts is to avoid to the extent possible personnel cuts that would then require unemployment compensation.  Because of extended benefits, in most instances we would have to lay-off two employees to realize the net savings of one. 

Our assigned cuts are:

• $244,555 reduction to Wrentham Elementary – This cuts in half the School Committee’s requested budget increase to maintain level service.  It does enable that budget to increase by 2.8% after two years of level funded or below level funded budgets.  (The amended KP budget has a 3.1% increase, although Wrentham’s assessment only increases 1.1 %.)  But as described in our previous article, even a 2.8% increase in funding requires a cut in services.  The Wrentham School Committee has determined that the most appropriate way to address this and avoid personnel cuts is to reduce the school’s transportation costs by cutting six busses.  The effect of this is that bussing will no longer be provided to students that live within 2 miles of the school.
• $147,488 reduction to Police and Fire – This reduces their budgets by 3.5% and 4.6% respectively from this year.  After going through the operational challenges that resulted in adding two new personnel for each department during the course of this year, the last thing we want to do is to make those hirings so tenuous.  A cut this size would normally result in the lay-off of at least one person from each department, along with other expense cuts.  As of the writing of this article, it is our understanding that these departments will seek to manage these cuts without lay-offs.  This likely requires avoiding the use of overtime expenses in many instances that would normally require it in order to maintain full shift staffing.  Each department already cut their OT budget in response to new staffing.  These cuts are on top of the previously taken cuts.  The impact is that there will be an as yet undetermined number of shifts, where if a vacancy occurs due to illness, injury or vacation, the vacancy will not be filled.
• $80,000 reduction to Department of Public Works – this results in the DPW budget being a $112,000 (or 9.5%) below FY 2011’s budget.  They will meet this in part by not replacing one employee who recently left and it may require an additional lay-off.  DPW has absorbed many of our reductions over the past several years, in part because over half if its budget is allocated to expenses, whereas most others are 70-80% allocated to salary.  The DPW expenses are largely what take care of our infrastructure.   These past reductions are showing evidence by the conditions of our roads, sidewalks and other infrastructure.  Further reductions will only exacerbate their condition.
• Reduction of one Public Health Nurse – the Town currently has two Public Health Nurses.  One will retire this summer.  Without the debt exclusion, we will not budget for her replacement.
• Reduction to Board of Health – The BOH has one full time employee, who will also be retiring this year.  Without the debt exclusion, we will budget for a replacement at half time. 
• Smaller Departments – for the smaller departments, the dollar figure of the cuts is relatively small because their budgets are so small.  (If the Town completely eliminated the Board of Health, Public Health Nurses, Library, Recreation, Council On Aging/Senior Center, and the Conservation Commission, we would almost save enough to cover the gap.)  Without the debt exclusion:
  • We will consolidate personnel and expenses among the Conservation Commission, Planning Department, and Zoning Board of Appeals
  • We will further reduce the two part time secretaries in the Building Inspection department (who together only provide the equivalent of one half time employee due to previous cuts)
  • Athletic user fees will rise - Our Recreation Department maintains two recreation complexes at a cost of $125,000 per year.  Approximately 90% of this cost is paid by user fees that have risen to $40 per player.  Their reduction will likely add another $10-$15 to each player’s fee.
  • The Library will see a reduction in book purchases, a reduction in circulation staff hours, and will need to solicit private funding for SAILS dues.

The debt exclusion has no impact to the KP budget because of the action already described regarding their amended budget.  Additionally, any remaining available Free Cash will be impacted.  Free Cash will not off-set any of the cuts listed above.  But it may avoid deeper cuts.  However, any Free Cash utilized for this purpose will not be available to apply for capital requirements in the Fall.

Conclusions

A common accompanying question to the impacts of the debt exclusion is whether this is a short or long term solution.  The answer is that it’s both.  By itself it is a short term tactical solution.  With careful management of its results, it allows for the maintenance of current services for the next year and perhaps a few years beyond that.  By itself it is not a long term solution, but it needs to be the first step in a long term strategy. 

Wrentham has now undergone three years of declining revenue.  The level of cuts required to respond to that decline has reached a point where further cuts affect some critical services.  We don’t see this as a one year fix, rather it needs to be one part of the long term solution.  The debt exclusion provides an opportunity to avoid the most critical cuts without a permanent increase to taxes while it acts as a bridge to long term solutions.  Perhaps the greatest value to the debt exclusion may be in acting as an impetus to energize our strategic planning and develop solutions that address the long term.  In 2007, the FINCOM wrote that a decline in revenues was already evident and was beginning to impact our long term fiscal health.  But we did not foresee the events of 2008 which accelerated the downward trend.

This is not a case of our expenses outpacing our revenue.  Our revenue streams cannot keep up and maintain level service (as we discussed in our previous articles).  Increasing revenue has begun to receive increased attention and is the linchpin to any long term solution.  But it is not the only factor. A long term strategy needs to take a three pronged approach that includes:

• Economic development and revenue streams
• Modernized business practices
• Compensation and benefits

It will have to factor in declining state aid that is not likely to ever return to provide the percentage of our budget that it was only a few years ago.   It will have to include accelerated consolidations and shared services (and Wrentham is moving that way with emergency dispatching).  It will have to address compensation and benefits, and may also need to include the elimination of certain services.  The debt exclusion can be not just the bridge but the forcing function.

Finally, with regard to the decrease in the gap resulting from KP’s amended budget, we intend to husband that amount if the debt exclusion passes.  We can do this one of two ways.  We could appropriate it at the June Town Meeting into the stabilization account.  This would make it available to support budgets beyond FY 2012.  Or we could simply not appropriate it at all.  Voters can decide this at Town Meeting.  Then when the tax rate is set in December, it will be based on a levy that does not include the $293,862. 

Summary 

• The cuts and reductions that will go into effect if the debt exclusion does not pass will be across the board.
• If the debt exclusion passes, the Finance Committee will recommend that all of the cuts listed above will be restored.
• Approval of the debt exclusion does not add anything new to the operating budget.  It does not add personnel or allow for any new expense items.  Even with the debt exclusion, there will be cuts and reductions to municipal budgets.
• With the debt exclusion, our operating budget will have a 1.28% increase from FY 2011.

The table below depicts the effect of a debt exclusion that covers the Public Safety Building and Town Hall.  For Fiscal Year 2012 (which begins July 1, 2011) the debt for these two buildings is $1,005,943.  This is the amount of additional taxes that a debt exclusion would raise.  From FY2013 to FY 2018 the debt payments drop gradually each year, going from $979,935 to $842,950.  After 2018 the Public Safety building is paid off.  There will be one remaining year to pay off the Town Hall debt, at $243,800.  That is the last year of the debt exclusion.  (These increases only cover the debt exclusion and do include tax increases resulting from the 2.5% levy increase that happens regardless of the outcome of the special election.)

• Line A shows the total debt to be excluded for the duration of the exclusion, ending in 2019.
• Line B shows the tax rate increase per $1000 of assessed value for each year of the exclusion.
• Line C shows the range of costs to property owners for each year of the exclusion as an annual cost.
• Line D converts the range of costs to property owners for each year of the exclusion to a monthly cost.

 (Wrentham Times Note: The chart is difficult to read online. If you click the image it will appear slightly bigger. Or you can access the original document from the Town of Wrentham web site here).