(5/16/07)  There was a joint meeting of the Select Board, the Finance Committee, the School Committee, and the Library Trustees on Monday, May 14th at 7:00 p.m.  In attendance for the Select Board were Gerry Weiss, Alisa Brewer, Hwei-Ling Greeney, Rob Kusner and Anne Awad.  In attendance for the Finance Committee were Alice Carlozzi, Brian Morton, Doug Slaughter, Marilyn Blaustein, Kay Moran and Paul Bobrowski.  In attendance for the School Committee were Andy Churchill, Elaine Brighty and Kathleen Anderson.  In attendance for the Library Trustees were Ann Grose, Nonny Burack, Molly Turner and Pat Holland.  Also in attendance were Town Manager Larry Shaffer, Finance Director John Musante, School Superintendent Jere Hochman, and Library Director Bonnie Isman.

Mr. Weiss opened the meeting with public comment.

Sy Friedman said he is a Town Meeting member and retired school teacher, and that he has voted against two overrides since 1980 because they were proposed prior to Town Meeting.  He said that body should not have its budget powers usurped.  He said that budget discussions in Town Meeting should begin this year with the higher budget amount first, and that if Town Meeting determines that a 1-year override for that amount is needed, he said it would then have a better chance of passing.

Mr. Weiss recapped briefly what the Select Board had discussed in its meeting, directly before this one:  that none of the members were prepared to recommend the Shaffer budget, and that 4 members had presented alternatives, with only his own increasing spending beyond 1%.

Mr. Kusner said that all the Select Board's recommendations involved shaving a small amount from the proposed general government spending, and said that the other budgeting bodies might be able to look at analogous line items of their own and do the same.

Mr. Weiss listed the Select Board's preliminary results as:  three out of four members recommending restoration of the fifth firefighter, two of four recommending restoration of both police officers, one of four recommending restoration of one police officer, three of four recommending restoration of various amounts of human service agency funding, four of four recommending restoring various amounts for an economic development position, four of four recommending restoring funds for the War Memorial pool, one of four recommending restoring funds for the wading pools, two or three out of four recommending restoring funds for line painting, two of four recommending restoring funds for the seasonal Puffer's Pond worker, and three of four recommending restoring funds for LSSE subsidies.  He said that three of four had recommended cuts to general government, one of four recommended taking money from reserves, one of four recommended cutting capital expenditures, and three of four recommended reducing money to LSSE. 

Ms. Carlozzi said that several weeks ago, the Finance Committee had voted to support the 1% budget if the override were to fail, and that they haven't reaffirmed that vote since, but expects that they would stick with that.  She said that budget includes extremely difficult cuts that they don't like, but that it is time to face that reality and deal with the structural deficit.  She said that taking money from reserves would be the last thing they would want.  She said the fact that reserves will be higher at the end of this year is because spending had previously been so high for the health insurance problem, and that some of that was being made up for now, but she said that is not “found money.”  She said using capital funds was a big mistake because the capital plan is already limping along on with insufficient funds.  She said that back before the capital plan was created, money for capital improvements kept getting spent on other things, and the state of the Town's equipment was poor and unsafe and said that it took years to recover from that.  She said the Finance Committee doesn't want to do that again.  She said that we should do the best we can this year and plan for the future.  She said that the FY08 budget is the foundation for the FY09 budget, and that if we create a problem now, it will be perpetuated into the future.

Mr. Kusner said his question had been about delaying $100,000 in capital spending versus taking that money from reserves, and said that negotiations with UMass were promising and could replace that money.

In response to a question, Mr. Musante said that the failed override decreased the capital spending recommendation by $387,500. 

Ms. Isman said that the Library Trustees had met and saw no reason to change their original 1% budget, because she said it was understood that there would be no restorations and that a 1% budget would be pursued.

Mr. Churchill said the School Committee met but didn't achieve a quorum.  He said that he and the Regional School Committee chair and the Superintendent had discussed possibilities.

Mr. Hochman said he had had discussions with the schools' Business Manager Paul Detweiler, and that the recommendations would be shared with the School Committee the next day.  He said that the region was working with several assumptions:  1) their highest priority bring-back was money to staff enough electives that two study halls wouldn't be required, and he said that determination had to be made immediately for staffing and registration considerations.  2) That while the schools want all the bring-backs they would have had under a 3% budget, three of the four towns approved funding at that level, but Amherst did not, and they need to respect that.  3) That a second override vote would be a short-term fix, but would be worse in the long run.  He described the beneficial elements of the three-year plan and how he hopes those elements of predictability, stability and spending caps would be available in a future multi-year override.  He said too much financial and political capital would be diminished by a short-term fix. 

Mr. Hochman said that three of the four towns had approved 3% funding for the schools and that Amherst would consider it soon.  He said that if Amherst doesn't approve it, there are a number of scenarios that could occur, all the way to month-by-month budget determination.  He said he hopes that if Amherst doesn't approve 3% they will approve a number that gives him some latitude to move.  He said the options available are:  that Amherst approves 3% and the schools get all their bring-backs; that 1% prevails, and then each town would be funding a 1% budget; that the school committee could seek permission to use $150,000 of its reserves – called E&D funds, for Excess & Deficiency – and that could take care of the study hall issue now while other options are brought to Amherst Town Meeting.  He said that at this point in the year and with all the monitoring they have done of the E&D money, they feel it would not be imprudent to use those funds, whereas he said that back in January they couldn't have made that decision.  He said that $150,000 represents about one-tenth of the E&D fund total.  He said those funds would make for a 2% budget if Amherst Town Meeting approves spending 1%, and would make for a 3% budget if Town Meeting approves spending 2%.  He said those scenarios respect the positions of each town.

Mr. Weiss asked about the timing issue regarding needing to know about study hall staffing and registration now, when Town Meeting's decision is still at least a week away.  Mr. Hochman said they could put off the decision by a week, but not three, and said they could plan to earmark $150,000 for the study halls.  Mr. Hochman said that if Town Meeting voted the full 3%, the schools would not need to take that money from their reserves.  Mr. Weiss asked if it would be beneficial to have the school budget discussion on Monday, and Mr. Hochman said it would. 

Mr. Weiss asked about the consequences of Amherst approving a lower amount than the other towns.  Ms. Brighty said that by approving the higher amount, the other towns have implicitly approved a lower amount.  She said it is similar to how the schools request approval of a higher budget number than the appropriation number, allowing them the flexibility to go higher if more money is available. 

Mr. Hochman said the schools got the message that Amherst did not want to fund the schools at a 3% increase and that they want to respect that while moving forward, and at the same time respect the votes of the other towns.  He said that if Town Meeting approves a higher amount, it is his preference that there not be an override to cover it. 

Participants noted that Town Meeting action doesn't become official until the meeting is dissolved, but that a vote would give an indication of where the body was going.  It was also reiterated that if a lower amount is approved by Town Meeting, that amount would become official for all the towns. 

Ms. Carlozzi, Ms. Brighty and Mr. Detweiler explained that a 1% budget represents a 2% increase to Amherst because last year some of our share was paid by Leverett and Shutesbury, to help the Town transition to the new assessment formula, so that amount would now be borne by Amherst in addition to a 1% increase.  Mr. Hochman said that the Regional Schools' total budget assessment is at the 1% increase, as requested by the Finance Committee. 

Ms. Greeney said she didn't want to muddle in the school budget but wondered if there might be an opportunity to reduce spending some place such that using the E&D money wouldn't be necessary.

Mr. Churchill said he was initially skeptical about using reserves and the potential negative consequences down the road, were they to be needed.  He said he has since been convinced that it is prudent and is a nice contribution from the district.  He said the Regional School Committee still needed to discuss it.  He said all the representatives wear different hats, and that as School Committee members, they are represented to protect kids and provide the best schooling.  He said that they also wear town hats, and that makes them want to do something sustainable over the long term.  He said the E&D contribution does both and makes the available money go further, prevents the Draconian cuts and the votes of the towns are respected.  He said he wasn't sure that the voters were necessarily saying they supported a 1% budget for all when they opposed the override, but said that the School Committee needed to protect kids and live within its means and that could be done by preventing a second study hall requirement at High School and keeping to a 1% increase at the elementary schools.

Ms. Brighty said that a week and a half ago, members of the Budget Coordinating Group were talking about needing to bite the bullet and take money from the reserves to make up for the extra 2% in the regional budget, but now that budget is up to Town Meeting.  She said that the region's budget is tricky because it requires good cooperation among four towns, and said the law change will make that even more necessary to ensure that one town isn't controlling the other three.

Ms. Carlozzi said that with the law change, the Finance Committee's rationale for using reserves to make up the deficit for the 3% regional funding was now gone.  Ms. Brighty said she realized that, and said that the region would still seek the 3% budget if not the 3% assessment, and said that with the region using reserves for half, perhaps the case could be made for Amherst to use reserves for the other half, and said that was Town Meeting's choice.  She said that she wanted to reiterate the need for cooperation and said the 1% budget was set, and shouldn't be juggled with now.

Ms. Greeney said she knows that the School Committee is “independent-minded,” but wondered if they would accept input from the Finance Committee, the public and others regarding use of reserves.  Ms. Brighty said the reserves are under the control of Regional School Committee which receives input from all four towns.

Mr. Hochman said the recommendation to use reserves was not made lightly and emphasized the monitoring of those funds.  He said that would still need to be approved by the Regional School Committee members, and he didn't know if they would do so, but he said that the other towns had approved the school funding be increased by 3% and might choose this option as a way to help make that easier for Amherst.  He said there is no longer an opportunity to tinker with this year's budget to try to find savings in different areas.  He said that budget has been carefully scrutinized for many months and many recommendations for efficiencies have been examined, including a proposal the committee will soon review regarding fees for high school activities.  He said that new creative ideas would become part of next year's goals.  In response to a question, he explained that the $150,000 would fund the 3.1 full time equivalent (FTE) positions needed to eliminate the second study hall.

Mr. Weiss asked for Mr. Churchill's perspective as Chair of the elementary School Committee.  Mr. Churchill said that the region's budget was more pinched and involved more drastic cuts, so the recommendation will be for the elementary schools to live with the 1% budget.  Mr. Hochman said that allowed for class sizes of 24 or lower and some in the teens, and said the primary loss is funding for 4 FTEs for contingency staffing. He listed various bring-backs he would like to have – more text book and supply money, funding for new environmental science initiatives, and cuts made in the last two years – but said they had gotten the message from the voters and would live within the guideline and look to replenish for the future.

Mr. Weiss said he wanted to comment on why he was unhappy with the 1% budget, and said he found the cuts to human services, which he defined as not just the human service agency funding but also the pools and LSSE subsidies, “impossible.”  He talked about how people really depend on those services, and said that cuts in the human service funding weren't cuts to agencies – they were cuts to humans, and he said the same applied to the schools.    He said not all families had backyard pools and took summer vacations and they depend on the Town pools, and said it is “unconscionable” to put money in reserves while closing the pools.  He said that 5.5% wasn't a lot to take from reserves and that it might be restored by the colleges by the end of the summer.  He said that line painting had to be done or else people would get hurt, and that wasn't worth saving $10,000.

Mr. Kusner said to please forgive him if he was impinging on the elementary schools' autonomy, but he felt the cuts to enrichment activities affected the most vulnerable people and the most vulnerable topics that make society richer.  He said he expected that they would be seeking more money for the elementary schools and said he hoped there would be sympathy in Town Meeting to restore some of that.  He said he'd been part of discussions with Select Board members about trying to find town money to restore to the schools, and said that there ought to be parity for the elementary schools and the region.

Mr. Churchill said that the cut lists were much longer than what they are seeing now and that all of it is painful to cut, but with cost increases such as they have seen with health insurance, a balance must be found.  He said finding new ways to approach the situation might be helpful, and suggested identifying a core set of activities for the Town, and once identified, protecting those activities at a decent level.  He said once that is done, other determinations could be made accordingly.  He said that with the current philosophy of 1% across the boards without regard to priorities, tough decisions like these need to be made.  He said that an override might add back some money for this or that program, but that wouldn't be a long-term plan.  He said that with a plan, it might be decided that core elements get higher percentage funding increases than non-core items.

Ms. Brighty said she agreed with Mr. Churchill and said that to create overrides options for different amounts could go on indefinitely.  She said she would love to have more money for bring-backs, particularly the contingency staff funding at the elementary schools, but said that adding money there would mean cutting it from another Town service.

Mr. Kusner reiterated his earlier points about vulnerable populations and making small cuts to general government spending and suggesting the schools consider the same approach.  Mr. Churchill said the committee has spent six months doing exactly that kind of trading within its budget, and said the cuts were not good, but were the ones that had been decided upon. Mr. Hochman said that if it weren't for the increases in health insurance and energy costs, and if under-funded mandates were fully-funded, they wouldn't be having this conversation, but that given the circumstances, they had to make hard cuts.

Ms. Isman asked if the Select Board would be taking a position on the library and school budgets.  Mr. Weiss said they either had to take a position or vote not to.

Ms. Brewer said that she was shocked that the Select Board was dealing with its recommendations for the Shaffer budget on May 14th, when the School Committee had been dealing with its 1% budget recommendations for months. 

Ms. Moran said that the Finance Committee had spent 36 hours in budget discussions before the votes they took for the Finance Committee Report to Town Meeting, with a lot of deliberation in public session, and that that didn't even include the hours spent by individual members in budget discussions at other meetings.  She said the committee members were unlikely to change their recommendations now from those already arrived at, which she said entailed painful cuts.  She also cautioned against deferring capital spending and using money from reserves, saying that both actions make next year's financial situation worse.  She said that unless the Town Manager creates an extremely good contract with the schools, the reserve money would be used again just to cover inflation costs.  She also noted that UMass already pays about $180,000 for fire services, and said that she wouldn't count on a lot of extra beyond that.

Mr. Weiss said that if money is received in August after the pools have been shut for the summer, and goes into reserves, he considers that a problem.  He said that maybe using the reserves as an endowment is necessary in hard times, and said they would still continue to grow a little.  He said that the library uses its endowment, and said it is impossible to keep putting money aside and making cuts.

Ms. Greeney asked what the budget gap would be in FY09 with a 1% budget now, and said that if it wasn't expected to be large, she would be willing to use the reserves as Mr. Weiss suggested.  Mr. Musante said that was impossible to answer given the lack of consensus on what a multi-year plan is, and what the appropriate use is of reserves, and whether having a reserve level equal to 8% if the operating budget by FY10 is a goal.  He said that a 1% budget with assumptions of 5% as historic spending levels would lead to approximately a $1.5 million gap.  Mr. Shaffer said that Mr. Musante's May 4th projections without the override anticipate a 3.8% budget increase in FY09, to $61 million.  Mr. Shaffer said the three-year plan called for 5.5% increases, and said taking 1.8% of the $61million left $1.1 -1.2 million if you were to live within the 5.5% increase projected in the original plan.

Ms. Carlozzi said use of reserves is generally saved for bad economic times.  She said Federal and State aid are reduced now, but not because the general economy is in bad shape.  She cited the higher health care and energy costs as problems now, but said a real economic downturn would be worse. 

Mr. Weiss disagreed and cited State aid numbers now approaching their 2001 levels, and said the signs don't point to a good economy, just one that is better than in 2003.  Ms. Carlozzi said the cause of the reduced State aid in the last few years is the State and Federal tax cuts.  Mr. Weiss said the economy may be good for Exxon but isn't good for the rest of us.  Ms. Brighty said that a bad situation is a 13% cut in State aid, which she said has happened in the past, and said the reserves are needed at times like that just to stay even.  Mr. Weiss reiterated his concern about putting money in reserves when people are struggling. 

Ms. Grose said she was speaking not as a Library Trustee but just as a citizen, and said that with all the cities and towns struggling with health insurance costs, there should be an ability to meet with the insurance companies and do something about it.  Mr. Weiss agreed but said that wasn't an option.

Mr. Steinberg said the point about the state of the economy in relation to the reserve use policy was an interesting one.  He said that State aid has a fluctuating cycle, and that when the cycle is in a downturn you use reserves, and when it's in an upturn, you put money back into the reserves for next time.  He said that cycle ought to set the reserve policy rather than the general State of the economy.  He said that taking from reserves now runs counter to the historic policies of both the Finance Committee and Town Meeting.  He said that if reserves are used, they ought not be just for general government, but for all budget areas supported by taxation, because the reserves are impacted by the schools and libraries as well.  He said he suggests choosing an amount and then working together to ensure that all stick with that resolve.  He said he was nervous to hear talk of using reserves and capital money for municipal services when both also impact the schools and libraries.

Mr. Weiss said that Mr. Steinberg's point was well-taken, and that he would now be glad to have an override.

Mr. Kusner reiterated his point about not wanting to take from the reserves or capital money indefinitely, but to borrow from one or the other.

Ms. Turner said she was concerned about comparing Town reserves to the Library endowment.  She said the endowment funds one-quarter of the library's budget, and that it is invested and managed and drawn from on a regular schedule, and that it was set up as an endowment for that purpose.  She said that using 5.5% is against best practices, and that they would prefer to draw from it at 5%.  She said that the reserves are not the same as an endowment.  Mr. Weiss said the reserves are also invested and earn interest.

Ms. Awad said she was shocked to hear a suggestion to use reserve money, and that she would prefer to go to Town Meeting with the budget and then have an override if necessary, which she said she would feel comfortable with if it were based on the budget Town Meeting approves.  Mr. Weiss said that would be fine with him.

Ms. Greeney said her concern about the school plan was in using non-recurring funding for recurring expenses.  She said that would create a larger budget than could be supported next year without the use of reserves, and said she wondered about that impact. She said that since the reserves should be for emergencies, perhaps the school budget could be tinkered with to avoid the use of the E&D money.

Ms. Carlozzi said that money from the University is always in an uncertain state, and suggested not committing those funds until they were quite certain. 

Ms. Moran said that emergencies aren't just to be imagined in the faraway future, saying that a major hurricane this season or other bad scenarios could wipe out the reserves because we would need them to keep the Town functioning in an orderly fashion.  Mr. Weiss said he agreed, and that was why he was only seeking to use $200,000. 

Mr. Churchill said it was a matter of seeing what a 1% budget looks like, and seeing if we like it or not.  He stressed the need to look at the regional budget from the perspective of cooperation among four towns.  He said that the budget needs to balance, and to do so, any changes require taking from one to give to another, or else using reserves or seeking an override.  He reiterated his concerns about an override this year decreasing the likelihood of an override and plan next year.

Ms. Brighty reiterated the scrupulous protection of the E&D funds, and the desire to eliminate the second study hall as the other towns had supported.  She said the fact that they are seeking to use E&D money for that purpose shows how high a priority it is.

Ms. Greeney started to cite ideas from the newspaper about controlling school costs, and Ms. Brighty interrupted her and said she didn't want to hear ideas in the middle of May on work the School Committee has been doing since January.  She said the committee knows the budget far better than those not on the committee, and that a final number will be agreed to voted on at the end of the budget discussion in Town Meeting.

Ms. Greeney said the Select Board had sought citizen input and that she wasn't cherry-picking school suggestions, but that some were received about the schools.  Mr. Weiss said those could be directed to the schools to process and respond to and that he didn't think they were appropriate for this discussion. 

Mr. Kusner suggested a three item override, either separately or together, just for the sake of discussion.  Mr. Churchill reiterated his point about identifying core functions of government, and said that hypothetically, it might be more instructive to have a menu override on some of the extra things that the Town does and see if the voters agree with such funding.  Mr. Weiss said that what is considered core by some would not be considered so by others.  Ms. Brighty reiterated her opposition to an override that is a short-term fix with long term consequences.

Ms. Carlozzi noted that the Finance Committee has some disagreement with the library over its budget, because the library wants to use $19,000 in overdue fees for operating expenses, which she said would amount to a 2.3% budget increase.  She said the Finance Committee's recommendation to Town Meeting will reflect that, and Ms. Isman said that the Library Board understands the Finance Committee's position. 

Ms. Greeney referenced a letter suggesting salary freezes and eliminating COLAs.  Mr. Hochman said those issues have been addressed multiple times already, and that with negotiation going on now, he would not talk about that in public.  He talked about how much more is known about the budget situation now than had been known in January, and how money has been saved because people know the situation is tight, and how these elements make him confident to recommend use of the E&D money.  He said talk about “snowballing budgets' is getting really old, and that he has read many creative ideas in letters.

Stan Gawle said he is a Town Meeting member, and Treasurer of Amherst Taxpayers for Responsible Change, and said he hoped the elected officials would respect the vote of the people and their rejection of the override, and he said voters were rejecting overrides locally and all over the state.  He said all sides are looking to protect each other's turf, and said priorities need to be looked at, and said that despite different opinions, as long as non-core services are being funded, it will be difficult to pass an override.  He said his group will offer a proposal to take money from the town and give it to the schools.  He said a thorough discussion is needed and that it is outrageous to cut teachers while still funding non-essential programs. 

Vince O'Connor said he has lived here for 33 years and has found that all the programs the Town supports are there for a reason.  He said that if funding human services and recreation were to be cut, kids would get in trouble and end up on the 11:00 news.  He said kids needs more than schools.  He said voters didn't object to any override, just this one for $2.5 million and its accompanying three-year plan, and the idea of collecting and banking more tax money than the Town needs.  He said that people would support additional funds for schools, the Town and libraries, and said he gave the people who ran the pro-override campaign a grade of C or D, and said that with a B effort, additional money could be found.

Billie Callahan asked how the Finance Committee would present the budget to Town Meeting.  Ms. Carlozzi said it would be presented as it always is, with the five municipal areas, debt service, the elementary schools, the regional schools, the enterprise funds, then reserve funds and capital funding.  Ms. Callahan said she has lived here since she was a year and a half old, and said that the municipal budget might get passed before the school budget is even presented.  Ms. Callahan said such discord couldn't be brought in to Town Meeting, and that people can't be doing mini-management of departments in any part of the budget.

Eva Schiffer said that the School Committee will propose a budget that it has worked on for months, and said the Library Trustees and Finance Committee would do the same.  She asked when the Select Board would vote on its “many disparate ideas.”  Mr. Weiss said they would be working on that until 10:30 that night and would continue on Wednesday and Thursday if need be.

The meeting adjourned at about 9:00.  The Select Board reconvened after a 10 minute break, and the Finance Committee held a meeting in a nearby room.  The recap of the Select Board's next meeting segment will be posted separately.

-- Stephanie O'Keeffe