(10/19/07)  The Select Board held a special meeting Friday, October 19th at 4:00 p.m. at Town Hall to discuss budget priorities and policy to guide the Town Manager in his creation of the FY09 budget.  Gerry Weiss, Hwei-Ling Greeney, Rob Kusner, Anne Awad and Alisa Brewer were present, as was Town Manager Larry Shaffer.

Mr. Kusner talked about the need to think about the budget with a long-term perspective and with an awareness of its long-term implications. 

Ms. Greeney talked about the projected budget gaps in FY09 and future years, citing the information that Finance Director John Musante presented at the September 24th Select Board Meeting. 

Mr. Weiss stressed the need to not concentrate on the numbers, but to find a different way to consider priorities and policy.  Mr. Kusner agreed, and talked about the problems inherent in depending on property taxes which are constrained by Proposition 2 ½ and don’t keep up with the inflation rate, resulting in a declining value of the tax dollars collected.  Mr. Weiss agreed and said that local revenue problems are directly tied to the reduction of the State income tax, which he said resulted in reduced local aid and transferred a larger portion of the budget burden to local property taxes.  Mr. Weiss emphasized the importance of lobbying the State legislature on that point, and referenced the enormous health care cost increases of recent years.

There was discussion of the 100 or so budget priority surveys that had been submitted by Town Meeting members, and the Select Board’s appreciation of the thoughtful comments contained therein.  There was also discussion about the relative value of that sampling of information, and different ways of interpreting the results. 

Mr. Kusner said he wanted some consideration of services and programs that perhaps should be offered by the Town but currently are not, citing expanded foreign language programs in the schools as an example.  He also said he would like consideration of the potential Economic Development position to include brownfields issues resulting from the Town’s industrial past. 

Mr. Shaffer said that he, Mr. Musante and the Finance Committee were well-versed in the budget numbers and that he would be creating a budget that fits the Finance Committee’s guideline, which he said is expected to be approved at 2%.  He said he needs for the Select Board to identify priorities, because he said that unlike last year when the cuts were distributed relatively equally among all departments, he said this year lower priority areas will receive less funding.  He asked them to consider what services the community is willing to have reduced.

Mr. Kusner noted with appreciation a particular survey comment that said that the community relies on the Select Board and Town Manager to use their judgment on such matters because they know the situation better than the community at large.  

Ms. Greeney said she would like the Town Manager to find ways to preserve programs and services by finding efficiencies through restructuring Town government and combining like elements of Town and School departments and functions.  She said that it was considered too late to consider such options during the spring budget discussions for FY08, and wanted it considered now for FY09.

Ms. Awad said she wanted to engage in creative thought on the subject and suggested considering restructuring the different departments located at the Bangs Center, with the possibility of sharing support functions.  She also suggested consideration of reducing the size of the Planning and Conservation departments by contracting out some services, such as the duties performed by the Wetlands Coordinator.   She said that as staff retire and leave for other reasons, contracting out their functions could be less expensive than paying salaries and benefits.  She emphasized the need to consider possibilities for restructuring beyond the current departmental boundaries.

Mr. Weiss talked about the need to consider the question of efficiency across the full spectrum of Town government, and the importance of not assuming that the way things are done now is the best way to do them.  He asked if that is something the Town Manager, as someone bringing fresh eyes to the position, is already looking at, or if that might best be handled by an outside party.

Mr. Shaffer said that the Town has been under a “soft hiring freeze” this year in an effort to meet budget projections by building up surpluses to cover potential year-end shortfalls.  He said that dramatic changes are being evaluated within Town Hall:  moving the Inspections Department into the Planning Department to consolidate clerical support and improve customer service; moving the Town Manager’s office, and small departments including Community Services, Human Resources, and possibly Veteran’s Services, into the basement level where Inspections is currently; and consolidating all of the Information Technology Department on the mezzanine level.  He talked about the successful efforts to quantify the costs of Fire and Ambulance service and the continuing efforts toward eliminating any taxpayer subsidy of such services to other towns.  He talked about analyzing the different enterprise funds – water, sewer, solid waste and transportation – to see if the fees and fee structures are appropriate. 

Ms. Greeney talked about the possibility of creating penalty fees for defective fire alarms in homes and businesses because such calls currently cost the Fire Department money.  She also talked about other towns putting a larger burden of permitting costs on developers. 

Mr. Weiss said that there is a fine-line dividing the Select Board’s micromanaging of departments and discussions of policy about efficient spending.  He said he was curious about why the Police budget and personnel count have increased over the years, while Police services have been cut.  He asked if such questions to the Town Manager were appropriate, or if they departed from policy.

Mr. Shaffer said he views the relationship between the Town Manager and the Select Board as a partnership, and said he recognizes that the views the Select Board represents are the views of those who elected them, and not just their own individual views.  He said that they should collaborate, but that there are specific responsibilities that are granted solely to him through the Town Government Act.  He said that he needs to hear from the Select Board regarding policy, and that it is then his job to work to implement it.

Mr. Weiss talked about the Select Board’s need to know if money is being well-spent by different departments before they can know if they want to increase it. 

Mr. Shaffer said that the Select Board could express opinions on Town government, and could identify a problem but not direct him as to how to solve it.  He said that they can help to define an objective, but that the determination of how to achieve it, and what tools to use to do so, are the purview of the Town Manager.

Mr. Kusner asked what other opportunities Mr. Shaffer is pursuing that have significant implications for the Town budget.  Mr. Shaffer talked about the importance of the Strategic Partnership Agreement with UMass, and how it establishes a framework for future dialog on issues of mutual concern, citing joint dispatch for emergency services as a possibility.  He said that the Public Safety budget is the largest portion of the municipal budget, but that it was difficult to make significant changes there.  He said that the Town is currently in negotiations with the Fire Fighters union, and that opportunities for significant long term benefits to taxpayers and fire service were being considered, but that he was not at liberty to discuss those details.  He said he is aware of the size of the Police and Fire budgets, and that they are primarily personnel expenses, and said that the best way to address those is through collective bargaining.

Mr. Kusner asked about the potential for finding efficiencies through combining various School and Town departments.  Mr. Shaffer said that this is a topic being discussed by the Budget Coordinating Group (BCG) and that a panel of outside experts is being created to analyze potential consolidation of both Information Technology departments and both Personnel departments, and is also considering the general concept of reducing the overall number of administrators.  He said that he was talking with people from the UMass Isenberg School of Management about forming this expert panel.  He said he expected to have the results in time to take them into account for budget planning, and that while he was pursuing this with an open mind and was happy to have an unbiased expert perspective, he was not optimistic about the potential. 

Ms. Greeney said that the issue is complex and should not be rushed for this budget year if taking more time would yield better results, emphasizing the need to think long-term about financial matters.

Ms. Brewer asked that Mr. Shaffer create a document listing all of his current efforts on cost-saving and revenue-producing matters, so that the Select Board will know what is being pursued.  She asked that he also address the status of consideration of the State’s new option to let towns join the Group Insurance Commission (GIC.)  She also expressed concern about the notion that restructuring and combining departments might be a way to find efficiencies and redistribute spending in a way that allows all programs and services to be maintained.  She said that it was possible to increase efficiency to a point, but that the financial problem was too big to solve in that manner and that they need to be considering “how to do less with less.”

Mr. Shaffer said there was no “silver bullet” to solve the problem.  He said that an unfortunate reality is that for FY08, the Town benefited from a small negotiated cost of living adjustment (COLA) for non-union employees of 1%, but that that was not expected to be the case in FY09, particularly if the Town is able to negotiate flexibility in relation to the health care situation.

Mr. Weiss said that some people expressed suspicion about the General Government portion of the budget due to the ability to reduce it by $100,000 from the original FY08 proposal.  He explained that that was due to having budgeted for a 2% COLA early in the process, and the ability to realize that savings once the COLA was finalized at 1%.

Mr. Kusner returned to his concept of wanting to look at programs and services that are not currently provided by the Town but perhaps should be, citing world language programs and universal preschool.  He said that those examples are both school items, and that they should be focusing on overall needs that should be provided through Town government.

Mr. Weiss questioned the usefulness of such issues to inform the Town Manager in his creation of the FY09 budget.  He asked Mr. Shaffer about items currently under consideration which he expects to yield short-term benefit for this budget process.

Mr. Shaffer said that a comprehensive analysis of LSSE was being done to establish the unit cost and priority of each of its programs, so that informed decisions about potential changes can be made.  This led to discussion about what kinds of programs have health and safety value, such as swimming, and what are purely leisure, such as tango.  There was also discussion about the complexity of how some programs that seem less important subsidize those that are considered more important, and how the analysis currently being conducted will allow for informed decision making on such issues. 

Ms. Greeney talked about her long-time desire to incrementally reduce tax support to LSSE, rendering it “tax neutral” over a four-year period.  She also said that last year’s budget cuts amounted to small-scale tinkering with programs and services, and that she believed larger-scale restructuring was required this year. 

Mr. Kusner suggested the possibility that LSSE might be reworked as an enterprise fund. 

Mr. Shaffer said he hadn’t heard of any town doing that with its recreation program, and said that LSSE is a “recreation program on steroids.”  He talked about how providing for the recreational needs of children from low-income families and others without additional options was the original intention of public recreation programs.  He said that making it entirely dependent on user fees would mean that such people could no longer afford to participate. 

Mr. Kusner talked about ways to possibly prioritize core LSSE services for tax support while others would be fee-dependent, and doing so within an enterprise fund model.

Mr. Musante said that recreation is not an allowable use of enterprise funds.  He said it was worth talking about what, if any, level of tax subsidy is appropriate for recreation, and talked about LSSE’s current financial structure as a revolving fund.  He talked about the value of the data currently being compiled about unit costs for LSSE programs, and said that fundraising is another option for paying for recreation programs, an approach he said has been has been particularly successful for Amherst.

Mr. Shaffer said the marketing effort for LSSE was also being considered.  He used the War Memorial pool as an example and said that although there is a lot of sentiment for the pool, he said that all reports are that it is an obsolete facility.  He said that even on the hottest days this summer, there were 10 to 12 people using it.  He said it needs to be considered whether the Town wants to fund that pool for 20 people per day to use, or to consider a completely different model to meet the desires of the target user group, and to charge them accordingly.  He said that Look Park’s water park drew big crowds, with people lining up to get in.  He said that the Town’s serious financial problems presented opportunities to rethink the paradigms of how it is meeting the community’s needs.

Mr. Weiss asked how the group should spend the last 15 minutes of the meeting, and noted that they had not provided much guidance for the Town Manager.

Ms. Brewer suggested that they all send their priority lists to Mr. Shaffer.  She asked if there is any consideration of a multi-year financial plan.  She suggested trying to quantify the unit costs and corresponding benefits of the funding to human service agencies in ways similar to the approach being used for LSSE, to provide a concrete basis for decision making.  She also spoke of the importance of letting those agencies know as soon as possible and in writing if there is any likelihood of changing their funding significantly from the FY08 levels, because of the agencies’ needs to plan accordingly. 

Ms. Greeney referenced a couple of questions posed by the public which she had included in her budget priority document.  She said that the answers to the questions would help the public to have confidence in how Town money is spent.  Mr. Shaffer said he would be happy to provide answers after he has an opportunity to review the questions.

Mr. Kusner said it would be helpful if Mr. Shaffer could provide a timeframe for the kinds of restructurings and consolidations he mentioned, and to quantify the costs and benefits of each. 

Mr. Weiss asked if the Select Board wanted to give Mr. Shaffer any sense of areas or programs that the members were definitely willing or unwilling to cut, or if that should happen at another time. 

Ms. Greeney suggested they all give him the lists they had created and that he could then use his judgment with the information. She suggested that he provide the Select Board with a report of his progress on his proposed budget in mid December, a month before it is due to be submitted.  Mr. Shaffer said he is happy to update them at any time, and that they need to understand the potential for the draft budget to change significantly as all the details come together.

Ms. Greeney made a motion that Mr. Shaffer would report back to them about it at the December 17th Select Board meeting. 

Mr. Weiss asked Mr. Shaffer what he wanted to hear from the Select Board before that date.

Mr. Shaffer said he would have liked to hear about their programmatic priorities at this meeting.  He said that what elements held the highest priority level, what elements were “sacred cows” and had to be preserved at all cost, what services they felt were not working and needed significant modification were among the questions he would have liked to have had them answer, and that he recognizes that such questions are among the most difficult.

Ms. Brewer said she wasn’t convinced that they could provide such information due to their varied individual priorities.   She said a 5-0 vote on any item was unlikely, and that a vote such as 3-2 might not be helpful.  She said that the reason that the Select Board had not identified any obvious programs and services to cut is because the Town provides great services that are important to everyone, and that the problem isn’t waste but lack of sufficient money to pay for everything, which she said was largely beyond the Town’s control.  

Mr. Kusner suggested thinking about new models for the human service agency funding, such as providing funds to match those raised in a donor challenge.

Mr. Weiss said that the issue of human service funding is often talked about, but that the amount is insignificant in such a large budget, and that even eliminating the funding entirely wouldn’t make any difference to the overall budget situation.

Ms. Greeney talked about giving their priority lists to the Town Manager and expressed concern that if they all prioritized a particular area, that it would mean he didn’t need to look for efficiencies there.  The others expressed confidence that he was looking for efficiencies everywhere.

Mr. Weiss said it would be helpful for Mr. Shaffer to provide a timeline for revenue from expected new sources, such as the Veridian Village project, which are not included in current projections.  He said that such numbers would help the Select Board to determine its budget priorities.

The vote to approve the motion about Mr. Shaffer reporting to the Select Board on the progress of his draft budget at the December 17th meeting was unanimous, and several members expressed the sense that a formal vote on the subject was not necessary.

The meeting adjourned at 6:07 p.m.  The next regular meeting of the Select Board will be held at 6:30 p.m. on Monday, October 22nd.  The Select Board will hold special meetings to share initial preliminary financial information for FY09 on Saturday, October 20th in the Town Room at Town Hall.  The first meeting will be at noon with the Finance Committee, School Committee and Library Trustees.  The second meeting will be at 2:00 p.m. with the Select Boards and Finance Committees from Leverett, Pelham and Shutesbury.

-- Stephanie O’Keeffe