(2/27/08) The Select Board met at Town Hall on Saturday, February 2nd at 2:00 p.m. to discuss budget priorities. Gerry Weiss, Rob Kusner, Hwei-Ling Greeney, Anne Awad and Alisa Brewer were present, as were Town Manager Larry Shaffer and Assistant Town Manager and Finance Director John Musante.
Gerry said that they would be calling each other by first names for this meeting.
Hwei-Ling said that she typically recuses herself from discussions of the human services budget to avoid conflict of interest issues, but asked that discussions about her agency, Not Bread Alone, be separated so that she could recuse herself from those, but still be able to comment on the other agencies, with which she said she has no financial ties.
Anne said that might still be a problem, because all the agencies share from the same “pot” of funds.
Gerry said talking about funding at the agency level was unnecessarily specific, and that under the Town Manger’s current budget proposal, no agencies are slated to receive funds. He said that Hwei-Ling should be involved in the more general discussion about human services funding.
Gerry read from written remarks: commending Larry on his work, his reduction of the Town’s projected shortfall to date, and in increasing revenues; expressing disappointment that the budget was partly balanced “on the backs of the most disadvantaged citizens; criticizing the Federal government for its spending policies since the Reagan administration; and noting the increases in poverty and its effects on society locally and nationally. He said that he thinks it is the Town’s role to “pick up the slack,” mentioned other human services covered by the Town budget, including LSSE, the Senior Center, and the education of children, and said that he considers the money allocated to the human service agencies to be of equal priority. He said that the Town Manager’s budget proposal should reflect the priorities of the Select Board and expressed confidence that a mutually satisfactory solution would be worked out before Town Meeting.
Rob said he appreciated Gerry’s statements and said that he knows that Larry’s proposal to fund the agencies starting in FY10 with Community Development Block Grant (CDBG) money was meant to insulate the agencies from Town funding uncertainties, but said that the community makes a philosophical statement by supporting these agencies through taxation.
Hwei-Ling talked about the “human side” of the funding, describing increases in the number of guests served at Not Bread Alone, and how conversations there often focus on the question “eat or heat?” regarding having to choose which area to spend money. She talked about how Not Bread Alone helps people to stretch their meager budgets by supplying free grocery items. She said the $5,000 her program receives from the Town as part of its $50,000 budget is an investment with a return of ten times that amount.
Larry said he appreciated the Select Board’s expression of the community’s concerns and said he had not taken the matter lightly. He said that the Town’s structural deficit isn’t going away any time soon and that he is looking for any opportunities to move expenditures from the general fund to other funding mechanisms. He said that the $66,000 could probably be found in this year’s budget but that his concern was for next year and subsequent years. He said that with that in mind, he recommended earmarking $160,000 of CDBG funds for next year to these agencies. He said that new efforts were also under way to assist the Amherst Survival Center in moving to a site that would better serve its needs. He said that changing the paradigm for funding these agencies and “weaning” them off of taxation support was necessary, and he said that helping the Survival Center was consistent with that goal. He said he was mindful of the Select Board’s policy directive and didn’t mean to be defiant. He said the conversation will continue regarding the different issues and options.
Anne said she likes the idea of an alternative funding source but was concerned about the instability and unpredictability of CDBG money and Amherst’s status in the program. She said that if that money were to not be available, it would be difficult to ask Town Meeting for it, and said it would be easier to keep it in the budget each year. Gerry agreed with those concerns.
Rob asked if municipal financing laws would allow for something analogous to an enterprise fund or an endowment, whereby the human services money could be protected from the general budget issues.
John said that such a fund would require a funding source, and that that is why the idea isn’t really analogous to something like the water fund, which takes in its money through user fees. He said that Town is already able to protect gifts and contributions that people make for a specific purpose, so no further structure would be needed if funds were received by the Town for the agencies.
Larry said a similar concept already exists in the form of Town reserves, which he said Town Meeting always has the ability to appropriate from as it sees fit.
Hwei-Ling reiterated her ongoing concerns about the expense of employee pay and benefits. She said she didn’t see much effect from reorganizing the Planning, Conservation and Inspections departments, and was concerned that regionalizing emergency dispatch services with UMass still was not being pursued. She called the proposed budget the “same old, same old,” and said that the Select Board’s values seem to be different than the Town Manager’s, and that the Select Board’s values need to be reflected in the budget he creates. She said she understands that employees must be fairly compensated, but that there needs to be a way to “share the pain.” She suggested that reducing the step increases would allow enough savings to fund the pool and human services.
Gerry said that all union employees did “share the pain” last year by accepting a 1% increase, and Hwei-Ling said she appreciated that. Gerry said the subject is difficult to talk about without violating the need to negotiate in good faith.
Anne said that Hwei-Ling was expressing a concern many residents have about public employees who get paid a lot and work a little. She suggested that more could be done to present the work of Town employees so that people can better appreciate the reality of the situation. She said it is important to be realistic about wage scales and to be sure the Town’s are in line with those of comparable cities and towns.
Gerry said that the relationship between COLAs and personnel cuts has to be part of the conversation, with cuts required if COLAs are too high. He said that might not be taken seriously because few cuts have occurred in recent years, but he said that eventually significant cuts will happen.
Larry said that he understands the frustration about benefits, but said that Town staff are not the cause of the structural deficit problem, and will help to find and create its solutions. He said that reorganization of Planning, Conservation and Inspections has resulted in a 2.3% budget reduction, and he said he is happy to look at efficiencies to be found through reorganization, and has done so. He said that analysis of regionalizing dispatch services is ongoing to see if such a change “makes sense.” He said that consideration of similar changes cannot be undertaken frivolously or quickly, and require planning and resources.
There was discussion about the oft-mentioned possibility of combining Veterans’ Services with other towns. John said that is being considered and discussed, and that there are legal mandates affecting that situation.
Per Hwei-Ling’s suggestion that the proposed budget represents different values than those held by the Select Board, John said that he didn’t want to be characterized as having different values, and said that the budget proposal is based on a recommendation of the best way to meet the needs with the money that is available from Federal, State and local sources.
Hwei-Ling said that she would like to have consideration of Hadley’s model of contracting out planning services rather than maintaining a Planning Department.
At this point, a woman from the audience interrupted and complained loudly that the town was not adequately assisting the homeless. Gerry said that her concerns were noted.
Larry responded to Hwei-Ling’s suggestion saying that he is not a fan of privatizing municipal services, but that some opportunities exist in some areas, depending on the position. He said that it will be necessary to “be very creative as we go forward,” but not in ways that diminish services or assets. He said he has seen many communities be unsuccessful in their privatization efforts, but that he is happy to consider all opportunities.
Gerry brought up the topic of an Economic Development Director, noting that the position is on Larry’s list of funding priorities if money becomes available. Gerry said there is mixed support for the idea on the Select Board.
Larry said that he and department heads are currently pursuing economic development work, and said it is difficult to propose a new initiative when the budget proposes cuts to existing ones. He said that having him and staff lead those efforts now is in the Town’s best interest, and that it would be good to bring in an Economic Development Director once there is a project with real goals and deadlines. He said he wants to be able to set clear performance benchmarks for such a position, and to provide every opportunity for it to be successful. He said that economic development is a key component to fixing the structural deficit over the long term.
Anne said that there are grants available to help support such a position.
Hwei-Ling said that the town has done all it can do in terms of planning and open space, and said that it should now be in a maintenance mode, and shouldn’t continue to require more resources. She suggested that a current Planning or Conservation staff person could take on the economic development work, rather than adding a new staff person. She said that she hoped that the Town Manager’s loyalty was not to preserving current staff, but to what works best for the Town. She suggested asking UMass or Amherst College to help fund an Economic Development Director’s position for a few years. She said she was concerned if the Town Manager spends time on economic development at the expense of addressing issues like traffic calming or graffiti.
Rob expressed concern about asking UMass and Amherst College to fund a position that might benefit them directly. He talked about infrastructure maintenance and upgrades, such as roads bridges and public transportation being part of economic development, and cited a New York Times column on that subject. He talked about Amherst’s industrial past and the residual impacts left by that, and said he hoped that environmental clean-up and restoration would be included in economic development plans.
Switching topics, Rob asked if a hiring freeze might be necessary, and if the Select Board should recommend that to the Town Manager.
Larry said that he does not prefer formal hiring freezes because some positions are more critical than others, and must be filled. He said he prefers to use his judgment, and that a “soft freeze” is and has been in effect. He said that he hopes to find more opportunities to take funds that are unspent because of a vacancy or other reasons and use them to pay down future obligations and remove them from future budgets.
Gerry said he expects to find agreement on budget issues between now and Town Meeting, to prevent a lot of fighting about a little bit of money. He asked if Larry could provide budget updates as time goes on, suggesting mid-March. Larry agreed and said that more would be known at that time.
Hwei-Ling said that any potential conflict of interest issues raised by Amherst College or UMass funding an economic development position could be avoided by the school making an unrestricted gift to the Town. She said that LSSE funding has been her “pet peeve” for three years, and said that its reduction in tax support from $405,000 in FY08 to less than $300,000 in FY09 could still be better. She talked about that representing a 30% subsidy by the Town for people’s tango lessons.
Larry said that the LSSE reorganization was a “splendid example” of Town employees being part of the budget solution rather than part of the budget problem. He praised Linda Chalfant, Barbara Bilz and Bob Brandts for their analysis of the organization and funding of all the LSSE programs, and the “dramatic changes” they were able to make in the organization to achieve an “incredible reduction” in the tax subsidy. He said that they did so with some program reductions, but that they were not drastic. He said that LSSE was moving in the right direction, and that he was very happy with what had been accomplished this year, and he congratulated that department on its work.
Anne talked about people and the press referring to negotiations with the colleges as seeking to get them to “giv(e) money to the Town.” She said that she supports Larry’s framing of the negotiations as seeking reimbursement, and she broadened it beyond the scope of emergency services, to include the benefit they get from having a good elementary school system a beautiful Town common, and so forth. She said that such factors assist Amherst College, for example, in its recruitment and retention of faculty.
Gerry said he appreciated LSSE’s programs and the efficiencies the department was able to find for this budget. He said that its staff of ten was still large and accounted for $286,000 in salaries not including benefits, and said that benefits raised the expense to more than $400,000, which he said was still reduction from last year. He said that a conversation still needed to occur regarding the possibility of paring down the LSSE programs to those with the “highest social value.”
Rob said he urged the Town Manager and others to not use Transportation Enterprise Fund surplus money for the general budget, and suggested that the fee structures for parking meters and permits be reconsidered. He also suggested that the School Superintendent consider fees for student and staff parking. He said that to move to a more effective and efficient 21st century transportation system, cars need to pay more of their “fair share.” He said that “higher quality” bus stops were needed, among other public transit infrastructure needs.
Hwei-Ling said she wanted to make sure the audience has a chance to speak.
Alisa said she disagreed, because much time had been spent of few issues, they had not heard updated projections from John, had not heard much from Anne and hadn’t yet heard from Alisa. She said she hoped to not repeat the same conversations at subsequent meetings about why different priorities are so important, and said that those priorities had been well-expressed at this meeting. Per human services and LSSE, she said that the LSSE subsidies are a form of human services funding, similar to funding the outside agencies. Per the colleges and University, she said that while they need for Amherst to be a nice community, she said it would probably not be responsible for their trustees to give the Town a “blank check.” Per charging for school parking, she said it would result in money that could only be used for school parking lot expenses.
On the subject of the municipal budget, Alisa said that there had been no discussion of cuts beyond the human service agency funding. She said that while the municipal cuts are difficult for Town staff to have to manage, the cuts aren’t comparable to those facing the Elementary Schools, and said that no type of fee increases could come close to raising the more than $1 million necessary to cover their shortfall. She also said that the issue of the Town budget coming in at a 3.1% increase, higher than the Finance Committee’s recommendation of 2%, had not been addressed. She said that she had been seeking a discussion about how to divide up the Finance Committee’s recommended increase – to continue to distribute it in equal percentages to the Town, the Elementary Schools and the Libraries, or to perhaps give more to the schools – and the Town was now giving itself an even larger share. She said there was talk of spreading the pain, but said that the Town faced little in this budget. She said she hopes there would be a way to talk about those issues. She said she hoped that might be part of the conversation at the Community Budget Forum on February 11th.
Anne said that she agreed with Alisa’s proposal to not have public input at this meeting, and to have that at regular Monday meetings instead. She said that there was little opportunity for Select Board members to have focused conversation on this topic at regular meetings because there is always so much other business needing attention. She said she would like to hear updated projections from John, and for that to be the end of the meeting.
John passed out a document with updated projections. He said that the bottom line difference between his September revenue projections and these was that these were “slightly worse.” He said that local revenues were higher, thanks to the Strategic Partnership Agreement with UMass and being close on completing agreements with the surrounding towns for providing emergency medical service. He said these help to preserve the level service funding for public safety. He said that State Aid figures were “sobering,” with Chapter 70 aid for schools increasing only 1.8%, or $107,000 rather than the 3% projected. He said that lottery revenues are flat, and that the current lottery aid allocation is not sufficient to meet the distribution. He said that the legislature has filled in this gap in the past, and there is lobbying for them to do so again. He said that the Governor’s budget seeks to use casino revenues to fill the gap. He said that even if the lottery aid is level funded, that will be less than the 3% increase estimated, reducing projections by $140,000 from the September numbers.
He said the news was better on the expense side. He said that September’s projections anticipated a $1.9 million shortfall, and said that three of the four budget makers had submitted their proposed budgets now, at or near the Finance Committee’s 2% guideline. He said the Town’s 3.1% increase used new revenue to prevent further cuts. He said the Regional Schools believe they are able to meet their budget with a 3% assessment. He said that the Library budget wasn’t formally submitted yet, but was expected to be a 2.6% overall increase with 2% coming from taxation. He said the Elementary Schools budget wasn’t submitted yet, but had a preliminary increase of 8.4% or $1.65 million. He said the capital budget projections were unchanged, and looking to use 8% of the levy, and said that capital spending two years ago was higher than that amount. He said the difference between 7% and 8% of the levy is about $340,000. He said that projections for assessments were “slightly more positive,” and that level funding of the retirement assessment helped that. He said the overall budget gap was projected at $1.4 million if the capital assessment stays at 8%, or $1.1 million, if capital is reduced to 7%. He said those figures include the preliminary 8.4% Elementary Schools increase, which he said the School Superintendent and School Committee were still working on, and might be decreased. John said that if the gap ended up being at half current projection levels, totaling $500,000 to $700,000, the question would be what the options are for addressing that. He said that those options would include making cuts, using reserves, or having an override. He said that there is both the need to resolve FY09 issues and to be thinking in terms of multi-year planning.
John explained different documents he had distributed, which he said showed different scenarios for dealing with the shortfall, one of which did so with all cuts, and another allocated 3% to the Elementary Schools, and less to the other budgets; another dealt with using reserves.
He said that FY08 began with $4 million in reserves, which he said sounds like a lot of money, but he said that the appropriate amount needs to be considered in the context of what amount would be necessary to sustain vital programs and services during a severe economic downturn, and said that an amount equal to 5% of the operating budget is the minimum needed in case of emergency. He said that $4 million is equal to 6% of operating revenue. He talked about the $600,000 appropriated at the Special Town Meeting in November to cover Amherst’s assessment for the regional lock-up facility ($30,000) and the balance going toward an advance to cover the required balance in the Health Care Trust Fund, which will be paid back to the reserves. He said that by July, reserve totals are expected to equal $4.3 million, or 7% of the operating budget. He said that if $500,000 of reserves were to be used, that would still have the balance at over 6%. He called that an option, and not a recommendation. He said that that should only be considered if there is a specific strategy for the out years of restoring reserves and getting the operating budget to be funded 100% with recurring revenues.
John said that the final page of his handout detailed the effects an override would have on average property tax bills. He said that every $100,000 added to the levy would add 5 cents to the tax rate. He said that for the average house valued at $332,500, it would equal $16 for every $100,000 of the override amount. He said that an override amount of $500,000 would mean an increase of $80 on the average tax bill ($16 x 5 = $80,) and less for houses with values lower than the average, and more for those with higher values.
Per Alisa’s question about the Town budget increasing 3.1% instead of 2%, John said that EMS payments had increased from the University and were anticipated from surrounding towns, and that the EMS rates were being increased over FY08. He said that LSSE had eliminated one staff position and had increased fees, such that tax support was able to be replaced by fees for about $37,000. He said that Cherry Hill had had an excellent year with revenues up more than 20% over the previous year, and that while the golf season is weather-dependent, he said that he was comfortable with the revenue projections for next year.
Alisa asked how the LSSE fee increases are applied. John and Larry both spoke to the new fee structure and how the increases vary according to the program.
The meeting adjourned at 4:17 p.m.
-- Stephanie O’Keeffe