When Bill Pennington met with the Board of Selectmen and Finance Committee on Wednesday, he said that he intended to withdraw his private article for a Proposition 2 1/2 override at Town Meeting, but that the article regarding a transfer of the Phillips Academy contribution fund to operating budgets might still be an option for the voters to consider. Vikki Gallagher expressed a similar sentiment in her letter to the Townsman yesterday.
It's easy to understand why some might look at the roughly $1M in this fund and consider it a 'quick fix' to some of our budget deficit problems for FY09. In reality, using that money to fund operations budgets really would be a quick "fix", helping get the town more addicted to a drug that we seem to like the taste of. Each year in recent history we have taken money from our "reserves" - money that has no recurring source of renewal, similar to our personal savings account (or credit card), and spend it on stuff we gotta have. The more fixes we take of this drug, the more we get hooked, and the more we focus on how to get our next fix, without taking responsibility for how we're going to cope financially with our nasty habit.
Andover's financial problem isn't really the $2M+ dollar gap between recommend department budgets and the available revenue that we face this year. The problem is that we have, for several years, chosen at Town Meeting to authorize more expenditures than we can truly afford. The gap last year was several hundred thousand dollars, and we collectively gasped as we said "okay, just one last time." Now the gap is a couple million, and the best estimate we can make today indicates that the gap will be over FOUR MILLION dollars next year.
Each time we take reserves to fund our operational budget, it increases the gap between "level services" and "available revenues" the following year. If the residents of the town vote to sustain the growth of the operational budget, they should take the responsible path and approve a Proposition 2 1/2 override. Eroding our dwindling reserves will only sustain our habit for very short time, and then we'll face a staggering deficit with nothing to fall back on.
The Board of Selectmen and Finance Committee both passed motions Wednesday to recommend that Town Meeting approve the transfer of the Phillips Academy fund into the Stabilization Fund. It's the sensible choice.
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Why was the Phillips money set aside and left to accumulate, anyway? It seems to me that this money is contributed to the Town in lieu of a property tax payment. Should it not be part of the Town's annual tax receipts?
Use of the Phillips money to “fix” this year’s budget gap is a quick fix as you suggest, I don’t think anyone involved sees it as a real solution to Andover’s long term budget problems. But, given the lack of cooperation and in-fighting among the town boards this year, there’s little time for any other acceptable solution. Only recently have we heard the Board of Selectmen say publicly that an override is within the realm of possibility. Brian Major says he may submit a warrant but won’t support it… what’s the point with that ringing endorsement! For an override to be successful in this town all three boards would have to propose it early and support it publicly right through town meeting and the ballot vote. Citizens need leaders to lead them to the sensible choice.
You say that the problem is that we have, for several years, chosen at Town Meeting to authorize more expenditures than we can truly afford. The sticking point in that argument is - what can we truly afford? Andover’s per capita income is in the top 10% for the state but we hear that our school and municipal spending is only at the state average and well below what other comparable income towns spend. This suggests that Andover residents can afford to pay more but very few will pay more voluntarily… again, they need to be lead to the sensible choice by town leaders.
I believe that under the current financial leadership our town services including safety and school will erode. It is not about wanting more than we can afford it is about not stepping up and realizing that we need more and therfore must pay more. Sometimes you just have to...
The money donated by Phillips Academy is a voluntary contribution that the school chooses to make. Accounting-wise, this money must be deposited to a Town "fund", and the use of that money for any purpose must be approved by Town Meeting. It isn't a tax that the Town levies, so it can't be included in tax receipts.
While the accumulated amount in the fund has grown to a significant amount (about $1M), the annual contribution has historically been only a fraction of this amount.
The money in the fund has always been included the Town's total tally of "reserves", but has not been very visible (or "transparent") to the leaders and community. The warrant article this year to ask approval to transfer the accumulated fund balance to the Stabilization Fund is primarily intended to make this asset more clearly visible to everyone, and to make a decision about how that asset is to be used (i.e., spend it on something, or save it for an unanticipated emergency).
While our elected and appointed leaders certainly have a responsibility to provide leadership, the ultimate responsibility for the choices made in this town rest with Town Meeting.
When I said in my post above that Town Meeting approved spending beyond what 'we could afford', perhaps I should have said beyond 'what the voters were willing to pay for'.
Without diminshing the responsibility of our leaders to lead, I also believe that our voters need to step up and take ultimate responsibility for making the right choices based on their own interests and values.
If current leaders aren't leading in the direction you think is right, then speak up, elect leaders that you think will do better, and/or become a leader yourself.
Point takenre: BOS and SC.
But isn't the finance committee appointed by the moderator and we have had a "dynasty" for many years with a particular point of view.
The Finance Committee is indeed appointed by the Moderator. It is also correct that many of the current members of the committee (present company excluded) have served for many years.
Those who disagree with the recommendations made by the Finance Committee may consider long terms of service to be a negative factor, but I would suggest that 'stability' and 'perspective' are quite valuable factors in a Finance Committee.
When you claim that the committee members have a "particular view" I'm afraid I'm not sure exactly which particular view you are suggesting.
In my opinion, the current Finance Committee members have a rather wide spectrum of perspectives, they care deeply about the long-term vitality and well-being of the town, and they invest considerable time and energy to discharge their responsibility to Town Meeting with diligence and integrity.
If anyone feels that the Committee is making inappropriate recommendations, or failing to adequately weigh certain perspectives, I would strongly encourage them to bring those concerns to the Committee (Wed night, 7:00 pm) for discussion. I assure you that the Committee welcomes and respects input from the community.
I may be incorrect, but it appears to me that the FC (and most of the BOS as well) have a conservative bent politically and come from the "read my lips, no new taxes" perspective and actually do not have passion for the public school system. This really does shock me when many of you have children and spouse in the school system.
However, I do believe the moderatordid not attend the public school system?
Just saying my piece.
Thank you.
Let me just say that I am tired of the school department and worse the parents being made to look irresponsible in this whole budget process. If anyone is irresponsible it is the Board of Selectmen and the Finance Committee. These groups have known and talked about a structural deficit for years. After the Town Meeting in April '07 the three groups were supposed to come together and layout a plan for the coming year which, considering that increased revenue was needed, should have been a TOWN AND SCHOOL override. Since that time the Board of Selectmen and the Finance Committee have stalled all in the name of "going through the process". Well now we are in worse shape than last year. How is it responsible to have not worked together to come up with a solution that is really the only sustainable fix tothis budget fiasco? How is it responsible to point fingers at parents who at least want level service for their students even if it means using money that is truly put aside for a rainy day after elected and appointed officials ignored the need and refused to put together a plan that would work for the whole TOWN? How is it responsible to applaud a available revenue budget which, among many other things, leaves that police department about a dozen officers short? The rhetoric has got to stop and this situation needs to be taken care of in a way that is not going to devestate the schools.
The finance committee should be a neutral body that advises on the financial status of the town and the financial soundness of proposed budget solutions with no commentary. We in effect have two or three extra, unelected, Selectman the way it is run now.
From Eagle Tribune, 3/30/08, in an article titlesd "Lawrence faces 'inevitable fiscal crisis'", these quotes from a Department of Revenue report on Lawrence fiscal practices:
Lawrence "returned to poor financial management practices" in 2003. The use of reserve funds "is a red flag and merely diverts attention from the deeper and inevitable fiscal crisis that lies ahead". And "it reflects a decision to take the easier route and raises serious concerns at DOR about the future ability of the city to balance its budget when all possible reserves are depleted."
I was moved to find the actual report itself, on the DOR website (search "Lawrence financial management review" for the full report), and found the following additional quotes:
"In FY 2003, ill-advised estimated local receipts were used for the tax rate despite evidence of a slowdown in the economy."
"In FY2003 and FY2004, relying on non-recurring revenues, the city used ... free cash to support annual budgets, and then in FY2005 used a combination of ... free cash and ... overlay surplus."
"In both FY2005 and FY2006, the revenue projections were deemed exaggerated by DOR and in each year, the approval of the property tax rate was delayed five months."
The balance of the report paints a very grim picture, indeed, of the fiscal situation in Lawrence, and places blame in many places for practices that have never occurred in Andover, fortunately, and, most likely, would not be tolerated. Several practices that have occurred in Lawrence, however, are the same types of things that Andover has seen in the past and that are being actively promoted at this time to solve the "budget shortfall".
A recent attempted solution proposal included increasing projected new growth revenues from $1 million to $1.25 million. The original new growth figure from many months ago was $2 million; it was reduced to $1 million, based on new information and more accurate estimates as the year progressed. The figure has been "scrubbed" many times and looked at repeatedly. The suggestion that it be increased was rejected by both the Board of Selectman and the Finance Committee.
The substantial monies proposed to close the gap, however, are from "reserves". See above for the Department of Revenue thinking on the reliance on reserves to fund operating budgets.
I'd like to repeat a previous post - Use of the Phillips money to “fix” this year’s budget gap is a quick fix as you suggest, I don’t think anyone involved sees it as a real solution to Andover’s long term budget problems. But, given the lack of cooperation and in-fighting among the town boards this year, there’s little time for any other acceptable solution. Only recently have we heard the Board of Selectmen say publicly that an override is within the realm of possibility. Brian Major says he may submit a warrant but won’t support it… what’s the point with that ringing endorsement! For an override to be successful in this town all three boards would have to propose it early and support it publicly right through town meeting and the ballot vote.
It would be irresponsible to think that this 11th hour, half hearted, attempt at an override will resolve this years budget problem. The BOS and FinComm have waited too long to come to that as a viable solution.
Rather than blame this on the Board of Selectmen and the Finance Committee, I think time should be spent convincing the voters that the money is critical. If we have gone this far without resolution this year (repeating what has happened the last several years... a pattern, perhaps), what makes us think that we will do any better next year. And next year, the deficit is estimated to be at $4 million, at this early stage. If we use $1 million plus in reserves this year (the amount that will have to be taken from reserves (THE PHILLIPS MONEY HAS ALWAYS BEEN PART OF RESERVES), unless the plan is to cut other department budgets), we will have less than the projected deficit left in reserves next year. I see little hope that the cooperation level will change substantially after this town meeting; in fact, if we have two budgets presented on the floor, someone is going to lose. That probably won't improve the outlook for next year.
And when the override doesn't pass, what happens to the school budget? And why only the school budget?
Time could have been spent convincing voter that more money is critial had the BOS and Fin Comm been behind the idea from the begining of the budget process like they indicated at the end of town meeting last year.
The mixed message being sent now has no chance for success.
Reserves or rainy day funds are being used in all parts of the state. The City of Boston used $10 million this year and our State Representatives said that is how the State balanced it's budget this year.
Andover's bond rating is still well above most communities in the state.
Andover's bond is indeed well above most. But it is trending down, because of our habit of spending more than we bring in with revenues. It can get worse, and it likely will get worse if the voters continue approving the use of reserves assuming that an override or financial miracle will occur in the future.
The observation that the State is suffering it's own financial struggle should be an extra warning of Andover's need to be conservative (since there is no guarantee that state aid will not be impacted next year).
Regarding the recent post asking "why only the school budget?" - note that it is not only the school budget which has been impacted for FY09; *all* departments have shared the reduced growth in revenues compared to expenditures. Every department has had it's budget request reduced in the budgets recommend by the Selectmen and Finance Committee. The details of the requested staff and expenses that were unfunded by the Town Manager from the town department requests are listed on pages 9 & 10 of the Manager's Recommended Budget book (on the town web site, or in the Library). These unfunded requests include roughly 15 full-time equivalent employees, and (with requested non-salary expenses) total $1.8M.
These requests were cut back before the budget was put forward by the Town Manager, and have hence not received as much public attention as the school budget.
Cutting school programs and increasing class size is unacceptable. An understaffed police and fire dept is unacceptable as well. The leadership has failed.
If town departments can make those cuts and not have the department heads or citizens complain about the change in services, then the cuts were not significant and maybe that was the right place to cut the budget.
The severe cuts proposed for the school budget are obviously causing concern for many citizens and maybe that should tell town boards that they need to rethink their decision.
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