Why The Town Has Some Explaining to Do

I warn you this is long, but you may find it interesting, thought provoking even. Direct excerpts from town documents are in italics, with links to the original documents and where they were mentioned.

My words in bold.

Fiscal Year 2011 Preliminary Message, Page 1:“We maintained a hiring freeze, instituted a spending freeze, and bid most contracted services. ”

I know you only have to go out to bid over a certain amount but since the town is in such a precarious situation, shouldn’t any job be put out to bid?

Page 1:“We overturned a denial from FEMA for ice storm reimbursement, and were successful in receiving over $528,376 for the town. These measures helped make it possible to get through the year with few layoffs or reductions in services.”

So back in 2009, there were layoffs…. 

Page 2: “Below is an illustration of reductions and reimbursements which we accomplished over the past 12 months:

-Utility Savings from reserve fund $509,302

- FEMA reimbursement for ice storm 528,376

- Bids for legal, insurance, health insurance 424,300

- Reduced staffing levels (7 FTE) 348,000

- Reduced compensation reserve 181,000

- Reduced IT expenses 68,000

- Negotiated lower tipping fees 57,000

- Reduced office supplies & printing 66,000

- Limited meetings & conferences 35,000

- Sample of savings in past 12 months: $2,216,978”

That’s substantial.

Page 2:“Local receipts ended over projections by $142,000 in FY09.”

Wow, that added $2,358,978 to the town’s cost savings.

Page 2: “Aggressive cost-saving measures resulted in appropriation closeouts exceeding expectations, leaving us total cash reserves of $5,490,301….. Historically, Westford (and many other towns) have relied upon Free Cash to balance their operating budget. While it is not ideal to fund operating expenses with nonrecurring revenue sources, it has not represented a serious situation as our reserves have been replenished annually. We are pleased to note that this year, thanks to the prudent efforts of our town department heads, boards, and committees, we are fortunate to reduce our draw off Free Cash significantly.”

We’ll get back to this one.

Page 3: “We are proposing allocating $2,094,544 to balance our FY10 budget at our October town meeting, which represents a reduction of Free Cash usage (specifically $1,079,946 less than during FY09) to balance the budget.”

Good job.

 Page 4: “Three months into FY10 - we have more positive news to report. We recently received construction bids for the town hall, which came in significantly under the estimated costs.

Ice storm reimbursement from MEMA is anticipated at $87,133. We also requested proposals for employee/retiree health insurance, and were able to secure a modest increase of 5.5%, representing a savings of $156,000 from budgeted amounts. Through bidding we were able to reduce heating oil contracts from $3.98 per gallon to $2.01, and we are currently working to rebid electrical contracts. We have signed our first contract after marketing our technology department’s permitting software, and expect to sign with more towns this year. It is also important to note that our cash reserves are almost $300,000 higher than at this time last year.”

Excellent, we are doing well financially.

Page 5: “By adhering to sound fiscal management practices, the town of Westford is fortunate to have been able to retain strong financial reserves. We are entering the FY11 budget process with reserves of $5.5 million, which is significantly higher than the $4.2 million we had projected at our May 2009 town meeting.”

So the town was 1.3 million dollars off with their estimate a couple years in advance.

Fiscal Year 2012 Preliminary Budget Message, Page 1: “Although the School Department received a modest increase of 3.23% for FY11, the School Committee and the School Superintendent worked diligently to continue their outstanding performance - resulting in achieving stupendous MCAS scores and being named in the top 50 high schools in the Commonwealth by Boston Magazine.”

Many people don’t think the schools are that special, but it appears Ms. Ross does, and I’m glad. A person could have phrased the first sentence differently, and as even reading it now I struggle to pick up the ‘modest’ part. And for the budget that is half the town, 3.23% is modest.

Page 2: “FY10 local receipts ended up $54,789 over projections, which would not have occurred if we had not sought new sources of revenue. For example, we are the only municipality to market a product to other towns. We sold and continue to sell permitting software (developed by our IT staff) and we have begun to receive revenue from ten contracts we have with other communities. In addition, the Tax Possession Sale Committee held its first ever auction of foreclosed properties resulting in new revenue of almost $360,000.”

So again the town’s estimates were underprojected, plus we have a new source of revenue. That’s great!

Page 2: “As we prepare for our fall town meeting, our cash reserves are estimated to be $5,442,025. This figure represents a reserve balance of 6.44% of our total operating budget. It is important to keep a minimum of 5% of the budget in reserves to maintain our town’s financial standing, to be prepared for unexpected emergency expenditures, and to insure high-quality bond ratings. The town’s bond rating is AA+ with Standard and Poors (S&P) and Moody’s recently restructured its bond rating criteria throughout the state, resulting in an upgrade of Westford’s rating from Aa3 to Aa2. According to S&P, Westford’s rating reflects ‘good and consistent financial position due, in part, to experienced management and its strong focus on multiyear planning.’

Historically, Westford has relied upon Free Cash to balance our operating budget. The Board of Selectmen established a goal of reducing this reliance, and we are pleased to note that this year, thanks to the prudent efforts of our town department heads, boards and committees, we are fortunate to reduce our draw from Free Cash once again. We are proposing allocating $1,846,535 to balance our FY11 budget at our October town meeting. This represents a reduction of Free Cash usage (specifically $207,321 less than during FY10) to balance the budget.”

I find it funny that every time it’s something like this, the people at the bottom aren’t mentioned. The town is doing well financially because of the Board of Selectmen, department heads and committees.

No mention of police, fire fighters or teachers. All the credit goes to town administrators when it’s good, but when it’s not good, it’s carefully placed on someone else’s shoulders. It can’t go both ways.

Fiscal Year 2013 Budget Message, Page 1: “We also added additional funding to our police and fire budgets, to account for protective clothing in their operating budgets, rather than capital, and we added a K-9 unit to our police department, which is fully funded through private donations. With a slight increase in state aid (+$77,960) for FY12, but a decrease in the Federal Education Jobs Stimulus funds (-$841,237), and with new growth projected at $900,000 and a 2 ½% increase in local revenues, we were creative yet conservative in our budgets.”

“Slight increase?” It was $77,960 and the State of Town Presentation for 2013 said state aid was “Essentially level since 2010.”

But when talking about the 2014 fiscal armageddon, gas was large enough to be noted $37,380 difference from FY 09 to 13.

Why are comparing fiscal years four years apart, one of which doesn’t exist yet?

And the town covered the short term stimulus money by quite a bit. I’m failing to see the 2014 disaster that was predicted, which was the reason why the town couldn’t pay teachers their steps.

Page 2 and 3: “In FY12, with the support of the Board of Selectmen and Finance Committee, we established an Other Post Employment Benefits (OPEB) Stabilization fund with a $50,000 appropriation to begin funding our future retirement costs. We took advantage of an early retirement bill and reorganized the Finance Department. With the retirement of our Finance Director/Treasurer and Collector, we combined the two positions into a FY13 Budget Message 3single Treasurer/Collector position, with the Finance & Budget Analyst assuming some of the duties of the Finance Director, and becoming a Budget Director – thereby saving one high-level full-time job. A lieutenant and dispatcher in the fire department also retired. These four retirements resulted in projected savings of $244,000 over a 3 year period.”

Page 3: “We received an increase of $207,284 in Chapter 90 funding for FY12, bringing the overall budget available for road maintenance and improvement to $886,045. We were able to supplement our capital replacement program by purchasing two pieces of road building equipment from these additional funds.

Fortunately, local receipts ended up $883,219 over projections for FY11, due to several one-time revenue opportunities, and with the implementation of a spending freeze in January 2011. This allowed the town to exceed projected closeouts, thus leaving us total cash reserves of $5,639,541. This figure represents a reserve balance of 6.6% of our total operating budget, which is an important factor considered when our bond rating is set, and when we are seeking to borrow for capital projects.”

Page 5: “With increasing state revenues, the future outlook regarding state aid appears more favorable, and although it is early in the state budget process, we feel we are being conservative to plan for level-funded state aid for FY13. With that assumption, we expect to be $4,840 over minimum recommended reserves.”

So why is there a need for this?

Page 1: “Five of the twelve town unions settled collective bargaining agreements, accepting 0% COLAs for both FY12 and FY13, and in addition, these employees agreed to forego step increases for FY12 in an attempt to help the town control expenses. For these actions, I acknowledge and thank these employees for their understanding and willingness to sacrifice their anticipated increases for the future financial stability of our town.”

I don’t understand.

Page 2: “The Board of Selectmen recently adopted the new health care legislation (MGL Chapter 32B Sections 21-23) which will allow us to bargain further health insurance plan design changes with the unions and retirees, thus increasing co-pays and further controlling the town’s health insurance costs.”

But the Board of Selectmen about the fact that we still had $5 co-pays. I guess they figured they better play that card while they can.

Page 6: “We are projecting using $2,929,354 in free cash to balance the budget. (Difference of 834,810 from 2011) The increase over the amount we applied in FY12 is because the majority of capital in FY13 is being funded using general fund monies, instead of bonding and using available funds,as was done in FY12.”

Based on how low the Town Manager has been with almost all previous projections and an honest look at revenue increases I don’t put much faith in this figure.

Since revenues are up, free cash is up, and the town is needing less and less of it to balance the budget…well, just look at page 3 of this chart.

The Town Manager says that the town’s budgets are the most balanced they have been in 10 years save 2005. Also all of her messages say that year 12 projections are on track to exceed expectations, some by a great deal.

2010-2011 revenue increased by $2,643,002 or close to it. Plus, the year 2011 steps for teachers are supposedly in an escrow account unspent.

Why is it that the town can’t pay them? And where is this coming 2014 disaster coming from? As from what I see we are in a better financial position now than you have ever been. I see one area that if we are really so tight we might want to hold back on.

Page 5: “The Capital Planning Committee has estimated that $35,000,000 worth of projects have been requested over the next five years. For FY13, we have budgeted $1,500,000 in capital appropriation, which includes restoring funds into our Capital Stabilization account, which was depleted last year. Allocating funds to the Capital Stabilization allows our town to have a funding source to meet future, anticipated capital needs.”

If the town doesn’t have to money to pay their employees, a large group of which are highly touted by the town but compensated less than average, how is this the time for $35 million in capital projects? 

If I do not understand any of this right please show me, but I’ve looked through every file available, compared and contrasted and I don’t see the town as in any financial trouble now or in the future. In fact, our town’s future looks good, better than most towns.  So again I ask, why can’t we pay the civil employees? Every time I hear our public officials say they appreciate this group or that group now I just cringe. “Appreciation” is not what I see.