Friday, February 16, 2007
Finance Committee looks to a challenging future
This article is part of an occasional series describing town boards.
Times have been good for Carlisle over the past years, with real estate values growing and few large town expenses. But is Carlisle prepared for the financial challenges ahead? "We've done well so far. We haven't had to make any hard decisions as have many communities in the state," says Finance Committee (FinCom) Chair Thornton Ash. But he adds, "I'm quite nervous about the long-term prospect for revenues." Given this and upcoming building plans, "our on-going challenge is to find an equitable spending plan for the whole town that balances schools, the Council on Aging, affordable housing, . . ." and other town needs.
The FinCom is an advisor to the Board of Selectmen with no decision-making authority of its own, but a huge ability to influence the outcome of the budgeting process. It also oversees accounts and makes recommendations for cash transfers and borrowing to fund operating and capital projects. In short, its job is to optimize the allocation of money so as to maintain operations, invest in needed capital projects, and prepare for an unpredictable future.
Interviews with the seven members uncovered a deep appreciation for Carlisle, a desire to safeguard what makes the town special, and a belief that the town's continued financial strength will require a careful balancing act. Members spoke of the challenges, rewards, and frustrations of serving on the board, including the need to make decisions with too little control and too little input from townspeople.
Town budgeting not a business
Each fall, the FinCom issues a guideline budget that reflects what it estimates the town can afford without an override of the Proposition 2-1/2 limits on taxation. Proposition 2-1/2 is a state law that limits property tax increases to 2-1/2% per year (excepting new growth from building and additions). After fixed costs are provided for, what revenue is available is allocated to departments as increases on the previous year's budget. If it is later determined the increases are not sufficient, the FinCom can recommend an override of Proposition 2-1/2, which requires a vote of Town Meeting and Elections.
Ash notes that it takes time for new board members to "understand the fundamental role" of the FinCom in managing the budget, particularly, how much is outside their control. "The bulk of spending is on autopilot," he says. "There are not that many big items to look at" once salaries, utilities, benefits, government mandates and other fixed costs are subtracted (salaries are negotiated by the BOS or school committees without input from the FinCom).
New member Jerry Lerman agrees, "It's been a large learning experience. I was unaware of how many constraints there are. It's more complicated than I expected." David Verrill, the other new member, says, "It's been a surprise to learn it's nearly impossible to run a town like a business. You can't cut where you would like. It's a complicated and difficult picture, not just a pie to slice up." Even after three years on the board, Barbara Bjornson continues to see "how little control we have over the budget. Cost increases occur independent of what we might decide is the spending objective."
Dave Model says it took him a while to accept the limitations. "I see why our energy is wasted on tiny issues while the teacher's contract is just happening." The danger, he believes, is that while departments tighten their belts, salaries may rise above what is tenable, "If collective bargaining continues to push for unsustainable increases, sooner or later voters will reject overrides. Then we'll have to cut teachers."
Scrutinizing the $500 line item
"I view the FinCom as an investigative body," says Lerman. "We examine budget proposals so we can understand them and make recommendations." Once the guideline is issued, the FinCom undertakes budget review meetings. Ash explains, "We dig into budgets down to the $500 line item. Everything gets looked at. The community gets very good value from the FinCom on due diligence." The FinCom must exercise self-discipline to avoid value judgments that are the purview of department managers or the BOS, "Our job is to see that departments are spending wisely, not to make policy," says Ash.
Tradeoffs as budget is finalized
After all budgets and requests are understood, the FinCom prioritizes over-budget items and makes recommendations to the Board of Selectmen for "prudent increases given competing needs," says Ash. Sue Wolfe describes that role, "We're an umbrella organization with a broader perspective on resource allocation" than is possible from a department. She understands both sides because in her day job as a department manager, "I fight for my budget as effectively as I can, and it's someone else's job to balance my demands versus other departments." She adds, "I think the FinCom does an excellent job on that."
Trask says the job is made difficult by the fact "We come up against spenders of money in hearings, but there are not many taxpayers there." It's the lonely job of the FinCom to represent the wider picture and push back where needed. Says Verrill, "It's tough when you have connections to the community and must make difficult decisions that impact people you know. That part is not fun."
Convincing the voter
Once the budget and any overrides are finalized and approved by the BOS, the FinCom plays an important role in educating and convincing voters. Says Ash, "If an override is recommended, voters at Town Meeting want to know, 'Have we scrubbed the numbers? Is the total picture understood?' It's our job to give a complete picture to the town." He points to the defeat of the Recreation Commission's proposal for playing fields last fall as an example where voters were not on board. "Town Meeting told us not to go forward till the big picture is understood."
Model believes such missteps could be avoided if there were a way to involve more townspeople early in the process. "One thing I'd love to see is if citizens with burning issues to air came to our meetings. Or contact us — citizen input is very difficult to get." He adds, "People wait for Town Meeting when input early would have more impact in affecting policy." Verrill points to a recent FinCom review meeting at which the Carlisle School defended its need for an additional $400,000, and says, "there were zero people" in attendance. Comments Bjornson, "We would love to see people who feel strongly or have interest get involved. We crave that kind of input."
Future holds challenges
Up to now, "Carlisle has benefited from very good real estate growth and has balanced the budget rather effortlessly," says Wolfe. "Looking at other towns, and our own future capital needs, I don't see a lot of good news there."
A new Long-Term Planning committee formed by the BOS is looking at the financial impact of upcoming building projects. Bjornson, who is a member, points to "really impressive coordination between the Finance Committee and Board of Selectmen. I suspect we are one of few towns so proactive in managing the balance sheet." Trask hopes one outcome of the planning will be a building-up of town savings: "I'm appalled we're not putting more into the Stabilization Fund." Without reserves, "we'll be depending on the [future] taxpayer to pay for borrowing, and that's hard" as opposed to spreading the pain over more years.
Need public input
So for those who like a challenge, the FinCom is the place to be. "It's a great time to be part of the process because the issues are substantive," says Model. "Over the past two years I've seen how important what we do is. We are asked to sift through conflicting priorities and frame the issues for voters. The Finance Committee is a focal point if you believe town government has a role in maintaining the quality of life in Carlisle."
"We need to hold on to what's unique about Carlisle and make it work as best we can," says Ash. "We've done a good job with that up to now, but need to keep our eye on it as we move forward." He adds, "We have a really nice group of very committed town employees" and a priority must be to maintain that commitment by keeping them "well-trained, equipped, and satisfied." Verrill echoes that opinion: "The effort citizens put in is unbelievable. Volunteers with very busy lives find the time and passion to do more. It's awesome to see the talent and commitment the town has to draw on." But, he says, "The town will be facing big challenges in the not-too-distant future. We need to be proactive to preserve what we like about Carlisle."
"The community needs to start paying attention," says Ash. "There are some hard decisions coming up and we need input." Trask agrees, "Come to budget hearings and contribute your thoughts!" And Verrill adds, "Our meetings are open to the public, and we need all the brain power we can get."
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