Regarding the compost dump, I have a few thoughts, which I've communicated to the Mayor. The question of moving the dump is an administrative one and so really beyond the Council's authority (it was not a part of the recent vote to allow the Mayor to enter into an extendable 5 year recycling contract) but that doesn't stop us from asking questions and being able to advocate about it. It's really a question for each Mayor to sort out and Mayor Moak may make this a moot point if he doesn't agree to the deal.
For me, there are TWO competing concerns on this whole issue: Cost Savings vs. Convenience of Amesbury Residents.
First, financial. We all know that bad times are here and more bad times are coming, so costs will need to be cut wherever they can be. The compost dump operates at a loss, when you look at fees collected versus direct costs (gate-keepers, on-site toilets, DPW staff and equipment time to move and turn material) and indirect costs (fringe benefits, etc for that personnel). Amesbury would basically be 'outsourcing' these costs to Newburyport and paying a lump sum to them (and residents would continue to buy stickers for there, rather than here). So, there is the opportunity for some modest savings by doing this. In terms of Cost Savings, it's a 'no brainer' if we save money. (And let Newburyport decide for itself if it's a good deal for them or not.)
One the other hand, there is the issue of having this service available to residents as conveniently as possible. I spoke to the Mayor about this issue and part of his thinking is to ask "Is processing yard waste a core function of local government?" This is a good question and should be asked about ALL the functions of local government, to make sure that we keep focused on core services. I DO think that the removal of household waste (like sewage treatment) IS a core local government service. I am NOT as sure that handling yard waste is a primary function of local government, and so will be a LOW priority when considered against, say, public safety and education.
So, should we lose money on a service that is not a primary function of government? I'm inclined to say NO, which either means raising the fees to cover the true cost of the service or buy the service from someone else (e.g. Newburyport). As it stands, the service is offered on the backs of residential and business taxpayers.
That said, the cost of operating the compost is small in the picture of the whole budget and the perceived value of the compost service is HIGH. About 1/4 of the households in Amesbury have stickers for the dump. For those that use it, it provides a very convenient service. My wife and I use it often, throughout the season its open. With a tiny yard, I would have no where to compost waste on my own property. SO, when you balance Cost Savings against Convenience and Value to Amesbury Residents, it is probably worth continuing to provide the service directly to the community.
I've requested more financial information from the Mayor about the costs of keeping the dump in Amesbury vs. using Newburyport. If the true cost to us is minor, I'd support keeping it here. We'd still have to come up with an alternative site, because I think most folks also agree that keeping it in the cemetery is not a good option.
UPDATE: The Mayor's office has produced a report analyzing the costs of maintaining vs. regionalizing the yard waste site. It also discusses alternative sites in Amesbury. CLICK HERE to read the report.
Wednesday, November 26, 2008
Sunday, November 23, 2008
November 2008 Mayor's Report
CLICK HERE for a copy of the 11/04/08 Mayor's Report.
Included in this report is information about:
Included in this report is information about:
*Personnel Compensation and Classification Study update
*Microfab Site update [CLICK HERE for federal EPA Info on this site]
*Budget Review
*Ongoing and Upcoming Road Projects
Split Rate/Tax Classification Workshop Schedule
At our November 18th Council meeting, we received the annual tax classification measure from the Mayor.
We will take up this measure at the December 2nd Finance Committee meeting, with a special Tax Classification Workshop to precede the meeting.
The workshop is at 7:00 p.m. and the Committee meeting at 8:00 p.m. I encourage all who have an interest in this matter to attend both the workshop and the committee meeting.
Amesbury's tax rate is currently divided, with residents and commercial/industrial tax payers paying different rates. Commercial/industrial properties are taxed at a rate 15% higher than residential properties. As you may already know, I have opposed raising commercial and industrial property taxes. Here is the agenda:
UPDATE: CLICK HERE to read the Annual Tax Classification Report produced by the Assessor's Office.
As many of you might already know, I strongly opposed the 2006 and 2007 Council decisions to split the property tax rates and raise taxes on commercial and industrial properties. I will be reviewing the information provided by the Assessor and remain inclined to bring Amesbury back towards a single tax rate for all properties.
We will take up this measure at the December 2nd Finance Committee meeting, with a special Tax Classification Workshop to precede the meeting.
The workshop is at 7:00 p.m. and the Committee meeting at 8:00 p.m. I encourage all who have an interest in this matter to attend both the workshop and the committee meeting.
Amesbury's tax rate is currently divided, with residents and commercial/industrial tax payers paying different rates. Commercial/industrial properties are taxed at a rate 15% higher than residential properties. As you may already know, I have opposed raising commercial and industrial property taxes. Here is the agenda:
Finance Committee Agenda
Tuesday, December 2, 2008
Town Hall Auditorium
7:00 PM
Roll Call
Classification workshop
Public Hearings:
2008-095 An Order to request the Municipal Council vote to hold the annual Classification hearing to vote on four (4) separate items in order to establish the tax burdens for each class of property.
2008-096 An Order to request the Municipal Council vote to increase the exemption amount of qualified applicants.
2008-100 A request that the Municipal Council vote to declare as surplus a municipal vehicle belonging to the Department of Public Works.
Adjourn
UPDATE: CLICK HERE to read the Annual Tax Classification Report produced by the Assessor's Office.
As many of you might already know, I strongly opposed the 2006 and 2007 Council decisions to split the property tax rates and raise taxes on commercial and industrial properties. I will be reviewing the information provided by the Assessor and remain inclined to bring Amesbury back towards a single tax rate for all properties.
Tuesday, November 4, 2008
Busy Election Morning!
Long line at Town Hall this morning, first thing today. Always great to see people enthusiastic about exercising their right to vote!
Monday, November 3, 2008
No on Question 1
Please consider voting NO on Question #1 on the November 4th Ballot. Eliminating the income tax would eliminate about 40% of the Commonwealth's revenue. Taking regional schools into consideration, Amesbury would lose about $15,500,000 in annual aid from the state. The effects on public education, public safety and infrastructure in Amesbury would be extraordinary, not to mention state-wide cuts to the wide variety of public services provided (mental health, public health, children services, elder services, veterans' services). For detailed information on the effects in Amesbury, go to: http://votenoquestion1.com/towns.
Saturday, November 1, 2008
Negative Free Cash for FY08 - What Does It Mean?
There have been some articles in the Daily News lately that have raised some alarms in the community. The Commonwealth's Department of Revenue recently certified Amesbury's 2008 financial records. This included a certification that Amesbury had "negative Free Cash" at the end of the year. Now, we usually have positive Free Cash and have used it to put $$$ in the Stabilization Fund, pay for over-budget snow and ice removal costs and other mid-year expenses.
What does this mean, "negative Free Cash"? Sounds like we ran a deficit. The bad news is that we won't have any unrestricted ("Free") money available through the rest of the year rolled from 2008, which only makes our outlook through the remaining 8 months of the fiscal year all the more challenging (see post below about budget cuts). The 'good' news is that this does NOT mean that Amesbury ran a deficit last year. In fact, we ended the year with positive revenue over expenditures, after adjustments.
The "Free Cash" calculation is complicated. The Mayor gave a presentation to the Finance Committee on 10/28/08 to clarify where we stand. You can CLICK HERE to view the PowerPoint presentation that Mr. Kezer gave us. Even though we ended the fiscal year with a positive balance, we have to deduct several MAJOR costs from that balance. First, there is property tax revenue that we have figured in the FY08 budget that has not yet been paid. This means that we have to account for it as if we will NOT ever collect it, so we deduct it from our positive balance. As of June 30, 2008, this was $763,100. Next, we have to set aside even more $$$ to cover possible loss of revenue from property tax abatement requests, called the "Tax Overlay". This is about $500,000. Then we have to set aside $600,000 for taxes due on the abandoned Microfab site; we may never get to collect those taxes, either.
So, even a $977,000 surplus gets captured and seized up by these different liabilities. As we collect the rest of that $763,000 in property taxes due, we will get to credit that towards this year's Free Cash estimate at the end of FY09. And if we may not have to cover $500,000 in tax abatements, so that $$$ would free up, as well. The whopping $600,000 that we have to basically escrow to cover Microfab taxes due will continue to be a big drag on our bottom line, until that property and its environmental damage gets cleared up and sold. In accounting terms, these are "liabilities" that we either will have to pay later or are revenue we may not collect, so we have to budget funds to cover them.
Clear as mud?
Looking forward to the FY10 budget, one thing we can improve is eliminating our reliance on Free Cash to inject money into the Stabilization Fund and cover Snow and Ice Removal when it goes over. We routinely under-budget that amount and should not assume that we'll always have a positive balance. Also, I wonder if the $763,100 delay in over-due property tax payment is either a sign of increasing inability to pay AND/OR a function of foreclosed properties (where taxes don't get paid until the property finally resells). If so, this means we will have this problem again at the end of FY09, carrying more past-due taxes.
What does this mean, "negative Free Cash"? Sounds like we ran a deficit. The bad news is that we won't have any unrestricted ("Free") money available through the rest of the year rolled from 2008, which only makes our outlook through the remaining 8 months of the fiscal year all the more challenging (see post below about budget cuts). The 'good' news is that this does NOT mean that Amesbury ran a deficit last year. In fact, we ended the year with positive revenue over expenditures, after adjustments.
The "Free Cash" calculation is complicated. The Mayor gave a presentation to the Finance Committee on 10/28/08 to clarify where we stand. You can CLICK HERE to view the PowerPoint presentation that Mr. Kezer gave us. Even though we ended the fiscal year with a positive balance, we have to deduct several MAJOR costs from that balance. First, there is property tax revenue that we have figured in the FY08 budget that has not yet been paid. This means that we have to account for it as if we will NOT ever collect it, so we deduct it from our positive balance. As of June 30, 2008, this was $763,100. Next, we have to set aside even more $$$ to cover possible loss of revenue from property tax abatement requests, called the "Tax Overlay". This is about $500,000. Then we have to set aside $600,000 for taxes due on the abandoned Microfab site; we may never get to collect those taxes, either.
So, even a $977,000 surplus gets captured and seized up by these different liabilities. As we collect the rest of that $763,000 in property taxes due, we will get to credit that towards this year's Free Cash estimate at the end of FY09. And if we may not have to cover $500,000 in tax abatements, so that $$$ would free up, as well. The whopping $600,000 that we have to basically escrow to cover Microfab taxes due will continue to be a big drag on our bottom line, until that property and its environmental damage gets cleared up and sold. In accounting terms, these are "liabilities" that we either will have to pay later or are revenue we may not collect, so we have to budget funds to cover them.
Clear as mud?
Looking forward to the FY10 budget, one thing we can improve is eliminating our reliance on Free Cash to inject money into the Stabilization Fund and cover Snow and Ice Removal when it goes over. We routinely under-budget that amount and should not assume that we'll always have a positive balance. Also, I wonder if the $763,100 delay in over-due property tax payment is either a sign of increasing inability to pay AND/OR a function of foreclosed properties (where taxes don't get paid until the property finally resells). If so, this means we will have this problem again at the end of FY09, carrying more past-due taxes.
Capital Improvement For Police and Fire Departments
The Mayor has recently brought 2 capital improvement requests for the Police and Fire Department buildings to the Municipal Council, including one for $600,000.I fully support them both.
The first one has already been approved and is rolled into a second request, which the Finance Committee voted to recommend for approval at our 10/28/08 Meeting. You might recall that in 2006 the Mayor requested about $80,000 to grind and re-point the exterior of two sides of the Police Department building on School Street. After much arm-wrestling, the previous Council approved only $60,000 for the work. Unfortunately (and as was apparent at the time), this was insufficient funds to make the necessary repairs.
The building was leaking and the City used a portion of the funds (about $12K) to apply a temporary chemical seal to the exterior of the building, putting off the real needs of the facility until a new request for funds could be made. In the meantime, the building's heating system failed. The Mayor requested that the balance of the original appropriation (about $45K) be allowed to be used to help replace the heating system. (The Mayor had to get approval to use those monies for a purpose other than re-pointing the brick exterior.) We approved this request at our October MC meeting.
The Mayor then brought a large-scale request to the MC to comprehensively address the exterior and heating/cooling needs of the Police and Fire Department buildings. This request is for a $600,000 bond to finance the grinding and re-pointing of brick exteriors, the replacement of 36 windows with energy efficient units, the replacement of HVAC units in both buildings and the repair of the roof at the Fire Station.
It is important to note that this is a bond request, meaning that we will be borrowing the money for a 15 year term, rather than paying it out of a single year's budget. This is how all major capital improvements should be handled, spreading out the cost of the work to all of the 'users' (meaning, taxpayers) of the asset, including future ones. Amesbury enjoys a relatively low debt service-to-budget ratio and thus is in a good position to absorb this cost in its budget.
On 10/27, a number of us Councilors took a tour of both facilities at a posted meeting. This included a visit to the roof of the Firehouse. I can say in very good conscience that the building is in bad shape and it is in the taxpayers' best interest to invest in these properties and protect these major City assets. Here is just one (cell phone) photo from the tour, to give you an idea of the bad shape they are in:
Click HERE and hit the 'ready-only' button to see a whole Slideshow of photos. There were signs everywhere of extensive water infiltration and damage, especially in the Firehouse.
It is worth noting that these repairs were prioritized at the top of the list in this years Capital Improvement Plan (2009-13). This is one of the first things that I checked. It is good to see the CIP working as it should, to identify, prioritize and schedule funding for our capital needs as a community. Maintaining and investing in public facilities is also a priority of the Master Plan.
The first one has already been approved and is rolled into a second request, which the Finance Committee voted to recommend for approval at our 10/28/08 Meeting. You might recall that in 2006 the Mayor requested about $80,000 to grind and re-point the exterior of two sides of the Police Department building on School Street. After much arm-wrestling, the previous Council approved only $60,000 for the work. Unfortunately (and as was apparent at the time), this was insufficient funds to make the necessary repairs.
The building was leaking and the City used a portion of the funds (about $12K) to apply a temporary chemical seal to the exterior of the building, putting off the real needs of the facility until a new request for funds could be made. In the meantime, the building's heating system failed. The Mayor requested that the balance of the original appropriation (about $45K) be allowed to be used to help replace the heating system. (The Mayor had to get approval to use those monies for a purpose other than re-pointing the brick exterior.) We approved this request at our October MC meeting.
The Mayor then brought a large-scale request to the MC to comprehensively address the exterior and heating/cooling needs of the Police and Fire Department buildings. This request is for a $600,000 bond to finance the grinding and re-pointing of brick exteriors, the replacement of 36 windows with energy efficient units, the replacement of HVAC units in both buildings and the repair of the roof at the Fire Station.
It is important to note that this is a bond request, meaning that we will be borrowing the money for a 15 year term, rather than paying it out of a single year's budget. This is how all major capital improvements should be handled, spreading out the cost of the work to all of the 'users' (meaning, taxpayers) of the asset, including future ones. Amesbury enjoys a relatively low debt service-to-budget ratio and thus is in a good position to absorb this cost in its budget.
On 10/27, a number of us Councilors took a tour of both facilities at a posted meeting. This included a visit to the roof of the Firehouse. I can say in very good conscience that the building is in bad shape and it is in the taxpayers' best interest to invest in these properties and protect these major City assets. Here is just one (cell phone) photo from the tour, to give you an idea of the bad shape they are in:
Click HERE and hit the 'ready-only' button to see a whole Slideshow of photos. There were signs everywhere of extensive water infiltration and damage, especially in the Firehouse.
It is worth noting that these repairs were prioritized at the top of the list in this years Capital Improvement Plan (2009-13). This is one of the first things that I checked. It is good to see the CIP working as it should, to identify, prioritize and schedule funding for our capital needs as a community. Maintaining and investing in public facilities is also a priority of the Master Plan.
2nd Quarter FY09 Budget Cuts
At the October Council meeting, Mayor Kezer proposed $125,000 in budget cuts for the current year: $100,000 from the waste removal/recycling budget and $25,000 from Insurance. The good news is that there is room to cut these amounts from each line item without any change is services to the community. The bad news is that these cuts are a taste of things to come. Local revenues are principally made up of property tax and excise tax collection. Excise tax is variable and depends on the value of property subject to excise tax. As I noted back in January 2008, all of Massachusetts is experiencing a dip in excise tax, as folks put off buying new vehicles, making the taxable base go down. Amesbury is experiencing its share of this, with a decline in excise revenues.
Worse, the Commonwealth is experiencing significant drops in tax revenue collections, due to the downturn in the economy. As economic activity slows down, incomes dip and capital gains decline, the tax revenue from these sources will go down. In mid-October Governor Patrick announced wide-ranging 2nd quarter budget cuts. For the moment, local aid to cities and towns was spared any cuts. But as the downturn continues and the Commonwealth has more revenue drops, it is a real possibly that local aid cuts will be made.
You can read the Mayor's 10/14/08 letter to the Municipal Council about this situation by clicking here.
Worse, the Commonwealth is experiencing significant drops in tax revenue collections, due to the downturn in the economy. As economic activity slows down, incomes dip and capital gains decline, the tax revenue from these sources will go down. In mid-October Governor Patrick announced wide-ranging 2nd quarter budget cuts. For the moment, local aid to cities and towns was spared any cuts. But as the downturn continues and the Commonwealth has more revenue drops, it is a real possibly that local aid cuts will be made.
You can read the Mayor's 10/14/08 letter to the Municipal Council about this situation by clicking here.
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