Saturday, July 24, 2010

Debt exclusion on November 2nd ballot

The Sandwich board of selectmen voted to put a debt exclusion on the general election ballot in November, to be preceded by a town meeting in late October.

The basics
A quick primer for those not familiar with the various overrides available for municipal financing is in order. To provide perspective in the Town of Sandwich, the average homeowner pays about $100 a year for a $1 million operating override or capital exclusion.

Debt exclusions are financed over an extended number of years, therefore, the annual effect on taxpayers is less. Specifically, the proposed debt exclusion would cost an average taxpayer (one whose property is valued at $388,000) about $50 to $55 in the first year of the bond term, coming down to $30 to $35 in the last year.

Any increase in property taxes exceeding 2½% requires the approval of town meeting and a successful vote at the ballot box. The order of the two doesn’t matter. If the override is the only article on the town meeting warrant, it makes sense to go to the polls first and to cancel the town meeting if the question fails.

Capital exclusion – A one-time, one-year assessment on property tax payers to pay for a capital project, such as re-roofing a building. From a practical standpoint, this approach is best for financing up to about $1 million worth of projects.

Debt exclusion – An override financed via a borrowing over a fixed number of years. Larger capital projects are usually handled this way, minimizing the impact in any given year on taxpayers. When the debt is paid off, the assessment on property tax bills goes away.

Operating override – An override for a fixed dollar amount that increments the property tax assessment and becomes part of the base for calculating subsequent years’ taxes. In other words, it never goes away. This is appropriate for covering new operating expenses (opening a fire station, for example) or to fund existing expenses that have grown faster than 2½% per year.

The proposal
The Town of Sandwich, just like any property manager, needs to maintain its capital assets. A committee has studied the issue of town-owned buildings maintenance and has recommended spending $5 to $6 million to make critical repairs to a number of buildings. See the details at Taking care of our buildings.

According to the committee’s study, more than $25 million is necessary to make all of the identified repairs to shore up the town’s buildings. By the way, the study did not look at the town’s largest capital asset: roads. The topic of a road bond is floating over the current discussions like a dirigible.

The problem
Voting to put a debt exclusion on the November 2nd ballot is a big step; unfortunately a misstep.

This November’s election is a referendum on the White House, Capitol Hill and Beacon Hill. It comes in the midst of nine-plus percent unemployment and the worst economic recession in most people’s memory.

That’s quite a backdrop for asking voters for more money. “Let the people decide,” it was said during the discussion at last Thursday’s board of selectmen meeting. They will do that, for sure. You betcha.

To her credit, Linell Grundman pointed out the bad timing during the deliberations before she voted against putting the debt exclusion on the ballot. She recognizes that asking for more money during a recession is likely to fall on deaf ears.

What do you think would have happened if the state legislature asked for public input before increasing sales and meals taxes by 25%? That’s why they didn’t ask.

In my opinion, the bigger problem is for the proponents of an operating override slated for next May. (For the record, I do not count myself in that group. More about that in a future post.)

If the debt exclusion passes, then the May voters will be saying that they just passed an override back in November.

If the debt exclusion fails, it sets up a very negative dynamic for getting anything passed next May. And that would leave us without funding for the building repairs that I believe is a necessary and wise investment in our town’s infrastructure.

The solution
Prior to the October town meeting, the board of selectmen should present a plan to eliminate the need for an operational override for municipal services in the spring. That would give the debt exclusion a shot of passing.

35 comments:

  1. Spending a dime on ill-suited, ill-placed buildings that outlived their usefullness three times over is foolish. The CIPC was tasked with what the buildings needs and did a thorough job. The larger problem is the CIPC presentation and its dire recomendations should have been conducted in the 1980's, not 2010. I do not believe I am alone in my opinion and yes, the timing simply can not be any worse. Kicking the can I think it is called.

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  2. Anonymous, you make an excellent point regarding the police and fire station complex, town hall annex, Clark-Hadded building, and possibly the Wing School.

    I think we should only spend the money necessary to ensure that the main fire station is safely inhabitable (currently there are questions about air quality). No more good money should go after bad when it comes to this building and the police station.

    Irrespective of whether this study should have been conducted in the 1980's, it wasn't. We are where we are, so our only choice is to deal with the future.

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  3. I assume, and you know what that means, that if a debt exclusion passed for 5 Million over 20 years that it would mean about $20 a year for the average tax bill?

    These numbers are scaring me. I have a job as does my husband, but his is precarious at best. If he loses it, we will need every penny we have to feed, cloth and house our family. You are right that they should come up with a budget not calling for an override, but what will that do to the general government side of the equation. Schools will lose anyway and they should be setting up a no override budget.

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  4. Good Morning MR.Hunt In regards to any debt exclusion placed on the ballot. Every item that requires repair money needs to be broken out as a individual need and appropriate cost.
    They should itemize every need and place the cost of repair next to it. They should not bundle every need into one debt exclusion.

    Every one speaks about letting the taxpayers decide if they want to spent the money, well let us decide where we want the money to go for. Many of the building expenses should be decided by the people, after all it is our money.

    What say yee keeper of the BLOG?

    Carl Johansen
    A concerned citizen of Sandwich

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  5. Randy, your analysis is right on the money, no pun intended.

    This is such an ill conceived idea to place this Debt Exclusion on the November ballot. To those who have criticised low turn outs of voters, you will not need to concern yourselves about this. The November voters, regardless of political affiliation, are coming out to show their opposition to more tax increases and government being out of control. This "Debt Exclusion" ballot question is doomed from the start.

    The BOS needs to rethink it's strategy. I agree with Mr. Johansen on unbundling the $5 - 6 million request. It may allow for one, or a couple of items to pass, but It's still going to be difficult and it fits with the clarion call of one of the Selectmen and chairman of the CIPC "let the people decide" and they will. Another strategy to consider is using the Capital Exclusion approach mentioned above, where it's one item each year. Even this strategy will have problems passing, even into the future, but in my opinion is a much better option than what is being championed.

    To those who would argue "if not now, then when?", may never.

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  6. I agree with Carl. I also don't like the fact that it is possible that not all of the projects will be completed. Bud said that if the debt exclusion passes, they will go out to bid on projects and if bids are higher than the estimates, then some projects with a lower priority may not get completed. I like the idea of the taxpayers deciding which projects they want to fund and making sure that the money goes to those specific repairs. Maybe some additional work should be done to make sure that these individual estimates are sufficient to complete the projects.

    I also do not understand why the elevator at the golf course is on the list. Isn't there an enterprise fund at the golf course that should be covering this cost?

    In addition, the Oak Ridge and Forestdale roof repairs may be partially reimbursed. It would be nice to see those repairs in a separate article with information about the net cost of these projects.

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  7. All I know, and little else, is that I am tired of paying more and more taxes and getting less and less services.

    Obama and Company will increase my taxes from 10% category to 15%, a 50% increase. Duval and Company have raised my sales tax by 33% yet less and less comes back to Sandwich to help my local tax assessment.

    Do we need all these builiding? Do we need a dump? Do we need all the teachers we have? Do we need all the SUVs that the police have? Do we need all the trucks the fire department has? Do we need all the pond beaches we have? Why does one cop run IT? Can we outsource the food service in school? Can we outsource janitorial and maintenance service? Can we outsource inspectional services? Can we establish a secretaril pool? Can we lease copiers with other towns to save big big money? Can we find leaders who help the income side of the equation by getting companies and senior home develpment in Sandwich? Can we get rid of the Jeep Liberty SUVs that are bouncing around town at 16 miles to the gallon? Can we buy gasoline for our vehicles at market rates rather than the futures market? Can we set up a best practice program in town government? Can we stop the dump employees from not working a 8 hour day with a lunch hour as called for by FEDERAL LAW? Can we fine unlicensed dogs $1,000? Can we have police enforce firworks law rather than just confiscate?
    Can we take all the beachfront property on East Sandwich Beach by eminant domain and then sell it to joint venture of Wompanogs and Donald Trump? Can we decrease the number of steps for town employees? Can we charge a fee to park cars at the high school? Can the people of Sandwich have a list of all vehicles owned by the town by department? Can we have a list of all town employees justify their job? Do we know how many hours a month are spent by town managers at working lunches? Do we know how much out of town training and travel their is, and, if so, why and when? Do we need Christmas Lights paid for by taxpayers? Do we need bottled water for employees? Do we need to pay for uniforms and cleaning for employees? Do we have automatic set back in all buildings?

    When these questions are answered I will vote for a debt exclusion. If not, I will not vote for an exclusion. Wake up Sandwich, Wake up.

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  8. I like the idea of seizing the beach areas. Then, we could could form cooperatives and manage them for the good of the State.

    That worked out pretty well for Stalin!

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  9. One area in town that is a true waste of funds is the transfer station. How many people get to sit under an umbrella all day? Why do we need someone sitting at the "guard shack"? There is an office right at the dumpster/stop sign. A person could be there to turn people away etc. and keep an eye on the traffic at the dumpster. If someone needs to get at the shed next to the "guard shack", novel idea, an employee could walk over to it and meet the customer. We don't need so many employees sitting around.

    Next money pit, the DPW. Why do they keep renting equipment when they have the same or similar equipment in the barn? Rumor has it that one employee doesn't want anyone else but himself operating the newer equipment. (Bulldozer etc.) How about a list of all the equipment that the DPW has and what is actually used, and sell what isn't used. Have a study done on the cost of equipment rented by the town?Why does the DPW have 2 pick-up trucks? Why aren't they fitted with snowplows/sanders? Why aren't town employees driving those trucks and plowing/sanding our roads during a snowstorm? Supervisors are paid a salary! That means you often have to work over 40 hours. They could be driving those trucks with their radios and still manage the roads being plowed/sanded during storms. What happened to the huge pile of ashpalt taken from when Snake Pond Rd. etc. were repaved last year? The pile was by the Pop Warner Field by the former kids center. My understanding is that a truck load of that stuff can be sold for upwards of $200. Where is the money from that if the pile is no longer there? All the fees the DPW collects what happens with those funds? The fire department ambulance fund what are those funds used for?

    Next, how many clerks does it take to handle the work and wait on the public at the annex, building dept., town hall etc.? How about a study on foot traffic into all of the town offices? Do we really need 3-4 people in each office? Could easily hire part-timers and/or "floating personnel" to cover vacations, sick etc. Less money spent on health insurance etc. Cross training in the different offices would be very beneficial.

    Sorry to go on and on. Just some thougts. I'll vote for a new police/fire station, but not to put good money after bad for those building. Clark Haddad needs to sold! Already being vandalized. Maybe needs to be put on town meeting warrant again, when there is an override vote. More people would be there to say yes sell it!

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  10. No yes no no no yes because yes yes yes yes yes no yes yes no no no yes no no no no no yes yes yes no. I hope this clears things up

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  11. I just cannot believe the problem of deteriorating buildings has appeared out of nowhere. What is it with those who have designed this town's budgets for the past 10-15 years? Why have routine capital maintenance expenses been so underfunded or unfunded for so long? In my experience, an honest budget provides for maintenance and repairs and puts something aside for the bigger items sure to come in the future. The future is now and it's made worse because by we never did the routine work in the first place. And, we have no reserves. Our leaders have delivered us to a crises and want us to continue to enable poor management by raising taxes. What's next? Did someone say the 2011 town budget also needs an override?

    In the midst of the worst economic conditions of my 45 years working, our leaders want two overrides. This is arrogant. What is it about government, federal, state and now local, that makes politicians think we taxpayers do not want our leaders to practice the same kinds of spending restraints and cost cutting we do when times are tuff? I'm disappointed, no, I'm angry that we have been led to this crises. I'm angry that no one explains and takes responsibility for the mess. I'm angry that nowhere in the discussion do I hear any leader pledging to work to assure this crises does not recur.

    I also agree with the writers who want to see the projects slated for repair and the projected costs for each set out separately. For example, is it true that a few hundred thousand dollars are being included to install an elevator and other goodies at the golf course? How is this proposed taxpayer funded item reconciled with the concept of the enterprise account set up for the golf course? Does anyone remember any longer how this money pit was supposed to cover the elevator costs? Why not just shut down the upper floor of the clubhouse until revenues cover the expense?

    With some real cost cutting (not just slowing the rate of expense growth), I might be persuaded otherwise. For now, tho, I cannot enable "business as usual" in the financial management of this town any longer. I vote and I will vote NO to both overrides.

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  12. Dr. Grundman and Mr. Pierce like to have get togethers with the citizens. How about doing one where citizens could ask questions about what is happening with all the things mentioned in this blog from cruisers to dump workers to dpw etc etc. Maybe its time for the people to ask the questions that the selectmen or the schools will not ask.

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  13. Just say NO! Take a look around town folks. Why are all of those for sale signs popping up. It isn't because values are dropping....its because people can't afford to stay in this town that just can't say NO. Perhaps bankruptcy which is very akin to the foreclosures people are facing these days....perhaps the town needs to just say NO!

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  14. The signs are popping up because people are dying, getting divorced, and not moving because of fear of starting a new job in a new place. They are also moving because they are making less money and can't afford the house. I don't think that taxes in Sandwich play as much a part as taxes in the state. I am against any overide unless all the players are not current or past members of the BOS or SC. I assure you that Simmons is gearing up with his charts of who voted and who didn't and will give the no overide folks a run for their money.

    Notwithstanding what I said above, if any overide passes then I'm gone. Trish, you lookin' for a house? I have sumtin'.

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  15. To Spike, Where have you been the past 10 years? Mars? This isn't something that just popped up.
    Remember the override for the Fiscal Year 2006 which was to last for 3 years, it lasted 6 years according to Town Manager Dunham. Get with it by staying in tune, not tuned out.

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  16. Simmons is gearing up his charts .... but he's not supporting any overrides this year. (But, thanks for your vote of confidence!)

    Given the current economic climate, the lack of cooperation from the Town's biggest union, and the lack of interest from the vast majority of voters --I think efforts would be better spent finding the least disruptive way to drastically reduce services.

    I wouldn't mind being wrong -- but the charts say it ain't gonna happen.

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  17. To anonymous: You just reinforced Spike's case. The reason Dunham knew the 06 override would only last a few years is because he knew he was going to continue spending faster than the increased income. It was all predictible and that's the point. If a budget problem is predicted for the future, you take serious corrective action...early and often. Duh.

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  18. To Annonymous, July 27, 2010, 5:21.
    You obviously need to attend the same remedial class on Municipal Finance as Spike.
    Mr. Dunham has forecasted a Structural Deficit for the past 7 years, i.e., our expenses exceed revenues by approximately $1.2 million dollars on average. This year, FY 2012, that number is $2.2 million. As smart as I think Mr. Dunham is in managing Town Finances, it is ludicrous to say "he knew he was going to spend faster than the increased income." Why? Two reasons; the fact that the FY 2006 lasted twice as long as originally forecast and the Town is constrained by Mass. General law for spending more than the Town has. You cannot deficit spend at the Municipal level like our Federal government does every day. Duh, Duh.

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  19. Just say NO! That will be my moniker until we defeat any prop 2 1/2 override or debt exclusion. Both of these TAXES, at this time, fulfill the wants of the few but will truly hurt the many. Robinhood would love this town. The stage is set for another fight....let the people vote they say....in actuality they are hoping for the customary low voter turnout with special interests leading the way to the booths. However, from the new selectmans chair I have been told I need to get off of my 'fat couch' and volunteer? It isn't a 5.5 million dollar request....put them out there together...its over 7 million they want regardless of how its paid for. We cannot afford this now...maybe later...and I agree with Mr Hunt....they picked the wrong election to test voter apathy! Just say no!

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  20. As the old saying goes, one can not pay for what one can not afford. Unless and untill the School Union makes it clear as to what type of reduction they plan to make in the payroll department to help them reduce the structual deficit they have created. This issue alone will trancend all other topics of discussion in further financial help no matter who or what it may be for.

    The town should place before the taxpayers a wish list of what is needed , along with a precise cost expected to complete the project. Let the taxpayers make the decisions as to what they feel is appropriate for these economic times. Be brave Sandwich Board of Selectman let every one really see if you mean what you have been saying in regards to having the taxpayers determining the final bill

    Carl Johansen
    A concerned citizen of Sandwich

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  21. I think part of the problem we face in town is the belief that we can't cut anymore. Any town manager worth his salt, and I believe Bud Dunham is worth a ton of salt, knows that if he has to cut personnel positions that it is almost an impossible task to ever get that funding back. If I were one of Bud's employees I would be washing his car because of the way he fights to keep their jobs. What concerns me is when the pocketbook says you just can't afford to man another firehouse or that a union does not chip in as others have, then its time to Just Say NO. Whenever I hear that the average town of 18,000 has an average of X number of police or fire I cringe. Tell that to the towns in western Mass or the southern states. They learned long ago that you can only pay for what you can afford. This town is expensive. The tax base to carry the load was long ago denied the growth that Mashpee happily accepted. The ability of the Town Manager to fix this broken wheel is limited. He has two choices...tax us to death or cut services. I think the taxes have reached their limit. However, sitting here on my 'fat couch' perhaps there will be money left to build that new public safety building with a miniscule $65 a year debt exclusion. It all adds up.

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  22. Mr. Dunham will cut whatever his bosses, the Board of Selectmen, tell him to cut, he is a good soldier and doesn't have much of a choice. If and when this were to happen, which I doubt, we as citizens need to have leard that we can't cry about not having the services we previously had,or additional, or what another town has. Unforunately, we want it both ways; plenty of services, but not enough to pay for them, or a willingness to have taxes raised. I vote for fewer services, including fewer teachers. Let class sizes rise to 28-30, so what. The kids will learn regardless.

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  23. DNR is one example that could and should be paying for itself. The Town needs to be taxing those with special uses on it's natural resources accordingly. That's a no brainer. Many communities have increased taxes for those that utilize facilities that require DNR permitting and oversight. In Sandwich the DNR claims they are drastically understaffed, thus the current unraveling of the Towns resource qualities. This particular problem does not have a complex solution. It is sensible to ask those that have the most effect on the public's resources to pay more for doing that which is necessary to protect them. It seems no one at the Town level is at the wheel for this purpose. It is inexusable to allow the Town of Sandwich resources to be run down and damaged to the extent they are when such a simple solution is ripe for the picking.

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  24. Make a donation to the police department where does it go? Into the general fund. Make a donation to the fire department and where does it go? General fund. The FD generates well over one million dollars a year that goes into the account many salivate over, the ambulance account. That money goes where? General fund. Who gets/takes %70 (approx) of the general fund? Yes folks.....t h e s c h o o l s. So DNR can write tickets all they want, the police can wtite tickets all they want and the FD can even charge what is the maximunm and only get 1/3 of the money back in operating budget funds. Another Vuvuzela type drone in the background is raising room and meal tax to pay for X, Y or Z. That would be great if the money raised would stay where it was intended.....but it doesn't. If one can figure out how to direct tax revenue to an intended target and it actually stay there, you are a majician. Revenues generated by the municipal side get plundered year after year. Randy can expand on Enterprise accounts.

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  25. Oh, by the way, here is another little nugget for 'ya to chew on. Let us say this thing does pass. If the town does not spend the money in the first 365 days it will then go back into that famous general and be used for whatever they want. Don't believe it? It has already happened. Feet dragging has become an artform.

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  26. Since the previous poster followed my rules regarding language and no defamation, I posted his/her comment; however, the assertion is not true.

    Money raised through a debt exclusion must be applied to the project stated in the article on the town meeting warrant. A subsequent town meeting can vote to change how the funds are to be applied--and we've done that before when there were leftover funds from a completed project--but I've never seen such funds be moved to the general fund. And certainly not by any default mechanism.

    So, Anonymous, you'll have to provide details regarding how this has already happened.

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  27. I am told that one of the selectmen is a rocket scientist. Why can't he tell all the others on the board that the problem is not only a spending one, but also a revenue problem. When the Commonwealth fails to balance a budget, they increase their revenues. Should we not increase ours? The guy who wrote about taking North Shore Blvd. Maybe that might work. Change the zoning that would allow for hotels on the water. Trump will then secretly buy up the cottages and guess what, then build something that will generate money. Other projects might be to lure a very large company to move in with call sites. Lease land on the base for 100 years and build a real industrial park. Maybe someone else has an idea, if not, we are cooked. As for Mr. Johansen's idea about menu, maybe that would be good, let's give it a try. One question though, what happens if the taxpayers say no to a new roof?

    Gary Towne

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  28. perhaps i can clear his statements randy. I believe annonymous was referring to any possible override that is passed. The money that could be approved on a split override and possibly say... approved for the municipal side would go to those departments for 1 year. The next year however those OVERRIDE funds, not debt exclusion funds would go back to the General fund. So the money would again be split 70% after only one year of its intended purpose.

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  29. Gary, if the best solution our 'rocket scientist' has is to chastise voters for sitting on their 'fat sofas' then we are in deep trouble at the speed of sound. The very sharp pencil that most rocket scientists carry is not issued with common sense. When your seat is barely warm and you turn on the voters, it doesn't take a rocket scientest to see the value of his ideas. Perhaps he volunteered for the wrong job! Just saying no is gaining steam as people learn of what is being laid out for them in terms of an override.

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  30. If my memory is correct the Town already borrowed moneys to install an ADA compliant elevator and make other necessary repairs at Sandwich Hollows. So, it’s very interesting to see that the elevator is listed (again) as a project requiring financing by the town’s taxpayers.
    I think it’s fair to ask: just how many times will taxpayers have to borrow money to make these much needed repairs? And, just what other projects on this list have been funded at least once already by us taxpayers?
    More importantly, all of these repairs are needed because upkeep and general maintenance have been neglected and underfunded for years.
    Has anyone seen a plan to fund maintenance of these facilities once repaired? I haven’t. Or, is the plan to resume neglecting the buildings (once repaired) for the next 20 years?

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  31. TaxMan, town meeting approved an appropriation for $250,000 on May 5, 2008 "for the purpose of completing extraordinary repairs to the Sandwich Hollows Golf Club clubhouse to meet accessibility requirements and purposes, and for the purpose of completing a business and management plan for SHGC operations."

    We spent about $25,000, as I recall, for the business plan. That leaves $225,000 for the handicap lift which, after receiving a number of quotes, will be short by $150,000 or so.

    The remaining funds are earmarked for that purpose, so either the town needs to find a less expensive solution or needs to petition town meeting for yet more money.

    I favor finding a cheaper, but adequate, solution.

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  32. Actually Randy, when the course was purchased taxpayers approved a capital improvements borrowing along with the land debt. That financing was about $1.5 million. So, by our count, the elevator project has been financed at least twice to date. Maybe the third time will be the charm?

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  33. You're right, TaxMan. That money was spent before I cut my teeth on the FinCom, but I have to say that it's one helluva driving range, though.

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  34. The appropriation at the 2008 town meeting was from the Golf Course Enterprise Fund. If they need another $150,000, why are they asking for $250,000 and not 150,000 in the new debt exclusion for this purpose? Also, what is the current balance of the Golf Course Enterprise Fund and why aren't they putting an article on the warrant to move money from this fund for this purpose???

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  35. To latest Anonymous: I could be wrong, but I don't remember the quotes being more than $400,000 for the handicap lift. So your question seems like a good one for the selectmen.

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