Voters could face a Prop 2-1/2 override next year, selectmen call financial projections ‘troubling’

by susan on January 30, 2013

Expenses are going up and revenue is going down. That was the conclusion of a 5-year financial analysis recently completed by Town Accountant Brian Ballantine. It’s a scenario that could have voters facing a Proposition 2-1/2 override vote as soon as next year.

Ballantine told selectmen last week he analyzed financial data for the next five years using numbers he called “conservative.” According to his projections, next year alone Southborough will likely see a 5.5% reduction in the total revenue coming in to the town. At the same time there is expected to be a 2.1% increase in expenses to maintain the town’s current level of service.

If nothing changes, the trend of declining revenue and increasing expenses will continue over the next five years, Ballantine’s report shows.

“(It’s) not a business model built for success,” Chairman John Rooney said. “It’s time the town seriously considers how it does things.”

Ballantine said the town will not be able to tap into sources of one-time money like the stabilization and overlay funds as it has in the past. There is no “magic bean,” Town Administrator Mark Purple agreed.

Rooney said the town needs to be open to “any and all” discussion about how to resolve the financial situation. “Everything needs to be on the table.”

One solution Rooney and his fellow selectmen say they have little appetite for is increasing the residential tax rate to close what is projected to be a $600K budget gap in fiscal year 2015.

“If we do nothing except stay as we are right now, we’re looking at a 4 percent tax increase this year and a Proposition 2-1/2 override next year,” he said.

Rooney noted that in the past decade, the average residential tax bill has increased by more than $3,500 (from $5,020 in 2002 to $8,573 in 2013) without a significant increase in the level of town services. Ballantine’s projections suggest over the next five years, the average tax bill could rise to nearly $11K.

While Purple said financial projections looking that far out are by their nature “fuzzy,” he agreed something needs to be done.

At their meeting last week, selectmen said increasing the commercial tax base in town would be an effective way of bringing in more revenue to the town, and they voted unanimously to create a new economic development committee with the goal of doing just that. I’ll share more details on the committee – and how you can get involved – in an upcoming post.

What do you think of the admittedly grim financial picture facing the town? Are you willing to pay higher taxes to maintain town services? What do you think is key to turning the revenue versus expenses equation around? Share your thoughts in the comments below.

1 Tim Martel January 30, 2013 at 12:27 PM

I think the town is going to have a hard time accepting that taxes have increased $3500 without anything to show for it in terms of service improvement/growth.

There is an expense problem in that equation, and growing the revenue will only feed it.

2 Al Hamilton January 30, 2013 at 12:39 PM

Here is a list. I have said some of these things before and some are new

1. Consolidate to 3 schools next years. Turn over one school to Municiple use. Sell the other rotting buildings we own (Fayville, South Union, Cordaville, The RE market is improving so do it now)

2. Consolidate Counter Service at Town Hall – We could expand hours and reduce costs if we can breakdown the entrenched silos that currently exist.

3. Consolidate the Cemetery Department with the DPW.

4. Close the Transfer Station – This is a service that the private sector offers on a competitive basis. There really is no compelling case for state action.

5. Require that public hearings on all new labor contracts be held. This should include a full cost analysis. Far too many deceptive claims have been about the real costs embedded in these agreements.

6. Renegotiate the “steps and lanes” that are buried in the teacher contracts. Average salaries for teachers have been rising at 7% per year for the last 7-8 years. Teachers at Algonquin are now paid about $16k more than the state average. We have to say no at some point.

7. Make it illegal for elected officials to commit to publically support a contract as part of a secret negotiation.

8. Move as many town services to the web as possible as soon as possible.

9. Review every position and ask “Does this role exist in a $10 million business? Did that role disappear 10 or 20 years ago? If so why are we still doing it?”

10. Charge the Region and Northborough a fair price for the use of the superintendent’s office not the discount rate currently in place.

I moved to town about 17 years ago. During that period the taxes on my home and most others in town have nearly tripled. Inflation has been very very modest. There is no reason to support further tax increases or an override until we begin to overhaul our government. It will not be fun but it is necessary and it is only fair.

3 Just Sayin January 30, 2013 at 1:46 PM

I think it’s obvious that some steps need to be taken to control cost growth and the town should also explore potential revenue growth in an effort to limit tax hikes to residents. But the growth of the property taxes, when taken in the proper context, has been roughly 5% per annum since 2002. Granted, that is more than twice the rate of inflation for that timeframe. But has anyone looked at the annual growth of taxes in comparable communities in the area? Before we start to claim that Southborough’s tax hikes are too high or that our local government is doing a poor job, shouldn’t we do a little homework? Are we underperforming / outperforming our neighbors? I’d love to hear if anyone has taken a look to date.

4 Rob January 30, 2013 at 2:05 PM

There is no business in our town! I would say that 90% of the traffic just drives right thorough Rt 9, and has no reason to stop at our stores. The buildings on RT 9 are old and neglected. Instead of looking to build appartment complexes all around 495 Rt. 9 junction, how about some business, or private schools of any age group?? We need to bring people here to buy things not just pass through. This way too small a town to be run off of Residential taxes. Look at Framingham and Westborough’s business on 9!! No brainer??

5 Matthew Brownell January 31, 2013 at 12:51 PM

I am pretty sure that most Southborough residents do not want in any way, shape, or form, their community to resemble the Framingham or Westborough Rt. 9 commercial corridor. Southborough residents view the town as an oasis from the eyesore and mayhem they witness in other communities where town governments embrace this foolish game of commercial rate – chasing .

This is not a revenue problem . It is imminently a cost-control, spending and management issue that must be addressed by both town management and SBRO
residents.

As Brian Ballantine references above – the Southborough town stabilization fund was raided a couple of years ago to pay for increasing town operating costs ( a classic case of kicking-the-can down the road), and Southborough no longer has the luxury or safety of a savings reserve.

It’s time for adults to come to the table, and hard-nosed managers to make the difficult choices. For the past decade, the private sector has done just that – with several large and notable local companies enforcing a 5% – 10% wage **DECREASE** for all employees.

6 Al Hamilton January 30, 2013 at 2:51 PM

“Granted, that is more than twice the rate of inflation for that timeframe.” I think that says it all, It is also far faster than private sector wages have been rising.

Comparing our selves to other towns is pointless. It is like one drowning man comparing himself to another. The painful fact is that the business model is broken. We cannot continue see our unit labor costs rise at a 7% rate. We are in the position where we are paying more and more for less service.

We have to start be making some structural reforms in our govt. We cannot simply continue to operate the steam engine the same way we have for the last 30 years.

I want to give the children of our community a good education, I also do now want to drive seniors out of their homes and I want to attract business to our community while funding police and fire services. Right now we are on track to fail at all of these desirable outcomes.

7 curious January 30, 2013 at 3:26 PM

You want to drive seniors out of their homes? I hope this is just a typo.

Speaking of Seniors: How much annually does the Senior Center cost to run? They have a great building and more programs than are available to any of us youngins. I am not saying to get rid of it, but I am curious what the budget is for that and how much that building costs us.

I do think we need to fund police and fire above all else. We need to be safe. The break-ins and all the crime that has been happening here hits home to many. It is important to be sure we have the services we need.

Is there any estimate of what the revenue to the town will be if/when Ken’s Foods moves in on Route 9? Does that help us?

The point of the matter is that we don’t get more services and we keep paying more and more. I think that is the frustration level for many in town. How many times have we asked that the transfer station be open more. It does not take a rocket scientist to see the town is overspending in way too many areas and then not in the ways we want them to. The town hall is overstaffed, the DPW is overstaffed, the schools – I won’t touch that. We need to make the hard decisions that nobody really wants to. Perhaps we need to do a little housecleaning at the town hall. Perhaps we do need to go to 3 schools.

I have heard that there is a proposal by the employees to eliminate the union at the town hall. Would that help us at all?

These are all hard decisions but if we don’t make them, we have to ask ourselves – then what?

8 Al Hamilton January 30, 2013 at 6:22 PM

Sorry, my fingers were faster than my brain. I do NOT want to drive seniors out. I am sneaking up on joining the club.

You are hitting the nail on the head. I don’t think Ken’s is going to make a dent. The facility is already taxed so there might be some gain from whatever the depreciated value of the equipment they bring in is.

This is not a problem that new business is going to solve. If we go to a split tax rate you will see some businesses leave and others reluctant to come. I oppose a split tax rate. The spending is driven by the residents of our community. We need to reach into our own pockets to see what we are willing to fund not try to reach into someone else s pocket

9 teacher, resident January 30, 2013 at 6:12 PM

I agree with Mr.Hamilton–he raises the hard issues that everyone wants to defend. I work for a private school where teachers have not had raises in a decade. Private sector businesses have had pay cuts and benefit cuts. No where, but in the public school teachers unions are employees getting 7% raises, fully funded health care, and retirement. I am just amazed when I enter Algonquin’s parking lot before 3 pm–most faculty are gone. Why are well paid teachers home by 300? This is the area of most expense. Let’s not protect it any longer–let’s be fair to the tax payers….We are spent and cannot do more.

10 resident January 30, 2013 at 11:44 PM

You are wrong. our teachers and staff do not have fully funded health care. Check your facts. Also, not all teachers are out of algonquin by 3: some stay and work for extra pay doing detention monitoring and running clubs paid for by an all student activity fee. whether or not your kid participates you fund these things for other peoples kids. how is that? Another way the schools stick it to you. When will it end?

11 Frank Crowell January 31, 2013 at 9:09 AM

“When will it end?”

Well, let’s see, how about when teachers raises do not go up by 7% a year when the private sector is not close.

Or maybe when their pensions are converted to 401K’s like the private sector.

Or maybe when I go to an IEP meeting and do not hear the words “it’s not in the contract” – particularly after a big fat contract has been passed under dubious conditions.

After all it is really all about the children.

12 Carrie January 30, 2013 at 8:38 PM

teacher, resident
how have the teachers at the private school not had raises in a decade? the schools we have looked at range in tuition from $30-$39 per student. What are they doing with all the tuition money?
just curious.

13 Carrie January 31, 2013 at 8:13 AM

resident,
that is such a narrow mindset. the schools don’t “stick it to you” they educate our children and when they are finished educating mine they will educate the next generation.
and when teachers run book clubs during their lunch breaks that are “not paid” what is that? or when my daughter goes and visits her past teachers after school and the teacher stays to reconnect and catch up —->what is that?

14 Al Hamilton January 31, 2013 at 9:56 AM

Carrie

I agree with you that we should not be disrespecting teachers. Done well teaching is hard work that is vitally important.

However, I think the current system we use to educate our children needs a lot of work. All of us can remember teachers that made a difference in our lives and I regret that most of us can remember teachers that were just marking time until they retired. The current system has no way to meaningfully reward the former and move the latter out of teaching.

The benefits package that is available to teachers will ultimately bankrupt us unless we make some serious changes. Our unfunded pension liabilities are very very large and our unfunded health care liabilities are similar. We just have our heads in the sand on this one. If I were a member of the teacher union I would care more about this than steps and lanes.

I for one think the Selectmen should be encouraging a charter schools to open in or near Southborough. Competition has a way of improving all the players game and could put some cost control pressure on our School Committees.

15 resident January 31, 2013 at 11:11 AM

If my kid does a club I would be more than happy to pay for it. If my kid gets detention I would be more than happy to pay for it. Paying for somebody else’s kid to do a club is not in my budget, maybe it is in yours. If they want to do a club, pay for it. If they get detention, they shoudl be paying for the monitor not me. I pay for my kid to do activities outside of school. I don’t want to pay for somebody else’s kid with an all school activity fee. The schools can educate my child without all the additional clubs. You want it, you pay for it.

And, you are wrong. Not paid for it. They are paid for it. They are paid for a certain number of hours a day and I might add, they are paid well.

If we can’t afford clubs and the such and nobody wants to pay for them, then do away with them. Let us not forget, we are trying to cut back here not kill the taxpayers will more fines for things that should be included in our taxes.

Northborough wins awards for their budget – where is Southborough going wrong? Perhaps a personnel change is in order.

16 Rob January 31, 2013 at 11:43 AM

Let’s not bash our teachers and schools. We have some of the best schools in the nation. In the world for that matter! We just tested off the charts very recently. You get what you pay for, and this alone drives people to want to live in Southborough! We need to look to cut other areas, and bring in new revenue sources.

17 Let's get real !!! January 31, 2013 at 6:00 PM

Rob, you say “we have some of the best schools in the nation. In the world for that matter!” do you mean “we” as in Southborough? If you do mean Southborough, I’d like to see what study figured that out. Even if you mean Mass. you are still reaching.

Try and look at it a bit differently. When you say we “tested off the charts” that is all fine and dandy but what are you testing? and are you teaching to the test? I think over the past 5-10 years our kids have been learning just that….how to take tests. I think Mass. children’s education these days caters to the standardized tests…their school day is merely a vehicle to get to that test so the school system can pat themselves on the back and say “we did a fine job; why, sure move here! Look at our scores!”

When you have kids in high school where over 50% are in honors classes; something just isn’t right. When you have kids, that when they get to college, figure out they don’t know how to study, something isn’t right. The bar has been lowered for our kids and it shows….locally, nationally and globally.

“The United States may be a superpower but in education we lag behind. In a recent comparison of academic performance in 57 countries, students in Finland came out on top overall. Finnish 15-year-olds did the best in science and came in second in math. Other top-performing countries were: Hong Kong, Canada, Taiwan, Estonia, Japan and Korea.
Students in the United States performed near the middle of the pack. On average 16 other industrialized countries scored above the United States in science, and 23 scored above us in math. The reading scores for the United States had to be tossed due to a printing error.
(http://www.greatschools.org/students/academic-skills/1075-u-s-students-compare.gs)

“Although the average scores among American students were not significantly lower than the top performers, several nations far outstripped the United States in the proportion of students who scored at the highest levels on the math and science tests.

In the United States, only 7 percent of students reached the advanced level in eighth-grade math, while 48 percent of eighth graders in Singapore and 47 percent of eighth graders in South Korea reached the advanced level. As those with superior math and science skills increasingly thrive in a global economy, the lag among American students could be a cause for concern. ”
(http://www.nytimes.com/2012/12/11/education/us-students-still-lag-globally-in-math-and-science-tests-show.html?_r=0)

do a google search; there are dozens of statistics and articles admitting we are lagging in multiple areas.

If this were the private sector, you’d see heads roll for this kind of performance.

18 Rob February 1, 2013 at 7:46 AM

Yes, I mean Southborough. Sorry if you can’t see that our schools are at the very top of the range in all catagories. Have you lived in any other Mass towns? We are doing a very good job. I understand the U.S. is falling behind, with respect to some other countries, but lets focus on us…. not people on the other side of the globe.

19 Frank Crowell February 1, 2013 at 10:26 AM

It seems to me that you brought up the world and “Let’s Get Real” presented facts that shows our educational establishment, local, state and federal is digging two holes for us not just one (educational and fiscal).

20 Let's get real !!! February 1, 2013 at 4:36 PM

Yes, I have lived in other parts of Massachusetts and lived there while my children were in the school systems. Yes, I agree that we have a good school system in comparison to other towns and inner city schools; however, you cannot ignore the fact that “the US is falling behind” and just say “let’s focus on us”. What happens on an academic level locally, nationally and globally all impacts “us”. You cannot ignore the academic progress in other countries because it directly impacts us. We cannot live in a bubble. It impacts the college opportunities and the job opportunities our childen will have.

Think of it like this: If all Mass. schools were given a “D” for performance and we got a “C” , I would hope you wouldn’t pat yourself on the back and say “hey, we outperformed the other schools in Mass!….. we must be doing great!”.

I want to clarify that I am not “teacher bashing” but more “system bashing”.
I am disappointed with the curriculum and educators that have allowed this dumbing down of our educational system to appease the test taking crowd. Teachers hands are tied when they have to follow certain curriculums which in turn follow state mandates. It is a false sense of academic achievement. I am disappointed with the huge disconnect between the teachers unions and the mission of teachers and why people even become teachers. I am one myself.

I am dumbfounded by how many kids slip through the cracks even with all of todays academic diagnostic tests and red flags and yes, even being in this town. Teachers are overwhelmed keeping up with mandates and the latest “program” being shoved down their thoats in reading (for example) to really throw those drowning kids a lifeline.
I see it first hand. I see kids who just aren’t “getting it” and they are pretty much left to fend for themselves.

They are being left behind for several reasons; too many kids in the class, too many disruptive and misbehaved kids (sometimes they are disruptive and misbehaved BECAUSE they are falling through the cracks) , too many overwhelmed teachers, and yes, sometimes teachers who just aren’t qualified.

It truly takes great talent to even be a good teacher. I don’t care what anyone says or regardless of what people think are great working hours, it is a challenging job to say the least. I have tremendous respect for the ones who really love what they do and really want to be there for the right reasons.

I think I am going off topic………*sigh*. The bottom line is, there is always room for improvement; even in our “high performing” town. Even here, if you are brave enough to look beyond Southborough, it is becoming more and more apparent that we are not up to par. We could do so much better and shouldn’t settle even for par.

21 Carl Guyer January 31, 2013 at 3:33 PM

Data from the Massachusetts Department of Revenue provides the following information comparing Southborough to the other 350 cities and towns in Massachusetts.

1) The percentage of assessed property in Southborough designated as industrial and commercial assets in 2012 was 19.4%. This ranked Southborough as the 86th highest out the 352 municipalities in the state and within the top 25% of the state municipalities for industrial and commercial development.

2) The average assessed value for homes in Southborough in 2012 was $516,361 and the tax rate was $16.15.

3) There were only six (6) municipalities in the state with average home assessments over $500,000 and a percentage of industrial and commercial assets greater than 15.0%, Southborough was one of them.

4) Of these six, three (3) had a percentage of industrial and commercial property greater than Southborough’s : Andover, Bedford and Boxborough.

5) Boxborough’s average assessed home value was $ 508,135 and the tax rate was $17.87. Neither of which are a desirable outcome for Southborough.

6) Both Andover and Bedford have higher property values and lower residential tax rates when compared to Southborough. For Andover they were $550,219 and $14.15, respectively and for Bedford they were $518,274 and $15.21 respectively. Both towns were able to reduce residential property tax rates by charging higher industrial and commercial tax rates, $23.45 and $ 33.21 respectively.

7) There are no municipalities in the state with property values above $500,000 and a percentage of industrial and commercial development above 25 %.

This data and much more can be found at http://www.mass.gov/dor/local-officials/municipal-data-and-financial-management/data-bank-reports/.

Any individual or group wishing to learn more about this information and similar data can contact me at carl.guyer@gmail.com

22 John Rooney January 31, 2013 at 6:12 PM

The factors that led to the budget challenges in town are systemic, difficult to resolve, and not unique to this town. The fact is that present spending levels and personnel benefits packages carved during time of surplus do not reflect today’s hard economic times. It is time to recognize the old adage: “when in a hole, at some point stop digging.” Southborough must decide how to resolve a serious revenue shortfall projected for fiscal year 2014 and several years beyond then. The funding of operational budgets with one-time, non-recurring revenue is no longer a possibility. The facts are known: fiscal year 2015 revenues are conservatively projected to be 5% less while expenses are projected to increase by 2%.

There are a variety of approaches available, and the town may have no choice but to employ several of them. Among the possibilities are to reduce spending, find money-saving efficiencies in town operations, increase various local fees and other charges, seek more money from others (tax exempt institutions in town), or increase the property tax levy by means of an override. The last option should not really be an option at all.

What we cannot do as a town is hasten the exodus of seniors from town or discourage young people from even getting started here. Hard decisions need to be made, the status quo questioned, and change implemented. Elected leaders have the responsibility to propose and discuss these difficult decisions without regard to popularity. If unpopular decisions fail to enhance and strengthen the whole, changes are easily made at the ballot box. Change for the sake of change is never good; change for the good of the community as a whole, though perhaps inconvenient and requiring extra effort, is at hand and must be considered.

I would encourage all residents to examine upcoming selectmen agenda items and actively participate in the discourse. This is your town and you need to have a say and be heard on changes to it.

23 Donna McDaniel February 8, 2013 at 10:47 PM

Hint on how to follow Selectman Rooney’s suggestion that residents “examine upcoming selectmen agenda items and actively participate in the discourse,” note that the agenda for their meetings comes under the topic “Meeting Calendar” on the town wesite, not under the listing for the board, as I expected. I’ll also note that the meetings are on our local cable–not feasible for active participation but for being informed and making your views known, even if in an old-fashioned letter.

24 Johnboy February 20, 2013 at 7:11 AM

The Board of Selectman has some control of town expenditures and taxes, but the real elephant in the room is the School Committee. The SC controls 70% of the town budget. You can fix all the roads, pay overtime to police and fire but never come close to the annual 7% raises that our teachers are handed by the SC.

25 Just Curious February 19, 2013 at 6:27 PM

As I read this thread, I was struck by the lack of public comments from Selectman Dan Kolenda who is also a member of the Northborough-Southborough Regional School Committee. It would seem that Dan is in a pretty good position to see this issue from both a town perspective as well as a school perspective.

Dan seems like a nice guy and I’m not trying to put him on the hot seat, but he ran for both of these offices so he should be standing up to be heard on these issues.

Mr. Koledna, we need leadership on these issues. Where do you stand?

Previous post:

Next post: