Fincom, slectmen on different pages of Oak Bluffs budget
As Oak Bluffs lurches into its third year of budget fireworks, the relationship between the board of selectmen and its finance and advisory committee appears increasingly strained and confrontational, according to conversations with several members of both bodies, and debate at several recent public meetings.
The selectmen and the finance and advisory committee, known as the fincom, met jointly three times over the past month. At other times several selectmen have participated informally in fincom meetings. These meetings have yielded relatively little agreement on how to address the dual dilemmas of a revenue shortfall in the current budget year, and large gap between revenue projections and budget requests for the coming fiscal year, which begins July 1. According to town administrator Michael Dutton, decisions on the fiscal year 2012 budget must be substantially complete by March 8, in order to be ready for the annual town meeting in April.
How it works
The board of selectmen acts as the chief executive for the town, roughly equating to the executive branch of government, with the town meeting representing the legislative branch of government.
The five selectmen have fiduciary responsibility, meaning they are legally and ethically bound to act in the best interest of taxpayers. They are responsible for the final decisions on the entire operating budget, this year totaling $24.6 million. They submit a spending plan to town meeting with detailed line items for each department.
Voters can eliminate spending, add spending, or amend the budget with nearly unlimited authority. The board of selectmen meets in open session on the second and fourth Tuesday of each month.
The town administrator and his finance staff do much of the detail work, estimating how much revenue the town will receive, how much each department will need to operate, and how that can be accomplished within the restraints of the tax-limiting law Proposition 2.5. The town administrator works at the will and direction of selectmen, but is also heavily involved in the work of the fincom.
The fincom's role is mostly advisory. The nine-member committee establishes budget guidelines and procedures, monitors progress, and recommends an annual budget to selectmen. Using the members' expertise in various sectors of government and private finance, the committee acts as a watchdog on town spending.
The fincom's only direct authority in money matters is control of the town's financial reserve fund, which can be allocated for emergency spending by vote of the committee. The fincom meets in open session on the first and third Thursday of each month, and more often during budget deliberations.
How it doesn't work
Over the past year, friction between the selectmen and the fincom has spilled into public dissension. That dissension is increasingly evident in recent months as the two bodies wrestle with difficult budget decisions that affect town employees and taxpayers.
"It's supposed to work with the finance committee giving us suggestions of how to deal with the budget," selectmen chairman Duncan Ross said following a joint meeting with the fincom on February 15. "It's not working in the sense that they have come in, in the past, with arbitrary numbers, cut this amount out of that, cut this amount out of that, and not really looking at those departments and going and talking to them and finding out what they can and cannot do."
As an example, he cited fincom chairman Bill McGrath's recent suggestion to eliminate travel costs for town employees until the end of the current fiscal year, as a way to close a substantial revenue gap.
"To suggest that you just stop all travel, is..." Mr. Ross said, stopping for a long pause in order to choose his words carefully, "not realistic.
"When I was on the finance committee a million years ago, each department had a representative on the finance committee that would go and sit with them and talk to them and completely understand their budget and come back and share it with the entire finance committee. I don't believe they're still doing that. I think if they were to go back to that practice it would be beneficial."
Big picture, little progress
The fincom sees its role as advisors on broad direction for spending decisions, not the nitty-gritty details of each department's operating budget. Mr. McGrath feels the fincom's direction is often ignored by selectmen, and the result is that budgets increase each year.
"The numbers don't change," Mr. McGrath said. "We're not making any progress."
He is harshly critical of selectmen, terming one joint meeting where few decisions were made "a complete and utter waste of time."
The town's accounting and budget process was complicated this year by the untimely death of Paul Manzi, 50, who held the dual roles of finance director and treasurer for the town of Oak Bluffs. Mr. Manzi died on October 26, 2010. His battle with cancer took him away from his duties overseeing town finances for long periods of time beginning in August. It was a critical time. Oak Bluffs missed important deadlines for closing the books on fiscal year 2010, and setting a tax rate for the current year.
"It's indicative to me that the town administrator is not doing the job we're paying him to do," Mr. McGrath said.
The town hired municipal finance professional Paul Watson from Billerica to help with finance work.
The town has since contracted with a private accounting firm, Sullivan, Rogers, and Company, to perform accounting duties and advise on procedures. Mr. Dutton has also solicited help and advice from other Island towns.
Mr. McGrath believes operating without a finance director is part of the reason for the town's current financial dilemma.
"There was no sense of urgency," Mr. McGrath said. "We hired outside help from Billerica, to close the 2010 year. It still hasn't closed. That's ludicrous. We hired this guy, we paid him, and where are we?
"The town administrator and the finance team that is paid to do the job, I think they lost the handle. They lost sight of what was going on. Expenses and revenue and all the other pieces that go together weren't being watched."
Selectmen do not share Mr. McGrath's views.
Mr. Dutton enjoys strong support from the board. Selectmen have staunchly defended his performance against public criticism. His annual reviews for the past two years rate his performance highly.
The town administrator serves at the will of selectmen, and takes his direction from them. If at any point the board loses confidence in his job performance, a majority vote would end his employment.
"He's always offering members of the board, members of the finance committee, options," selectman Ron DiOrio said. "It is not his role to tell them what to do, it's to present options.
"I think Michael is doing an outstanding job. I think he works very hard. We're lucky to have him, especially during tough times. Michael has a great calming effect on everyone, and I think that's what's needed."
Steve Auerbach, vice chairman of the fincom, is a relative newcomer to the committee. He says delving into town finance was surprising.
"I feel a little bit, it seems we're kind of powerless," Mr. Auerbach said. "We have known for quite some time the town was in budget difficulty, but there are so many different points of power. Every department has its department head and employees, but they all have supporters and advocates who proclaim the necessity, the essential nature, of that department."
In a small town, where only a few residents actively participate in town government, it is difficult to elect a board that does not have a special interest in town finance.
At a February 17 meeting of the fincom, attended by several selectmen, members of the board advocated vociferously for budget recommendations that directly affect them or their family.
Fincom member Hans von Steiger, whose wife is one of three paid town staffers at the council on aging, spoke against a proposal to cut $60,000 from that department, as he has at several public meetings. Last Thursday, he contrasted the council on aging budget to the money the school department spends on music programs, though he said he favored funding both. "To take away something for the seniors, and give it all to the children," he said, "you're taking away something."
Committee member Mac Stark, who is employed as the town custodian by the highway department, questioned whether the director of the council on aging should cut his work week in half. Mr. Stark's hours could be cut under a proposal to slash highway department spending in the coming fiscal year.
"Why not let the director take a 20-hour hit," Mr. Stark said. "We balance the budget on the backs of the people on the ground. I took a 20-hour hit."
The participation of Mr. Stark and Mr. von Steiger in debate over money issues that directly affect them, did not sit well with some other town officials.
Mr. McGrath, in a telephone conversation with The Times on Monday, acknowledged the conflict.
"Hans it turns out should have recused himself from that vote," Mr. McGrath said. He questioned whether Mr. von Steiger should have participated in the discussion. "I tend to think he should be out of the room."
The motion to cut spending in the council on aging budget was defeated 4 to 3.
Mr. McGrath, who is a teacher at the Martha's Vineyard Regional High School, abstained from voting on a recommendation for school spending, and says he limits his participation in school budget discussions.
"In previous meetings, the differences between the school and the fincom have been much more significant," Mr. McGrath said. "There have been a couple of times when I've got up and gone out."
The state's conflict of interest law says any town official who participates in a matter in which "he, his immediate family or partner ... has a financial interest," is subject to a fine, imprisonment, or both.