Island towns get serious about tightening their budget belts in planning for FY2010
Leaders in all six Vineyard towns want level or decreased spending from town departments and from the county, the regional school district, and other regional agencies, many of which are already scrambling to cover revenue shortfalls.
While the towns, unlike some other Island organizations, particularly non-profits and regional public agencies, will feel little or no direct loss in operating funding from the $1.6 billion reduction in state spending ordered last month by Massachusetts Gov. Deval Patrick, town officials say they are adamant that their residents will not be asked to vote increased budgets at annual town meeting.
Their concerns are twofold: bad economic times translate into lower revenues and residents feeling the financial pinch; and, as they see their home values drop, taxpayers will be in no mood to support increased spending and the higher taxes that follow.
To reinforce the message, selectmen in at least two towns, Chilmark and West Tisbury, have vowed to make any requested increase in spending subject to a Proposition 2.5 override, which the submitting department or agency will be required to defend at annual town meeting.
Depending on emergencies or special needs, the condition of stabilization and free cash funds - and how budgeters toe the line - it is probable that Island residents will be asked to consider more override questions in the spring than in past years.
The town budgeting process begins in December with budgets due generally by year-end, for town review in January and February. The budgets are then translated into warrant articles for voters to consider at annual town meetings in April.
"This is a difficult time economically for everyone. We cannot ask people to approve increased budgets," West Tisbury selectman Richard Knabel told fellow board members last week. He suggested budget increases be submitted as override warrant articles. Such requests require a town meeting vote and a concurring vote on a town election ballot.
In Chilmark, selectmen were equally firm. This week, executive secretary Tim Carroll said of overrides, "Everything is an option. We will be scrutinizing budgets for new programs or spending. If you want six more lifeguards, for example, it'll probably be an override."
Like most Island towns, Chilmark is in good financial shape. Last week, its auditing firm gave a glowing report on the condition of town finances and controls.
Chilmark does not depend on state fund or grants to operate. "Our state grants and funding are generally for non-operating expenses. For example, the fire department received a $9,000 grant last year to buy an infra-red camera to enhance safety, an important item but not part of core expenses," Mr. Carroll said.
Meanwhile, organizations such as the Martha's Vineyard Commission, The Martha's Vineyard Shellfish Group and the Councils on Aging have been scrambling to cover expected shortfalls from state funding, and grants that have disappeared in the past month.
At the Martha's Vineyard Commission this week, executive director Mark London was planning how to replace perhaps as much as $100,000 in lost grants, 10 percent of his agency's operating budget, some of which had become part of the annual budget.
"For years, Bill Wilcox (water resource planner) got a grant for wastewater treatment and testing. That isn't available this year," Mr. London said. He added that he called the Permanent Endowment Fund of Martha's Vineyard for help. "The requests for funding have increased dramatically there. They just weren't able to help," he said.
"This comes at an extremely bad time," Mr. London said. "We are in the final stage of completing the comprehensive Island Plan, and last week we lost $60,000 in a state grant to complete it."
Mr. London got the memo on level funding and says he will comply, so he must find other revenue. He has an idea. "The state is very interested in smart growth and in exploring shared services between towns," he said. "We are experienced in that work, and there is a $90,000 grant available from the state to do it. We think we can get it."
Mr. London said that Island Plan work falls under the state initiative and, if granted, he will ask towns for permission to use some of the grant funds to complete the Island Plan.
Rick Karney at the Martha's Vineyard Shellfish Group has a rainy day fund. "For a number of years we got a $22,500 state grant for the hatchery," he said. "That's gone this year, so we'll use our emergency reserves rather than ask the towns for additional money." "These are harsh economic times, so we'll hold the line for requests for town funding," Mr. Karney said, adding, "I hope other regional agencies will do the same."
"All we can hope is that the recession won't last that long," Mr. Karney said. "Recession puts pressure on fishing in the ponds. In a down economy, carpenters tend to turn into fishermen."
At the Dukes County offices, county manager Russell Smith is keeping a close eye on deeds and excise taxes. "We're currently seeing a 30 percent decline in excise fees to the county registrar," he said. "We are partially funded by excise fees, so that translates into a three to four percent revenue loss trend."
"But I get the picture," Mr. Smith said. "Everyone wants level funding. We've been doing that for years. We've only gone override once in 22 years."
Mr. Smith said he hopes voters will again approve healthcare access and rodent control programs offered by the county. Last year, towns voted to share 50 per cent of the cost with the county. "But the money is not part of town budgets. We have to present it again," he said, noting that 2,000 Islanders signed up for the health care access program last year. Healthcare access costs the towns $45,000 in total, and rodent control carries a total $22,500 bill to towns.
And several weeks ago, the Friends of the Councils on Aging lost state money and launched a private fund for donations to replace it. While the state money was restored, the organization has continued with the program, which supports seniors' fuel and electric bills.
There are some economic bright notes. Mr. Karney pointed to the recent downturn in energy costs. His hatchery runs light and heat 24 hours a day and he hopes for some cost savings there.
Tisbury finance committee chairman Larry Gomez said the regional high school found a bonus in its heating budget. "The original budget, prepped last summer, was based on oil at $150 a barrel," he said. "Now it's a lot less than that, and we're talking about a $1.9 million expense, so we asked them to rebudget. Savings can be achieved. Why should Tisbury approve an $18 million budget when we could have a lower one.
"We aren't demanding that budget increase items be submitted as overrides. We don't like to do that, but we are telling departments that if they need more money, they better be prepared to justify it. If the economic situation is severe enough, we may have to go to the override strategy, but I've never seen that in eight years on the finance committee."
Some towns are making cost-saving decisions now.
In Aquinnah, the town hall furnace will have to last another year. "It's an $8,500 expense, so we'll get another winter out of it," town coordinator Jeff Burgoyne said. In addition, last week's Aquinnah town meeting, held as a continuation of an earlier meeting which failed to achieve a quorum, also failed to find a quorum. So, an article that would have funded the furnace replacement never came before voters.
In West Tisbury, executive secretary Jennifer Rand and librarian Beth Kramer put their heads together to solve a lighting and safety problem. The library has low lights on its walkways but no lighting for the unpaved parking lot. Last week, the women suggested that the town remove several of the low lights and replace them with six-foot coach lamps to avoid the expense of installing a new system next year.
While towns are preparing for fiscal 2010, which begins mid-2009, they are also keeping an eye on state revenues due this year. Cherry fund payments are being received on schedule.
Edgartown and West Tisbury both benefit from cherry sheet funds received in lieu of taxes on undeveloped Manuel Corellus State Forest.
"Receipts are right in line," Edgartown treasurer Kimberly Kane said. "If there are any problems, they will probably occur at the end of the year," she said, noting that Edgartown will receive a reduced amount of Conservation Preservation Act funds, a state matching fund program. "We expected that and those funds reflect discretionary spending."
Mr. Smith, the county manager, was philosophical about voter choices at town meeting. "Programs that are perceived as valuable by the voters are funded. It's a direct democratic process, but it can be a difficult process for voters."