Oak Bluffs voters face overrides, $24.7 million town budget
Oak Bluffs voters will face difficult financial decisions at special and annual town meetings scheduled for Tuesday, April 13, including a proposed town operating budget of $24.7 million.
The fiscal 2011 budget represents a five-percent increase in spending over the previous fiscal year. That figure does not include $646,491 in proposed spending beyond the operating budget and requested in 10 Proposition 2.5 override questions. Many of those questions would restore personnel cuts approved by special town meeting voters last October in a mid-year round of budget trimming.
Further complicating the spending picture is $300,000 projected in new revenue from proposed meal and room taxes. If voters reject those new taxes, the town would face a $300,000 deficit, forcing budget writers to return to the drawing board. The special town meeting is scheduled to begin at 7 pm at the Martha's Vineyard Regional High School Performing Arts Center, followed immediately by the annual town meeting.
The largest increases in the proposed budget are fueled by costs that the town has very little control over, according to town budget strategists. Health care insurance premiums for town employees are up 10 percent, while employee pension costs rose 11 percent. Liability insurance rose 9 percent, while workers compensation self insurance more than doubled. The town's share of educating students at the Martha's Vineyard Regional High School rose 10 percent.
Those five line items alone account for $6.4 million dollars, or approximately 26 percent of the entire town budget. Add 3 percent salary increases, most of them contractual, and the result is a budget that leaves very little room for trimming, according to town officials.
"When you have health costs and insurance costs that approach double digits, it's pretty hard to hold a budget to 0 percent or 2.5 percent," said Greg Coogan, chairman of the board of selectmen. "It's going to continue to be a problem."
Other budget items that could raise eyebrows on the floor are a 4-percent hike in the selectmen's budget, fueled mostly by a sharp increase in professional, legal, and technical fees, as well as a significant hike in meeting and travel expenses. A 39-percent increase in maintenance contracts contributed to an 8-percent hike in the town's information technology department.
The town clerk, who received a raise of $10,213 last year, over the objection of the finance and advisory committee (FinCom) as well as the personnel board, is asking for a 3-percent raise this year. The FinCom recommended that the town clerk's salary remain at the $74,360, the fiscal year 2010 level.
Fire department equipment repairs and replacement pushed that budget line up 8 percent.
Stay and eat taxes
Right out of the box, voters will discuss new taxes enabled by recent state law intended to provide towns with new sources of revenue. Article 2 on the special town meeting warrant asks voters to implement a .75-percent tax hike on meals, making the combined state and local tax 7 percent. The town estimates the tax increase would yield $200,000 in new revenue. The FinCom unanimously favors the measure. "The town needs more revenue to balance the budget, and this option is preferable to raising taxes on property owners," wrote the committee in its recommendation.
Next on the agenda is a 2-percent increase in room taxes, bringing the total state and local tax to 11 percent. The town projects $100,000 in new revenue, if voters approve the room tax.
"They make it seem like it's not going to have any impact," said Erik Albert, who owns the Oak Bluffs Inn with his wife. "It's easy to say these things when you're not paying the taxes. One of the things that makes us competitive is the gap we have with Edgartown. The rooms here are less expensive. Anything you do to make that gap smaller is going to make us less competitive. There are other things they can do - they're just doing the easy thing." If enacted by voters, Oak Bluffs would become the only Island town to do so. All other towns considered the measures this spring, but declined to put them to a vote at their town meetings.
Selectman Ron DiOrio was an early supporter of the room and meals taxes. "Anytime you increase taxes it's a very hard decision, but the reality is if we don't do it we're going to have a shortfall," he said. "You would have to increase taxes or cut personnel, which is the only area we can cut."
According to Mr. DiOrio, about 80 Massachusetts towns have adopted the new tax increases, and he said many are realizing higher than projected revenues.
If voters do not prove to be in a taxing mood on town meeting day, town officials will have to scramble. The loss of $300,000 in projected revenue would force spending cuts, other taxes, or some combination of the two. Those decisions could be made on the town meeting floor, but it is more likely that the budget writers would have to retrench.
"If they turn down those two sources of revenue," Mr. Coogan said, "we would have to go back and bring another balanced budget." He said that those decisions are not likely to be made on the annual town meeting floor, but at a future special town meeting. "I think that is too complex an issue; we're talking about $300,000."
The annual town meeting will pitch into ten Proposition 2.5 override questions. Originally, the list was longer. The FinCom strongly advocated putting annual step raises for town employees, including teachers, on the town meeting warrant and the election ballot as override questions. If voters rejected the raises, the town would still be obligated to pay the contracted rates, but would most likely have to cut personnel in order to meet the authorized spending level. Selectmen chose not to face that dilemma, and folded the employee raises back into the budget. The budget does not include any cost of living adjustment for town employees.
"An override vote has traditionally been used sparingly in Oak Bluffs," wrote town administrator Michael Dutton in a letter that accompanies the budget. "With reductions in state aid and drops in local receipts, override questions allow the people of Town to determine what should be spent and what should be deferred. This year the Selectmen voted to grant voters a more direct say in the future of the Town by asking voters a series of override questions. It is likely that the Board will continue this practice in the years ahead."
The first Prop. 2.5 question would restore $27,286 to the Board of Assessors salary account, restoring a personnel cut town meeting voters approved on October 22. "The cuts have not severely hampered the department," wrote the majority for the FinCom's recommendation. "The current economic climate is a time to tighten the town's spending, not to raise taxes."
A Prop. 2.5 question requesting $96,980 would restore personnel cuts to the police department. In a 4 to 3 vote, the FinCom favored the override question, noting that police officers took a voluntary pay cut in order to avoid layoffs last year. The minority said critical police functions are still supported, and the cuts should be maintained.
In his report to the FinCom during a March 4 public hearing, chief Erik Blake said he now has 15 full time officers, enough to cover every shift with two officers, but only if there are no absences or vacations on the force. Otherwise, shifts are filled by special officers or regular officers on overtime. He said if the override question is rejected, the school resource position would be eliminated, detectives would be assigned to patrols more often, support for events like road races and concerts would be altered, and training would be reduced to mandated programs only.
The fire department override question has already proved controversial in selectmen's discussions and FinCom hearings. The fire department is asking voters to raise taxes beyond the Prop. 2.5 limits to fund $67,546. The money would increase the fire chief's salary from $12,000 to $42,000, and increase stipends for all other department officers and call firefighters. Approximately 47 percent of the salary increase would go to the chief, 44 percent to department officers, and 9 percent to the call firefighters. The FinCom recommended against the override question in a close 4 to 3 vote. "Compensation in this article has not been developed in the same way as the study that was conducted for other town employees," wrote the committee's majority. The minority called the raises a "token increase," and advocated raising fire department salaries more in future years.
Another override question would fund a yearly paving and road maintenance program at a cost of $220,000. The funds would restart projects delayed by budget cutting last year.
The Oak Bluffs School Committee asks voters for to fund the local elementary school at the level requested. The school is budgeted to receive $5,929,861, an increase of 2 percent, in the town operating budget. The override would add $37,500. The FinCom endorsed the article by a vote of 4 to 3, noting that the school committee has worked hard to reduce costs. "In the last several years, the Oak Bluffs School budget has been reduced by seven full-time and five part-time personnel cuts," said school committee member Priscilla Sylvia in a statement at a public hearing.
Another article would restore mid-year personnel cuts at the board of health, and another would restore cuts to shellfish department.
The final override question would bring lifeguards back to town beaches at a cost of $75,000. Town officials say they receive hundreds of complaints from summer residents and visitors, and more from year round Islanders, about the unguarded beaches. The lifeguard program was eliminated in fiscal year 2009 as a cost-cutting move.
After two difficult budget years, opinion varies among town officials about whether the worst is over. "I have heard good news as far as the national and state economy," Mr. Coogan said. "I would hope this is the bottom. It will take some time for us to recover."
"Next year, quite frankly is going to be worse," Mr. DiOrio said. "It's going to take us a little time to bounce back. I think we've got another two years where it's going to be incredibly tight."
Voters will consider two significant bylaw changes at the town meeting. A new proposed wind generating facility bylaw would require that windmills meet minimum technical standards and be certified by the manufacturer and a qualified engineer. Also, wind generators could operate for a limited number of years, before they would have to be inspected and recertified. It would provide the town with the authority to force an owner to decommission a wind generating system when it is no longer functional.
Voters will also be asked to change the way development is regulated in flood-prone parts of the town. Building would be prohibited in a zone encompassing beaches and coastal banks. Building or land modifications would require a special permit from the zoning board of appeals if the property lies within federally designated flood plains. The permit would require compliance with federal, state, and local regulations.
Two other bylaw changes are drawing interest. One would ban smoking on any town beach, as well as Healey Way, the pedestrian area between Circuit Avenue and Kennebec Avenue.
Another proposed change would require licensing and regulation of street performers. The bylaw attempts to address complaints from merchants about noise levels and crowds that gather to hear performers on Healey Way.