Town of Newbury
Finance Committee Meeting
Tuesday, October 21, 2010, 9:30 am, Byfield Fire Hall
Meeting Summary
In Attendance: Gene Case, Bob Connors, Larry Guay, Dick Passeri, Frank Remley (Chair
Ex-Officio: Chuck Kostro, Town Administrator/Finance Director
1. October 5 Meeting Summary: Adopted unanimously without further revision
2. September FY 11 YTD revenue and expenditure summaries
a. Revenues: Per our Oct 5 meeting, the FY 11 revenue forecast has been
reduced by $85,000 largely as a result of falling auto excise tax
collections, fees and fines, and penalties and interest. The later is a result
of diminishing outstanding back taxes, some of which dated to 1990. Of
the original list of tax delinquents of three years ago involving $660,000
in arrears, $551,000 have been collected. While there is currently
$450,000 of outstanding tax billings, almost all are incurred within the
past 12 months. While collection of back taxes has been and on-going
goal, the interest and penalties resulting from older tax debt is diminished
substantially.
b. Expenses: After four months, at 25.6% expended, the budget is tracking
substantially on target. Chuck Kostro cited a delay in Mass Electric
shutting down a list of street lights due to their own bureaucratic
procedures, which has lead to higher than budgeted billings. However,
these invoices will be adjusted and lights will be turned off as planned
within the next week or so. He also pointed out that the OBRA move for
certain employee has been delayed by a month, so that expected savings
in benefit cost has not occurred as fast as hoped.
3. Reserve fund update, transfers: There were no requests for reserve fund
transfer. The reserve fund stands at its budgeted $35,000.
4. Fall STM Meeting Planning
• Message/issues/choices for taxpayers’ w/r to FY 12: After vigorous
discussion, it was decided by consensus to keep FinCom comments brief
and simple at the Oct 26 Town meeting. The main message is to imbue
Town Meeting with the impending financial challenge facing the Town
going into FY 12. It was decided to ask Frank Remley of the Finance
Committee, Dina Sullivan of the TRSC, and Joe Story, Chair of the BOS,
to make brief, unified comments in advance of Article 6. No PowerPoint
slides to be used at this meeting. Frank offered to draft some suggested
talking points, which has subsequently been done.
• Process and Task Force to plan financial future: All members of the
Finance Committee have been invited, and have agreed to participate in
the new Financial Planning Task Force being organized by the Board of
Selectmen. This Task Force has been proposed by the BOS as a joint
group planning body to address Newbury’s financial future. Bob Connors
has drafted an overview/description of the nature and mission of this body
(see attached).
5. Other:
• Warrant articles 3 and 4 update: Bob
Connors attended the PB meeting on Wednesday evening and reported
that there was a productive discussion of Article 3 of the Town Warrant to
limit building height to a maximum of 35 ft. Subsequently, the PB has
decided to bypass this warrant at the STM for further study and
clarification. Article 4, involving the definition of “story above grade” as
it affects the definition of a basement, will remain as is.
• PI beach replenishment update: The dredging and beach replenishment
project is now successfully completed. It initially appears that more sand
than anticipated was dredged and deposited on the center island beach.
• TRSD update: Audrey Keller and Frank Remley attended a meeting with
new Superintendent Christopher Farmer and Assistant Superintendent
Brian Forget on Wednesday, Oct 20. Messrs Farmer and Forget properly
recognize the financial crisis that faces TRSD member towns. It was
conveyed by Supt. Farmer that he intended to form a new “Financial
Advisory Committee” consisting of representatives of each town, the
TRSC and TRSD administration to track the budget setting process for
FY 12. It was proposed by Remley and Keller that each town should
invite its Town Administrator, a member of the BOS, a FinCom member,
and a School Committee member to these meetings. Other issues
discussed included:
-Efforts to reduce choice out;
-Disparity between DOE and TRSD enrollment counts
- -Ensuring proper teacher coverage of heavy choice-in at NES
-Strategies to enhance high achiever programs in the district
• Town Barn project update and projected costs/funding: Chuck
reported that the final report has not yet been submitted, but that plans to
close the barn to personnel were underway. It is hoped that vehicles could
still be stored there, but the DPW is seeking alternative location(s) to
carry out vehicle maintenance. Tim Leonard’s office has already been
moved to the trailer behind Town Hall.
• Middle Rd. flooding update: Chuck reported that the flooding has been
temporarily alleviated by clearing existing draining pathways around the
Bandonian property. The Town continues to seek permission from the
owner to inspect the Beaver Damns on his property to assess alternative
measures to clear additional natural drainage patterns.
• Finance Committee open seat: One candidate has dropped out, while a
second, Marshall Jespersen is considering nomination and was at the
meeting to better understand the Finance Committees work. Marshall was
well received and actively contributed to discussions about how to
address the STM regarding our financial issues going forward.
6. Next Meeting: Tuesday, November 16, 7:00 pm, Byfield Fire Hall
Page 1
Formation of a Joint Task Force to Secure Long Term and
Short Term Financial Stability for the Town of Newbury"
Strategic Financial Planning Committee
The old ways of doing business are no longer sustainable.
The economic struggles of Newbury mirror those of the nation, decreasing revenue, rising costs are all
contributing to local government anxiety.
Many local governments are taking action to mitigate the effect of these declining revenues by freezing vacant
positions, reducing service hours, sharing services with another local government, and eliminating delivery of
non-required services.
The town can no longer afford to provide the services residents have come to expect for the taxes they pay.
Recognizing that the town and schools are operating in a non-sustainable mode, the Board of Selectmen,
Finance Committee and residents need to do something about the budget before the town is pushed off the
precipice. It is only a matter of time before state and local cuts become deeper.
Residents have rejected Proposition 2½ overrides put before them in the past. Taxpayers are clearly saying
that they will pay no more. The alternative, however, may well include, longer times on the bus for
schoolchildren, and regionalized police, fire, or other services the town can no longer afford on its own,
resulting in a loss of autonomy to which residents and town officials have become accustomed.
The town of Newbury is, like many others, for several years, budget cuts have been the cause of stress
throughout the system. No line item in the town’s $17 million budget has been spared review and, often,
cutbacks at yearly budget meetings between the Finance Committee, and the Board of Selectmen have been
approved.
The town should consider forming a Strategic Financial Planning Committee, made up of members from the
Finance Committee, Board of Selectmen, and one member from town departments plus a citizen who has no
political association. [The committee shall receive input from the town administrator, department heads and
schools superintendent.]
The committee’s mission would be to assess the town’s current operations, policies, procedures, organizational
structures, resources and services and make recommendations to the Board of Selectmen on essential needs
and alternative ways the departments can enhance efficiencies and customer services. As a cohesive team,
the Finance Committee and Board of Selectmen all need to agree that every line item and operation is “on the
table,” and politics and special interests are to be left behind when the Strategic Financial Planning Committee
meets.
The committee shall interview department heads, reviewing contracts (including those with unions), examining
health benefits and the retirement system, and analyzing capital needs and debt service.
The residents of the town will be asked for their opinions via a Web-based survey and/or public meetings. The
list of activities is exhaustive and will continue to expand. The committee will interview all department heads
and the elected chairs of each department. Each person interviewed will be provided a prepared list of
questions beforehand, requesting honest and open input.
Questions will range from an overview of the roles and responsibilities of the department to an analysis of the
department’s strengths, weaknesses, opportunities and threats. Best management practices will be noted, as
well as any opportunities to centralize, regionalize or outsource work or programs to save money or improve
efficiency.
Each interviewee will be given ample time to elaborate on their written answers. The interviews will provide a
wealth of information about town operations.
Operating Expenses
As a small town, Newbury has become a very expensive operation to run. Newbury’s TRSD budget alone is $9
million, including costs for benefits such as health insurance and retirement funding and other expenses
directly attributable to the schools. Parents have come to expect door-to-door busing and moderate class
sizes—and they will loudly voice their opposition to any changes in services.
In the last few years, many local School Committees have found it necessary to cut sports program funding in
order to support general education. This decision required significant funding by parents for school sports, with
no family cap. Additionally, students who drive to school are charged $180 a year to park, and students in
grades 7-12 are charged a busing fee of $200 a year.
The town’s police force, at a cost of about $1.2 million including the cost of dispatchers, keeps the peace and
patrols a town of 2500 households and 7,000 residents—a town divided by two major highways and rivers.
Fires are fought by dedicated call firefighters and a couple of full-time officers, (Total cost to Newbury taxpayers
for fire protection: about $500,000 per year.) 26 square miles and all town roads are maintained by six men,
with assistance in the winter from plowing contractors.
The town’s common and sporting fields must be maintained to the level necessary to play in the leagues the
town supports. Residents expect the use of the transfer station regardless of the amount of trash they put out
or how much they recycle.
The senior center offers daily activities to seniors, and the library provides vital media services to residents,
including books, music and movies. The recreation department coordinates the scheduling of all town fields
and provides cultural services that no other department does. All these items come with a cost. And these
costs continue to rise.
Total town employee benefits, which now costs $ 1 million a year, rose 6 percent in fiscal 2011. Retirement costs
increased by more than 10 percent and the capital needs of aging buildings boost the town’s operating costs
even more.
Suddenly regionalization, centralization and outsourcing are emerging as possible options for maintaining
crucial services.
Changes Ahead
The Strategic Financial Planning Committee needs to focus on defining core versus non-core services.
Services mandated by state or federal government or town bylaws are considered core services. The
committee is also looking into the reach of certain mandates.
For example, a service may be mandated, but the town may be allowed latitude as to the breadth of the
service. It’s clear that the town is currently providing services that are not mandated, such as in town transfer
station, but residents have come to expect these services. In the coming months, the committee will be make a
determination of which core services must be maintained and making recommendations
to the Finance Committee and Board of Selectmen based on its findings.
Newbury must be proactive and look internally to see what must be done to ensure the financial stability of the
town. The town will need to change current business practices, look to neighboring towns to regionalize
services, and examine which services are required versus those that have been provided.
Most of all, the town must look at how it can provide sustainable, quality services to residents. The question
remains: At what price?
If a local government decides to share a lockup facility with a neighboring town rather than build a new one,
there has to be a guarantee that in the next year or two, the neighboring town won’t renege.
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