Citizens for A Better Longmeadow

is the name of the group led by Roger Wojcik that organized a “public” forum that was attended by an overflow crowd of ~ 65-70 people last night at Storrs Library. The meeting objective as outlined at the outset by Mr. Wojcik was to provide some factual information about the financial issues facing the town both today and into the future. This group believes that many town residents need additional information to make informed decisions at the upcoming town meetings on May 11 and May 25 as well as town elections on June 8. Mr. Wojcik asked attendees to be respectful to each other and not have a repeat of the April 12 forum.

First of all, I applaud Mr. Wojcik’s attempt to provide some factual information about town finances including both the town’s annual operating and capital budgets as well as some of the other current liabilities such as Other Post Employment Benefits (OPEB). In addition to being a member of the town’s Finance Committee and a past member of the Capital Planning Committee, Mr. Wojcik has useful workplace experience in developing and managing corporate budgets. During the meeting Mr. Wojcik was criticized a number of times by some attendees, particularly about the accuracy of a $35 million OPEB future liability but he pointed to an official town analysis by Scanlon & Associates as his source. Similar objections were voiced about a report on town infrastructure problems and there were attempts by some attendees to discredit this information as well.













Other than one flamboyant outburst by a well-known town resident and regular poster on this blog, the meeting proceeded with a reasonable decorum- far better than the previous forum on April 12 (see my previous post)…. that is, until Mr. Wojcik turned the meeting from an information session into a political debate about Select Board candidates for the upcoming election and the inadvisability of electing former/ current School Committee members to the Select Board. What followed was not unexpected from my vantage point given the makeup of the audience.... the meeting turned into a similar “shouting match” situation as did the April 12 forum and the meeting ended on a very sour note….

Regarding Mr. Duquette’s latest post here on the Buzz blog…

I have listened and attended numerous Select Board/ School Committee meetings as well as official public forums on the current school/town budgets and high school building project during the past 9 months. I believe that I understand the situation quite well and have become very concerned about where we are headed.

Mr. Duquette makes the following statement in his latest Buzz post…

“The library is an operating expense, while the new high school is a capital expense. Closing the library doesn’t do anything to advance the high school project.”

He also states that Mr. Wojcik would have “earned a poor grade in my public budgeting course”. During the meeting Mr. Duquette also restated his recurring theme that “you can’t run public government like a business”.

As Mr. Wojcik tried to explain at last night’s meeting, a capital expenditure turns immediately into an line item operating expense through annual repayment of interest + principal. For the proposed high school project this operating budget line item is likely to be ~ $3.5 – 4.0 million in FY2014 (based upon estimates by Paul Pasterczyk- Town Finance Director but actual numbers are dependent upon municipal bond interest rates). (See my recent post to determine individual property tax impact.)

Mr. Duquette’s approach is similar to many new HS school building advocates who have simply decided to ignore or discount or discredit mention of the any other financial needs of the town and want to simply move forward and build the new high school. They do not want to discuss the financial ability of Longmeadow’s town residents to support such a project.

I believe that we are making a mistake if we simply choose to ignore Longmeadow’s other financial issues as we debate the decision to build a new high school. Given our difficulties in formulating the FY11 budget, it is clear that we will be making additional difficult choices in the very near future… not necessarily ones that we want to make but ones that we are forced to make. These unpopular choices may include reductions in teachers, fire dept/ police dept staff, additional curtailment of library services ……

Our town leaders need to BALANCE available financial resources to deliver both school and town services so that all segments of our town population are treated fairly. With two seats (out of 5) on the Longmeadow Select Board being decided at the June 8 election, it is important for town voters to fully understand each candidate’s position on this issue so that they can make right choices.

Longmeadow Select Board Approves FY11 Budget

“At a special board meeting held on March 22, the Longmeadow Select Board approved a town budget of $51,389,100; a reduction of $385,775 from the current year’s spending level. This budget, which reflects a 4% decrease in state aid and the anticipated reduction of other local receipts, will be put before town residents at the Longmeadow Annual Town Meeting on May 11.” [press release, 3/23/10].

The FY11 budget process which has been followed on the Longmeadow Buzz since November when the Tri-Board (School Committee, Select Board and Finance Committee) met has been very difficult. Many budget cuts have been proposed and then restored by both the School Committee and Select Board after careful analysis and feedback from public forums. During this budget process a Select Board initiative toward creating a more sustainable budget was not very successful and next year’s budget will likely meet similar difficulties.

Below are a few short video clips (courtesy of LCTV) from last night’s special SB meeting which provide an overview of various SB member’s positions on the current budget.

The first video clip is Mark Gold explaining his proposal to balance the budget while maintaining as many important town services as possible. His long hours of work to “drill down” into the budget details with Finance Director Paul Pasterczyk, Town Manager Robin Crosbie and others were key to achieving the balanced budget that was approved at last night’s SB meeting.



The second clip is Rob Aseltine “thanking” Mark Gold for diligent work but stating he could not support the budget as proposed because there were insufficient cuts in town side headcount and services and that it did not meet what he felt was the desired sustainability requirement. Without additional town side cuts, the school dept would be severely impacted with their increasing technology and curriculum needs. In this video clip, Mr. Aseltine also suggested that after the June election when the “new board is constituted”, he will launch an important initiative to reduce the town side cost of doing business.



In the next clip Mark Gold provides some additional thoughts on the FY11 budget.



Robin Crosbie- Town Manager shares her thoughts on the issue of “comparable cuts” in budget items. Rob Aseltine had challenged the TM and the SB many times in the past few months suggested that there were insufficient town side headcount reductions as compared to the School Dept. proposal.



This next short clip is Paul Santaniello summarizing his thoughts on the FY11 budget.



The final video clip is that of SB Chair Bobby Barkett commenting on the FY11 budget and expressing some significant reservations that the desired “restructuring” of town government was not achieved and fearing that the state legislature may impart some mid-fiscal year cuts that could be very difficult for our town finances to absorb.



The final vote on the FY11 budget was 3-2 with Gold, Santaniello and Scibelli in favor and Aseltine and Barkett opposed.

Longmeadow Residents Speak Out

The public forum last Tuesday night (March 9) at Longmeadow HS on the proposed FY11 budget was a chance for town residents to provide some guidance to the Select Board as they make the necessary final FY11 budget cuts. At this meeting town residents provided balanced feedback citing the importance of schools, library, parks and recreation programs, senior center, police/ fire.... not wanting cuts from any of these important town programs.

Below are a couple of video clips (courtesy of LCTV) of comments made by town residents expressing their concern for cuts in various programs. [A web rebroadcast of the entire public forum is posted on LCTV's website.]

The first video shows town resident Jamie Cass- a Springfield teacher commenting on the town’s outstanding Parks and Recreation program and the Storrs Library and asks that the Select Board not cut funds to either program.


The second video is town resident Irene Madden- a career school librarian and Storrs Library board member overviewing all of the many programs provided by the Children’s Library staff.


The third video clip shows town resident Saul Finestone appealing to the Select Board not to cut the Longmeadow Adult Center budget because of all the important programs that it provides for senior citizens in our town.

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I think that it's important to understand that there have been many more cuts proposed than will likely be needed to create a balanced FY11 budget. The ongoing budget discussions involve identifying potential budget cuts and then prioritizing them.

The latest information yesterday from the state legislature recommended that towns prepare for a 4% maximum cut in local aid. This should provide some relief for the FY11 budget and allow the Select Board to restore some of the proposed budget cuts.

The Select Board has another goal and that is to create a "sustainable budget" so the current fiscal problems do not reappear year after year. "Our expenditures are too high and the rate of increase too great to be sustainable and must be reduced." This message is repeated at virtually every SB meeting since November. It will be very interesting to see how budget process ends up... it is the not the first time that our town leaders have tried to tackle the imbalance of expenditures vs. revenue growth.

It is not too late to provide your inputs to the Select Board regarding proposed program cuts in the FY11 budget. The Select Board will meet again on March 15 to discuss the budget and there is a public comment period at the beginning of the meeting.

On March 22 the SB will approve the final FY11 budget (town + schools) to be presented at the Annual Town Meeting on May 11.

Financing the Longmeadow High School Project

Below is a copy of a press release with some additional information about the financing costs of the Longmeadow High School project...

The final actual cost of the Longmeadow High School project is probably three years away at best- once the mortar sets, the paint has dried and the classrooms are filled with students.

What will be known in the very near future is the state’s agreed upon portion of the debt and the Town’s share. The appropriation of the Town’s share of the debt is controlled by Town Meeting which is scheduled for vote at the May 25, 2010 Special Town Meeting. The vote at Town meeting will be contingent upon a successful June 8, 2010 debt exclusion ballot vote authorizing the borrowing of the Town’s share of the debt.

Current estimates for the new structure and renovation portion of the High School are approximately $78.5 million. The more important number to the Longmeadow taxpayer is the Town’s share of the project. This amount is currently estimated at $46.6 million dollars and is subject to change based on the MSBA (Massachusetts School Building Authority) Project and Scope meeting currently scheduled for March 31st. Upon MSBA approval of Project Scope and Budget, the Town will only have 120 days to successfully fund the Town’s share. Under the MSBA’s current project financing methodology, the Town will progressively receive the MSBA’s share of the project which eliminates the need for the Town to borrow the full project cost. The Town will only have to borrow its share of the total cost which will save the Town hundreds of thousands of dollars in interest costs.

How will the $46.6 million be financed and how will it affect the individual taxpayer?

An example of one financing option uses equal principal payments over a 25 year bond life at a 3.5% interest rate. Currently, the average assessed home value in Longmeadow is $350,000 which equates to an average increase in taxes of approximately $455 per year over the life of the debt (see Chart A below for tax increases for each year).

[click to enlarge]

A 5% interest rate would average a tax increase of $516 per year for a $350,000 assessed home (see Chart B below). These are only examples.

Several different financing options are currently being reviewed in order to minimize the tax impact. Some areas of consideration include: supplemental grant funds availability; conventional tax exempt bonding versus other bonding options available; timing of permanent bonding; consideration of phasing the borrowing to take advantage of current low rates; and, the overall town debt schedule. It is our goal to minimize the tax impact to all residents by leveraging the best financing and grant options available.

Paul J. Pasterczyk
Finance Director, Town of Longmeadow
Member, Longmeadow School Building Committee

A Budget Update for Longmeadow

As reported in a previous post a collective bargaining agreement has been signed between the Longmeadow School Committee and the Longmeadow Education Association. While this agreement does not reduce the $2.15 million projected deficit for the FY11 budget, it does provide town leaders some clarity about unresolved potential future salary obligations for the town. The estimated salary budget cost avoidance of this contract vs. a 1% COLA for FY10 and FY11 is estimated to be ~$675,000 assuming that teachers salaries are ~ 75% of the town employees. Let’s hope that the remaining town and school collective bargaining units are considering similar contract agreements as the Longmeadow Education Association.

click here to read full story

There was some additional news this past week regarding the state aid… Governor Patrick announced that his proposed FY11 budget would include level funding for education and unrestricted local aid for cities and towns.

The $2.1 million projected deficit for FY11 discussed at earlier budget meetings (Tri-Board + Select Board) anticipated a 15% cut in local aid for Longmeadow. FY10 state aid for Longmeadow is expected to be $5.6 million (Chapter 70 = $4.34M + unrestricted local aid = $1.23M) … so a 15% shortfall = $837K. If the FY11 budget proposal for level funding for cities and towns passes the legislature, it would shrink the projected FY11 deficit for Longmeadow to $1.31 million.

However, given that this is an election year (and Gov. Patrick is running for re-election with state Treasurer Timothy Cahill as one of his opponents), there is hardly unanimous support for this level funding of local aid to cities and towns given the current economic environment.

click here to read full story

In the past week, Mass State House Ways and Means Chairman Charles Murphy- the chief budget writer from Burlington, MA was quoted as saying: “I heard what the Governor said to you yesterday about level funding local aid. Well, good luck to him!”

It looks like it will sometime this summer before Longmeadow will have solid information about how much local aid it will actually receive for FY11! Not much different than last year.

Bottom line

Given the difficult fiscal situation still facing the state of Massachusetts, Longmeadow should continue to plan how it would deal with a significant drop (10-15%) in state aid. Perhaps, the idea of multiple budget scenarios and related cuts should be used as suggested in earlier Tri-Board budget discussions.

Both the School Committee and Select Board will continue intense budget discussions next week and it will be interesting to see what actions each group plans take to meet their assigned targeted cuts (Schools = $1.5 million cut, Town = $650,000 = $2.15 million).

Upcoming dates for the FY 11 Budget Process….

1. Select Board/ Regular Meeting, February 1 at 7 PM- Police Dept Community Meeting Room


2. School Committee- Special Meeting- February 4 at 7 PM in the School Committee Room at Longmeadow HS to discuss the School Department FY 2011 Budget.


3. School Committee- Public Hearing- February 8 at 7 PM in the LHS Cafeteria- on the Longmeadow School Committee budget.


4. School Committee/ Select Board- Special Meeting- February 24 at 7 PM in the School Committee Room FY2011 Budget Presentation


5. February 26- FY2011 budget submission by Town Manager to Select Board

Check the Town Calendar at LongmeadowBiz for the latest calendar of scheduled events.

Longmeadow Teachers Agree to 0% COLA

The Longmeadow School Committee and the Longmeadow Education Association have reached a two-year collective bargaining agreement that provides for a 0% COLA for FY2010 and FY2011. Below is the official press release....

"The Longmeadow School Committee and the Longmeadow Education Association are very pleased to announce that they have reached a two-year collective bargaining agreement with the Association’s approximately 285 teachers, counselors, and specialists. During the negotiations that resulted in this agreement, the Committee and the Association recognized the extraordinary financial challenges facing the District. Although we are in difficult financial times, we all kept our “eyes on the child” and reached an agreement that does not further stress our financial resources. The agreement, which the LEA ratified last week and the School Committee approved this evening, provides for zero percent cost of living adjustments (COLAs) in FY 2010 and 2011, permits a temporary reduction in professional development days over the two-year period, and goes through August 31, 2011. The Committee and the Association are pleased that we have reached an agreement especially at this critical budget time."

Now that this contract has been settled... will the other town employee collective bargaining units without contracts for FY2010 and FY2011 do the same and accept a 0% COLA?

As summarized in a recent post (Tough Times Ahead for Longmeadow- Part IV, 1/10/10) achieving a balanced FY2011 budget will be very difficult with a current projected budget deficit of over $2 million. This agreement to a 0% COLA for FY2010 and FY2011 provides significant financial relief to the town of Longmeadow and allows our town leaders to create a balanced FY2011 budget without the uncertainty of a teachers union collective bargaining agreement.

A large thank you to Longmeadow teachers!

Looking for a Choice at Town Meeting?

Longmeadow News- May 14, 2009
[click image to read entire article]

In the May 14, 2009 issue of the Longmeadow News, Mr. Alex Grant wrote in an opinion piece that the voters of Longmeadow were “missing … a choice” in the budget. Mr. Grant wrote that Longmeadow residents “have little choice but to approve the budget presented to them.”

Although Mr. Grant’s observation is correct that the town residents were given but one budget option to either approve or disapprove, I submit that the floor of the town meeting is not the place to write a $52 million budget. What is missing from Mr. Grant’s essay is the fact that the School Committee, the Select Board, and the Finance Committee jointly developed the proposed budget over a period of nearly six months – during which time there were numerous opportunities for public input. By the time of the Town Meeting, residents should expect the budget to be finalized and presented for approval by the residents of the town.

The complexity of the budget, and the requirement that it be balanced, is such that its development by 11,000 town voters, or even 150 town meeting attendees is not practical. The budget is appropriately, in my opinion, prepared by the three committees that are charged with representing the town residents. The members of these committees take into account the needs of the town as well as input from residents. They assure that legal constraints (mandated programs) are financed, and that other statutory requirements are met (such as having a balance between income and expenses).

Once the proposed budget is developed and finalized, what the Town Meeting should do is provide a forum for:

• Those developing the budget to explain what they did and how they made the choices that were made. Options that were considered and rejected could be presented, but a review of six months of budget development would are not needed. Nothing would be served by rehashing at the town meeting each controversy or compromise that took place during the preparation of the budget. The Town Manager’s presentation met these objectives.
  
• Individuals to ask questions regarding the budget process, the bases for decisions that were made, and the budget recommendations.
  
• Individuals and groups with alternate positions on budget items (income or expenditures) to communicate their position and seek support from the town voters acting as the legislative branch of our government. Alternative proposals for additional spending should include either equivalent spending reductions in other line items or a source of income to support the added line expense.

Even with the prior development of the budget, residents still have the option of rejecting the budget on the floor of the town meeting – although I would submit that such action should be accompanied by a clear directive of how the proposed budget should be revised.

Mr. Grant acknowledged that the operating budget presented at this year’s Town Meeting “looked like a reasonable product of tough times and hard choice”. However, I could not disagree more strongly to his other comment that “the 150 residents who attended should be under no illusion that they wielded any significant power at that meeting.” Those 150 people did far more than pass a budget that that had been written, debated, and rewritten over a period of six months; they acted on 33 other articles on the Warrant, several of which had not been subject to that same level of public review over the prior several months. It is most interesting to note, that indeed, many of the articles and motions that failed to gain residents’ support at the town meeting were those that had not been broadly considered prior to the meeting.

The issue that appeared to be of greatest interest to Mr. Grant (and perhaps to those who were in attendance) was the issue of postponing the vote on the budget. Although the tri-committees (School, Select Board, Finance) had met the evening before the town meeting to discuss this issue, the short notice prior to that meeting and technical difficulties at LCTV (which prevented it from being televised) essentially made this a “new” issue to most of the electorate when it was proposed on the floor of the meeting. As a new issue, the debate was lively and polarized. I would guess that opinions were voiced at the Town Meeting that had not been heard the evening before. With the State Aid budget still not in place two weeks after the town meeting, it appears that the decision reached by the town’s electorate prevented an unnecessary delay in the approval of the budget that was developed over months of effort.

Other articles that seemed perfunctory when posted (such as articles 13 for remote reading water meters, articles 16 and 18 on parking and snow removal and article 32 on outdoor water use) also failed when questions arose on the floor of the town meeting that might have been addressed or at least anticipated had these items been given the same opportunity for prior public review.

Contrast these articles that did not pass with the passage of articles that included the approval of large expenditures. No, Mr. Grant, the passage of these articles was not a “foregone conclusion”, but their passage was rather an indication that the appropriate amount of planning and review had been completed prior to the evening of the meeting. In addition to the budget, the capital expenditures and the Community Preservation expenditures had been the subject of multiple publically held committee hearings over many months. Input from individuals and groups potentially affected by these warrant articles had been considered prior to the votes at the town meeting

Yes, Mr. Grant, only 150 people participated in this year’s town meeting, but whether in the vote on postponement of the budget or any of the 34 scheduled Warrant Articles, these people had significant power – and hopefully next year will see ten times as many voters at the Longmeadow Town Meeting to show the power of the people.

Mark P. Gold

Mark Gold is the chairman of the Capital Planning Committee and is a candidate for the one year seat on the Select Board. See his website at GoldforSelectBoard.com for additional information.

It’s all about the money!

The following are excerpts from an April 30 Longmeadow School Committee PR.

“The Longmeadow School Committee and the Longmeadow Teachers Union have been engaged in “Interest Based Bargaining” since January. As of April 29, a settlement had not been reached and both negotiating teams have agreed to jointly file for mediation with the Division of Labor Relations for the Commonwealth of Massachusetts. The School Committee is hopeful that with the assistance of a state mediator, the parties will reach resolution on a successor agreement before the August 31 expiration of the current agreement.”

“The School Committee recognizes that the current financial climate makes collective bargaining extremely difficult for both management and the union. The School Department budget, recently approved at Town Meeting, included more than $200,000 in step increases imbedded in the current collective bargaining agreement for the teachers, but did not include additional funds for a cost of living adjustment (COLA). The Committee recognizes that there is a potential $600,000 deficit for the FY2010 budget and that such a deficit will place an even greater strain on the District’s limited resources. In the next two weeks, the School Committee will be taking the difficult action of reducing its workforce for the 2009/2010 school year.”

In the May 14 issue of the Springfield Republican, there was an article about the upcoming SC/ teacher’s union mediation process. Marcia Haar, president of the Longmeadow Education Association, was quoted “These difficult economic times require a level of creativity in negotiations that a mediator should be able to facilitate.”
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For anyone who has been reading my posts on LongmeadowBuzz, you will know that I believe we as a town need to be realistic as to what we can afford whether it comes to teacher (and other town employee) salaries, building a new high school or repairing our decaying town infrastructure (water/ sewer lines, DPW facility, etc.).

Longmeadow is certainly not isolated from the difficult economic times that the world is now experiencing. The town is receiving significantly less state aid than in previous years and our other revenue sources (auto excise taxes, interest on town deposits, etc.) are down sharply. At the same time some of our expenses, particularly those related to Special Education are escalating at a fast pace.

In the world around us, we are seeing skyrocketing unemployment/ job losses, business bankruptcies, crashing stock markets and collapse of some of our best know financial institutions. For even the most savvy people, financial survival is becoming more and more difficult with every passing day. No one knows for sure when this crisis will be over.

Now back to the subject at hand….Looking from the outside it would appear that one of the key obstacles in these SC/teacher union negotiations is likely related to cost of living adjustments (COLA) and other salary/ benefit considerations that need be factored into the new three year teachers contract.

In other words…. “it’s all about the money!”

From what I understand about the Longmeadow teacher’s contract there are at least three components that make up total teacher compensation. These components include step increases, education credit raises and a COLA.

According to my source the step salary schedule for the current contract ending August 31 provides for an average of ~2.8% for every year up to 15th year.

[It is interesting to note in the SC press release that $200,000 for step increases has been “allocated” in the FY2010 budget. However, at the April 27 Select Board meeting the Finance Committee chairman stated that the current teachers’ contract has ~ $350,000 for step increases. Does that mean that the FY2010 school dept budget as approved at Town Meeting does not include the full allocation of salary step increases and is $150,000 short? How about the allocation of funds for education credit raises in FY2010?]

The current contract provides for teacher advancement of their Masters Degree and education credit raises of ~ 1.5 - 2.7% for every 15 credit hours achieved. Obviously, this salary increase is not achieved every year.

For teachers who have been in the system longer than 15 years and who are approaching retirement there are longevity pay increments during the last three years of employment. The current increment is a $3000 increase for each of the last three years.

In today’s uncertain times, a “no cut” employment contract would appear to be a great job benefit. According to the current contract, notice of termination must be given to a teacher before June 15 otherwise employment is guaranteed until the end of the following school year. There are not many people employed in business today that have such an employment contract. Usually, it is 2 weeks notice or less.

Town Meeting passed the FY2010 budget without provisions for teacher or police/fire COLAs. Each 1% COLA that is agreed to will cost the town ~$300,000/year. Now that the teachers union and SC have initiated mediation, the police and fire unions will likely await the outcome and not be inclined to settle for anything less than what the teachers receive.

It is interesting to note that April Consumer Price Index (CPI) data reported today showed prices were unchanged from March and 0.7% lower than one year ago- the largest 12 month drop since 1955. If this is the case, why is there a need for a “cost of living adjustment”?

As reported at Town Meeting, the town has $2.1 million in its Operational Stabilization Fund (aka “rainy day” fund) which will likely be used to meet any contract financial obligations and to balance the FY2010 budget. Let’s be careful that we do not use all of this money too quickly or else we may find that it is still raining for the next two years or more and we have no easy remedy.

Let me repeat what I said three weeks ago in previous Buzz posting…

"I am hoping that the teachers and town employee unions will agree to a 0% COLA for at least one year. We need all of our town employees and teachers to help maintain the quality of life and education in our town. We also need to recognize the difficult financial circumstances that lie ahead and plan accordingly."

FY2010 Budget

Based upon the agenda for tomorrow's (2/23/09) Select Board meeting, it appears that we will be getting a 15 minute review of the Town Manager's FY2010 Budget Report.

I would encourage Longmeadow residents to watch this discussion on LCTV at 7:15 PM. Update: The SB meeting on 2/23 will not be broadcast LIVE.

With only 15 minutes, I suspect that our town manager will only be able to review overall budget highlights. 15 minutes seems much too short a time for such an important topic so hopefully the SB chairman will extend this allocated time.

I am particularly interested in how this budget report handles the potential shortfall in revenue to cover the upcoming town employee collective agreements that are expiring at the end of the current FY2009 year. I'm guessing that the proposed balanced budget will not include any provision for possible town employee related salary increases for the FY2010 budget nor budget any funds in this direction or include any contingency plans.

The Longmeadow School Department proposed budget for FY2010 that was approved last week by the School Committee which was $83K less than the current FY2009 also did not provide for any teacher salary COLA increases. The SC did acknowledge that any teacher salary increases must be met with additional school department budget cutbacks in order to meet the FY2010 budget commitment to the Select Board.

I would expect that the Town Manager and Select Board also need to work out the details on how to fund the FY2009 revenue shortfalls before they can fully understand all of the revenue sources such as "free cash" and the operational stabilization fund for FY2010.

Everything that I read in the newspaper seems to suggest "a not to worry attitude" and that Longmeadow is much better off than the rest of the town and cities in Massachusetts. That attitude seems strange given all of the budget issues that we have faced during the past couple of years.

Stay tuned for an interesting budget season.

Reality Check

Below are some recent news headlines that paint a pretty dreary near term local economic future....

click here to read full story

click here to read full story online

Recent cutbacks in state aid by Governor Patrick (see previous LongmeadowBuzz blog postings) to Massachusetts cities and towns are strongly related to the worldwide recession and appear to be getting worse. In October, Gov. Patrick reduced FY09 spending by over 1 billion dollars and just recently announced additional large cutbacks in aid to cities and towns for both FY09 and FY10. My guess is that we haven't seen the whole story and more cuts should be anticipated.

Because of this trend in the global economy I believe that at least in the short term (next 1-2 years) the finances of Longmeadow will be stretched to the limit. Many of us have already reacted in our personal finances by significantly reducing spending and building contingency plans (increased savings, etc...) for financial survival.

This week's vote by the School Committee on the FY10 school budget ($31.2 million) and reported in this week's Longmeadow News highlighted the need for 11 staff layoffs in order to meet the FY10 budget guidelines set by the Select Board and the Town Manager.

I attended the recent public forum held by the School Committee at Longmeadow HS on the upcoming School Dept FY10 budget and was very impressed by the large amount of effort that was involved. The proposed budget included some difficult staffing reduction decisions in order to meet the budget guidelines. (The proposed FY10 budget is ~ $83,000 lower than FY09 budget.)

My concern is that the proposed budget did not include any allowance for "cost of living adjustments" (COLA) that might be involved with the upcoming teacher contract negotiations (the current contract expires at the end of this school year). In response to a question that I asked, Superintendent Hart indicated that she "hoped" that some agreeement could be reached before the Town Meeting in April to allow the budget process to be finalized.

(note: The last teacher's contract negotiation in Longmeadow extended more than one year past the prior contract expiration date and resulted in the need for a $2.1 million Proposition 2½ override .)

To put some economic prospective on this concern, professional salaries (I'm assuming mostly teachers) in the FY10 budget are $18.6 million dollars. (It should be noted that this number does not include health care and other related school dept employee benefits which according to the FY09 budget report was 3.8 million dollars) .

If a 2.5% COLA was negotiated it would add approximately $465,000 to the proposed FY10 budget. With current budget process, the likely way to achieve this savings would be through a reduction of teachers and/or other staff positions since salaries are ~75% of the total school budget. Obviously this approach would not be in the best interests of our schools or community.

While I do not know all of the specifics of the teacher salary structure, I do know that many teachers in our school system will receive "step increases" even if a 0% COLA was implemented.

If you have been following the budget process for the past couple of years, you will have become aware of the large impact of teacher and other town employees salaries on the budget of our town.

I believe that additional town employee contract negotiations are also underway which will put additional pressure on our FY10 budget.

Given the current economic conditions that surround us, I would like to propose a one year contract and freeze on salaries (that is, a 0% COLA for FY10) for both town and school employees so that we do not lose key people that are important to maintaining the quality of life in our town. Contracts for FY11 and FY12 can be negotiated once the economy stabilizes and future town revenues are more visible.

As a community we need to react in a prudent manner or else the future of our town may become very distressed caused by drastic cuts in town and school services dramatically affecting our quality of life.
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The LongmeadowBuzz blog invites both pro and con agruments to this proposal for posting. Comments are moderated but are more likely to appear if you add your name and address. Consider the posting of such comments on the LongmeadowBuzz blog as a Internet "letter to the editor".

"....Longmeadow Face(s) hard choices on looming budget cuts

The following story appeared in The Republican on Thursday, January 29
“East Longmeadow, Hampden, Longmeadow, Ludlow and Wilbraham face hard choices on looming budget cuts” (click link to view full story)

Here are some excerpts…

Last week, Longmeadow Superintendent of Schools E. Jahn Hart announced the elimination of at least six teaching positions throughout the district for fiscal 2010. The School Department is currently working with a projected $31.2 million with $28 million coming from the town's general fund. Hart said she does not know what will happen with the layoffs.

"We respond to decisions at a town level, so we will see after the Monday night Select Board meeting what changes we will have to make," she said

Editor’s Note: While the $31.2 million proposed school dept budget for FY2010 is $83,000 less than the FY2009 budget it does not include a COLA increase for teacher’s salaries. A 3% COLA increase could add $550,000 to the school dept FY2010 budget.
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Longmeadow Finance Director Paul J. Pasterczyk said the town is currently working with a $47 million budget. He said the town will take an estimated hit of $335,000 in the next fiscal year, much less than the anticipated $950,000.

Town Manager Robin L. Crosbie said the governor's cuts will not have as big an impact on the budget as they expected."We had already planned for deeper cuts, so this isn't as bad as we initially thought," Crosbie said. "The accounts that were targeted are not ones that we get a lot of money from. We do not get any additional assistance and only a small amount of lottery aid, so this has a fairly minimal impact on us."

However, Crosbie said the town has to look at the future and the reduction in revenues. "There have already been drops in local receipts and because of that we have indefinitely stopped hiring for positions that have become open in town departments," she said.
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Editor’s Note: Hopefully, we may be getting some insight during Monday’s (February 2) Select Board meeting as to how the town plans to meet the expected shortfall in revenue for the current FY2009 budget estimated to be ~$400,000. However, looking at the SB meeting agenda, it doesn’t look like much time has been allocated for discussion of this subject.

Given that the economic situation at both the state and national levels seems to be worsening, the town should anticipate and plan contingencies for still greater cuts in state aid and other town income as we move forward.

The numbers are in!

According to the numbers posted today on the Massachusetts Dept of Revenue website, Longmeadow's state aid for the current FY2009 will be reduced by $169,442 which is higher than my original estimate of $146,000. Below are the official numbers for FY2009 (original), FY2009 (revised) and FY2010 (projected).


Combining this number ($169,442) with the reduced excise tax receipts, lower investment income and overbudget snow removal costs (total = $225,000) that were discussed at the last Select Board meeting adds up to almost $400,000 which must be cut before the fiscal year ends on June 30.

Looking to next year's budget... it doesn't get any better. Comparison of the original FY2009 state aid with the proposed FY2010 state aid shows a shortfall in revenue to Longmeadow of almost $500,000.

According to Paul Pasterczyk, town finance director there is ~ $917,000 of "Free Cash" and approximately $2.13 million in the Operational Stabilization Fund. Both of these sources which are the town's reserves can be used to reduce the current deficit.

While the FY2010 proposed school dept budget is $83K less than FY2009 (see earlier post), it does not include a "cost of living adjustment" or COLA for teachers since their contract ends at the end of the current school year. If a new teachers' contract were negotiated that provided for a 3% COLA increase, it would increase the proposed $31.3 million school budget for FY2010 by $550,000!

The current financial environment suggests that the FY2010 budget process which has been underway for some time looks like it may be very difficult.

Stay tuned!

Longmeadow Public Schools Budget Hearing

The Longmeadow School Committee invites and encourages all residents to attend a public hearing on its FY10 budget on Wednesday, February 4 at 7 PM in the Longmeadow High School Cafeteria. This hearing provides residents the opportunity to listen, learn and provide feedback on the current and future fiscal challenges of the Longmeadow Public School system.

The School Committee is proposing a FY10 budget of $31,239,339. This budget proposal reflects a DECREASE of over $83,000 from the FY09 Revised Budget as well as significant staffing reductions.

Please click the following link to view the DRAFT FY 2010 School Department Budget that was presented the School Committee during their meeting of January 26, 2009.

* IMPORTANT –The current proposed budget is subject to change by the School Committee prior to the Budget Hearing and/or as additional information becomes available (i.e. town and state revenues, etc.).

An update on budget cuts...

After reading Gov. Patrick's speech yesterday at the Massachusetts Municipal Association I learned that the proposed 9.7% cut will be applied to the "Lottery aid" and "Additional Assistance" line items in the FY09 Cherry Sheets.

Note: “additional assistance” provides unrestricted general purpose aid to municipalities

See summary below.

[click table to enlarge]

For Longmeadow the FY09 total of these line items is: $1.51 million .... so it looks like the financial hit will be $146,000. This is only my guess and not an official number.

It is possible that Gov. Patrick may elect to apply some other formula to decide how to distribute these cuts particular given the fact that the city of Boston has such a high amount of “additional assistance” in their cherry sheet allocation. A straight application of the 9.7% cut translates to $22 million cut for the city of Boston of which $16 million comes from the “additional assistance” line item.

For Longmeadow it looks like the underperformance of investment income and excise tax receipts (-$200,000) as FY09 revenue sources + higher than budgeted snow removal costs (-$25,000) that were discussed at this week's SB meeting (reported in an earlier post) will be larger items.

At this point total budget cuts required for FY09 may total ~ $371,000.

Looking forward to FY2010 Governor Patrick said that he will be proposing a level funding of Chapter 70 funds for education and a significant cut in “Lottery aid” and “additional assistance” funding with the net result of a total state aid reduction for cities and towns of 7.1%.

For Longmeadow this FY2010 budget reduction would amount to ~$480,000. It looks like the upcoming FY2010 budget process will be very difficult.

On Wednesday, January 28 the official FY09 budget cuts for each town will be announced. Hopefully, it will be equal to or less than the $146,000 estimate.

Cuts in state aid are announced

Some “relatively” good news…

Today, Governor Deval Patrick has announced cuts of state aid to cities and towns will total “only” $128 million as compared to earlier estimates as high as $500 million.

See full article on Boston.com.

Gov. Patrick also announced that the $128 million in cuts would not affect the state aid to cities and towns for public education but did not indicate how these latest cuts would be allocated town-by-town across the state.

With the new information and applying them equally based upon original state aid allocations ($128M/$5.3B = 2.4%), our "guess" for reduced state aid for Longmeadow is ~ $205,000. Add this number to the $200K shortfall in other town revenue highlighted during the Select Board meeting earlier this week, the town will likely need to cut ~ $400K in expenses for the FY2009 budget year.

It will be interesting to see how the Town Manager/ Select Board and School Committee address this revenue shortfall.

An update from the Select Board

.. and not much good news!

At the Longmeadow Select Board regular meeting on January 20 some additional information related to the FY09 budget crisis was provided…

• Finance Director, Paul Pasterczyk stated that there likely will be a FY09 revenue shortfall of ~ $200K originating from lower investment income (-$107K) and lower excise tax receipts (-$90K). Both of these areas will likely impact FY10 budget revenue as well.
  
• Mr. Pasterczyk updated the SB regarding snow removal costs and stated that the current expenditures were $25K over budget and likely to increase as the winter progresses.
  
• Town Manager, Robin Crosbie updated the SB regarding FY09 budget actions and said that she has asked all town departments to develop budget reduction contingency plans but at this point has not requested specific “appropriation turnbacks” or expenditure reductions. In addition, purchase orders over $500.00 are being carefully scrutinized before she approves them in an effort to curtail unnecessary spending. Ms. Crosbie indicated that a large portion of current expenditures are directed at maintenance and repair items to keep the various departments operational. Bobby Barkett asked if the oversight could be extended to purchase orders > $100…. Ms. Crosbie said that she would followup with each town department.
  
• Ms. Crosbie stated that the fiscal problems currently being addressed by Gov. Patrick that will be impacting Longmeadow and other towns will likely require a detailed review of prioritized town services to determine which ones will be impacted- both in the current FY09 and FY10 budgets.
  
  Ms. Crosbie highlighted that it is possible that the cuts in state aid may not be applied equally across all towns and cities and that a per capita income adjustment or similar factor may be applied… which doesn’t bode well for Longmeadow’s share of the cuts.
  
• Ms. Crosbie wants to maintain current headcount in order to retain key experience and knowledge within town departments. Furthermore, there is no excess in current staffing to provide required municipal services. Clerical staffing is being rotated from department to department when needed to complete specific projects. However, she acknowledged that salaries are a very large factor within the overall town government budget and that large reductions in expenditures will be difficult to achieve without staffing reductions.
  
  In an effort to curtail FY09 expenses, two open job town government vacancies will not be filled.

Overall, not much good news from last night’s meeting. In fact, it looks like there will be an additional shortfall of ~ $200K in town revenue that will need to be compensated in addition to what the state announces late next week.

The SB seemed resigned to wait until the "financial tsnami" hits Longmeadow at the end of next week and will take up discussion of what to do next at their regular meeting on February 2.

Stay tuned to the LongmeadowBuzz blog for additional updates.

A Financial Tsunami is Heading Toward Us!

These headlines are from this past week’s Springfield Republican (week of January 12, 2009) and highlight the continuing fiscal crisis facing the the state of Massachusetts. The news stories highlight that there is an need to cut another $1 billion (vs. total budget of $28.1 billion) by the end of January from the fiscal 2009 budget because of shrinking tax collection revenue. This is in addition to the $1 billion worth of cuts already imposed last October which did not include aid to cities and towns.

A total of $2 billion of cuts in the current FY09 ending on June 30 are needed.

Governor Deval Patrick said, “ We’ll apportion the pain- and it’s sure to be painful- as equitably as possible and as broadly as possible.”

This past week the state legislature gave Governor Patrick the authority to cut state aid to cities and towns but limited it to cuts of $500 million for the current fiscal year. Gov. Patrick’s new authority is also somewhat limited when it comes to cutting general education for a single school district. He cannot cut it to less than the “foundation budget” which is what the state calculates is the minimum $$ needed to educate students. While I do not know what the current foundation budget is for Longmeadow schools, I suspect that it is much lower than the current school budget so the budget cut limitation is not going to protect our state aid for Longmeadow schools which is currently $6.2 million.

Here is a possible scenario that is very scary….

In the current FY2009 the state budget is providing a total of $5.3 billion in local aid to cities and towns.

Current FY 2009 financial aid to Longmeadow is as follows:

Schools- $3.9 million

Town- $2.3 million

Cuts of $500 million to cities and towns represent a 9.4% cut ($500 million/ $5.3 billion). For Longmeadow this might translate to state aid cuts of $367,000 for schools and $216,000 for the town- a total of almost $600,000!

Given that the FY2009 is more than half completed, reductions of this size would be very difficult and result in a significant reduction of town and school dept services. If there was significant free cash available to reduce this unanticipated deficit, then the FY2010 budget would be significantly impacted.

My question is:

What are town leaders (Select Board/ Town Manager + School Committee) doing right now to prepare for the tsunami wave that has already been formed in Boston and is heading west towards us?

Let's hope that for some reason that this financial tsnami is deflected and heads in a different direction! We should know by the end of January!

Is there a looming financial crisis for Longmeadow?

Two months ago Governor Deval Patrick announced significant cuts in budgets for most state departments after a $1.4 billion state budget shortfall. At the time there was no impact on local funding for cities and town. However, the Boston Globe reported on December 31 (see online story) that the governor was preparing up to $1.0 billion in additional cuts for the current fiscal year which may involve some cuts in local town/city funding.

From this 12/31/08 Boston Globe article…

“Governor Deval Patrick said yesterday that he was preparing for up to $1 billion in additional budget cuts, raising the specter of reductions in aid to municipalities, more layoffs of state employees, and drastic cutbacks in the services that state government provides to its residents.”

"There's a lot of pain, and it's going to have to be spread around," Patrick told reporters during a 30-minute briefing in his State House office. "Nobody's enjoying this. This is incredibly difficult."

Possible emergency budget cuts being considered by the state will not effect FY2010…. cuts in local budgets to compensate for less state aid will need to be made now! In FY2009. Cuts made in the middle of a fiscal year are much more difficult to make because the budget funding deficit must be made up before July 1.

In the current FY2009 the state budget is providing $5.3 billion in local aid to cities and towns. Current financial aid to Longmeadow is as follows:

FY2009
Schools- $3.9 million
Town- $2.3 million
Total- $6.2 million

In the yesterday’s Springfield Republican (1/04/09), it was reported that local western Massachusetts cities and towns were expecting a 5-10% cut in state for the upcoming FY2010… for Longmeadow that could be as much as $850,000. Let's hope that the Governor Patrick does not cut FY2009 local aid to cities and towns.

















To add some additional worry for the current fiscal year, it was also reported in yesterday’s Springfield Republican that current motor vehicle excise tax collections for many towns/cities are down significantly for the current fiscal year.

Based upon the budget information (see page 2 of ATM report) presented at the 2008 Annual Town Meeting, Longmeadow was expecting $2.15 million in excise tax revenue for the current FY2009 fiscal year budget. A short fall of 10% would mean that the town would have to cut $215,000 from the current FY2009 budget.

In past years, the challenge to town leaders has been to prepare a balanced budget that meets the needs of our town for the upcoming fiscal year starting July 1. Let’s hope that we do not have make emergency cuts in town services before July 1 because of revenue funding shortfalls.

25 minutes is too long!!

I consider myself very fortunate to have lived in Longmeadow for 28 years and not needed to call 911 for a family medical emergency and ambulance service.

The Longmeadow Fire Department has provided outstanding 24/7 ambulance service for our town residents for many years and it is one of our town services that is a critical resource for everyone.

Many towns in our area such as East Longmeadow engage private companies to provide this service and sometimes the service does not meet expectations.

As part of my Longmeadow- FSBO service on LongmeadowBiz I get to meet many people who are selling their Longmeadow home and moving out of town.

I spoke to one of my past clients who had sold her home in Longmeadow and moved to a condominium/town house in East Longmeadow earlier this year. I asked her how it was going and she told me that she missed the great services provided by our Longmeadow Fire Dept. Recently, her husband had an medical emergency and she promptly called 911 for help. When the 911 phone call was answered she was placed on “HOLD”. While she didn't elaborate on all of the details, the end result was that it took almost 25 minutes for the ambulance to respond to her home. The crisis ended well and her husband was OK but such a response is unacceptable.

I’m counting on our Longmeadow town leaders to provide the necessary budget resources for our Fire Dept for ambulance equipment, personnel and training so that when my wife or I or anyone else in town needs to call 911… it will not take 25 minutes!

The LONGMEADOW FINANCE COMMITTEE is looking forward….

As I highlighted in my last Buzz posting… in order to live within the town’s financial means there is a need to look at longer term fiscal planning.

Last week the LONGMEADOW FINANCE COMMITTEE issued their report to the Annual Town Meeting and recommended that the General Fund operating budget be reduced by $89,000 rather than using $89,000 from the Operating Stabilization Fund.

The committee recommended against supporting the General Operating Budget as proposed. “….we feel we need to reduce this proposed budget by $89,000 and save all we can for 2010.”

Their reasoning was based upon looking forward at next year’s (FY2010) difficult budget process wherein all town employees salary contracts (including teachers) will be renegotiated.

Last year’s BUDGET STRATEGIES COMMITTEE proposed a path forward through 2010 after recommending a Prop 2½ $2.15 million override. It was clear at that time that balancing the FY2010 budget without a Prop 2½ override was going to be a challenge.

Some excerpts from the latest LFC report…

The first responsibility of the Finance Committee is to present to Town Meeting and all the citizens of Longmeadow a budget that balances the interests of all citizens, regardless of what level they use our myriad of premium town services, and a budget that is sustainable over the long term. …. Integrated in our challenge to balance resources and uses for the next fiscal year we are charged to advise the town on the impact the proposed budget will have on long term fiscal planning. As a town our challenge is to live within the means of the allowed annual 2 ½% increase in the tax levy without frequent Proposition 2 ½ overrides to finance our shortfalls.

The FC report also recommends a series of “facilitated forums” starting in September 2008 to get resident input on how to meet the upcoming FY2010 budget challenges. This is certainly a step in the right direction but how about extending the path forward to FY2012 rather than reverting back to the one year at a time planning process. And while this planning process is underway the town should also consider integration of possible future major capital expenditures (new/ renovated high school, DPW facility, et al) into the budget process in a more comprehensive approach to town finances.

I would strongly recommend that town residents read both the ATM warrant and the Longmeadow Finance Committee report and attend Tuesday night’s Annual Town Meeting. (starts at 7 PM at Longmeadow HS).