Guest Editorial: Gretchen Straub on the SB Town Budget
I was curious about what the facts really are relative to how the Town of South Berwick has received and spent money over the last 10 years, and how this compares to the budget to be voted on at Town Meeting on June 2. People are saying a lot of things in this budget debate, and I wanted to see what the facts showed.
My questions included:
- What are the trends in the Town’s total spending?
- How does this compare to our non-property tax revenues? And importantly:
- What are the trends in our general fund balance (analogous in many ways to the Town’s “savings account”).
I took information directly from the Town’s audited financial statements and tax assessment records (removing the SAD 35 and County portions from these figures, resulting in Town-only numbers). I then compared this information to the regional inflation index. This 10-year period includes the tenures of several town managers and Councils.
The resulting information is depicted in the graph below. Take a look. I believe the graphic speaks volumes about where we have been over the last 3 to 4 years. During that period:
- Total expenditures have risen significantly higher than the rate of inflation, and
- The General Fund Balance has been reduced by more than 50%, to very low levels.
In a nutshell, a few years ago, the Town began “buying groceries out of its savings account” consistently spending more than it took in.
Since March this year the Town Council has moved in the right direction with their proposed 08/09 budget. They have stopped the increases in Town expenditures, and are stopping the continued drain on the town’s General Fund (the Town’s “savings account”).
My conclusion is that voters should support the direction the Council is taking since March, and support this budget at Town Meeting on June 2.
- Gretchen Straub
Tags: So. Berwick Budget
May 29th, 2008 at 7:04 am
I thought you were going somewhere else completely with your discussion. I think not only should they not increase expenses, but they need to CUT expenses. Holding them to the current level is not enough in my opinion, given the current state of our economy and what many of our residents will be facing; increased fuel bills, gas, food, lower raises and incentives, and decreased benefits. Everyone needs to tighten their belts, not just the taxpayers.
May 29th, 2008 at 7:14 am
Gretchen, thanks so much for doing this analysis of trends, which most of us could never fathom by looking at town reports. It reveals how the current town council and manager have RESPONDED to past mismanagement. In recent weeks they have cut over $900,000 in projected spending for the coming year, thus dramatically reducing our prospective tax burden. They have resisted further draining of our savings in the General Fund Balance. And our town employees and most of the town services we need and enjoy have been retained in this budget.
But we should remember, also, that this positive direction in the 08/09 budget will not become a reality unless citizens attend Monday night’s town meeting and approve it. (Meeting is in town hall and starts at 6:30 pm.)
The budget gets decided by those who show up! So let’s all attend and support the responsible work this town council and manager have done to put South Berwick on the right path.
May 29th, 2008 at 7:25 am
Wow. I never knew that Grossman spent so much; and yera after year. And his proposed budget in January had more huge increases. What was he thinking? The good news is this is being turned around and being corrected. Turning this around is like turning a supertanker. The current Council (without Grossman) has turned the tanker. $900,000 are huge cuts; and they stopped draining the savings. You might say the party’s over. Good! Let’s keep going in this direction.
May 29th, 2008 at 8:41 am
The only problem I see is that everyone is assuming there are actual cuts.
What the council had for a budget was 1.3 million dollars OVER last years budget. Now we are only 485 thousand dollars OVER last years budget.
To me, that is not cutting the budget, that is reducing the amount they want to raise it.
That is a laudable accomplishment, but a cut would be a reduction from the previous year, and a reduction in the mil rate. That is something we will not see for a long time.
I agree that the drain from the undesignated fund needs to continue to be stopped. We now need to look at the services provided by the town, decide whether we actually need them, and look into alternative ways to do some of these tasks that are more cost effective.
This is something that will take years to accomplish, and we may find that there are no alternatives, and that a majority of the people want all the current services to be left alone. Regardless, the goal of the town manager and town council should always be to minimize spending to prevent major tax increases.
May 29th, 2008 at 8:56 am
Dave (NTEC), I think the actual cuts put the expenditures BELOW last year’s expenditures by a small amount. These are real cuts, (not just a reduction in increases). There is not a proposed $485,000 increase in expenditures; I think it is a real reduction by about $20,000. I agree with Sharon, the Council turned a large corner here. They reversed a troubling trend that former manager Grossman had them on. And the use of the reserve fund was most troubling. You can’t live off savings indefinitely, and that’s what he had us doing.
May 29th, 2008 at 9:30 am
Bill,
I agree that the trend needs to stop.
You are also correct that they did cut around 15,000 to 20,000 form last year, and covered last years budget from the undesignated fund.
The point I was trying top make is that not increasing something by as much as anticipated in not necessarily a cut.
If Comcast asks to raise their rates by 10% and only gets 3% that is still an increase, not a cut.
THe other point I was trying to make, is that this should be an ongoing process to reduce costs by as much as possible.
That includes shopping around for health insurance, as well as other cost cutting measures.
May 29th, 2008 at 9:42 am
I agree, which is why the proposed budget is not acceptable to me. They need to make actual cuts, not just decrease the amount of the increase.
May 29th, 2008 at 9:49 am
My understanding is that the Council and Manager will be looking at health care costs for next year. I went to some of the budget workshops and really appreciated Councilor Burke saying over and over that he thought the pay raises and cost of living increases were out of line with what happens in business when economic times are tough. I am going to vote for this budget to go through, but I want the Council and Manager to use this year to ask the tough questions and make tough decisions on every line item so next year’s budget continues the good trend that has started.
May 29th, 2008 at 9:55 am
I think we are saying the same thing, BUT to be clear the Counciul has proposed a budget for 08/09 is less that expenditures from 07/08; it’s not just a “decrease in the increase.” It could be lower, based on further evaluation of type of tings that Dave has suggested. The point I am making is that this Council was presented with an irresponsible budget by teh former manager, and wrestled it back, REVERSING a 3-4 year trend of increases.
May 29th, 2008 at 10:38 am
Bill,
I think we do agree to a point.
The council did reduce spending from last year by $15,000 to $20,000.
The additional reductions from the proposed budget of over $850,000 was over last years budget.
Those are the numbers I am refering to when I say that it is a reduction in the increase.
I agree with Molly that we may have to eat this years increase, which is due to alot of factors which include, but are not limited to the past manager. The past councils also had the job of reining in these increases, as did the department heads.
The council needs to establish firm oversight for any increased spending, and the town manager needs to be more hands on when it comes to monitoring spending by each department.
Some of the departments do a good job of controlling costs, but some do not.
I just want the council and new manager to focus on reductions in the future, b looking at health care costs, granting merit raises to everyone on top of COLA, etc.
May 29th, 2008 at 10:49 am
Very well put Dave (not the ex-councilor)!!!!
May 29th, 2008 at 11:07 am
Thanks, Just Thoughts.
I think one of the problems alot of people have is realizing that last years budget was supplemented by pulling around $500,000 from the undesignated fund, as Gretchen points out.
This year, the council is NOT pulling form undesignated, which is why we see what seems to be a huge single year increase, but actually is the accumulated increase over several years.
People are seeing the increase as a sudden occurance.
This is where communication from the town council is very important.
If left to guess about these things, most people are going to assume the worst
With hopes, the next town manager can emulate the Police Chief in searching for grants and donations to take care of some of the needed repairs, and equipment replacements.
As I have said in the past, if we are going to demand a certain amount of services from the town, we have to be prepared to pay for it.
We just need to ensure that all effort is taken to ensure any unnecessary expenses, and cost overruns are avoided.
May 29th, 2008 at 6:10 pm
It sure is a good thing that we have a council that is smart enough to see the financial picture we were headed in and act bravely in the face of a lot of criticism to make moves to redirect the management of the town.
I don’t understand why anybody, looking out for the interests of South Berwick, would be thinking about recalling these thoughtful, well meaning, hard working councilors.
Paul
May 30th, 2008 at 10:49 am
They are maintaining the raises for the employees in the face of an environment that is deteriorating faster than the speed of light. They are going thru with the misguided purchase the church. To date, no one knows how much it is going to maintain, much less, renovate the property to
While this is a group that may be smart enough to realize the trouble we are in, they don’t have what it takes to really turn this ship around. That is clear.
May 30th, 2008 at 11:39 am
Ron, you write strangely like KC
May 30th, 2008 at 11:51 am
Anyway, please attend the Town Meeting on June 2 and propose specific changes to the Town’s warrant articles , if you have such changes to propose. At this point, it will be more meaningful to participate with real suggestions, rather than generally rant about your generalized opinions about the personal qualities of the councillors.
May 30th, 2008 at 2:07 pm
Not Kc, whoever that is. Just haven’t seen a raise myself in the last two years. Don’t know why town workers must get one. Just means a larger share of my paycheck, which is shrinking, is going to increase theirs.
May 30th, 2008 at 2:13 pm
Well Ron, with that login I guess since I got a raise, bonus and 100% health insurance this last year I should support the town doing the same…
May 30th, 2008 at 2:13 pm
logic, not login… must have computer on the brain.
May 30th, 2008 at 2:34 pm
Point is that most people in this town are having a tough time. Too tough a time to be handing out raises.
Whatever, my entire neighborhood is coming down to vote No anyway due to the situation with code enforcement. No point in providing raises or voting yes when the Town government seems to be working against you.
May 30th, 2008 at 2:47 pm
Ron- What’s the code enforcemnt “situation”?
May 30th, 2008 at 3:49 pm
I think the Town Manager and Council should look at the issue of raises and benefits for town employees when tax payers are facing tax hikes. But I think that they should develop a fair and rational policy to do it, not just make cuts without thinking them through. Town employees are struggling the same way all of us are and they should be able to expect fair and equitable treatment by their employer. That’s why I will vote to have this budget go through and I will call for the Town Manager and the Council to look at town employee raises and benefits to have a plan in place for future budgets so if we have to reduce or eliminate raises and reduce benefits that it will be done fairly and rationally.
May 30th, 2008 at 8:33 pm
Let’s not forget that a lot of the town employees are union and the rates are set by the contracts. The town can not just stop giving them raises without re-negotiating these contracts. Not defending them (although they do a great job), just pointing out a fact that may not be able to be controlled by the council.
May 30th, 2008 at 10:35 pm
The police department is the only part of the Town with a union contract. All others are not bound by union contracts.
May 31st, 2008 at 3:24 pm
The Highway Department is also unionized, as well as the school district.
May 31st, 2008 at 5:36 pm
Really? At the budget hearing, I heard the Chairman say that only the Police is unionized. The school is another matter.
June 1st, 2008 at 11:50 am
The Highway department is NOT unionized. As far as the town goes, the PD is the only one. And the schools of course.