"town meeting" Forum ~ June 14, 2007
Transcribed Recordings of Discussion Points
Budget & Finance
Mayor John Moak presenting, engaging in public discussion/Q&A
[The Public "town meeting" Forum, moderated by John Altson,
followed information format via PowerPoint presentation and an opportunity
to relate "powerful points" during three open discussions.
The Mayor assumed the introductory budget presentation and discussion
about general budget and finance (also joining in the conversation during
the other two discussion points).
were recorded by Karen Kelley; transcriptions provided herein are confirmed
with other notes and recollections. Italicized text provides additional
information/insight in context.]
about strategic planning:
The Mayor indicated that he is working with a volunteer financial group
and a Strategic Long(er)-term Plan should be available in few months.
focused more on stabilizing funds, along with analysis of revenues &
expenses. Regarding the latter, the Mayor offering an example of future
cost savings for trash disposal when that contract is renegotiated in
a couple of years. Regarding the former, he cited a strategy under consideration:
pulling predicted new debt out of operating budget by seeking a debt
exclusion, thereby reducing debt payments from operating budget &
funding "buybacks" of old debt.
discussion: Coordination/sharing or selling commonly needed services
with other communities, evaluating feasibility/practicality (in practice
as well as concept).
property tax increase:
- Assessments change but overall tax levy must be within 2.5%
- Tax bill may rise as tax rate goes down
- Tax bill itself may go up more than 2.5% because of allowed increases
in levy limit
[Note/quote: "A community's allowable levy for a fiscal year
(called the levy limit) cannot increase by more than 2.5 percent of
the maximum allowable limit for the prior year, plus certain allowable
increases such as new growth from property added to the tax rolls."]
about the balance in the stabilization fund:
Balance in stabilization fund must be kept at 5% of budget or approximately
$2.5M, per previous City Council resolution. Free cash was $400K at
the end of FY06; spent $60K in FY07 thus is $340K.
Follow-up questions about budget commitment for union contracts:
Union contracts (salary, health insurance, retirement benefits) are
70-80% of the $45M budget; thus only 20% of the budget is flexible.
Suggestion to be creative in restructuring contracts. Mayor
explained that negotiation/arbitration would consider City's free cash
and stabilization funds in the decision, ultimately favoring unions.
question about options for health insurance:
While acknowledging there is a long way to go, the Mayor retraced
strides made in lowering the annual increase in health insurance costs
this year. (With 6.1% increase versus an average increase of 14.6% over
the past 5 years, had the status quo continued, that would have resulted
in up to $400K to $500K higher operating budget.)
Cited were the Massachusetts Inter-local Insurance Association (MIIA,
see Website at this link without)
~ a group with 56 communities who buy as a group. The Mayor explaining
that a combination of this association along with implementation of
a creative option for insurance deductibles implemented this year, was
responsible for lower costs.
If the Municipal Partnership Act (view MPA summary as pdf file at this
link within) is passed ~ (under Sections
4, 6, 7 and 8) the City can participate in the State Government Insurance
Commission (GIC) program to (further) slow the rate of increase of health
insurance costs for local municipalities. The bill, which has already
been filed separately, stipulates that the decision to participate is
conditional upon the outcome of contract negotiations (with unions).
Mayor Moak was one of the first municipal leaders to openly support
the Governor's Municipal Partnership Act (MPA) ~ a comprehensive initiative
to assist local municipalities. Newburyport's City Council recently
introduced a resolution which was passed unanimously at the 6/11 City
Council meeting. [See pro forma resolution (link
without) as provided by the Massachusetts Municipal Association
(MMA) MPA Advocacy Kit. ] With that resolution, Newburyport formalizes
its endorsement of the MPA ~ and joins with other communities, leaders
and citizenry, to encourage legislative approval.
If the legislation is passed ~ included in the myriad of benefits, reimbursements
and disbursements (e.g., participation in the GIC mentioned above) ~
the City will be eligible to receive the following additional revenues,
based upon MMA's Estimates for FY07 data (Newburyport is #206 on the
detailed municipal data):
Projected revenue from eliminating Telecom tax exemptions $68,683 (under
Sections 23 to 27 of the MPA)
- At 1% Meals Tax $571,959 (under Section 29 of the MPA)
- Meals and Telecom combined $640,642
- FY07 Levy $35,419,336, thus potential new revenues at 1.81% of (FY07)
(In anticipation of the future development of a waterfront inn/conference
center, Section 28 of the MPA will allow an increase in local hotel
tax from 4% to 5% assessed the (occupied) room rate. Such examples and
projections to be further examined during follow-up forum.)
note: The Massachusetts Municipal Association (MMA) Website offers a
resource page for more information about the Municipal Partnership Act
(MPA) at this link
without. Watch for future forums and other information about the
combined efforts to "hatch this 'golden egg' now quietly nesting
in the legislative branch of government."]
Discussion Point 2
Tax Revenues & Economic Development
OPD Director Nancy Colbert presenting, engaging in public
Dan Raycroft detained at the City Council's Budget and Finance standing
committee's rescheduled final budget review meeting at the public library
was unable to participate. Nancy Colbert, arriving from that B&F
meeting, presented and addressed public comment & inquiry. A follow-up
forum will be scheduled to expand the conversation about tax revenues
and economic development and relationship to the budget process, which
the OPD Director briefly broached during her presentation.
question/comment about Subdivision costs:
There should be impact fees assessed for water, sewer etcetera - in
the order of $70K per lot. OPD
Director explains that Massachusetts State Law prohibits "impact
fees" per se but the city can charge for direct cost of specific
development (e.g., Maritime Landing, Woodman Way, charged for sewer
improvements via betterment fees, such as those assessed on Low Street
and Plum Island projects). Others
use a system of equitable distribution. Previously, Newburyport had
not considered such mitigation and thus missed opportunities, but will
do (and is doing) so now.
Developers throughout the City do pay connection fees assessed per lot;
while PI residents pay $3K per hookup, contractors pay $5K.]
Chapter 40D Permitting:
"Quick" revamped tool for Industrial Development in Cities
in Towns, processed within 120 days from completed application. Major
advantage is that State markets City from State House. (See Mass Law
Chapter 40D at this link
Regarding the renewal to Lord
Timothy Dexter Industrial Green:
restrictions must change to adapt development for newer "cleaner"
ft currently OK for industrial but not executive/office park
- Kept at 35 ft restriction - special permit would be required
re 40D Site: Who determines?
Property owner requests designation
2. City Council approves
3. Submit to State
about PowerPoint Chart citing increased payroll:
questioned: What relevance, what benefit to City, since City coffers
not affected by payroll tax?
Higher payroll and education translates to higher level jobs and cleaner
businesses that do not ask for lots of services.
building = bigger = more tax revenue that older industrial buildings
referenced earlier discussion about higher income in Newburyport which
translates to decreased state aid for education; Mayor indicates must
continue to lobby for "fair share" - (further discussion deferred
until Q&A about schools).
about encouraging more State Revenue Sharing:
- Working with State regarding creative solutions - these requiring
(State) legislative action;
- Inevitable strain on property taxes as a basis for revenue;
- Must balance the need for property taxes with highest/best use of
properties to retain quality of life;
Municipal Partnership Act - tagged for future discussion. (The Massachusetts
Municipal Association provides a resource Web page about the Massachusetts
Partnership Act, see link
without, also referenced above.)
School Financial Issues
Gordon Bechtel of School Committee presenting, engaging in public
Gordon (Gordy) Bechtel, Chairperson of the School Committee's Finance
subcommittee presenting and addressing public comment. Superintendent
Kevin Lyons also engaging in public discussion.
Buildings old, excluding the newly renovated High School, which reopened
after renovations in 2002. (E.g., Brown built in 1910s; Bresnahan in
- Window replacement
- Technology, especially at the elementary level; comment that even
the new NHS PC's are now out of (5-year) warranty period
- Note: PowerPoint presentation chart for capital needs should be adjusted
to exclude items related to the Kelley School
Major factor when engaging the community regarding improvements in schools
and financial constraints
Q &A regarding budget:
2005 - 2007 there was a 10% increase in school budget, tax bills, but
not in taxpayers income. Trying
to operate more efficiently, with City and community at large
about "No Child Left Behind" as an unfunded mandate:
by Superintendent Kevin Lyons conveyed that the costs were not so substantial
because Massachusetts already had comprehensive testing programs before
"No Child Left Behind." Comment
that on a national level, MCAS exam standards are the "hardest
tests" (MA and CA in this category). The costs associated are time-related,
with the testing absorbing about 3 weeks out of the school year; requiring
principals involved with execution to commit time away from other school
management. A major drawback is that results are not received until
well after a ½ year later. The advantage is that the testing
identifies children who are learning as well, but there is no money
to follow to aid those students to better achieve.
with School Committee, City Council and citizens to address what to
At 6/4 School Committee meeting, Mayor strongly suggesting (with
Chair of SC finance subcommittee Gordy Bechtel in agreement) that an
ad hoc committee be established to look at finances and held School
Department with curriculum: Strategic Financial Planning Committee -
to look at revenue options (state, City taxes, fundraising). The item
is on Monday's (6/18) school committee agenda. (See link
concerning school population projections (past history, building permits,
from Gordy that the student population will peak in a few years, then
decrease (due to choice decrease) then level off.
question regarding choice program:
Allowing Gordy to clarify that while the School Committee votes on the
choice program each year, determining the number allowed per grade,
once a student is accepted, the School District is required to keep
the student until graduation (unless student opts out).
regarding the Long Term Elementary Building Needs Plan:
Answer clarified that the Building Needs subcommittee is currently reevaluating
(new) building space based upon the new school configuration.
That the schools consider a creative alternative of selling the schools
and leasing back the buildings as a means to bring in some revenue.
Dialogue with Gordy ensued about creative solutions, with Gordy mentioning
that the Schools had previously contracted out HVAC - but brought it
back in-house which resulted in a $150K savings. (Note: The schools
have also reduced KW consumption with oversight, but unfortunately with
increased fuel costs these prior savings have evaporated as indicated
in the PowerPoint presentation's charts.)
concerning the factors in per public cost/expenditure (PPE):
Comparing Newburyport to other communities, Gordy indicating that this
was due to smaller class sizes, requiring hiring more teachers. With
the recent reconfiguration, going from 20 to 24 students per class realized
a big savings, but also did cut no core components. (FY08 cuts were
to seriously impact Newburyport High School not only in programming,
but that the school is at the maximum student enrollment.)
of School choice:
$5K per choice student is not enough to cover the cost of teaching these
students; OK when there were empty seats, but not now as the School
District was forced to create more classes, hire more teachers for choice
Expenditures declined in Newburyport with the FY07 cost less than the
State average; Try to get as low as possible, lower than now, by continuing
to look at ways to reduce overhead.
point regarding State Aid:
Question about "how we can get what we deserve" in State Aid
(Chapter 70) since Newburyport receives far less when compared to other
communities (even of equal demographics). The
Superintendent mentioned the lobbying planned by a newly formed group,
directing a question to one of the group's principals present at the
discussion about seeking more revenues and revenue sharing (with State):
- Mention of the meals tax option of the Municipal Partnership Act
(previously cited above) as an example of revenue
out different ways than just the formula the State is presently using,
such as pilot programs.
- Cited as an example by Gordy, a different way to be reimbursed for
Special Education, allowing the State to pick SPED costs entirely, with
the School picking up the cost for educating other students.
- Look at similar communities and form a bloc (which is what the group
concerned with lobbying the State is doing.
end, the burden still rests on local property tax, but the new governor
and others at the State level have become aware that this is not sustainable.
Suggestion made that a percentage of sales tax go directly to education,
along with exploring other and all alternatives.
it was reiterated that a combination of cost-savings and additional
revenues (as well consideration of creative solutions) will be explored
at the future sessions focusing on Strategic Financial Planning for
the Schools (which will be open to the public and encourage public participation)
--- continuing the public discourse as a course of action is planned.