At A special Friday meeting, the Chatham Board of Selectmen took a giant step towards recognizing the reality of the difficulties being experienced by Chatham's taxpayers. The Board on a 4-0 vote adopted a resolution asking all school and other town employees, union and non-union alike, to accept a compensation freeze for fiscal year 2010 no higher than fiscal 2009 compensation. An answer is due on or before February 24th.

An across-the-board freeze was raised as the most sensible first step at reining in spending at the initial meeting of Chatham Concerned Taxpayers on February 4th.

Almost all school employees are unionized as are fire and police employees, but the police do not have a contract in force. However, the fire contract has not been funded by Town Meeting. As a practical matter, the unions will accede to the request since not to do so would force a considerable number of layoffs of their fellow union and non-union workers.

According to the prelliminary calculations of Chatham Concerned Taxpayers, the savings for fiscal 2010 should be approximately $700,000, more than enough to offset any need for an override vote at the May Town Meeting.

To prevent any increase in the property tax for fiscal 2010, additional reductions in proposed spending increases of approximately $300,000 will have to be made. .

There are clearly more savings that can be made. For example, Chairman Summers specifically asked that a costly, optional healthcare plan that has been discussed for years be finally dropped. The Schools Department has lots of work to do, since it has resisted efforts to trim its spending. The schools and other town departments have room in a $32 million budget to pull back their spending requests and the examination of spending by the Finance Committee and Selectmen should help them unearth such savings.

However, thanks are due to Chairman of the Board of Selectmen Sean Summers for putting the motion on the table and to Selectmen Sussmen, Seldin and Whitcomb for supporting it.

These actions only concern the operating budget and its effect on property taxes. Capital project costs that will raise 2010 property taxes will be taken up at the May town meeting. Details are not yet available. Also, sentiment is growing among taxpayers to rethink the $16 million plus authorized in 2007 and 2008 for the expensive Police Department Annex project that could start hitting property taxes soon if not stopped.

At the meeting Town Manager Hinchey was at his most candid in pointing out that the chronic overspending by the school department can no longer be contained within even the limits of Proposition 2 1/2 and will present an override issue in FY11 and later years unless something is done. It does not appear as if the school department has the capability to manage its finances within the limits of available resources. It needs help. Indeed, one way to look at the across-the-board compensation freeze for FY10 is that is just spreading the result of school overspending over all departments.

The Town Manager also stated that unless economic conditions improve, the compensation freeze may well have to be continued through FY11, since a substantial portion of town spending is supported by revenues other than property taxes, such as the hotel-motel tax, which could well be done in these difficult times. Fees may be able to be raised in some cases, but state law forbids fees that exceed the cost of the services for which the fees are charged.

The Town Manager warned that significant property tax increases were not too far in the future if plans for the town wastewater project are to proceed as scheduled. He noted that nearby towns are rethinking their wastewater plans due to the economic collapse. Chatham might, too, since the ability to finance the project depends in large part on low interest or nterest-free money from special state funds -- which may not be there if the down times continue. Projects of lower priority such as the Police Department/Annex and the fire department facility may have to be deferred or scaled down or both.