Following are the prepared remarks of Fran Meaney for delivery at the outset of the initial meeting of Chatham Concerned Taxpayers on February 4th at the Chatham Community Center. 65 turned out at 8 a.m. the morning after a snowstorm.

The initial meeting of

Chatham Concerned Taxpayers

February 4, 2009, Chatham Community Center

Francis X Meaney’s prepared remarks

WHY ARE WE HERE?

Welcome to all. I’m Fran Meaney.

First of all, a word about who called this meeting. The other night I received an email from a person to whom someone had forwarded a copy of an invitation to this meeting. “Who,” she asked, “are you?” Fair question, so a minute of background about me. Let me also introduce Phil Dupont, who is working with me.

Speaking for myself, I’m a really new citizen of Chatham. We’ve been coming here for about 12 years, bought a place just nine years ago and made the break from Boston a couple of years ago when Mayor Menino got too aggressive with the property tax.

In short, the bare facts:
[Braintree High School, Notre Dame; U.S. Navy; Harvard Law School; lawyer for just short of 50 years; as managing partner ran law firm with a bigger budget’s than Chatham’s for seven years; bond counsel to the Commonwealth of Massachusetts; bond counsel to the City of Boston; and congressional strategist for a dozen years on financial matters for those big, bad Wall Street guys such as Goldman Sachs. Despite all that, I never had occasion to learn anything about town finances till the last few weeks. No expert yet, just starting to learn.]

Like many transplants my wife Jackie and I were delighted with the low taxes in Chatham, though they’ve been edging up lately. Chatham is beautiful and well-run. What’s not to like? And Jackie could indulge her passion for gardening, something she couldn’t do in Boston.

As financial chaos swirled around us, some friends and I started to pay more attention to what’s going on with the town and its plans. Items in the Cape Cod Chronicle seemed to suggest that budget increases for Chatham were in the offing when almost every other city and town in the state, and the state itself, was looking for ways to cut spending. That seemed odd.

When we began looking into things, we were surprised to learn that the budget in Chatham had soared over the past eight years. What was $21 million in 2001 is $31 million in this fiscal year 2009 which ends June 30th. That’s 44% in just eight years. When the draft operating budget came out, it proposed to add another almost 5% in spending and there was talk of more to come at the Annual Town Meeting in May for capital projects, all of which would push up property taxes. Looking back, we saw that quite a lot of debt had been recently authorized which town taxpayers will be paying off for 20 years, much of it overlapping with the huge debt service that will be required for the townwide wastewater plan.

Well, we have been digging and we’ve learned a lot in just a few weeks, but there’s still a lot we don’t know. We don’t know much town history yet. We’re far from being experts. The town’s budget is a bit Byzantine since revenue pours in from various places and goes out the same way. The selectmen have some say here, the school committee has say there. We certainly have learned that there are very competent people in town government and dedicated folks serving in elected positions.

Bu where was the voice of those who paid the bills, the taxpayers, we wondered? Unlike some towns, Chatham has no taxpayer association and a few letters now and then in the Chronicle or the Cape Codder seem to be the most prominent outlets for protests about spending.

What we do know from personal experience is this:

In normal times at all levels of government – national, state and local – the people who are active are generally those who want something that involves more spending – a program for this or that worthy cause. An excellent case can be made for every program, every project and officials standing for election can be sincerely persuaded that a sought-after expenditure is a good thing. Seldom do those who think leaving more money in the hands of the taxpayer bestir themselves, so spending goes up and up till a recession or other financial setback occurs and people wonder what’s going on. That’s where we are now in Chatham.

Chatham has been blessed in recent years with growth in the tax base that made increasing annual expenditures possible. While overall town spending was growing so much in just eight years, schools spending closely paralleled that of the rest of the town departments, especially if you take into account the money they’re looking for in 2010.
In large part Chatham has been the beneficiary of a second-home building boom of McMansions. These expensive properties were added to the tax rolls yet relatively little burden was placed on town services by folks who lived elsewhere and sent their kids to school somewhere else. With the increased money available, the town stepped up its own building program – the handsome if little-used but expensive community center we are in is a prime example. Elegant additions to the police and fire facilities have been drawn up, much spending has already authorized and these projects are poised to be pushed ahead. But, just maybe, this is not the time.

These are different times, tough times, extraordinary times. Perhaps it’s time for a pause and a tightening of the belt.

We are all aware that there is an extraordinary financial crisis affecting the world, the nation, the Commonwealth and our own community of Chatham and its taxpayers and residents. There has been nothing like this since the 1930s. No one knows how long this crisis will last. Our president says it will take years to dig our way out of this hole. Many if not most economists expect difficult times to last at least through the next two and one-half fiscal years.

Despite the public perception that Chatham is a rich town, it is not. To be sure, there is a lot of very expensive shore-side property in town that the public cruising through town sees. But a rich town such as Weston in the Boston suburbs has a per capita income almost four times that of Chatham. We must keep that in mind.

Financial difficulties are being experienced by ordinary folks, such as those living on fixed incomes; working families who are having difficulty meeting expenses, including their housing costs; those in retirement whose life savings and income have been decimated by the collapse of securities markets; and those facing or fearing the loss of employment. A lot of them live in Chatham.

Town businesses have suffered sharp declines in revenues or other reverses. Restaurants that have stayed open year-round are unable to do that or are operating on a skeletal work week or shorter hours. Roo-Bar, for example, which had stayed open winters and wanted to, couldn’t get the usual bridge loan from his regular lender or any lender to stay open through the winter. “Come back in March and we’ll see how things look,” Roo-Bar was told. Retailers had the worst holiday in memory. Consumers aren’t consuming, new job layoffs are being announced daily and unemployment is creeping towards 10%; the Cape is already at 8% according to some estimates.

As a result, those experiencing such financial difficulties are of necessity reining in their spending to enable them to live or operate within the revenues and resources now available to them. Many feel lucky if they can manage to live at the same level as last year.

In my view, this is no time for their property taxes to go up to support a growing town budget, salary increases or new facility construction. Yet the draft operating budget published by the Town Manager projects an increase in spending of $1.268 million over the fiscal 2009 spending authorized last May by the Annual Town Meeting. The spending plan assumes an increase of 2.5% over last year’s property tax levy AND another $600,000 or so to be made possible by a special vote (or override) at the town meeting in May. (While it is said there is a device or gimmick that can offset the override cost for fiscal 2010, it is a one-year fix at best but the override amount is built into the property tax base forevermore.)

This budget can be rejected by the taxpayers at the town meeting in May. So can the new capital spending we hear will be proposed that would also increase the property tax levy. But it should not come to that.

We believe that town officials led by the Selectmen should take steps now with the aim of holding the spending line for fiscal 2010 at 2009 levels. Some will say this is impossible, ridiculous, draconian, overkill or unnecessary. We are saying “Think of those who are paying the bills.” Doing this will necessitate obtaining cooperation from the town’s unions to freeze compensation rather than suffer personnel layoffs. This is happening in other cities and towns on the Cape and elsewhere. This includes at least one school department we heard of. Indeed, to conserve cash that can be used in either fiscal 2010 or 2011 if needed, cities and towns throughout the state are beginning their cuts now, with five months left in the fiscal year, to generate so-called free cash. Chatham should do the same.

A word about cost of living increases: Not to pick on our invaluable firefighters, but the selectmen recently approved a two-year compensation increase for our firefighters of five percent a year for the next two years. Yet the Federal CPI released two weeks ago shows that over the past 12 months there has been ZERO INFLATION, so any cost of living adjustment should be down, not up. Built into the draft town budget we are told is a 2% increase for cost of living of non-schools employees; again, with the CPI at zero, what is the justification for such an increase? The School Department budget includes compensation increases for union and non-union personnel in their budget – we don’t know how much yet – which should be approached in the same way as for all other departments. There aren’t many working families employed in the private sector that will be getting a cost-of- living increase this year. It’s bizarre for them to be asked to pay for such compensation increases for public employees.

As taxpayers committed to fiscal restraint, we believe the Town of Chatham should itself do what is necessary to control, curtail, freeze and reduce spending as necessary to keep spending for the fiscal year beginning July 1 within available revenues, taking into account possible reductions in revenues such as local aid from the Commonwealth, fall-off in hotel/motel tax revenue and even a drop in motor vehicle excise tax revenue, without inflicting additional financial burdens on residents and taxpayers. In other words, no property tax increases. No increase in financial burdens to taxpayers, no Prop 2 ½ increase, no Prop 2 ½ overrides, no capital or debt service exclusions. We hope that a target of running even with fiscal 2009 will do the trick, but it is possible for revenues to dry up even more. Whether to use free cash or money in the rainy day fund is a question for later. That cash could be needed for 2011, so caution even there is called for.

It is a time for fiscal prudence: Hope for the best, but prepare for the worst.
Very important matters get presented to the Annual Town Meeting in May and often get approved perhaps without many realizing the financial implications of the votes they approve. The warrant is a daunting document for most and, in a busy world when the good times are rolling, no doubt it doesn’t get the study it should.

These are not good times, so it’s right for taxpayers to get actively into the fray. That’s the purpose of this meeting. We need to enlist the support of like-minded taxpayers who agree that in these difficult times the town should not be imposing additional costs on taxpayers. We also need people skilled with numbers and management experience to join our small working group to research and publish facts to inform folks why town spending should pause during this time of trouble. The usual argument about project costs growing by delay doesn’t apply to a deflationary environment such as we are in.

We need to build our email list to keep people informed We also need it to enlist some of the great talent that now resides in Chatham to help the town’s officials do their job and to support them in the painful decisions they will have to make if they are to do their best for the taxpayers.

In no way do we suggest that the schools should be the fall guy in all of this, though the draft budget shows the deficit as a schools problem. It’s a town problem. The necessary cuts to fund the schools in full can be made in the other departments if that’s the policy judgment of the selectmen. At the same time, having listened to their arguments, we think the schools haven’t yet approached their budget with a recognition of the extraordinary times we are in.

The schools do, however, present a very real long-term challenge. With an aging population, the number of Chatham students has been in steady decline. As the numbers get smaller, should the schools department shrink, too? So far, the schools have been kept near capacity by recruiting students from other towns who want to experience the excellence of the Chatham schools. Fully 25% of the students in the Chatham school system live in other towns. The town gets a financial benefit from it, but is the so-called School Choice program just putting off coming to grips with the demographic problem? That’s a problem that can’t be solved right away, but it’s a matter that needs to be dealt with.

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We have asked Chairman of the Board of Selectmen Sean Summers to review briefly the roles of the Selectmen, the School Committee, the Finance Committee and, most important, the voters at the Annual Town Meeting in May. After that there will be a short graphics presentation by Phil Dupont and an open discussion where all can express their views, pro or con. How do people feel? Agree or disagree? What are folks willing to do?

Sean.