Chatham fiscal 2010 budget: 2009 Archives

It seems as if many resident taxpayers had their assessments go up although the town's overall valuations remain roughly the same. Most of the increases appear to be in the valuation of land, not buildings.

We anticipate sharp increases in property taxes in the very near future. Chatham is already number one on Cape Cod in per capita spending for capital projects. If bonds are sold for the 38,000 square foot PD/Annex project ($17 million) and the sewer treatment plant upgrade ($50-$60 million) in this assessment period, debt outstanding will more than triple to about $100 million. (We had urged town officials to defer non-emergency capital projects until better economic times return, but they rejected that appeal.)

When debt service payment starts on these two projects, the cost of debt service on the property tax will go up more than 250% over what is in the budget for this fiscal year. So if you're paying $270 for debt service this year, expect the bill for debt service to be close to $700 when those payments start, if not more.

And, of course, we don't know what will be required for fiscal 2011 operations. CCT believes and so stated that the fiscal 2010 spending plan presented by town officials at the Annual Town Meeting was in substantial deficit, calling for spending $1 million, perhaps even more, than revenues expected to be received in fiscal 2010. CCT's call for fiscal prudence was ignored as compensation increases for public employees ranging as high as 6, 7 and 8% -- plus benefit increases -- were awarded. Almost all full-time town employees receive more in compensation than half the households in Chatham have income to live on.

So one should consider carefully whether to file for an abatement of assessment this time around.

The first real property tax bill to pay for fiscal 2010 will be going out in mid-December, we have been told. Abatement applications must be filed within 30 days thereafter.

Click on this link to obtain a copy of the Abatement Application form.

Last week there was bad news for Massachustts. While the national GDP for the third quarter was reported to have surged 3.5%, the Massachusetts GDP dived 1.1 %. The governor announced new state employee layoffs would be in the thousands.

At the same time in the Massachusetts enclave of Chatham, free of the worries of the national and state economies, the selectmen are discussing where they will get the money for fiscal 2011 (beginning next July 1) to pay for union pay raises such as the 8% built into the school union contract. And whether or not they should offer a cost-of-living increase when price increases have been non-existent for the past year, with the consumer indexes falling below zero! Social Security recipients aren't getting a cost-of-living increase, but Chatham public employees might.

The fat schools union contract is just a touch richer than the fire union contract negotiated by town officials and approved by the selectmen last October - December as the economy was in free fall. Under that contract fire department employees are enjoying 7% increases during the current fiscal year.

Already, almost all Chatham full time employees receive more in compensation than the incomes that half the households in Chatham have to live on.

For fiscal 2010, the selectmen asked the unions to consider reopening their contracts to negotiate reduced increases. As soon as one union said no (the fire union), that cost-saving idea was discarded and the spending plan went through granting all public employees an average increase of 6% - as well as increases in pension and health care benefits.

A similar request has been made to the unions about fiscal 2011. Based on past experience, one cannot be optimisitic that the public unions will take the economic condition of taxpayers into consideration.

Massachusetts downturn deepens

U.S. economy heads up as state’s falls further

By Jay Fitzgerald | Friday, October 30, 2009

Massachusetts may be mired in a recession through the end of the year, even as the nation’s economy tentatively pulls out of the worst downturn in decades, according to reports released yesterday.

On the same day Gov. Deval Patrick announced major layoffs in state government, the University of Massachusetts reported that the state’s economy shrank by about 1.1 percent in the third quarter - as indicated by increasing corporate layoffs and plunging tax revenues.

“We’re at the bottom and we might bounce around there for a while,” said Michael Goodman, co-editor of the report and chairman of UMass-Dartmouth’s department of public policy.

Meanwhile, consumer confidence in Massachusetts has dipped for the first time in two quarters amid fears of economic hardships ahead, Mass Insight reported yesterday in a separate report.

“Some people are concerned that next year is a big black hole,” said William Guenther, president of the Boston research organization.

The gloomy Massachusetts news was in stark contrast to a national report yesterday that the U.S. economy grew by 3.5 percent in the third quarter, unofficially ending the nation’s longest downturn since the Great Depression.

Economists warned that the federal government’s stimulus spending may mask the true picture of the nation’s economy. The government’s “cash for clunkers” auto program and the $8,000 tax credit for first-time home buyers helped the economy earlier this year, they said.

But the “cash for clunkers” program is now over, while the fate of the tax credit is up in the air.

Goodman said the U.S. economy, as a result, may not be much better off than the Massachusetts economy.

The UMass study estimated that the state’s economy will be “flat” through the end of this year - and probably won’t start growing until early next year.

Alan Clayton-Matthews, a Northeastern University economist and co-editor of yesterday’s economic report, said the state’s technology sector is slowly expanding in reaction to the tentative national growth, so it could boost Massachusetts in coming months.

But he said he’s still concerned about the national economy - and the risk of a “double dip recession” in the near future.

Some observers, including Patrick, have touted the possibility that the state’s economy might emerge as a leader in any recovery. But those hopes seemed to be dashed by yesterday’s economic data.

Chatham's rich flow of property tax revenues from second home owners -- who impose little in the way of extra costs on the town -- has enabled Town government to maintain a expensive lifestyle much more than it has kept property taxes low for resident taxpayers.

The fruits of this expensive lifestyle of Town government show up principally in two ways: extravagant building projects and unsustainable compensation arrangements with public unions.

The 22,000 square foot underutilized $10 million community center and the $17 million 40,000 square foot Town Hall annex to house a handful of town employees during working hours are current examples.

The most extravagant of all is just being launched now: a 100% townwide sewer system costing hundreds of millions of dollars. Everyone agrees that the chemical pollution of our ponds and embayments should be halted, but not everyone agrees such a massive undertaking is the only answer.

A review of the Comprehensive Wastewater Management Plan does not yield convincing evidence that cost-effective alternatives, particularly those employing newer technologies, were -- or are being -- seriously considered.

Our neighboring town of Orleans, also considering a large sewer system, has engaged a third-party consultant to conduct a cost-effective analysis of its sewer plan and has already learned that a major part of the proposed system may not be needed at all. This process is ongoing under the auspices of a special citizen Wastewater Management Validation & Design Committee.

This peer review is being conducted by the Woods Hole Group, an environmental organization respected worldwide, that Chatham has employed in the past. Orleans is also monitoring the kinds of alternatives under review at the Waquoit Bay National Estuarine Research Reserve to save water and lessen the need for wastewater infrastructure.

Chatham should do the same. Spending on this project will stretch out over at least 20 years, so there will be plenty of opportunity to adopt new possibilities and save many millions of taxpayer dollars in doing so. Even Democratic Cape legislator Representative Matt Patrick thinks this can be done and it would be irresponsible not to explore every option.

The other area in which the Town government displays its extravagance is in staffing and compensation of personnel. In this regard, Chatham is not alone. Chatham, like many other cities and towns, is in the grip of public service unions whose contract demands relentlessly push up costs beyond what would be reasonable in the private sector. Iron-clad contracts are signed with unions promising compensation and benefits come hell or high water, regardless of economics or revenues or the interests of those who pay the bills.

These outmoded arrangements are finally getting national and state attention and need to be addressed at the local level as well. Chatham has several collective bargaining agreements, the principal ones being for school teachers, the police department and the fire department. The police contract has expired and is in negotiation, the fire department contract is in the second year (FY10) of a three-year contract and the schools contract ends in FY11.

The time to seek dramatic change at the town level has arrived. New union contracts cannot continue the rich promises of increases and benefits of the past. Cities and towns across the nation are looking for multi-year freezes in union contracts, merit increases based on performance instead of automatic income step increases, elimination of various benefits and shifting from pension plans to defined contribution plans.

This unacceptable situation was addressed by David Luberoff of Harvard's Rappaport Center recently:

[H]ealth insurance [cost] is just the tip of the iceberg. The high cost of fully funding pensions and other postretirement benefits will continue to stress local budgets. Local officials’ ability to make needed changes are greatly limited by an outdated civil service system that bases promotions on test-taking and collective bargaining agreements that make it easy to challenge any changes to existing routines. Why, for example, does every town need its own emergency dispatch system? Why do many localities have separate systems for police, fire, and emergency services? Yet any effort to change these practices runs into a host of seemingly insurmountable obstacles.

Local officials are not blameless. State law, for example, gives them the power to greatly lower health insurance costs by requiring retirees to enroll in Medicare, a federally funded program. But many localities have not yet taken advantage of this option, not least because of resistance from retirees.

Such changes are hard to achieve because relatively small groups of individuals strongly oppose them. But the status quo may not be an option.

Costs are going to keep rising, revenues will remain flat, and the demand for services will not decline. Local policy makers, therefore, will have no choice but to reexamine longstanding practices and assumptions.

The Town of Chatham did not come to grips with this unsustainable situation in its FY10 spending plan, granting salary increases of approximately 6% across the board when local taxpayers were experiencing devastating losses in their life saving and reductions in their incomes. There is a severe disconnect from reality when public employees are receiving such large pay increases when on average they already earn more than half the households in Chatham live on.

Chatham taxpayers area facing sharp increases in property taxes because of the debt service costs of extravagant infrastructure projects. It is therefore all the more urgent to hold the line on property taxes for all other Town spending. No increases in the property tax levy for FY11.

Fiscal year 2010 begins today, July 1, 2009.

It's worth reviewing what this means for Chatham taxpayers.

In February, Chatham Concerned Taxpayers had urged the Selectmen, in light of the harsh economic realities suffered by resident and other taxpayers because of the world financial collapse, to hold FY10 spending to the FY09 level and not to increase the property tax levy.

The Selectmen spent several weeks reviewing the budget but did not make a single cut in the spending proposed by the Town Administration. What began as a proposed spending increase over FY09 of about $1.3 million wound up ultimately, after the Annual Town Meeting, as a spending increase very close to that figure. The core property tax levy was raised $770,000. In effect, CCT’s urging that the taxpayers’ interests in these difficult times be taken into account was ignored.

There was a real battle over the proposed spending increases on the floor of the Annual Town Meeting on May 11th. Taxpayers were angry at the proposed increase. At the same time they were understandably confused by the way the spending plan was presented in the Town Warrant. Town officials split the usual operating budget up into several pieces and scattered it over six Articles (excluding the water department, which is self-supporting).

This approach hid the true level of spending, which was far in excess of expected FY10 revenues, and how it was to be financed.

Some messages from residents and nonresidents concerned with Chatham’s extravagant spending:

Being a nonresident taxpayer I have no vote but have been a taxpayer for [many] years and my parents...before that. I feel that it is the nonresident taxpayers that have enabled the town to spend as much as they want for years.

Unfortunately, that spending attitude impacts those of you who live there and are voters as well. . . . we have been the source that has provided a warped sense of reality when it comes to town spending.

Just for the record, I am not a trophy home owner but a person whose ancestors came from Chatham and still own the family homestead. I'm just barely able to hold on to the place with the ever rising tax burden.

Across the 15 towns Chatham spends more to service its debt than any other town on the Cape as a percent of its total spending. In fact we spend 47% more on a percent of total spending basis than the next highest, i.e., Harwich.

Chatham’s total spending per capita population is $4748. Only Truro and P Town spend more, and those are towns where lack of size and extreme seasonality impacts those numbers. In fact the only other town of any size that spends more than $4000 per capita is Orleans and we still spend 14% more than they do. So for a town on the Cape of any size Chatham’s spending number stands out. Of course from the information in the paper one of the points you could make is it is because we have more debt! I would agree and I think that is a problem, not a reason.

Lastly, our tax relative to valuation is shown as the lowest on the Cape by a wide margin. Why doesn’t that make me feel better? Dollar value of houses don’t require town services, people require town services. The ability to raise taxes shouldn’t define the budget, the services required should define the budget and the taxes should be the result. None of us in Chatham can live on the value of our house, unless we sell it, remortgage it or rent it.

Chatham is discussing a budget that ignores the economic reality of its taxpayers, it provides pay raises when other towns on the Cape deferring them, it spends windfall savings from lower energy costs, and it uses reserves meant for other contingencies to make the math work and package it for our voters to buy.

Many of us our tired of hearing about our low tax rate and feel the focus needs to be on our very high cost structure. I feel the constant reference to the low tax rate is just a way to not engage the real issue of cost control in the worst recession most of us have seen in our lifetime.

Just as we were shocked into reality watching our investments crumble, we may just have to accept that we can no longer spend money we don't have. . . .The mentality of buying on credit got our entire country into very big trouble so I don't understand why we want to continue to do it on any scale... individually, community- wise or nation- wise.

iF YOU FEEL THAT THE 58% PLUS INCREASE IN TOWN SPENDING OVER THE PAST NINE YEARS IS TOO MUCH -- MORE THAN TWICE INFLATION AND TWICE WHAT PROPOSITION 2 1/2 ALLOWS, HELP MAKE IT STOP.

THE FISCAL 2010 BUDGET IS SO FAT IT SPILLED OVER INTO SIX ARTICLES (6, 7, 8 , 10, 11 AND 12) IN THE TOWN MEETING WARRANT. NOT ONLY SPENDING AS USUAL, IT RAIDED EMERGENCY SAVINGS ACCOUNTS ($605,000) TO COVER THE $2 MILLION IN RED INK. AND THE PROPERTY TAX LEVY WAS PUSHED HIGHER AGAIN, THIS TIME BY $770,000. IN THE END, TAXPAYERS PAY FOR OVERSPENDING LIKE THIS.

TO STOP THE OVERSPENDING, A "NO" VOTE AT TOWN MEETING WOULD HAVE DONE IT, BUT THE "NOs" WERE 58 SHORT.

The Town refused to face reality. Although 342 said "NO" at Town Meeting, the supporters of spending whatever it takes, including public employees, family and friends who vote in Chatham, turned out in sufficient numbers to prevail in a close vote. Despite the hard times for Chatham's resident taxpayers, the budget, packed with pay raises of 6% and 7%, passed.

Now, heading into FY10 and FY11, the Town has to go cold turkey. It won’t be pretty as it has used up so much of its reserves and extra cash to support the FY10 budget that it is $2 million in deficit. It gave away a lot of money with those startling pay raises in a below zero deflation environment that won’t be available to help prevent layoffs in FY10 and FY11. The Town had its chance to save for the tought times, but couldn’t break its overspending habit.

Since the Town has refused to hand over to the Finance Committee or anyone else what the trend line is on Local Revenues (hotel/motel and other taxes and fees), we don’t know if those revenues are declining, as they are in all other Cape towns, or whether they will meet or exceed forecast. The Town will certainly try to raise taxes for FY11, probably seek overrides and special votes for capital expenditures to pay for the FY11 budget, but if the taxpayer protest on May 11th is any indication the Town will have trouble even maintaining taxes at the FY10 level. There will probably be agitation to put a new hotel-type tax in place on short term rentals (such as is done by many resident and nonresident taxpayers in July and August to pay the mortgage) to give the Town more money. Why is it always that the government should get more money to spend and the taxpyayer should get along with less?

The first charge backs for the bonds sold for Taj Mahal II (the PD/Annex) and the first stage of the sewer project may both hit in FY11, although FY12 is more likely, and be piled on top of the operating budget, which can’t be allowed to go up. If the Town isn’t able to get any tax increases in FY11, it will have to make severe reductions in spending, unless money hidden away in secret accounts suddenly appears. The Town may luck out and FY10 and FY11 may turn out to be not as bleak as most are forecasting, but that’s what the Town has bet on. Most of us did not think that was a wise thing to do. But spending is addictive.

Mark Steyn, a world-famous author, commentator and raconteur , made a remark the other day that applies to Chatham as well as to the Massachusetts and federal governments:

There's a lot of evidence that the major problem the Western world faces is governments spend more than they can raise from their citizens.

Eventually, that catches up with you." –
- Mark Steyn

Thursday, May 14, the polls are open in Chatham from 7 a.m. to 8 p.m.

VOTE SEAN SUMMERS!!

There are two selectmen standing for two seats. Both are running for re-election. In effect, both are running uncontested.

Chairman Sean Summers has been the champion of the taxpayer on the Board of Selectmen for this year and years before. He deserves an outstanding vote of thanks. Make sure you get to the polls to vote for Sean and urge your friends and neighbors to do the same. Sean is often a lonely -- and unpopular -- voice for sanity in spending in Chatham. May his numbers increase, but there is no opportunity for that at this election. The best we can do is show strong support for his stand against overtaxing and overspending. Because Sean does not support extravagant spending and wanted pay raises reined in during this time of hardship for taxpayers, those who favor spending whatever will probably give Sean a pass. Therefore, you can give maximum force to your vote by voting only for Sean.

The taxpayers could have won the budget battle at Town Meeting, Monday, May 1lth, but lost 456 to 342. The Cape Cod Times said the budget battle was “close.” It was. With just a shift of 58 votes, the deficit budget presented to Town Meeting by the Town Administration would have gone down to defeat.

This was the first challenge to a budget in at least ten years.

I am sorry to say that your lead spokesman Fran was largely responsible for the loss. I made two critical mistakes and bungled my presentation.

At the outset of the meeting, Judy Thomas, a League of Woman Voters poobah, jumped up during the routine adoption of rules and moved that a speaker’s time limit be cut to three minutes from the traditional five. Strange position for an organization dedicated to open debate. (Later, the moderator said this had never happened before in his long history of town meetings.)

I I thought that was so absurd no one would support it. I didn’t know town meeting. It passed easily without discussion. I should have got to my feet and said that speakers had prepared their remarks for serious debate and it would undercut the democratic process to reduce the time at the last minute like that. In my case, the 15 minutes I had written was pared down to five minutes through hours or work. In the few minutes before debate on Article 6 began the rule change should never have occurred. If I had spoken, I believe five minutes would have been retained as the speaking limit. My fault. But the forces that wanted to limit the speaking time of the opponents of the Town speinding had won a critical victory.

The following is a snapshot of the "real spending in Article 6 and its companion articles 7, 8, 10, 11 and 12. Not including Article 7, the spending all adds up to $2.2 million in deficit spending financed off budget by stealing money from the emergency Stabilization Fund and using cash squirreled away from overcharges in prior years.

Article 6, the “Operating Budget,” is just part of the story. The rest of the operating budget is scattered among Articles 7, 8, 10, 11 and 12. What the Town Administration wants to spend in excess of current revenues for FY10 (the property tax levy and expected other revenues) is deficit spending of more than $2 million. Reserve Funds and so-called Free Cash which is left over from prior years (and can be added to Reserve Funds) are being used off-budget to pay for town overspending. This is all taxpayer money, whether collected this year, next year or last.

Exclusive of water-related charges, this is the true operating budget spending situation:

$32.400 million Article 6 - the stated spending plan for operations
.200 million Article 7 - COLAs for non-school employees in zero inflation
.275 million Article 8 – overtime and other operational items
1.500 million Article 10 – mostly maintenance items normally in operations
.280 million Article 11 – if not capital, belong in operations spending
.050 million Article 12 – if not capital, belong in operations
$34.705 million Total “real” non-water spending

These are the off-budget sources of funding the deficit spending for FY10:

Article 6 $ .072 million Free cash to balance operations spending
Article 8 .275 million Stabilization Fund
Article 10 1.500 million Free cash
Article 11 .280 million Stabilization Fund, Allowance for Abatements Fund
Article 12 .050 million Stabilization Fund
$2.177 million Total deficit in current revenues

Ordinarily, Capital Exclusions would have been sought for some of the capital spending, but by using the Stabilization and Abatement Funds and free cash taxpayer override votes were avoided, which in all likelihood would have been defeated. Article 12 spending could easily have been included in Article 6 as a priority item for summer tourism. Article 11 spending could have been a priority in use of free cash. Article 8 items are ordinary operating items and should be included in Article 6 if considered priorities.

IF YOU WANT TO STOP CHATHAM’S EXTRAVAGANT SPENDING, VOTE “NO” ON ARTICES 6, 7, 8, 10, 11 AND 12 TO SEND THE BUDGET BACK TO THE SCHOOL COMMITTEE AND SELECTMEN FOR PRIORITIZING AND DOWNSIZING FOR RETURN TO A RECESSED TOWN MEETING JUNE 15TH.

In addition to voting NO on Article 6 and the other five parts of the red ink budget (Articles 7, 8, 10, 11 and 12), you can save $17 miillion by helping cancel a terriblly conceived Annex project by voting YES on Article 27.

There are several Affordable Housing articles in the Zoning articles 28, 29 and 30 which have been said to be confusing and inconsistent; a NO vote will force a set of clairifications.

Article 31 has important financial ramifications. Vote YES to require that the Finance Committee get the Town Manager's (and, hopefully, School Commitee's proposal) at the same time as the Selectmen so the Finance Committee can advise the Selectmen as well as the Town Meeting. The sooner the Finance Commitee gets these documents the more they can get to understand globally what's going on. For example, the Finance Committee rightly rejected Article 6 this year but had mixed votes on the other parts of the six-part budget, principally because they did not get the big picture early enough.

Vote YES on 31. If it may influence you, the Town Manager and Selectmen Whitcomb are for NO, but Chairman Summers, Selectmen Sussman and Berstrom and Selectwoman Seldin say vote YES.

With all the overspending that's been going on, the sewer project (Article 14) doesn't come at a good time. If Article 6 passes, the property tax levy is going to rise $770,000 or $80 for the $600,000 home.. If Article 27 doesn't get voted down and the Annex goes forward, add another$140. And if the first $60 million of sewer bonds gets approved and sold, add another $222.

An Article 14 YES vote tells the town to go see if it can get federal stimulus in some meaningful amount. During the summer and fall as the facts become known, there can be a drive to get all the facts on the table for a special town meeting in December (which 200 taxpayers can call) on wastewater pros and cons. There's been a flurry of articles in the past few days about how the state is going to force all Cape towns to really get going on nitrate reduction, but these were driven by the well know agitator the Conservative Law Foundation, whose press releases are dutifuly reprinted by the Cape Cod Times. There was a chuckle in one report: It said reducing nitrates could cost millions of dollars. Or was it tens of millions of dollar?. Of course, it's hundreds of millions of dollars. To get the needed favorable vote there has to be a YES at Town Meeting on the 11th and a YES vote in the secret ballot at the Election on the 14th.

At our Monday prep meeting, we explained that this year’s spending budget is so fat it spills over into six articles –ARTICLES 6, 7 8 AND 10, 11 AND 12.

Article 6 uses up just about all the property tax and other revenues expected in FY10 to pay for the spending in Article 6 - $32.4 million.

But spending in the other five articles totals about $2.2 million for which there is no current revenue. This deficit spending is financed off budget, by invading emergency savings accounts and using money that could wind up in the savings accounts if not spent.

While some will pooh-pooh this deficit spending and say using the Stabilization Fund is no big deal, state law says otherwise: It takes a two-thirds vote to take money out of the Stabilization Fund, which is supposed to be for emergencies.

Are we in an emergency now? How can you say that when Article 6 (the core Operating Budget) and Article 7 have pay raises ranging as high as 6% for school and non-school employees, including “cost of living increases” when inflation is zero or less? Not counting the increases in health care and pension benefits, pay raises total more than $730,000. Hardly an emergency that justifies raiding the Stabilization Fund.

To make the Article 6 budget look smaller, the additional $2.2 million in spending is spread around in these five other Articles. But all six Articles should be considered as this year’s spending plan and all six should be voted down (NO) so that they can all be sent back to the Selectmen and School Committee to produce a lean, realistic budget for these tough times for those who pay the bills.

We have alerted the Town Moderator that, if the fat budget is rejected, we plan to move that the Town Meeting, after all other Articles are dealt with, be recessed until June 15th, giving the Selectmen and School Committee a full month to slim down the budget to prepare for the uncertain years ahead. These are different times. The extravagant spending of the past can not continue.

FY10 may be tough. FY11 may be tougher. Even the Town Administration has said that the schools must drastically reduce their spending or be pleading for overrides every year in the future.

The economy has gone south in each of the last two quarters, shrinking more than 6% each quarter. While some forecast a bottoming later this calendar year, no one is looking for more than the economy staying flat or crawling upward at a sluggish pace.

So what do we do at Town Meeting? The simple instruction, if you want to see a leaner budget, is to VOTE NO ON ARTICLES 6, 7, 8, 10, 11 and 12. (Article 9 is about the water department, which is self supporting.)

Article 27 is important. Here the vote is YES if you want to kill the $17 million monstrosity that’s wildly overbuilt. Putting police with the planning and permitting people makes no sense. (Yes, they do all begin with the letter "P.") We do need new police and fire facilities. Keeping public safety together makes sense for cost-savings, coverage sharing and synergy. They’re together now and should stay together, wherever that is. Save $17 million. We have one Taj Mahal. We don’t need another.

Contact your neighbors with this message. Remember that every piece of spending in the budget has some group that wants it, so those who pay the bills have to turn out to get their voices and votes into the action. If enough people who are upset about this extravagant spending turn out in sufficient numbers, we can start down the path to sane spending.

There’s lots in the Warrant. Take the time to read it.

Article 6, the “Operating Budget,” is just part of the story. The rest of the operating budget is scattered among Articles 7, 8, 10, 11 and 12. What the Town Administration wants to spend in excess of current revenues for FY10 (the property tax levy and expected other revenues) is deficit spending of more than $2 million. Reserve Funds and so-called Free Cash which is left over from prior years (and can be added to Reserve Funds) are being used off-budget to pay for town overspending. This is all taxpayer money, whether collected this year, next year or last.

Exclusive of water-related charges, this is the true operating budget spending situation:

$32.400 million Article 6 - the stated spending plan for operations
.200 million Article 7 - COLAs for non-school employees in zero inflation
.275 million Article 8 – overtime and other operational items
1.500 million Article 10 – mostly maintenance items normally in operations
.280 million Article 11 – if not capital, belong in operations spending
.050 million Article 12 – if not capital, belong in operations
$34.705 million Total “real” non-water spending

These are the off-budget sources of funding the deficit spending for FY10:

$.072 million Article 6 Free cash to balance operations spending
.275 million Article 8 Stabilization Fund
.500 million Article 10 Free cash
.280 million Article 11 Stabilization Fund, Abatements Fund
.050 million Article 12 Stabilization Fund
$2.177 million Total deficit in current revenues

Ordinarily, Capital Exclusions would have been sought for some of the capital spending, but by using the Stabilization and Abatement Funds and free cash taxpayer override votes were avoided, which in all likelihood would have been defeated. Article 12 spending could easily have been included in Article 6 as a priority item for summer tourism. Article 11 spending could have been a priority in use of free cash. Article 8 items are ordinary operating items and should be included in Article 6 if considered priorities.

IF YOU WANT TO STOP CHATHAM’S EXTRAVAGANT SPENDING, VOTE “NO” ON ARTICES 6, 7, 8, 10, 11 AND 12 TO SEND THE BUDGET BACK TO THE SCHOOL COMMITTEE AND SELECTMEN FOR PRIORITIZING AND DOWNSIZING FOR RETURN TO A RECESSED TOWN MEETING JUNE 15TH.

The turnout for the Monday prep meeting for Town Meeting was great, if we do say so. The count was around 125, maybe 25 of whom were town employees. School folks were justifiably defensive about how the School Committee let them down by not making detailed budget information available to be included in the Warrant. Search in the back for schools and you’ll find one $9 million plus line.

We had a multipronged discussion with lots of questions and commentary. The Town Moderator Bill Litchfield thought he’d spend ten minutes explaining town meeting procedures and wound up fielding questions for the better part of an hour. It was highly educational and everyone appreciated his taking the time to educate voters. Bill then stayed through most of the budget discussion, so he gained an understanding of how concerned resident taxpayers are with the overspending by the Town that in the end they will have to pay for.

This email that came in early last evening captures the spirit of the meeting:

I just arrived home from this afternoon's town meeting and I would like to commend those present for such a wonderful educational opportunity. I have lived full time in Chatham for the past 12 years and really have never been involved in the politics of the town and rarely attended meetings of this type. I am a widow and have watched with concerned interest the current problems within our national economy and I left today's meeting realizing that what you were talking about is exactly why we are finding ourselves as a nation experiencing such a difficult economy.... we spent years purchasing items as individuals for which we didn't have the cash....... we charged or mortgaged it. I loved your description of the Waste Water plan.... one million people flushing at the same time..... with a population of 6,000 or so people perhaps the time has come to resort to the PT Cruiser model versus the BMW. . . Just as we were shocked into reality watching our investments crumble, we may just have to accept that we can no longer spend money we don't have. I am so glad I attended the meeting and have a better understanding of what is happening in our town. The mentality of buying on credit got our entire country into very big trouble so I don't understand why we want to continue to do it on any scale... individually, community- wise or nation- wise. Thank you

There is a spirited contest for school committee in Sandwich. The Chairman of the Board of the School Committee, running for re-election had this to say:

The economy and its impact on the budget is the district's No. 1 priority, Guerin said. "We have to tackle our labor costs," he said. "Clearly all of our town contracts, including the teachers, are set at a rate that is not sustainable and not affordable. That's an issue we have to tackle."

Sandwich unions have agreed to pay freezes to help with the FY10 budget and the schools have been cutting sharply on FY09 expenses, including laying off personnel.

We received an email from a nonresident taxpayer who offers some insight why Chatham is thought of as a rich town. To be sure, because of our nonresident owners the valuations of the town real estate are very high. And since many of them live in free-spending areas, whether it’s Greater Boston, New Jersey or New York, Chatham’s tax bills seem low – to them. For those who propose town spending, it’s a great comfort to know that about half the cost can be shunted onto nonresident owners who are used to big tax bills. That makes so many things seem so much more “affordable.” It seems that whatever is done, Chatham chooses the gold-plated solution, be it a majestic Community Center or an expansive and expensive $17 million PD/Annex project when Harwich was able to build its new police station for half that.

Yet the resident taxpayers by and large aren’t rich and the constantly swelling budgets and rising property taxes take a toll. When suddenly the world financial crisis hits home in Chatham and savings, interest and dividends shrivel, it is no surprise that many are worrying if their money will last their lifetimes. So every dollar becomes more important.

So what does our nonresident taxpayer have to say to us?

Being a non resident taxpayer I have no vote but have been a taxpayer for [many] years and my parents...before that. I feel that it is the non resident taxpayers that have enabled the town to spend as much as they want for years.

Unfortunately, that spending attitude impacts those of you who live there and are voters as well.

We have no children in the schools and put little stress on the infrastructure for most of the year. However, we have been the source that has provided a warped sense of reality when it comes to town spending.

No town body or official can make a decision without a $100,000 study.

In spite of the studies they do stupid things, i.e. the CBI golf course purchase and following lawsuit; the original computer system for the town; the current CBI/golf course management fiasco; the greatly overpriced proposed town hall annex and police station; the years of wasted time, consultants, and expense over the community center; ugly guardrails along the Oyster Pond road which had to be replaced by public demand; numerous frivolous lawsuits; etc, etc

Is there anyone in charge with their head screwed on straight?

A “warped sense of reality when it comes to town spending.”

Is our nonresident taxpayer right? Will it be spending as usual as if the world hasn’t dramatically changed for the worse?

There are two weeks to Town Meeting.

CCT will hold its second and final meeting of volunteers (old and new) at Campari’s Bistro, Orleans Road, 4:45 p.m. to 6:15, Thursday, April 30, to prepare for the meeting of all Chatham Concerned Taxpayers who can make it on Monday, May 4th at the Community Center, at 4 p.m. Please come.

ALL CHATHAM CONCERNED TAXPAYERS ARE INVITED TO ATTEND THE ALL HANDS MEETING ON MONDAY, MAY 4TH, 4 P.M. AT THE CHATHAM COMMUNITY CENTER. THE KEY ARTICLES WILL BE REVIEWED AT THAT TIME.

When CCT was launched in early February, we said we were acting sort of like Paul Revere. We sounded the alarm that the extravagant Town taxation and spending of the good times appeared to be going to continue into this time of severe financial stress for many, many residents. We said concerned resident taxpayers had to stand up and make their voices heard if they didn’t want the budget to ballon and their taxes to go up. Like the Minutemen of Lexington and Concord, resident taxpayers have to join the battle.

The time to stand up and fight is 14 days away. All Paul Revere can do is sound the alarm. To win the battle, the Minutemen must come out from behind the trees and fight. Many have said they are afraid to take a position against spending at town meeting for fear of retaliation from town officials and employees. We believe that fear is groundless, but do recognize the fear is real enough. Nonetheless, people will have to speak up, raise their hands and vote. We understand secret votes are rare at town meeting. Courage is called for.

Of course, votes are secret at the May 14th election, at which there will be an important vote to allow the property tax to be pushed up to pay the debt service for the first $60 million bond cost of the sewer.

We believe there will be more spending at issue at this town meeting than ever in the history of Chatham.

It’s hard to pin a number on it, but spending for operations for fiscal year 2010 beginning July 1 is going to be close to $35 million, including maintenance projects. (The operating budget is spread over several Articles, not just Article 6.) Operational spending has zoomed 50% in just nine years and is going up close to 5% for FY10. We believe Article 6 and the related budget articles should be voted down (NO) and the budget sent back to the Selectmen and School Committee to produce a sustainable budget without increasing property taxes or raiding reserves.

Will Article 27, spending for the ill conceived PD/Annex, be killed so that $17 million can be saved? Article 27 asks that re-planning be done for a better police/fire solution and something not so gold-plated can be built. A YES vote on Article 27 to cancel the PD/Annex project is the right vote for taxpayers and townspeople.

As for the $60 million sewer bond issues that will launch a $300-$500 million sewer project suddenly accelerated in hopes of getting some federal stimulus money, each person will have to decide if he or she wants to spend that much money to solve the problem of nitrates in the waterways.

Once that $60 million is spent though, there’s no turning back. Are there effective solutions other than 100% sewering of the town that may cost less? We don’t know. Some say there are. The Town insists there are not.

Bu less than well informed resident taxpayers of the Town have to vote yes on both May 11th and May 14th for the Town to be eligible for federal stimulus money this year, be it $5 million to $10 million or more. There may be more stimulus available next year, but who can say? What will be available in future years is the same low-interest state assistance for wastewater projects there has been since the 1990s.

This week the League of Women Voters will host a discussion on the Warrant articles Wednesday evening at 7 at the Community Center. There will be question time.

ANNUAL TOWN MEETNG CONVENES MONDAY, MAY 11TH, AT 6 P.M. AT THE CHATHAM HIGH SCHOOL, 425 CROWELL ROAD. THIS WEEK YOU WILL RECEIVE THE WARRANT WHICH PRESENTS ALL THE ARTICLES THAT WILL BE VOTED ON.

THERE IS AN IMPORTANT ELECTION THE FOLLOWING THURSDAY, MAY 14TH. POLLS ARE OPEN 7 A.M. TO 8 P.M. IF YOU WANT TO APPROVE THE $60 MILLION BOND ISSUE TO BEGIN THE $300 MILLION SEWER PROJECT, VOTE YES. TO DISAPPROVE, VOTE NO.

In these last two and one-half weeks before Town Meeting every effort should be made to get the word around that voters can block tax increases and out-of-control spending with their votes.

Let your views be known by phone, email and letters to the editors of the Chronicle and the Cape Codder. You can send the letters to them by email.

To the Chronicle editor Tim Wood, email twood@capecodchronicle.com with your “letter” just like a regular letter. Put your address, email and phone number at the end so they can call to verify it’s a real letter.

For Cape Codder, it’s cdumas@cnc.com with the same kind of information.

Earl Hubbard’s letter appeared this week in the Chronicle. Here it is to inspire you:

Editor April 19, 2009
60C Munson Way
Chatham, Ma 02633

Chatham is a small Cape Cod town with a Town Meeting coming up in May that is being asked to vote an initial appropriation of $60,000,000 to commence a sewering project that could shape the Town for decades. The construction cost of this project has been estimated at $318,000,000, with the real ultimate cost over 30 years in excess of $600,000,000, not including interest incurred on debt service.

It is a Town whose primary source of revenue is from retired people living on fixed incomes. Revenue also comes from tourism and second home owners. With the local, state and national economies in a deep recession, plans are to more than triple its debt from $32,000,000 to $95,000,000 in FY10. This is an action to be taken without a clear estimate of the Town’s future revenue sources. How do you think revenue be raised? Of course, increase our taxes. After the FY10 phase there is another $258,000,000 in debt to be incurred to complete the waste water project.

Town Government is mesmerized by the hopeful but in no way guaranteed possibility of federal stimulus money to help pay for an expanded waste water system. Local full time residents have not had an opportunity to review and debate the costs of the project at a Town Meeting and have little information on how much it will cost each of us.

The local taxpayers who attend Town meeting require a more detailed summary of Town finances to make informed decisions at Town meeting. The warrant of 100 or more pages with financial data scattered throughout overwhelms the voters. The summary should contain – a) summary of FY09 budget, proposed FY10 budget and estimated FY11 budget – b) breakdown of where the revenues came from in FY09 and an estimate of where the revenues will come from in FY10 – c) before and after data of the Stabilization fund, free cash, overlay monies (all pots of money used to balance the FY10 budget this year). Also, a summary of all articles to be voted on at Town meeting and how they will affect future levies. Last, but not least, if all articles with a financial impact pass at Town meeting what will the Town debt and debt services be?

This is not the time to just go along. Citizens need to be informed and have the opportunity for dialogue and debate at Town Meeting.

Earl Hubbard
99 Potonumecot Road phone number email address

Check our website every day now. Attend our meeting on Monday, May 4th at 4 at the Community Center. Print up flyers for your neighbors using the one on our website. We may have more shortly.

Be active. Voting concerned taxpayer can vote can stop the runaway spending, but they have to show up at town meeting and vote. Everyone has to pay attention, because efforts will be made to confuse things and to push spending proposals through. Spending in Chatham has risen 44% in just eight years and this year proposed spending could push it over 50%. Every year most of that increase in spending is paid for by your property taxes. The same is true this year.

Property taxes should be kept at the fiscal 2009 level and non-emergency capital spending should be deferred until better economic times return.

Stand up for yourself.

First, a correction: Our big, final meeting to prepare for Town Meeting will be Monday, May 4th (not May 7th as we have said at least twice), at the Chatham Community Center, Main Street, just up from the rotary going towards Chatham Village Market. It will begin at 4 o’clock. We will review the Articles in the Warrant with the most financial impact on resident taxpayers. It is important for all concerned taxpayers who can do so to attend town meeting on Monday, May 11th and to vote in the election that follows on Thursday, May 14th since votes affecting finances will be on the ballot. Get your like-minded friends to do likewise. The spenders will turn out, so to protect your wallet and pocketbook, you need to be there.

The printed copy of the Warrant you receive is huge and daunting. It is important to familiarize yourself with it, since that is your guide to voting. Town Meeting has the “power of the purse,” as it’s called. That means that voters at Town Meeting can vote to fund something or not. For example, Article 6, the budget, recommended by the Selectmen but rejected by a majority of the Finance Committee, continues the trend of overspending that has pushed Chatham’s budget up more than 44% over the past eight years. The budget should be rejected and sent back to the Selectmen, who should cut it back to at least the fiscal 2009 level. (It should actually go about $650,000 lower because debt service should have dropped by that much from FY09 to FY10.) You can vote “No.”

At our meeting on Monday, May 4th we will have an open discussion about how to address the various articles. This is a time of financial stress for all taxpayers, including the many retired folks living in Chatham. Every dollar counts and overspending has to be reined in. Capital projects pose a big problem, too.

It’s a grave question as to whether this is the time for a town like Chatham to launch expensive building projects. As we reported yesterday, Moody’s has announced that because of the fiscal crisis all (not some, all) municipal bonds are candidates for default as their supporting revenues collapse.

But it seems overspending and the hollowing out of the revenue base is a nationwide phenomenon affecting cities and states everywhere.

The New York Times, in reporting on Moody’s giving all municipal bonds a “negative outlook,” said:

The report suggested conflicts ahead between taxpayers struggling to keep their own households afloat and elected officials charged with balancing budgets, making their payrolls and protecting their credit ratings. “Taxpayers, worried about their own financial condition, are more resistant than ever to increasing property or other local taxes,” the report observed.

As we know, in Chatham this isn’t a matter of “making their payrolls,” but of continuing the award of handsome pay raises in a time of crisis.

As we have said many times before, “end overspending,” and “not now” for non-emergency projects. These are difficult times and Chatham should not be putting its taxpayers in harm’s way.

As for the $300-$500 million sewer project, whatever the amount of the federal stimulus might be, the overwhelming percentage of the cost will fall on the property tax. We don’t even know why the town’s plan is so big and expensive. At most, during the height of the season, Chatham’s population is in the 20,000 range. Why is it being built to accommodate more than 50,000 people flushing toilets every day? In what high rises and condominiums will they all be staying? We all want to clean up Chatham’s waterways and ponds, but efficiently and cost-effectively, without destroying Chatham’s unique character and driving people from their homes. We have to think about those issues. Is the federal money worth being rushed like this?

We also need to rethink the best way for police and fire to work together in this time when increasingly the calls to both of them are asking for help for seniors. The ill-conceived PD/Annex project should be cancelled. Separating the police and fire makes no sense. Let’s do some re-planning to provide joint new quarters for police and fire that will better serve the town and, hopefully, at more modest cost than the $17 million ticketed for the PD/Annex now. Harwich built its brand-new police headquarters (being attached to the fire station) for $8.5 million. Chatham should take a lesson from that.

This is a time to make your voices heard. Send letters to the editors of the Chronicle and the Cape Codder saying this is no time for overspending and selling bonds for non-emergency projects. Concerned taxpayer Earl Hubbard just fired off a letter to the editor of the Chronicle decrying the way town overspending as usual is going on, ignoring the economic pain of suffering taxpayers. His letter will be posted on our website as soon as it appears in the Chronicle.

Also, since we are a very low-budget operation, we encourage you to make up flyers urging your neighbors to show up at town meeting and vote against overspending. They don’t need to be fancy; just let folks know they can make a difference with their votes. Email us a copy and we’ll post them online for people to copy.

If you can spare a few dollars, even $10 or $20, to help with ads and such, they would be welcome. Just send to Chatham Concerned Taxpayers at our PO Box 616 in North Chatham, MA 02650. Thanks.

Our emails now reach well over 500 households of voting taxpayers concerned about town spending in Chatham, constantly growing tax bills (up over 5% every year for the past eight) and keeping Chatham affordable for those of modest means. The shrinkage of savings and income streams – bank interest and dividends -- affect many Chatham resident taxpayers.

So it’s important for those who care about town spending and growing property taxes to show up at town meeting – just three weeks from today -- and be prepared to protect their assets. Town meeting decides whether to spend or not and can say “No.” If the steady upward spiral of Chatham overspending – 44% over eight years -- is not broken in this year of tremendous financial stress, can it every be?

Alert your like-minded friends to get on our email list and check our website regularly. And get them to town meeting on May 11th and the town election on May 14th.

It’s very difficult to get adequate information about town spending and revenues. While it’s supplied when asked, it isn’t always what we asked for and sometimes it doesn’t reflect real options. Even those of us who dig for information can get easily misled or confused. For example, CCT asked for actual receipts against forecast for the first nine months of fiscal 2009 (through March 31) for “Local Revenues” that support town spending. After all, we read that in all or most all other Cape towns those revenues are falling. Is this true of Chatham? What we got wasn’t “actual figures” but “estimated figures”; even so, the figures appeared to show a million dollar shortfall. We then went back and analyzed what happened in fiscal 2008; that, too, showed a possible shortfall on “estimated” figures after nine months, but the final “actual” figures came in more than one million higher than what had been “estimated” for the full year just three months before. So is Chatham, like all the other towns on the Cape, running behind in its “Local Revenues”? We don’t know.

With the uncertainty about town finance numbers, perhaps our best course from here on is to ask questions rather than try to analyze numbers that might be meaningless. The same goes for those who ask questions at meetings from the floor.

By the way, just as the town proposes to issue more than $70 million of new bonds, Moody’s has announced that because of the fiscal crisis all (not some, all) municipal bonds are candidates for default as their supporting revenues collapse. We don’t know if that is Chatham’s situation. As we have said before, prudence, cautious, “not now.” These are difficult times and Chatham should not be asking for trouble.

It’s vital that voting taxpayers who pay the bills show up, listen carefully and vote to protect their assets and incomes and to keep Chatham affordable. And to preserve Chatham’s unique character. There’s nothing wrong with reasonable development, but Mashpee East or Atlantic City we don’t want.

How the votes go will determine the near term and long term future of Chatham.

In the remaining days before town meeting – three weeks from today -- information may be coming thick and fast. We will post on the website and provide less detail in emails because of the time it takes to distribute the emails, so check the website daily www.chathamct.org and have your friends do the same.

It is possible to get a sensible financial result out of this town meeting, but only if enough of those who care about spending show up and vote.

Our final meeting for all Chatham concerned taxpayers to prepare for the town meeting and town election will be Monday, May 4th, at 4 p.m. at the Chatham Community Center. Come and bring your like-minded fellow voters.

If you would like to hear the Town’s defense of its spending, attend the League of Women Voters forum on Wednesday, April 29th, at 7 p.m. at the Chatham Community Center. You will have time to make your voices heard during the question period.

Union concessions help narrow budget gap
April 17, 2009 6:00 AM Cape Cod Times
HYANNIS — Concessions from Barnstable labor unions could help the town preserve 11 municipal jobs, according to town officials.

Local officials had planned to cut as many as 30 or 40 positions as they shaped the town's 2010 fiscal year budget, but concessions accepted recently by the town's five unions could cut the number of layoffs to 20 or 30, Town Manager John Klimm said this week.

Workers from the unions — two police unions, a Public Works Department union and two unions for other municipal employees — have agreed to concessions including weeklong furloughs and unpaid vacations, likely saving the town more than $330,000, which could preserve about 11 staff positions, Klimm said.

The impact of the union concessions will depend in part on the size of cuts to state aid, which are still under review at the Legislature, Klimm said.

"We are so profoundly appreciative and grateful for these (concessions)," he said. "We think this will make a big difference."

JAKE BERRY

Sandwich unions accept pay freeze
By George Brennan Cape Cod Times
gbrennan@capecodonline.com
April 17, 2009 6:00 AM
SANDWICH — Five more town unions have agreed to forgo pay raises next year, a gesture that could save the town as much as $350,000 if those employees had negotiated a contract with a 3.5 percent increase.

In all, six unions, all the department heads and even selectmen have made salary concessions for next year.

"It's not so much to help us for this year, but we're projecting big deficits for (fiscal years) 2011 and 2012," Town Manager George "Bud" Dunham said.

In the next two years, the town projects deficits of $2.7 million and $3.8 million.

"I think we all realize we're going to have to have a (Proposition 2½) override, in the next year or two; it's going to be needed," Dunham said. "If it fails, we're looking at losing 15 percent of our workforce."

Dunham had asked the unions to agree to the pay freeze last week, and the firefighters union agreed immediately. This week, the town's two police unions, department of public works, clerical workers and dispatchers all followed suit.

"More than anything, we felt in light of what's going on with the economy and town it was the right thing to do," Michael Hoadley, president of the patrolmen's union, said yesterday.

Town officials applauded the decision by the unions.

"It's a wonderful gesture, but the reality is that it gives us a year to plan," Selectmen Chairwoman Linell Grundman said. "I'm grateful they've given us breathing space right now."

All of the union contracts expire July 1.

The school department will make $1.4 million in budget cuts, including as many as 20 staff positions, to meet the town's 2 percent budget cap, Supt. Mary Ellen Johnson said yesterday.

Teachers, who still have a year remaining on their contract, have not been asked to forgo their 3.5 percent raises, she said.

"We have adequate enough staffing so we can make progress and even do some things we haven't done in past," she said. That includes offering a foreign language to younger students, she said.

Johnson, who is scheduled to receive a $5,500 raise to boost her salary to $157,500 as of July 1, said she has not decided whether to follow the lead of other town department heads and not take a raise. "That would be premature to comment on that," she said.

What is the Tea Party movement about? It's a nonpartisan citizen taxpayer uprising against too much spending, too much debt and too much resultant taxing, as this cartoon captures.

What follows is a report of CCT’s first volunteers get-together April 15th, yesterday, at Campari’s Bistro on Orleans Road.

The turnout exceeded our expectations. We had a great cross-section of Chatham residents, all concerned about the rising costs of living in Chatham – which are reflected in constantly rising tax bills. Forget the tax rate; it’s the tax bill that counts.

Our grateful thanks to Campari’s for its generous hospitality.

The importance of town meeting. The basic point made to the volunteers is this: It is voters at town meeting who decide what spending to approve. After all, it is their money. If they think what the Selectmen are recommending is too much or too little, they can disagree and vote accordingly. CCT wants taxpayers to be informed and to stand up for their interests.

We discussed the importance of getting like-minded concerned taxpayers to attend town meeting on May 11th and to vote in the election on May 14th. There will be important financial items on the election day ballot as well as on the floor of town meeting. There are about 30 articles, so the meeting may run late or run to two days. Some important items may not come up till late in the process so all should plan accordingly.

For those new to town meeting, it was explained that the Warrant, which should be arriving in mailboxes in the next few days, is the core document which contains all the issues to be voted on at the town meeting and the following election, It should be read carefully to get an understanding of the important issues that, depending on how the votes go, can drive spending in Chatham to unprecedented levels. Of the 30 or so different articles in the warrant to be voted on, most of them involve spending money. Shortly after the Warrant is distributed, CCT plans to hold a second volunteers meeting to go over the Articles in detail. A grand meeting of all concerned taxpayers is being scheduled for Monday, May 4th, probably at 4 o’clock, in final preparation for participation in town meeting.

The Operating Budget and Capital Spending. We reviewed what Chatham Concerned Taxpayers has been doing since its sudden emergence the first week of February in response to the announcement that the operating budget would be going up about $1.25 million. We have attended many meetings. We made concerted pleas to the Selectmen that in this year of unprecedented financial stress the plight of the resident taxpayers be taken into account. Whether those pleas fell on deaf ears or were ignored, the result was the same: Spending as usual prevailed. Similar entreaties were made to the members of the Finance Committee and on the Operating Budget a majority led by Chairman Coleman Yeaw and Vice Chairman Jo Ann Sprague showed they shared our concerns and rejected the budget recommended by the Selectmen 5-4.

CCT had asked that spending for fiscal 2010 beginning July 1 be held at the fiscal year 2009 level and that non-emergency capital projects be deferred till better economic times returned. We said it was too much to ask financially stressed taxpayers to fund pay raises ranging as high as 6 and 7% for those full time public employees whose pay packages already placed them above the median of household incomes in Chatham. There was some hope when the Selectmen led by Chairman Sean Summers asked town employees to accept a voluntary compensation freeze. While the Vice Chairman of the Finance Committee voiced an appeal aimed at the unions that “we are all in this together,” the unions saw it differently and rejected the call. Pay raises in the budget total more than $730,000, not counting overtime, not taking account of the nine-month school year, not taking account of “longevity payments” and not taking into account increased payments for employee health insurance and pensions. As for capital projects, we won’t know the exact dollars until the Warrant is printed, but at least $1.5 million in what appear to be non-emergency, mostly maintenance, projects were okayed by the Selectmen, using off-budget taxpayer money collected in previous years to pay for them. So the “real” operating budget is about $35 million, not the $32.5 million as it will appear in the Warrant.

Even though members of the Finance Committee and of the Board of Selectmen identified hundreds of thousands of dollars of cuts that could be made – in addition to eliminating or reducing pay raises – at the end of the process no real cuts were made in the budget proposed by the Town Manager and recommended by the Selectmen to Town Meeting for adoption. Indeed, the unusually careful examination of the fiscal 2010 budget disclosed that a smaller budget than fiscal 2009 and a property tax cut to taxpayers could have resulted if the will were there.

A principal argument CCT advanced was that FY10 and FY11 are being forecast as very difficult years and therefore spending should be restrained so that reserve funds could be built up to deal with emergencies that might arise. The Selectmen acted to the contrary. To avoid an override vote at town meeting (to authorize more spending than permitted), the Selectmen approved taking monies out of reserve funds to keep spending high but not push up the property tax levy to the point of a special vote. So-called “free cash” was used for more than $1.5 million to pay for projects and at least $600,000 from other reserves were used to support the fiscal 2010 budget. Rather than commit to so much spending, why not keep money that could be used during the next two years to avoid layoffs or slashes in essential services should conditions continued to deteriorate?

Town revenues are slipping. Town spending depends on more than the property tax. Of the FY10 budget of about $32.5 million (actually, about $35 million) proposed by the Selectmen, the anticipated property tax levy for FY10 will provide about $24.5 million. The rest of the money comes from various sources (in addition to reserve funds and free cash) such as the local share of the state’s hotel/motel tax, vehicle excise taxes (from cars and boats) and mooring fees. What if those revenues don’t live up to expectation? Already, for fiscal 2009, revenues appear to be falling below forecast for the first nine months – and fiscal 2010 revenues from these sources are forecast to be the same as for fiscal 2009. So, it would appear that already the fiscal 2010 budget could be in deficit. If so, should the budget not be cut to account for the shortfall as well as the overspending?

This is a time for caution and fiscal restraint.

Annex/PD project. The article to defer and rethink the “oddly conceived” $17 million Annex/Police project was discussed at length. Why so costly when Harwich, twice Chatham’s population, built a new police station for half that? Why separate police and fire at a time when they should be working ever closer together to serve Chatham’s older population with EMT and similar calls? It is agreed a new fire facility is needed as is a new police facility. Maybe new police and fire facilities should be planned and built together when the economy improves. Some real planning should be done as this non-emergency project is deferred and rethought until better economic times return.

Suddenly, the sewer. The most contentious item discussed was the town sewer proposal. While it has been in planning for years, it appears not too many have followed it closely on the assumption they would never live long enough to use it let alone be asked to pay for it. But, suddenly, because of the possible availability of federal stimulus money, the Selectmen are proposing full speed ahead on this $300 million project with a $60 million bond issue proposal. No one knows if any stimulus money can be obtained or how much, but, as usual, there are federal strings which demand an unconditional vote for project approval before June 30th and planning and design to be finished and the project shovel-ready by February 2010. As one volunteer said, “We’ve never had a chance to vote on whether we want to spend $300 million for a town-wide sewer system.” Another said, “I’ll never get a sewer where I live, but I’m going to have to pay for it anyway? Why wasn’t a betterment approach used as most towns do, so the people who get the sewer pay for it?” And so it went. Selectmen Sean Summers explained the sewer was a good thing for the environment and some day state or federal environmental requirements might demand that Chatham have a sewer, though he admitted that wasn’t the case right now. Questions about the size, scope, extent and necessity of the project could not be answered. Nor could questions concerning costs to the taxpayers. The only thing that was clear is that there is no way taxpayers can be fully informed on the project and what it means to them as taxpayers before the May 11th town meeting. There was a lot of anger about being rushed into this, though it was explained it was the federal stimulus money that triggered the sudden rush. There may well be some stimulus money for Chatham, since not too many communities are far enough along on their environmental wastewater plan approvals to have a chance of being shovel ready by February. And most other communities are concentrating on cutting spending.

The 20-year Phase 1 of the sewer project, using the 2007 estimate, would cost about $318 million (including interest) if no federal money becomes available. Because the massive upgrade and expansion of the wastewater treatment facility would be done upfront, probably 60 to 70% of that money would be spent during the first ten years (when most of us think we’ll still be alive and paying the bills). If the bonds sold to pay for that spending are more or less to be paid off during those ten years, that would mean about $200 million being added to the property taxes in those ten years beginning in 2011, 2012 or 2013. Since the current “real” operating budget is around $35 million, the average addition of $20 million a year is no small matter.

So, what to do? Vote no and lose the chance of federal money? Vote yes and commit to a $300 million project without adequate information? Unhappy choices. But perhaps there is a way: If the Selectmen agree that they would do all the design and planning necessary to be shovel ready but not do any implementation (i.e., actual digging) until February 2010, that would provide the opportunity for a special town meeting (called by the Selectmen or by 200 citizens) in December or January solely on the sewer project. In the meantime, through publications, meetings and debates throughout the town, taxpayers can get the information they need to make informed decisions and vote yea or nay on the project. There may be other solutions, but the need for informed decision-making must be met.

Most important town meeting ever. Is this May town meeting important? You bet. Biggest operating budget ever proposed. Bonding proposals to be acted upon could more than triple outstanding debt to over $100 million – and in effect commit taxpayers to at least $200 million more in spending to finish Phase 1 of the wastewater project.

Chatham is a great place to live. Keeping it affordable should be a paramount objective at all times, but even more so in these murky financial days.

The people have the power. The power to keep Chatham affordable is in the hands of those who attend and vote at town meeting and in the election that follows. CCT will do its best to help inform, analyze and comment on articles to be voted on. We are unpaid volunteers, not experts at all in town finance or administration, just doing our best to dig out and understand the facts. If we make mistakes, we correct them. Since we have very limited funds, we will resort to simple ways to spread the message. That’s why we use email and our website. There will be a few ads in the Chronicle – and Cape Codder if we have the money -- to reach those without emails. We also will prepare and volunteers will distribute leaflets to reach those same people. We hope people will make phone calls to other concerned taxpayers. The emails we send out can be forwarded to people not yet on our email list. Since email and our website are our principal information outlets, we urge one and all to send us emails of like-minded people who care about sensible spending in Chatham. The more people we can reach, the better chance there is of a sensible outcome at town meeting.

We do need a few dollars for the final push. A bank account has been opened and although contributions are not yet deductible because there has not been time to file papers, we have obtained a Federal ID number, so we’re legal! Your contribution in any amount will be gratefully received; mail it to Chatham Concerned Taxpayers, P.O. Box 616, North Chatham, MA 02650-0616.

It is time for concerned taxpayers to stand up and be heard.

We thank those who aided the organization of this first meeting of volunteers:
Parker (Peter) Wiseman, former Selectman, former member of the Finance Committee
Phil Dupont
Dick Curtiss
John Payson
Rosalie Moretti
Kim Doggett
Ginny Nickerson

We also extend thanks to those who attended and said they would help spread the message and rally the concerned to attend town meeting and to those who made contributions.

News from other towns on Cape Cod:

Sandwich firefighters forgo pay raise
By George Brennan for the Cape Cod Times
gbrennan@capecodonline.com
April 10, 2009 6:00 AM
SANDWICH — The town's 34-member firefighters union has agreed to a salary freeze next year because of the town's budget problems.
"It was a unanimous vote of the membership to voluntarily freeze our pay," union president Jason Viveiros said yesterday afternoon. "We go into people's homes every day, and we see how they're struggling. We can't with good conscience take a raise when we see people struggling."
The union president was expected to formally announce the vote at last night's selectmen's meeting.
"Obviously it's a great thing that they decided to do this," Town Manager George "Bud" Dunham said.
Dunham met with all six of the town's unions earlier in the day and asked them to forego raises for next year because of the town's bleak budget outlook.
Selectmen have recommended a 2 percent increase in overall spending next year, an amount that will make it difficult to provide a level-service budget if raises are part of the picture.
None of the other unions had announced a decision on Dunham's request as of yesterday afternoon.
The firefighters contract expires July 1.
"We're doing it now because we think it's the right thing to do," Viveiros said.

Boston is a special case in many respects, but one can learn from what it's doing in the current crisis. Chatham's spending, like Boston's, is in significant part in the grip of unions, which makes dealing with the reality of a collapsing economy difficult.

Mayor Menino's budget cuts 565 jobs to close the gap on a $140 million shortfall. It is estimated that another 200 would have been cut except for 22 of the city's unions agreeing to voluntary freezes. In Boston the head of Boston Teachers Union stoutly maintains ""We see absolutely no need to lay off a single person." In Chatham, the fire, police and school unions refused to agree to a voluntary freeze.

The mayor also raided rainy day reserves, as Chatham Selectmen propose to do for the FY10 budget.

Samuel R. Tyler, president of the Boston Municipal Research Bureau, said the number of projected layoffs is lower than he expected given the city's budget problems. He said the budget's reliance on one-time revenue - including stimulus funding, wage freezes, and reserve withdrawal - could pose problems down the road.

"There are dollars being used [in the proposed budget] for fiscal 2010 that may not be available in fiscal 2011, and fiscal 2011 is going to be no easier, and could be even more difficult, than next year," Tyler said.

In Barnstable, the proposed school budget for FY10 will be smaller than that for fiscal 2009 as will the proposed budget for all other departments. Nonetheless, up to 40 layoffs may have to be made.

"It's our intention to bring forward a budget that is balanced based on recurring revenues," [Barnstable finance director] Milne said this week. "We don't want to dig into savings for (basic operating expenses). ... It's just a matter of how far into the personnel level we have to cut to accomplish that."

Declining revenues from hotel and motel occupancy and motor vehicle and boat purchases are a concern across Cape Cod. Yesterday, Falmouth reported that on a year-to-year basis hotel/motel tax and vehicle excise tax revenues are off significantly. Such revenues and other tourist-related revenues help support Chatham's budget, which will be voted on at the Annual Town Meeting on May 11th. It is $1 million higher than the fiscal 2009 budget.

Menino proposes cutting 565 jobs
Police, schools would see biggest reductions
By Donovan Slack and John C. Drake, Globe Staff | April 8, 2009

Mayor Thomas M. Menino today will propose laying off 565 city workers, including public school teachers, police officers, and librarians, cutbacks that Boston officials said are needed to help balance the $2.4 billion city budget.

The job cuts are a response to the national recession and decreases in state aid. The budget, which Menino will present to the City Council today, requires pink slips for 212 teachers and classroom aides, 67 police officers, 44 police cadets, and 39 community center employees. Twenty-six library workers will lose their jobs, including four librarians.

The Boston Globe reports that cities and towns are delaying financial decisions in light of budgetary uncertainties.

"I expect this to be very fluid for a couple more months," said Sam Tyler, executive director of the business-funded Boston Municipal Research Bureau.

"And it's not just Boston. Every city and town is in the same situation."

Not so, Sam. Chatham has sent its budget off to the printer for the May 11th Town Meeting. Unlike almost all other cities and towns Chatham's operations budget for FY10 rises almost 4% (about $1 million), boosted by generous wage hikes for all town employees. (The Selectmen ignored the Finance Committee's majority vote rejecting the budget.) The Selectmen did not make a single reduction of even one dollar in the spending proposed by the Town Manager.

For property taxpayers who did not build anything on their properties in FY09 the property tax levy will rise precisely 2 1/2. To avoid an override vote the selectmen approved taking money out of the Stabilization Fund and other reserves which are principally set aside for emergency use to pay for the spending in excess of the Propositon 2 1/2 limit. This is one of the maneuvers which drew fire from the Finance Committee.

Chatham school personnel are scheduled to receive pay raises for fiscal 2010 ranging as high as 6 percent and in, at least one case, 8%.

The School Department and the School Committee would not make any significant reductions in their overall departmental 8% spending increase request.

The school union declined to agree to the Selectmen’s request for a voluntary price freeze. In fact, the union asked the Selectmen to withdraw its request for a voluntary freeze, which the Selectmen refused to do.

Members of the Chatham Finance Committee have expressed concern that worsening financial conditions in fiscal year 2010 (beginning July 1) might lead to layoffs if monies aren’t saved from pay raises or other items to deal with revenue shortfalls. A significant part of Chatham town revenues supporting the town budget comes from such economically sensitive sources as hotel/motel taxes, motor vehicle taxes and such charges as mooring fees.

Meanwhile, the Sandwich schools are showing their seriousness about living within their means. The special needs department has overspent its budget by $113,500 with three months to go in fiscal 2009, so School Superintendent Johnson laid off two part-time tutors and told a special needs teacher her job was in jeopardy. The Cape Cod Times reports:

"The special-needs department overspent their budget, and they are suffering the consequences," school board member Trish Lubold said.

Laura Calyle, president of the teachers' union, said she is still investigating the cuts and may file a grievance on behalf of the teacher. The two tutors are hourly employees and are not part of the union, she said.

Lubold said teachers knew the contract they negotiated could result in budget shortfalls.

"We told them if they wanted a 3 percent raise, it would result in teachers losing their jobs. [Superintendent Johnson] is doing her job, making people accountable," Lubold said. "If you don't want to get on the change train, then get off and get a job somewhere else."

It beginning to look as if taxpayers at Chatham’s Town Meeting on May 11th will be left to make the hard choices necessary to deal with the FY10 budget that to many seems too rich. The Selectmen's recommended budget was rejected by a majority of the Finance Committee, but the Selectmen did not make any reductions in the spending increases of $1 million over FY09.

The bulk of the Chatham spending increases are in pay raises. Across all departments pay raises built into the Chatham FY2010 budget total at least $730,000, $351,000 in the schools (many as high as 6%) and $380,000 in the other departments (some increases up to 7%). Money being spent on raises might be better diverted to reserve funds to guard against a deteriorating financial condition in FY10 that could trigger layoffs.

For a good picture of where things stand, do read CCT’s report of the Finance Committee deliberations on the operating budget.

At a special Selectmen’s meeting Monday, March 23rd, members of the Finance Committee will tell the Selectmen the Fiscal 2010 budget they have proposed is too rich.

Though the Selectmen and Town Manager have done a commendable job thus far in reducing the hit on the property tax from $1.268 million to $625,000 or so, that $650,000 reduction did not come from a reduction in increases in spending but principally from raiding reserve accounts that may well be needed as conditions worsen during the upcoming fiscal year beginning July 1. As one Finance Committee member put it, that’s “dangerous.”

That’s why the Finance Committee voted to reject the budget.

At its meeting last Thursday members discussed at length where cuts could be made and numbers added up to well over one million dollars.

The biggest obstacle is the iron stance of the unions insisting on their big pay raises despite the economic storm battering the taxpayers. These pay raises add more than $780,000 to the budget and run as high as 6 and 7% in some cases. (It is estimated that the great majority of full-time town employees have compensation packages yielding more than the incomes of half of the households of Chatham.) If one were looking just at a cost of living adjustment in today’s environment, there would be none, since inflation is at zero and projected to continue declining. Even if pay raises were cut in half they would be still be in excess of the 1.7% declining inflation number of November used as a base for increases. As anyone reading the Boston or Cape papers knows, union and non-union employees elsewhere, from Boston to Provincetown, are voluntarily agreeing to smaller increases, in some cases, zero. They have accepted the fact that “we are all in this together.”

“Free cash,” described by the Town Manager as “the first hedge against economic decline,” is being tapped for over $1 million for capital spending that presumably can’t be delayed. (About $930,000 is being spent on the transfer station, most from free cash but $280,000 from the Stabilization Fund, another major reserve for bad times.)

In addition to the reduction or elimination of pay raises and delay in capital projects, Finance Committee members are ready to identify cuts that can be made totaling well over $250,000. In total, there is more than enough to refill the reserves to where they should be to be “hedges against economic decline” and to avoid any increase in property taxes altogether for the ordinary taxpayer.

The Finance Committee wrestled with the interests of the stressed and strapped taxpayers, the interests of public employees and of students in the schools and the desire for the continuation of services as close to normal as possible. What they took into account:

First, the desire to avoid placing additional financial burdens on the property taxpayer, with concern focusing mostly on those who live in Chatham, the many retired and seniors experiencing drops in assets and incomes and the modest working families among which unemployment is said to be already 11%, reportedly worse than the usual off-season situation.

Second, the wish to avoid layoffs if the economy continues to worsen coupled with the sense that compensation increases in all departments, including the schools, are far out of step with the times and would be using up revenues that might be needed later to avoid layoffs.

Third, the need to be cautious about expected non- property tax revenues which support the budget, such as motor vehicle excise taxes and hotel/motel tax revenues and even water. Generally, revenues for fiscal 2010 are projected to be at fiscal 2009 levels. Only about $25 million of the $32 million budget comes from property taxes, so those other revenues are critical.

Fourth, the need to preserve funds that might be needed should the downturn deepen, such as free cash and monies in the Stabilization Fund and other funds.

Rather than go into fiscal 2010 with depleted reserves, actual reductions in proposed INCREASES IN SPENDING need to be made. Replenished reserves then will be available to help avoid personnel layoffs should economic decline continue and non-property tax revenues come in below forecast.

In extraordinary times like these, prudence and caution should be the watchwords.

The school department, responsible for the largest single dollar and percentage increase of any department, should not remain so aloof from the financial challenge facing the town, but should work with the Selectmen, the Town Manager, the Finance Committee and the unions to achieve a result that will be best for the town, its taxpayers, employees and the residents and students who are served. All should step up to the responsibilities of leadership and not leave the solution to the Annual Town Meeting in May.

The Finance Committee continues its review of the budget and the articles to be included in the Warrant for the Annual Town Meeting and Election (May 11 and 14). The Committee meets in the downstairs meeting room at Town Hall and the meeting will be broadcast on Channel 18 live and be available for on demand viewing on the town website tomorrow.

In the FY2010 budget reviewed by the Finance Committee, Chatham school personnel are scheduled to receive pay raises ranging as high as 6 percent and in one case, 8%. The School Department and the School Committee would not make any significant reductions in their overall departmental 8% spending increase request. The school union declined to agree to the Selectmen’s request for a voluntary price freeze; the union’s request that the Selectmen withdraw its request for a voluntary freeze was refused by the Selectmen at its regular Tuesday meeting.

Members of the Chatham Finance Committee have expressed concern that overspending in worsening financial conditions in fiscal year 2010 (beginning July 1) might lead to layoffs if monies aren’t saved from pay raises or other items to deal with revenue shortfalls. A significant part of Chatham town revenues to support the town budget depends on hotel/motel taxes, motor vehicle taxes and such charges as mooring fees. That led them to reject the proposed budget.

As for tonight's meeting, here is the agenda prepared by Chairman Coleman Yeaw:

A big surprise was unveiled at the special Selectmen's meeting on the vast Comprehensive Wastewater Management Plan. It is possible for Chatham to get as much as $15 million in federal grant money to help pay for the system. Chatham will have to get to "shovel-ready" by February 17, 2010 and make a "commitment" for the project by June 30th of this year.

That means revising the article for the May town meeting from the $7.5 million for an odd part of the project (that we thought should be folded into the bigger project at the January 2010 meeting) to moving the whole project up to the May town meeting in hopes of getting that federal handout of $15 million. (It could be more or less, depending how many towns can scramble to qualify by February 17th.) About $60 million to approve at the May 11th/14 happenings.

Makes sense. Nothing like free money to change one’s thinking.

So the Selectmen voted to accelerate everything to see if the town can meet the February 17th deadline. Town meeting will have to approve. By town meeting time, the facts and numbers will be clear (charts still too optimistic counting on program monies that don't yet exist and a puzzlement why some areas are being done first rather than other areas that seem more critical), but it's worth every effort to see if the federal money can be captured.

There will have to be a major town effort to inform taxpayers of the implIcations for their tax bills. They will go up sharply to get the first $60 million or so underway. As we analyze the numbers, we will present our findings. The time is shorter than we would like, but taxpayers nonetheless need to be informed as the federal windfall is pursued.

There seem always to be strings with free money, but none were mentioned at the Selectmen's meeting. We'll watch out for them.

But, for the day, good news indeed?

Thursday night the Finance Committee by a vote of 4 to 3 rejected the Chatham operating budget proposed by Selectmen for the fiscal year beginning July 1.

Concern about the dangerous fiscal times seemed paramount.

As one member of the Finance Committee noted, this budget has been in process for such a long time, but the reality of how bad the world situation is really only began to sink in in October. She seemed to feel that drastic things would have to be done in FY11, but others felt the time was now.

Some core principles and concerns emerged during the discussion:

First, the desire to avoid placing additional financial burdens on the property taxpayer, with concern focusing mostly on those who live in Chatham, the many retired and seniors experiencing drops in assets and incomes and the modest working families among which unemployment is said to be already 11%, reportedly worse than the usual off-season situation.

Second, the wish to avoid layoffs if the economy continues to worsen coupled with the sense that compensation increases in all departments, including the schools, are far out of step with the times and would be using up revenues that might be needed later to avoid layoffs.

Third, the need to be cautious about expected revenues (other than the property tax) which support the budget, such as motor vehicle excise taxes and hotel/motel tax revenues and even water. (At a recent Selectmen’s meeting, for example, it was reported that water revenues surprisingly, for the most recent two months, were sharply below projections.) Generally, revenues for fiscal 2010 are projected to be at fiscal 2009 levels. Roughly speaking, only about $24 or $25 million of the $32 million budget comes from property taxes, so those other revenues are critical.

Fourth, the need to preserve funds that might be needed should the downturn deepen, such as free cash and monies in the Stabilization Fund and other funds.

During fiscal 2009 Town Manager Hinchey had instituted a hiring freeze and begun ferreting out savings to keep budget costs down. In the budget under discussion school spending increases over fiscal 2009 were by far the larger part of the increases. Town Manager Hinchey warned at recent public sessions that school spending increases had become a serious, recurring problem that had to be dealt with. School spending is increasing faster than normally allowable revenues and would lead each year beginning in fiscal 2011, even if fiscal 2010’s problem was somehow solved, to chronic override situations.

Town Manager Hinchey had done a masterful job in responding to the concerns of taxpayers, the Selectmen and the Finance Committee in reducing charges that would drive up the property tax levy but at the expense of taking ‘off-budget” money to be used in emergencies from sources such as the Stabilization Fund, free cash and the Overlay Reserve, That the free cash and reserves were able to be accumulated is a tribute to good management.

The basic problem remains that the operating budget of $32,356,835 developed over the better part of the past year is just too much.

By far the largest part of the budget increase from fiscal 2009 is compensation increases for personnel. Leaving aside pension and health care contributions the town (the taxpayer) makes, these amounts were approximately $351,000 on the school side and $380,000 for all other town departments, with increases in some cases reaching 6 and 7%.

There was a great deal of discussion about how to reduce those increases to levels that would not be a shock to the struggling taxpayer. While taxpayers wish to demonstrate that they value the service of all town employees – as they have shown repeatedly in better times – they feel there should be a recognition of the difficult times many of them are experiencing. As Finance Committee Vice Chairman Sprague said, "We're all in this together." It should be remembered that half of all resident households in Chatham have incomes that are less than the compensation packages of the great majority of town and school employees even before the proposed increases of up to 6 and 7%.

The Selectmen’s call for a voluntary freeze by all union and non-union employees weeks earlier failed because one large union rejected it. It was all or none. Finance Committee members recognized that, despite the Selectmen’s acquiescence to that rejection, they could make their own recommendations. In the last analysis, it is voting taxpayers at Town Meeting who will decide how to spend their money and how big or small the budget will be.

A good many suggestions for reductions in the operating budget were discussed, including how reductions in compensation increases could be accomplished by town meeting by votes dealing with the operating budget itself and the Article on Cost of Living Allowances in a time of zero inflation. (While a zero inflation environment currently prevails and did in December, the town used November CPI numbers which, while declining, were at 1.7%. This number provided the floor for the 2% and 3% increase COLA recommendations for all non-school units totaling $200,000. The balance of the raises incorporated into each non-school department’s compensation schedules is $180,000. The schools do not break out any cost of living adjustment; as noted above, their proposed raises total $351,000.)

It should be possible to keep the property tax levy for operations flat with FY09, refill the reserves and still provide some modest wage increases to show the town’s continuing appreciation of its personnel. Those refilled reserves may be needed in fiscal 2010 to avoid layoffs or cutback in services if other revenues needed to fund the budget fall off.

The town meeting can accomplish this or all parties in negotiation can work out a solution before that. For that to happen, it is essential that the school department for once cooperate with the Town Manager and the Selectmen.

The Finance Committee led by Chairman Colie Yeaw has set the stage for a reconciliation of the needs of the town with the economic and fiscal realities of the times and the taxpayers. The members worked long into the night, not adjourning until after 10 p.m. They deserve the thanks of all for showing a way forward.

Update: Members of the Finance Committee will appear before a special meeting of the Selectmen on Monday afternoon, March 23rd at 5:30, to explain why they voted to reject the budget.

Too long taxpayers have not spoken out. Now, in this time of financial stress, we are starting to speak. But, so far, we are not being listened to.

With less than two months to the critical Annual Town Meeting on May 11th and, in some respects, the even more critical Town Election on May 14th, it’s time for us to prepare to stand up for our interests, the interests of the taxpayers, the people who pay the bills.

We already have hundreds who are rallying to the defense of the taxpayers. It should not be automatic that our property taxes go up every year. It should not be thought that, despite desperate financial times, taxpayers should pay more for town business as usual. Expensive new projects that can wait or that should be reconfigured to be better values for the taxpayer should not go forward now.

Three important meetings are coming up in the next few days. Those who can are urged to attend to make their voices be heard.

1. The first important meeting is tonight (Thursday) at 7, at Town Hall. It will be carried on Channel 18, but it will be more beneficial if you show up to support the hard decisions that need to be made. The Finance Committee has an enormously difficult job to do. The members have just officially been handed the $32,356,835 operating budget by the Selectmen, who basically accepted the Town Manager’s budget without making any ‘real’ reductions in the spending he proposed. Committee members are hard-working and dedicated, led by long-time Chatham resident Colie Yeaw, who understands the concerns of the taxpayers. Mr. Yeaw has prepared a detailed agenda (at the end of this entry) explaining what they will tackle tonight. It will be a great learning experience for those who can attend or watch on Channel 18 (or later on the Town’s website as an on-demand video). You may also have an opportunity to express your views.

2. Monday, March 16th at 4, at Town Hall and on Channel 18, the Selectmen will hear Town Manager Hinchey argue why he must suddenly rush forward with a spending proposal at the May 11th town meeting for the hugely expensive Comprehensive Wastewater Management Plan before taxpayers have had a proper opportunity to learn what the costs will be for them. Before the Selectmen’s meeting on Tuesday, March 3rd, when the Town Manager showed a couple of graphs to illustrate an idea, no financial information of any sort had been published – and those graphs were not a basis for informed decision-making.

Since Mr. Hinchey has already indicated he plans to schedule a meeting in January 2010 for a major bonding authorization ($39.5 million), Chatham Concerned Taxpayers’ position is that no action regarding spending authorization should be taken before January. In the interim, and as soon as possible, the Town Manager and other officials should issue full information about the project covering at least these subjects: Why this proposal is the right one for Chatham, why it is being put forward for implementation in the midst of the worst recession in decades, what the proposed construction timetable will be, when money will be spent, when bonding will be done and its costs and what the annual impacts on property taxpayers will be. Opportunities to debate these and related matters should be provided over the next several months throughout the town. The 2007 estimated cost of $270 million (which estimate should be updated) dwarfs anything the town has ever done.

Everyone supports protecting the precious Chatham environment and everyone should want Chatham not to be changed because a full-fledged, large capacity wastewater disposal system is to be built. There is a place on Cape Cod for the condo towns, but Chatham must remain Chatham.

3. Tuesday, March 17th at 4, the Selectmen will hear from the sponsors of the petition for an Article in the Warrant for the May 11th Annual Town Meeting for a moratorium on the PD/Annex project. These are not the times for this $20 million project.

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Chatham Finance Committee
Meeting Agenda

Date: Thursday, March 12, 2009
Time: 7:00 PM
Location: Selectmen’s Meeting Room, Town Hall

1. Call to Order

2. Approve Minutes of 3/5 meeting

3. Review of the FY 10 Chatham Anglers’ Request

4. Vote on Article 6 – Operating Budget
a. Use of Free Cash
b. Use of Debt Drop Off
c. Use of Stabilization Fund
d. Use of Overlay Surplus Funds
e. Use of Excess Levy Capacity – not used
f. Use of Reserve Fund
g. Use of Encumbered Funds

5. Vote on Article 7 – Water Dep’t. Operating Budget
6. Vote on Article 8 – COLA
7. Vote on Article 9 – Transfer from Stabilization Fund for
a. Public Safety Overtime
b. Library
c. School Circuit Breaker
8. Vote on Article 11 – 5 Year Capital Plan
9. Vote on Article 12 - Transfer from Stabilization Fund for Trailers
10. Vote on Article 13 – Water Dep’t. Capital Plan
11. Vote on Article 14 – Waste Water Bond
12. Vote on Article 17 – MCI Lease
13. Vote on Article 19 – Public Ceremonies Committee composition
14. Vote on Article 21 – Kendrick Village Easement
15. Discussion of Finance Committee Warrant Report

The Selectmen’s meeting Tuesday, March 10th proved to be relatively uneventful. The most important announcement was that there will be a special Selectmen’s meeting on Monday, March 16th to hear the Town Manager start to lay out his plans for the first stage of Phase 1 of the Comprehensive Wastewater Management Plan (CWMP). No need repeating ourselves on what happened at the previous meeting. Check prior emails or go to our website www.chathamct.org.

Suffice it to say, that, checking with members of the two advisory groups working on the sewer project, they confirmed that the March 3rd presentation to the Selectmen was the first time any presentation of a financial nature had ever been made to any group. Two slides were shown that were somewhat illustrative of an approach to bonding that clearly did not represent any actual figures or real world situation or projection. There was no information or data on construction schedules, drawdowns and expenditures of funds, time of bond sales (except for the first $40 to $50 million) or impacts on the property tax base.

While CCT immediately asked for whatever financial data had been developed (and some has just been delivered to us), our position is that less than two months to Town Meeting is much too short a time for taxpayers to evaluate the financial consequences for them. Since a January meeting is being planned, the only sensible course is for any discussion about beginning implementation of the CWMP project to take place then. There should be no action on it at the May 11th Annual Town Meeting or at the Town Election on May 14th. All financial data should be issued in detail as soon as possible, providing taxpayers with several months to get to understand the effects on their property taxes. The magnitude of this project is too great to ram it through.

The Town Manager and Selectmen did return once again to the operating budget. Mr. Hinchey announced that utility costs had gone down and the $190,000 override had now melted to $90,000. Having consulted with Department of Revenue personnel in Boston, he discovered that there was just enough left in the Excess Levy Capacity account (under the Proposition 2 ½ limit) to cover the $90,000. The levy could be adjusted ever so slightly upward to absorb the $90,000 and avoid an override vote at the Town Election. The tax levy increase would be $610,000. CCT’s goal is still to have that $610,000 reduced, so there is no increase in the tax levy over fiscal 2009 for properties experiencing no taxable additions.

Is it not amazing that in a budget now at $32,356,835 there has not been a single real reduction in spending after weeks of scrutiny by the Selectmen? All of the adjustments were due to costs coming in lower than estimated and shifting items off the property tax levy for fiscal 2010 on to property tax income left over from prior years residing in the Stabilization Fund. The budget still contains compensation increases in excess of $700,000, with full-time personnel receiving raises of up to 6 to 7%. No savings of 1% can be found? No efficiencies? No adjustments to realities?

Proposition 2 ½ was adopted to be a limit, a restraint, on town spending on the property tax. Now, in many towns and cities, and Chatham is no exception, it is as if 2 ½ is an automatic gimmie for increasing taxes. No one quarrels with taxing new buildings and other improvements. But taxing the same property more? Public officials feel a great victory is achieved if they tax those properties “only” 2 ½. The goal, certainly in times of zero inflation and anxiety, should be to hold the line and avoid any tax increases on properties that are the same as they were this past year. Zero.

Some $635,000 of taxpayer money collected under the CPA program is proposed to be disbursed for six projects, worthy though they all are, almost surely would never have made it into the town operating budget. Though not in the property tax levy as such, the annual assessments of 3% of taxes cost taxpayers real money – approximately $60 for a $600,000 property. Since the state match this year has sunk to 26%, one questions the utility of continuing the program, despite state promises of higher matches in the future. At the least, if possible, a suspension of the CPA assessment should be considered for FY10.

Chatham's Board of Selectmen meet this afternoon. Here is the business agenda:

New Business

Operating Budget Ballot Question/Excess Levy Capacity W. Hinchey A

Affordable Housing Trust Fund Guidelines T. Whalen B

Committee Update – Land Bank Open Space Committee V. DiCristina C

Committee Update - Community Preservation Committee J. Kaar D

ATM Article(s)

The agenda is singularly uninformative as to what is to be discussed about articles for the Annual Town Meeting on May 11th.

Discussion about the possibility of a surprise appearance of a wastewater action article on the May 11th agenda arose for the first time at last week's Selectmen's meeting on March 3rd, but ended inconclusively when the Selectmen questioned what the money being sought ($7.5 million bond authorization) was to be used for. That discussion may continue this afternoon.

A significant amount of that money -- about $3 million -- is for the $17 million PD/Annex project that may be frozen by taxpayers at the ATM due to the financial crisis.

Indeed, it is astonishing that the actual cost of the PD/Annex project is now $20 million, when many thought $17 million was excessive. That the Town wants to spend $20 million for that project right now when -- sources tell us -- it is planning to borrow $55 million for the upgrade and expansion of the Wastewater Treatment Facility in the next few months is astounding.

It only became clear for the first time last week to regular observers of the Selectmen's meetings that the Town intended to start the ball rolling on the entire Comprehensive Wastewater Management Project at the May 11th Annual Town Meeting with a bond authorization request -- to be followed by a special Town Meeting in January for another bond request for $39 million.

The Town Manager presented a few financial slides so that the Selectmen could decide whether to fund the CWMP solely by way of the property tax or to fund 25% by way of betterments. The Selectmen decided on 100% property tax funding. From the material presented it was impossible to gauge the property tax impact in the near, intermediate or long term.

Chatham Concerned Taxpayers immediately took the floor to request of Chairman Summers that all of the data relating to the construction, spending and bonding schedule be made available. He directed the town officials to supply it promptly.

CCT followed up with a detailed request on March 5th by email to Town Manager Hinchey and Director of Environment & Health Duncanson. Included in the request were requests for electronic copies of the Town Manager's presentation to the Selectmen on March 3rd and a presentation by Dr. Duncanson to the Chatham Retired Men's Club on February 20th. Thus far, the only materials that have been delivered are paper copies of the presentations, which are not a proper response to our request. (A copy of that email is reproduced below.)

The point made in our CCT Alert yesterday is the important one: It is not right that with only two months remaining until the May 11th Town Meeting details of the intended financing and assessment on property taxpayers have not been made available. For a project of this consequence a great deal of lead time should be provided to taxpayers so they can evaluate the consequences for them. Even in good times, this should be done. In times like these, when taxpayers are conserving dollars wherever they can, it is doubly so.

Since town officials are contemplating a special town meeting in January for a much larger bond authorization, this matter should be deferred to that Town Meeting. The only amounts that bear directly on the Wastewater Treatment Facility are for design work, some $1.7 million; if anything is to be authorized at the May 11th meeting, at most it should be that.

By presenting the project at the January special town meeting, town officials will have adequate time to make detailed disclosure of construction, spending and bonding schedules and related information and taxpayers and all others concerned will have a proper chance to evaluate the financial and other aspects of the program that will impact them.

For CCT's detailed information request made by email, click on the entry below.

The economy of the United States is contracting and experiencing deflation, the stock market is at 1996 levels and unemployment has reached 8%. The Wall Street Journal reports today that credit markets are seizing up again. More and more it is beginning to look as if this recession, depression, whatever one calls it, is still deepening and some are now saying it could be 2012 before the nation comes out it. This is no time for laying additional financial burdens on the taxpayer.

Nonetheless, the Town of Chatham is fashioning a warrant for voters to approve at the May 11th Town Meeting and the May 14th Election that will raise property taxes now, in the immediate future and for years to come.

CCT’s position is simple and straightforward. “Not Now.” While taxpayers, particularly the elderly and retired, have suffered and are suffering losses in savings and income, this is no time to impose additional financial burdens on them. Indeed, even a small tax cut would be a proper response to the times.

Here is the situation as it stands now with two months to go to Town Meeting:

The operating budget that is to be presented to Town Meeting has a deficit in excess of $700,000 that the town leaders propose should be cured by a property tax increase. Most of that deficit is for pay raises ranging as high as 6 and 7% for Chatham’s well-compensated public employees. While unions and other employees in other cities and towns are agreeing to freezes on compensation at various levels, that is not the case in Chatham. A special vote will be needed to fund the budget as it stands. Voters can say no.

Free cash that could be saved ($1.2 million) as a buffer for the hard times ahead in fiscal years 2010 and 2011 is to be spent for a number of small capital projects. This has been the practice in the past. But are they really essential, are they for emergencies? Is this wise? Voters have a say on this, too.

Stabilization Fund monies (several hundreds of thousands of dollars) that are accumulated (left over from property taxes levied in earlier years) for fiscal emergencies are being used to keep the school budget intact, pay for fiscal 2009 overruns in police and fire overtime and other what seem to be non-emergency spending. Voters have a say here as well.

But that’s not all.

On the capital side, the ten year planning of the wastewater system is suddenly to become a live capital project, with the first spending of what may be as much as $270 million (2007 estimates) getting underway with votes at Town Meeting and the Town Election this May!

The Town should have put out all the financial information, including the construction, spending and sale of bonds schedule a long time ago and not just two months before Town Meeting. That’s just not right.

Because of the long planning period, relatively few citizens have paid much attention, feeling it’s certainly “a good thing,” but probably thinking they would never have a chance to use it let alone be asked to pay for it. Now, with just two months before Town Meeting, it’s a go? In this time of economic distress?

Last Tuesday, for the very first time, there was a public presentation of a few graphs to the Selectmen to help them decide if the sewer would be paid for by the property tax alone or with a 25% contribution from betterments. (Most sewer projects in Massachusetts are funded with up to 100% in betterments.) The Selectmen quickly decided the cost would all be on the property tax.

Considering that the project is hugely expensive, involves a great deal of underground work the conditions of which are not fully known and has a 20-year time frame, it certainly seems taxpayers should have more time than two months to become fully informed of the impact of the costs on their properties before being asked to embark on the project, Considering also that the town leaders are planning a special town meeting for January for authorization of some $40 million more in additional spending on the wastewater project, isn’t it the better course to defer all spending decisions to the January Town Meeting so that taxpayers will have the time to learn what they are being asked to vote on?

These are 2007 figures. The town is going to be looking for about $50 million in bonding authority between the May and January town meetings. That would raise Chatham’s outstanding bonds to about $80 million, not counting interest, more than doubling the bonds now outstanding. (There’s another $21 million authorized but not sold; $17 million is for the PD/Annex project, which should go into deep freeze for now.)

We have heard from non-residents who want everything to go forward immediately and be finished in eight years. Of course, that can’t happen. For the design work about two years will be required, we are told. We do not know how long the enlargement of the treatment facility will take or when the collection system expansion will begin. All told, Phase 1 is supposed to take 20 years, nine months a year, no activity during peak summer season.

The economy will turn up at some point and that is the time for new capital spending.

The Town should be tightening the proverbial belt as taxpayers are doing. The Town should not be looking for taxpayers to fund operational deficits or to authorize a major though admittedly beneficial non-emergency project without time for a thorough vetting of the spending and taxing plans.

As we have noted before, we are not opposed to the wastewater plan; we don’t have any relevant expertise. It’s a very big and important project and we believe taxpayers should have full opportunity to study and discuss the fiscal impacts on them before being asked to vote.

“Not now” is what seems to make the most sense. Resident taxpayers need time.

On the same day one of the smallest communities in Massachusetts, Provincetown, achieved a breakthrough by sealing an agreement with all union and non-unionized school workers, Boston's Mayor Menino secured agreement with one its largest unions to forego cost of livnig increases to avoid layoffs of their personnel.

Negotiations continue with other unions as the likelihood of layoffs loom.

CCT had reported previously on the case for wage freezes made by the head of Boston's Municipal Research Bureau Sam Tyler.

City union agrees to one-year wage freeze
By Stephanie Ebbert, Globe Staff | March 6, 2009

One of the city's largest unions has agreed to a one-year wage freeze, avoiding 50 layoffs and assuring its members job protection in a time of anticipated layoffs, Mayor Thomas M. Menino is expected to announce today at his annual speech before the Boston Municipal Research Bureau.

The American Federation of State, County, and Municipal Employees Council 93 agreed to forgo raises for one year, beginning in July. A scheduled 2.9 percent wage hike will be postponed to July 2010.

AFSCME represents 1,239 city workers, including parking compliance officers, tow truck drivers, and Police Department mechanics, with the largest concentrations in the departments of public works and transportation, parks and recreation, and inspectional services. Last year, the average salary of AFSCME members was $43,820.

It became the first large union to answer the mayor's plea to halt wage increases to help stem the bleeding in the city budget, expected to be $131 million in the red next year.

AFSCME members will still get step increases for their increased tenure. The wage delay will save

Provincetown's Town Manager Sharon Lynn worked cooperatively with Provincetown's School Committee to forge an agreement for all school employees to forego wage increases for Fiscal Year 2010. Town Manager Lynn has also now contacted the police and fire unions about wage freezes and is waiting for replies. Taxpayers stressed by the economy's collapse were protesting wage increases and school costs.

Provincetown school workers OK pay freeze
By Mary Ann Bragg
Cape Cod Times
mbragg@capecodonline.com
March 06, 2009 6:00 AM
PROVINCETOWN — All employees of the town's school district have agreed to forgo pay raises for the next fiscal year.

School committee member Peter Grosso announced the agreement yesterday to the town's finance committee.

Grosso, Town Manager Sharon Lynn, school union officials and others held talks over the weekend.

The agreement includes all union and nonunion employees including teachers, janitors, cafeteria workers, office administrators and secretaries.

Union members received a 3 percent raise for the current fiscal year, based on a three-year contract, said school Supt. Jessica Waugh. They will receive no raise for the next fiscal year. They will then receive a 3 percent raise in the following fiscal year, Waugh said.

The nonunion members will forego this year's 3 percent raise. Waugh's annual salary of $106,000 is frozen as well.

The wage increases would have amounted to about $79,000, Grosso said.

The Provincetown school district is the smallest K-12 public school district in the state. It has come under fire from townspeople in recent years because of high per-pupil costs and declining enrollment.

The school district employs about 85 people, with salaries ranging from $15,000 to $69,000 for full-time positions. Its annual budget for the next fiscal year is $3.6 million, which excludes any wage increases.

The finance committee voted yesterday to recommend the school district's budget to town meeting members in April.

Lynn said that she has now contacted the police and municipal union leaders to find out if they would agree to forego pay raises for the next fiscal year. She had not heard back officially from the unions yesterday.

As of now, police union members will receive a 5 percent raise for the next fiscal year, Lynn said. Municipal union members will receive a 4.5 percent raise.

The Chatham Health Department accepted a new plan advanced by the Park & Recreation Department for patrols and okayed opening Lighthouse Beach on a trial basis for the summer. The added small cost can be easily absorbed in the FY10 operating budget, which can and should be finalized at no higher a level than fiscal 2009 spending.

The magnitudes are different in Boston, but the similarities with the problems in Chatham are striking.

Backed by a unanimous vote of the Chatham Board of Selectmen, Chairman Sean Summers, taking a cautious look ahead at the sinking economy and the black predictions for fiscal years 2010 and 2011, proposed that town and school employees accept a voluntary freeze in compensation for 2010. Such a move would go a long way to avoiding layoffs if in fact the bad times continued and deepened.

Mayor Menino of Boston made the same plea to his employees The non-unionized and some small unions agreed to do as the mayor asked, but the large, powerful unions such as police fire and schools so far have said no. Chatham is in the same situation; the fire union has said no and the school and police unions didn't even bother to reply. The non-union workers did agree if layoffs could be avoided.

Sam Tyler, who has served as the Boston watchdog for decades now, explains why this sensible move is the best hope of avoiding layoffs. Read it and think of Chatham.

Unions should agree to city wage freeze

By Samuel R. Tyler, President, Boston Municipal Research Bureau
Boston Globe
March 4, 2009

FACED WITH the certainty of significant local aid cuts starting in July as well as the decrease of selected city revenues, Boston Mayor Thomas Menino called upon the unions to help save jobs and protect services by agreeing to a wage and step-increase freeze in fiscal 2010. Full compliance of this request would save approximately $55 million in increased expenditures.

Five small unions have agreed to the freeze, but the larger unions want a pledge of no layoffs or would rather push for new revenue sources. School unions hesitate, thinking that federal stimulus funds for school operations will preclude the need for substantial layoffs. The mayor cannot promise no layoffs given the magnitude of the budget gap in fiscal 2010, the uncertainty of new local revenues, and the nature and restrictions of the stimulus funds.

This year's city budget totals $2.4 billion, and 70 percent of the budget is tied to employee expenses. Boston officials originally estimated a budget gap of $140 million for fiscal 2010 based on increased spending and limited revenue growth. Savings from the city's hiring freeze and lower health insurance premiums along with prudent use of stimulus funds would still produce a gap of over $100 million that would require the layoff of hundreds of employees.

Even with an expected increase in property tax revenue of $61 million next year, revenue growth will be limited by state aid cuts and reductions in city revenues closely tied to the economy, such as interest on investments, motor vehicle excise, and building permits.

The biggest spending increase next year is $55 million in collective bargaining costs for salaries and step increases. Salaries for employees are to increase next year by 2.5 percent or 3.5 percent depending on the union contract. Employees not at the maximum step in their salary schedule will receive a step increase that generally adds 4 percent in addition to the contract salary increase.

Controlling spending in other budget accounts is more difficult to achieve in the short term. Spending for health insurance, pensions, debt service, and state assessments primarily for MBTA services and charter school tuitions is expected to grow by over $60 million in fiscal 2010.

A few union leaders have suggested that they will support new municipal revenue sources in lieu of a wage freeze. Yet the governor's local aid budget for next year already assumes $150 million in funds from a new 1 percent meals tax and 1 percent hotel room occupancy excise, of which Boston would receive $27 million. However, the Legislature's consideration of a gas tax to address state transportation needs could influence its willingness to also approve a statewide meals or occupancy increase.

Public-sector budgets are labor intensive, and when spending needs to be cut quickly, reducing the workforce is the first option by necessity. That was the case during the last downturn in fiscal years 2003 and 2004 when Boston's state aid was cut by 8 percent and the city reduced its employee level by almost 9 percent or 1,515 positions.

What will make this round of employee cuts difficult is that 88 percent of the 1,209 employees added to the city payroll since 2004 were in the school, police, and fire departments. The city's largest departments are too big to not play a central role in reducing workforce levels.

Cutting spending next year also will be more difficult because a few tools used last time will not be available. For example, an early-retirement incentive in 2002 enabled Boston to reduce its workforce by 476 positions but it added $62 million to the city's pension liability, which cannot be repeated.

City reserves will be used next year but they must be applied judiciously since Boston will face equally serious budget challenges in fiscal 2011. One-time federal stimulus funds for school and police operations should be targeted to provide long-term benefits in areas like technology and not to artificially prop up employee levels only to be cut in two to three years when the stimulus funding stops.

The city should continue to pursue service efficiencies and consolidations to generate savings over time, and the state should provide municipalities with new tools to support this effort. Even so, employee reductions will be the city's primary means of reducing spending, which is why the unions should do their part to save hundreds of jobs by agreeing to a wage and step-increase freeze starting in July.

In Chatham all public employees are scheduled to get raises higher than those in Boston. As in Boston, full-time public employees already get more in compensation than what half or more of the local population lives on.

Stimulus money from Washington for the schools is poised to hit Cape Cod. The Superintendent of Schools of Barnstable immediately analyzed the requirements and told Radio WXTK that she couldn't use the $2.6 million for which Barnstable is eligilble.

All towns were looking for money to cover shortfalls in their budget. But the money can't be used for that. It must be used for NEW SPECIALIZED PROGRAMS that have not been offered before. The money is for FY10 and FY11. After that, Barnstable would have to find money to continue the new programs or end them -- if they can! In other words, expand your spending and in two years find yourself in a bigger budget hole.

The Chatham schools are already into what appears to be a future of chronic budget overspending. To use the federal money Chatham schools would have to add new special programs, thus increasing their overspending. When the federal money runs out in two years, the schools would be looking to the town for even more money.

While Barnstable is scheduled for some $2.6 million, Chatham is earmarked for $191,000, about $95,000 in each of FY10 and FY11. Unless things change, Barnstable will be rejecting the federal money.

Hopefully, the other stimulus money the town is hoping for will not have strings that will render it unusable. The federal stimulus plan was supposed to be for saving as well as creating jobs. Not so for this school aid program.

Our excitement about what the Selectmen might do in their special Friday's meeting for fiscal discipline quickly fizzled as Town Manager Hinchey took control of the proceedings. Nothing would change.

Having guided the Selectmen skillfully through weeks of close scrutiny of the operating budget, the Town Manager finally got them to do exactly what he wanted them to do. The budget he had advanced did not suffer even one reduction in increased spending. The only "cuts" in his $32.757 million budget were downward adjustments due to final costs from third party providers coming in a couple of hundred thousand lower than estimates.

It was a masterful performance. He is really good at what he does.

In the blink of an eye Mr. Hinchey proposed free cash for off-budget capital spending ($1.2 million?) and then allocated Stabilization Fund monies amounting to hundreds of thousands of dollars for off-budget operations spending for the town side and the schools, thereby reducing property tax levy increases this year for the operating budget to $710,000, more or less. An override approval vote for about $190,000 will still be required at the election on May 14th following the Town Meeting on May 11th. (An override is sought when spending would drive the increase in the property tax levy up beyond the 2 1/2% allowed (but not required) by state law.)

The bad news is that that free cash and stabilization money won't be available as a cushion for hard times in fiscal 2010 and 2011. (Free cash and stabilization money were mostly raised by the property tax in prior years in excess of what was actually needed.)

Cost of living increases were approved (the nation is at zero inflation) to the approval of the large complement of town employees attending the meeting.

Ironically, the $700,000 or so increase in the property tax levy for fiscal 2010 for the operating budget is almost exactly the amount of pay increases in the budget. The unionized town and school employees declined to go along with the Selectmen's request for a voluntary compensation freeze. Chatham taxpayers have rewarded their public employees very well over the years and it was hoped the employees would appreciate the stress ordinary citizens were experiencing at this time. If they had, there would be no increase in the property tax for operations. And there would be a strong constituency to resist layoffs if economic conditions deteriorate.

The result is that resident taxpayers will be asked to accept increases in their property taxes to pay for raises -- ranging as high as 7% for fire personnel and 6% for school personnel -- for full-time public employees, most if not almost all of whom already have compensation packages adding up to more than the incomes of roughly half the households in Chatham.

And that's before considering the cost proposals for various capital projects being prepared for articles in the warrant. For example, if the Town were to go forward with the Police Department/Annex project, the first year debt service cost would be about $1.3 million on top of everything else. We're still paying about $1 million a year for the costly and under-utilized Community Center.

The numbers are not yet clear on what the Selectmen will recommend that will drive up property taxes. Nonetheless, the FY10 operating budget is now going over to the Finance Committee for its "official" examination. Because of the financial crisis, the members of the Finance Committee have been informally -- but diligently -- studying the spending plan for some time and now will dive into it in earnest. In a $32 million plus budget, it's hard to believe there's nothing to cut

It is clear that the schools are on a collision course with reality. That they sought increases in spending of the magnitude they did (8% or 10%, depending on how you count) in these awful times indicates they are living in an alternate universe. Town Manager Hinchey predicts that they will become a chronic cause of overspending requests every year in the future unless they mend their ways. While the schools complain the town doesn't give them enough money, the town provides the schools with substantially more dollars than the state requires, about 50% more for fiscal 2009.

Another attitude that must change is the assumption that the town has a right, a duty, even an obligation, to raise the property tax 2 1/2% every year. Town spending has grown 44% in the last eight years, twice as fast as the CPI. Don't be misled: Chatham's low tax rate doesn't mean a thing. What's important is the increase year by year in property taxes. The town is indeed well-run, but is it run as efficiently and as cost-effectively as it should be?

Whatever the Selectmen and the Finance Committee recommend, it is up to Town Meeting to decide whether or not to put up the money, regardless of what the Selectmen have approved or recommend. All public contracts are subject to appropriation and that's what voters do at Town Meeting -- appropriate or don't.

Surely, voters do not want to have a financial crisis develop during fiscal year 2010 or fiscal 2011 because of spending decisions made now that are out of synch with fiscal realities. Chatham is not an island; it is not immune from real world developments. Chatham spending relies in substantial part on revenues from other sources, such as hotel/motel revenues and motor vehicle excise taxes. Will they be as high as projected for fiscal 2010?

In 2008's last quarter, the American economy contracted by 6.8%, the sharpest drop since 1982. The Dow Jones average in February had its worst February since 1933. Chase has cut its dividends 87%, GE, 67%. The Dow, as a predictor of the future, is now at a 12-year low, closing today down about 300. Retired people are suffering and it's no wonder they're scared.

It's a time to be cautious and prudent. Or is there more in the magic hat?

Friday Alert!

Capital projects are for later discussion, at Town Meeting. Now it’s the Operating Budget. Non-essential capital projects should be deferred until the economy improves. Only emergency capital spending should be undertaken now.

The Finance Committee has a very extensive review scheduled for this evening. It convenes at 7 p.m. in the Town Hall and will be broadcast live on Channel 18. In about 24 hours the video will be posted in the archives on the town website. For a list of the members, click here. If you can stop by, do. It's educational and you show your support for the dedicated service these folks are providing for the taxpayers of the town.

Chatham Finance Committee

Meeting Agenda

Date: Feb. 26, 2009
Time: 7:00 PM
Selectmen’s Meeting Room, Town Hall

1. Call to Order - Coleman Yeaw, Chairman

2. Approve Minutes of 2/12 and 2/19 meetings.

3. Review of the FY 10 Water & Sewer Budget

4. Review of the FY 10 General Government
a. Town Manager
b. Human Resources
c. Legal
d. Audit
e. Town Accountant
f. Assessors Treasurer/Collector
g. Information Systems
h. Town Clerk
i. Parking Clerk
j. Permit Office
k. Buildings Dep’t..
l. Veterans
m. Chatham Booster Club
n. Maritime Festival
o. Chatham Anglers
p. RR Museum

5. Review of Benefits Budget

6. Review of Insurance Budget

7. Review of Debt Service Budget

The Town of Dennis is taking action to save money for its taxpayers joining other Cape towns in consolidating its dispatch service with Barnstable County. Dennis said, among other things, it would cut firefighter overtime. Chatham still handles its own dispatching.

Dennis will be the ninth Cape Cod fire department joining the county dispatching system.

Dennis joins county fire dispatch service
By CAPE COD TIMES
February 26, 2009 6:00 AM

SOUTH DENNIS — After a three-hour public meeting last night, selectmen voted 4-0 to move responsibility for the town's fire dispatch services to the Barnstable County Sheriff's Office.

The move could save taxpayers as much as $135,000 annually, because it will free up a firefighter for emergency calls and eliminate the need to pay overtime to staff the dispatcher position over holidays and sick leave days, according to Selectman Wayne Bergeron,. "It was a difficult vote," but town officials need to move forward with their efforts to contain municipal spending, Bergeron said.

Dennis Fire Department officials have said the change could reduce the level of fire dispatch services in the town, citing the potential for walk-in cases at the fire department going unattended if a dispatcher is not present.

The county's dispatch program already handles emergency calls for eight Cape Cod fire departments.

Thus far the Selectmen have made no reductions in the Town Manager's Operating Budget spending increase proposal (including schools) of $1 million or so that will drive up property taxes for Chatham's taxpayers. Indeed, they have increased spending over the Town Manager's initial recommendations. They plan to button up the Operating Budget and send it to the Finance Committee for its formal review.

How much more spending will impact property taxes will be known until the capital spending proposals are identified and quantified.

The agenda for Friday's Selectmen's meeting at 5:

Meeting will be broadcast on Channel 18 and video posted within 24 hours on the Chatham town webiste.

Taking up the spending plan for Fiscal 2010 beginning July 1:

Article 6 – Operating Budget W. Hinchey
(CCT comment: No cuts made yet; spending still $1 million over fiscal 2009 despite
taxpayer stress)
• Union Response (Apparently, there will be responses from all)
• Additional School Cuts (CCT: No cuts yet; spending still sky high; property tax
increases coming)
• Additional Town Cuts (No cuts yet; property tax increases coming)
• Article 10 – Lighthouse Beach
• Other Action (CCT comment: Taxpayers must rally for fight at Town Meeting to
oppose property tax increase)
• Ballot Question (CCT: Taxpayers must be heard at May 11th Town Meeting and May 14th Election.)

Tuesday turned out to be a sorrowful day for taxpayers who live in Chatham.

The week had looked promising.

The Selectmen had taken a big step towards reducing spending – and avoiding any increase in property taxes – by unanimously asking all town employees -- union and non-union alike – to accept a voluntary across-the-board freeze in compensation. All had to agree. By our calculation that would save taxpayers more than $700,000 or 70% of the million in reductions needed to keep the property tax levy at the fiscal 2009 level. The Selectmen asked for employee responses by this week.

Then the Selectmen changed their meeting schedule for this week, adding a special Friday meeting (tomorrow) to deal with the responses. That seemed like good news.

Tuesday’s meeting opened with the Public Forum. Chatham Concerned Taxpayers thanked the Board of Selectmen for the close attention they seemed to be showing to the concerns of taxpayers in “these extraordinarily difficult, indeed unprecedented, times.” (Note: CCT is just forming; our first meeting was February 3rd. We’re still digging, still learning and there’s much still to learn. What we say is what we know so far.)

CCT briefly reviewed the above-inflation growth in town spending of over 44% in the past eight years that had to stop. During those years the town’s employees had handsomely benefitted with excellent pay and benefits. But the good times, at least for now, were behind us. Federal statistics were showing ZERO INFLATION, a strong argument against any pay increases in these tough times. .

We reminded the Selectmen that more than half of Chatham’s adult residents were of retirement age or nearing retirement. Chatham’s population is one of the oldest in Massachusetts. They are “hurting”, we said, using the words of a similarly disposed Selectman of Brewster. They are “scared” as they see their nest eggs dwindle.

Though many think of Chatham as a rich town, according to publicly available information, the median household income of Chatham is below even that of neighboring Brewster, and far below that of a rich town such as, say, Weston, $153,918.

We suggested that the Selectmen ask the representatives of the employee groups – school union, police union, fire union and other municipal employees – to appear at Friday’s Selectmen meeting in person to deliver their responses to the request of the Selectmen for an across-the-board freeze. We said “We certainly hope that they will show appreciation for the past generosity of the Chatham taxpayers and an understanding of the anxiety and fear that those past their earning years are now feeling in these very difficult times. With their cooperation, Chatham can hopefully get through this next fiscal year without imposing additional financial burdens on already stressed taxpayers.”

We noted that an added benefit of the Selectmen’s proposal would be keeping all or almost all public employees employed without the need of major layoffs.

We closed by urging caution for what could be even worse times ahead. “As residents tighten their belts, the town must do the same.”

Well, that was the end of hope for the taxpayers, at least as far as the Selectmen were concerned. Or so it appeared.

Immediately thereafter, Town Manager William Hinchey informed the Selectmen that the fire union had rejected the Selectmen’s request, although the non-union employees had agreed to it if they could avoid layoffs. The police and school unions hadn’t bother to respond.

In the following exchange between Mr. Hinchey and the Selectmen, “some taxpayers” were accused of “panicking” and one selectman maintained that he for one wasn’t going to panic. Indeed, he could live with the property tax increases including an override and if there was to be a battle at town meeting, so be it.

One of the written principles adopted by the Selectmen for this year had been to avoid any override. (State law permits but does not require an increase in the property tax levy of 2.5% each year; anything beyond that requires a vote of town meeting be it for an override (excess spending in the operating budget), a capital exclusion or a debt service exclusion.) The town spending plan proposes almost a 5% increase in the property tax in the operating budget, requiring about one million dollars in reduction in a $32 million spending plan to avoid property tax impact.)

Not another word was said about the across-the-board freeze or the fact that two unions had refused to respond to the Selectmen.

The Selectmen then proceeded for the next two hours with spending as usual. The first thing they did was vote cost of living increases for all town employees outside the school department; the cost of living increases for school employees are already in the school budget as other pay increases. The Town Manager argued that since the Board had just recently approved (4-1) the new fire union contract he had negotiated giving the union a 7% increase for fiscal 2010 (at a time when cost of living figures were plunging towards zero), it was obligated to give them their 3% cost-of-living increase. (The other 4% of the fire union’s 7% increase was already in the fire budget). Selectmen then voted cost-of-living increases for the other town employees.

Not a single reduction in spending was made by the Selectmen. In fact, several spending items were added off-budget as it were by taking from emergency funds money raised in prior years in excess of what was needed. It was difficult to follow what the Town Manager and Selectmen were doing because they were working from papers the public in attendance did not have. Free cash was tapped for this, the Stabilization Fund for that involving hundreds of thousands of dollars, perhaps more. The School Department 10% spending increase came down somewhat because of health insurance costs came in lower than estimated and the magical injection of off-budget money from the Stabilization Fund. One member of the audience rose at one point to state what she believed was the unspoken obvious: The real “elephant in the room” is the chronic and unsustainable overspending by the schools.

Overall, the sole reduction in spending came about because health care insurance final figures came in below what was estimated. At the end of the discussion, the Selectmen were still proposing an operating budget that raises property taxes in excess of 2.5% and requires an override vote at Town Meeting, an override they had pledged to avoid.

The Selectmen led by the Town Manager then went on to adopt and approve Articles for Town Meeting that will ask for spending for capital projects that will also raise property taxes. Only Chairman of the Board Summers on several occasions brought up the concerns of the town’s resident taxpayers and questioned what was essential capital spending and what could be deferred. Nothing was deferred.

Tomorrow’s Selectmen’s meeting at 5 (new time) is supposed to wrap up discussion on the town’s operating budget. Will any reductions in spending be proposed or adopted if proposed? Will the police and school unions deliver their answers to the Selectmen’s request for a compensation freeze? Based on Tuesday’s Selectmen’s actions, neither is likely.

The taxpayers’ hopes now lie with the Finance Committee (Chairman, Coleman Yeaw), which will formally receive the Selectmen’s recommendations in a few days. They meet Thursdays a 7 at the Town Hall and live on Channel 18 and by video later on the Town’s website.

It’s beginning to look more and more as if the taxpayers who live in Chatham will have to fight for themselves at Town Meeting.

The Selectmen have a difficult job. The Town Manager is a master at what he does. They are all intelligent and diligent. But their actions Tuesday reflected their apparent judgment that the stress being suffered by those in Chatham who pay the bills because of the financial crisis did not warrant any change in the course of their projected spending, that the town could afford it. The town, of course, is that Chatham household with median income of $45,817 which will be voting at Town Meeting in May.

A number of people have indicated they are uncertain about who makes the final decisions on spending in Chatham.

The answer is “You do.”

CCT’s position is there should be no property tax increase for fiscal 2010, except for those who have added new value to their property (new building, a deck or whatever), for the operating budget or for capital project that aren’t demonstrably urgent and can’t be delayed until better economic times.

Chatham voters at the Annual Town Meeting and Town Election in May make the decisions. The ATM this year begins May 11th (it can go beyond one day) and the Town Election is May 14th. It is important for voters concerned about town spending growth to attend town meeting AND STAY TO THE END. Strange things can happen if voters aren't vigilant.

Simply put, the process is this:

The Town Manager William Hinchey prepares a spending plan and presents it to the five-person elected Board of Selectmen. The Town Manager has reviewed all the spending requests of all town departments EXCEPT for the School Department. The School Department spending plan is in the hands of the elected School Committee. The Town Manager includes the spending plan approved by the School Committee in the overall town spending plan without any change.

Despite the world financial crisis, the town’s spending plan calls for an increase in spending of $1.268 million, of which approximately $1.1 million is attributable to a 10.52% increase in spending approved by the School Committee.

The Selectmen are giving what is perhaps unprecedented attention to the spending plan. They have identified the largest single item of increase in the budget is about $713,000 for salary increases of one sort or another. According to our calculations, these increases are roughly equal between the School Department and all other town departments.

Since the town has been very generous to all town employees in terms of compensation and other benefits, the Selectmen proposed to all town employees they accept a voluntary freeze for fiscal year 2010, thus saving $700,000 or so. The answers of the employees (most of which are represented by unions) are due this week. If the employees consent, then the spending increases that have to be peeled back are in a manageable area of about $300,000, less than one percent of the $32.757 million budget, to freeze the property tax level for the operating budget at the fiscal 2009 level for those who didn’t add improvements to their properties.

In just a week of so, the Selectmen will hand over the spending plan with their changes and recommendations to the Finance Committee for its review. The Finance Committee has been informally reviewing the budget already for weeks. The Selectmen and the Finance Committee have suggested to the School Committee they subject their spending plan to further review, but no changes have as yet been forthcoming.

On or about April 1, after all the back and forth, the Warrant goes to print with all the recommendations. The Warrant is what the voters who attend the Annual Town Meeting and vote in the election a few days later act on. The voters have the final say. They can change the spending plan or reject it in total. For example, voters can reject a compensation freeze the employees have agreed to or refuse to fund any compensation increases if the employees have insisted on their increases. The same is true for capital spending. (The town, in effect, has two budgets, an operating budget and a capital budget.) Whatever the recommendations of the Selectmen, the School Committee or the Finance Committee, the voters decide.

So it’s important for all concerned taxpayer voters to be informed and show up at the Annual Town Meeting and Election on May 11th and 14th. There is a certain intimidation factor in speaking out at a town meeting of several hundred, but one should not worry about that this year because the stakes are too important to stay silent.

Chatham Concerned Taxpayers will be offering suggestions and guidance all the way up to Town Meeting and helping to organize speaking on the floor as well. While we hope we can give full support to the recommendations put before Town Meeting, as of this writing it is impossible to know if that will be the case. We will be prepared to advocate in support of the taxpayers.

We welcome the input and suggestions of all who believe this is a time for fiscal prudence. For taxpayer voices to be heard it’s important that we reach as many as possible. Please send the emails of like-minded taxpayers who don’t want to see property tax increases to chathamct@comcast.net. And stay in touch not only by these email alerts but by regularly checking our website www.chathamct.org.

These are extraordinary times and the voices of the taxpayers must be heard. In the last analysis, it is the votes of the taxpayers which will decide the outcome in May. The future of Chatham's spending is in your hands.

The towns that support the Nauset school system (Brewster, Orleans, Eastham and Wellfleet) told the schools its budget wouldn't fly. So last night the Nauset School Committee cut its proposed budget $500,000 for fiscal 2010.

Selectmen Ed Lewis of Brewster made it clear

"there is no appetite for an override now because people are hurting."

"A lot of retired people on the Cape have seen their nest eggs dwindle "and they are scared," Lewis added. "And it's going to get worse next year."

The Nauset system expects to cut at least 16 staff jobs.

In Chatham, in an attempt to avoid personnel layoffs and increased property taxes, the Selectmen asked the unions and other employees to accept an across-the-board compensation freeze (all town departments including schools) that would save an estimated $700,000. The $700,000 represents salary increases ranging up to 7% in some cases. These raises represent 70% of the $1 million that would be raised by increases in the property tax rate. The Finance Committee and the Selectmen are seeking savings that would eliminate the remaining $300,000 increase in the fiscal 2010 operating budget over fiscal 2009. The School Committee has been asked to join in that effort.

The response from Chatham's unions and other employees is expected to be announced at the Selectmen's meeting on Tuesday, February 24th.

The Selectmen have been going through the Operating Budget for Fiscal Year 2010 very carefully. They have raised numerous questions about increases asked for in the budget that will drive property taxes up about 5% for all Chatham taxpayers. It could be even more if other revenues the town receives fall off, such as hotel/motel and motor vehicle excise taxes. Chatham Concerned Taxpayers has been monitoring meetings of the Selectmen and the Finance Committee as they go over the wish lists. The School Committee presented what appears to be its biggest increase request in percentage and dollars in recent memory and has thus far made no adjustments to its requests.

The Selectmen have expressed significant concern about hitting property taxpayers with more taxes during these financially disastrous times. To hold the line on spending and to keep the property taxes flat, the Town has to peel back desired increases by about $1 million from the operating budget. The Selectmen by a 4-0 vote asked the unions and other employees to agree to an across-the-board compensation freeze for fiscal 2010, which would reduce excess spending from $1 million to $300 thousand. Chatham Concerned Taxpayers pointed out that the nation is currently in a period of zero inflation, so cost of living increases (and other increases) for town employees in such a time seem bizarre for private sector taxpayers who aren't getting any bump-up in income. The union and other employees were asked to respond to the Board on or before this Tuesday, February 24.

Assuming town employees take account of the difficulties of town taxpayers, the additional reduction in spending increases of $300K should be doable in a $32 million budget, less than 1%.

Property taxes are also impacted substantially by capital projects, which are planned outside the operating budget. To hold the line on property taxes will require a freeze on capital spending for FY10 as well. In other words, during these tough times, should not the town take a spending break on capital projects until economic times improve? The so-called debt dropoff used in recent years should be used to reduce property taxes or to build up the Stabilization Fund to save for emergencies in FY11.

As the agenda set forth below shows, this coming Tuesday the Town Manager will present his proposals about capital projects to be brought up at the Annual Town Meeting on May 11th. Such proposals can have very significant impacts on the property tax. The Selectmen may disclose the response of town employees to the across-the-board freeze proposal. Without such a freeze, personnel layoffs are almost certain unless the property taxpayers are forced to pay for such pay raises in increased taxes.

Tuesday, February 24, 2009
Board of Selectmen meets, Town Hall, Channel 18, 4 p.m.
Sean Summers, Chairman

Agenda on ATM Warrants
Article 6 – Operating Budget
Article 8 – Cost of Living Increases for Town Employees (in a zero inflation environment)
Article 9 – Stabilization Fund – Use of funds for PD/Fire overtime and library
Article 11 – General Obligation Bonds – five year capital plan
Article 12 – Stabilization Fund – use of funds for transfer station trailers
Articles -- May discuss hotel/motel tax revenues and possible State House actions on same and meals tax
Ballot Question – Operating Budget

The key players in the budget discussions in Chatham are the elected members of the Board of Selectmen and the School Committee.

The Town Manager reports to the Selectmen.

The Superintendent of Schools reports to the School Committee.

The Finance Committee members, appointed by the Town Moderator, review the proposed spending plans and make recommendations to the members of the Town Meeting convening in May.

To get a bigger picture of the chart below, click on it. As with any pop-up chart or picture, for future reference you can print it out or save it to a file on your computer by right-clicking on it.

Tell you fellow taxpayers about this site and that they can join our email update list by emailing chathamct@comcast.net. See the link to the right of this column under "Contact" for an easy way to send us an email or send in your usual way.

Our list of concerned taxpayes is growing robustly.

Anyone can join our Chatham Concerned Taxpayers Alert email list by emailing us at chathamct@comcast.net. It's the best way to stay current on the threat of property tax increases. Please urge your friends and neighbors to join up.

Anyone who has put his or her email address in to join the list who has not received emails from us has to adjust his or her spam filter to allow emails from chathamct@comcast.net. There are a few (seven, actually) that are consistently bouncing.

"Chathamct" stands for Chatham Concerned Taxpayers.

Today, Thursday, February 19, 2009
Finance Committee, Town Hall, Channel 18, 7 p.m.
Coleman Yeaw, Chairman

Budget Review Agenda
FY 10 Health & Human Services Budget
FY 10 Cemetery Budget
FY 10 Parks & Recreation Budget
FY 10 Highway Department Budget
FY 10 Transfer Station Budget

Editorial: Finding the money
By Staff reports
Fri Feb 13, 2009, 07:35 AM EST

Chatham Board of Selectmen chairman Sean Summers said this week he plans to ask all town employees to agree to a wage freeze – including union and nonunion staff.
For most town workers it would eliminate a 2 percent increase, but for the fire department and some school employees it would nix a 3 percent raise. An agreement between employees and the town would save $700,000 and help avoid or largely offset an override.
But since union contracts have already been negotiated, the town can’t mandate a wage freeze – it can only request one.
“We don’t have the authority, but don’t we have the moral authority?” Summers asked.
The answer is yes. If they haven’t already, every Cape Cod town should ask all employees to accept wage freezes and, if necessary, reduced work hours.

continue reading ...

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.

The Cape Cod Chronicle welcomes the formation of Chatham Concerns Taxpayers, editorializing that Chatham will benefit from a "close fiscal review." It agrees that the such a constituent group should "give voice to their interests." Vigorous public oversight promotes budgetary thrift, the Chronicle maintains. CCT agrees.

WE ARE CONCERNED TAXPAYERS WHO OWN A HOUSE IN S. CHATHAM. Please let us know what is going on. WE do not want an increase in ANY taxes or any capital expenditures, especially at this time when we have already taken such a big hit in the value of our property in S. Chatham and in our retirement funds, experiencing a decline of between 30 and 40 percent. What the heck are they thinking?

At the initial meeting of Chatham Concerned Taxpayers on February 4th we indicated that our goal was to avoid all increases in property taxes for fiscal 2010. This, as a practical matter, meant holding the spending in the operating budget to approximately fiscal 2009 levels and instituting a "pause" in capital spending and authorizations.

Since then, in poring through the spending plans of the school department and the other departments of the town, it became quickly clear that a solution exists that will avoid personnel layoffs and maintain Chatham's levels of excellent quality services in the schools and elsewhere. Rather than a 5% increase in property taxes to support a bigger spending plan, the increase in property taxes can be completely eliminated.

A concern is that revenues may fall below those currently estimated by the Town Manager, so caution is even more necessary.

The solution is aided by the fact that the nation is now in a ZERO inflationary period. An across-the-board freeze in compensation at fiscal 2009 levels will eliminate the need for about 70% of the proposed spending increases. Of the $300 thousand or so more in additional spending reductions needed, our team has already identified about $100 thousand. In a $32 million budget, finding waste and non-essential and unnecessary spending should not be a significant challenge with the Selectmen, the Finance Committee and the volunteers of Chatham Concerned Taxpayers all working on it.

Boston's Mayor Menino is to take a 3% salary cut beginning immediately as he asks all city employees to freeze salaries for the upcoming fiscal year.

Mayor Thomas M. Menino and his top staff members will voluntarily take a 3 percent pay cut beginning next week and will freeze their wages in the next fiscal year in a move to encourage the city's 17,000 other employees to accept his request for a wage freeze next year.

The mayor said in a letter to employees yesterday that the city faces tough fiscal challenges, and that he and his 19 cabinet members will make the sacrifice as a way to help close widening budget gaps in this fiscal year and the one that begins July 1.

Unions are considering the request, but the Mayor has not been able to give them assurances there will be no layoffs because the freeze only partially closes the Boston spending gap.

In England changes have occurred that mirror what has happened in the U.S. People who work for the government often are better off than those who work in the private sector. A dramatic example is in retirement benefits: Pensions or defined benefit plans still are dominant in the public sector and with unions such as GM's, but those working in the private sector mostly must save for themselves with no guaranties from anyone.

Boris Johnson, the new mayor of London, at the far end of the political spectrum from his communist predecessor Kenneth "Red" Livingstone, comments on the way it is today. The similarities to conditions in the U.S. are eerie:

As the recession deepens, so does the divide between those who are paid by private companies, and those who are paid by the state, and nowhere is the division starker than in the matter of pensions. A decade or so ago, . . people went to work in the public sector on the understanding that they would probably be paid less than their counterparts in the private sector. But they were fortified by the knowledge that they were serving their country or their community, and that their jobs and pensions were more secure.

[T]hose assumptions, and that essential symmetry, have been abolished...There has been a complete transformation in the relationship between private and public sector reward.

[M]ost private sector employees are finding their retirement looking ever leaner, while the state sector has been miraculously insulated.

It is incredible but true that the average public sector wage is now higher than the average private sector wage; and public sector pensioners can still generally expect a final salary pension scheme – and these can be very generous indeed. In local government, for instance....

With firms now laying off staff in their thousands, with unemployment apparently set to hit three million for the first time since the 1980s, it is simply too much to expect council-tax payers to scrimp and save to pay for the pensions of local government's colossal clerisy, when those pensions are so much more comfortable than anything they could afford themselves.

And the second, and more serious, reason for believing the position to be unsustainable is that these public sector pensions are now, frankly, unaffordable.
blockquote>

Posted by Chatham Concerned Taxpayer on Tuesday, February 10, 2009 at 9:38 AM | Comments (0)
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Retirees count on Social Security and, if they are lucky, whatever they can draw from their savings by way of dividends and capital gains. Capital gains and dividends disappered for many during 2008.

How bad was the devastation of the stock market in 2008? In context, it was breathtakingly bad:

No wonder taxpayers are worried about paying their bills.

The Chatham draft spending plan for FY10 (begins July 1, ends June 30 2010) assumes everyone's property tax will go up about 5%. The Chatham Concerned Taxpayers position is that that should not happen.

Here are the numbers in brief:

FY09 $31.401 million
FY10 $32.757 million
Increase $ 1.268 million

Now, new property is coming on to the tax rolls for the first time in FY10 (new homes, additions and the like) and it's fair to add new growth like that to the base.

So the increase for all property taxpayers is about $1.02 million.

Though taxpayers get one bill for real property taxes, the spending plan is put together by the Town Manager under the elected Board of Selectmen for all the departments except the School Department. The Superintendent of Schools under the aegis of the elected School Committee constructs her spending plan.

The Finance Committee appointed by the Town Moderator will carefully review the spending plans of the Town Manager and the Superintendant of Schools and will report directly to the Town Meeting in May that has the power to accept or reject the spending plan for FY10. The Selectmen will also provide their recommendations to the Town Meeting in May.

Because of the worst financial situation since the1930s the Selectmen are devoting an unprecedented amount of time to the budget. Is such a huge increase in the budget fair to impose on the taxpayers of the town in these difficult times, who, as can be seen by the chart of spending growth (scroll down), have been quite generous in putting up the money for salaries and facilities for the town? Especially, according to recently released federal government statistics, at a time of zero inflation?

Not only are we in financially chaotic times, we are in a zone of "zero inflation" such as we have not experienced in our lifetimeS. The Federal CPI report released January 16th shows that from December 2007 to December 2008 the three inflation measures averaged out to below zero. And we know that Gross Domestic Product contracted 3.8% in the fourth quarter of 2008 as spending continued to ratchet downward.

What does this mean for Chatham? Since there are no increases in the cost of living, what increases in compensation should be considered for Fiscal 2010? Many towns and cities are freezing salaries at fiscal 2009 levels to avoid layoffs.

To get a bigger picture of this news release, click on the picture below.

This past Wednesday, February 4th, Chatham Concerned Taxpayers had its first meeting at the Chatham Community Center. Although the meeting was at the unusual hour of 8 a.m. and was taking place after a snowstorm, some 65 taxpayers showed up. The meeting was advertised principally by email and word-of-mouth. From the discussions that took up most of the meeting time, Chatham taxpayers are indeed concerned. We will post on this website some of the material -- graphic and written -- that was presented at the meeting. We will be updating this website frequently as we develop more information.

The graph shown below probably got the most reaction. Chatham's town spending has sooared from $21 million plus to $31 million plus in just eight years. That's 44%.

Despite the financial crisis the world, the nation, the state and Chatham citizens find themselves in, the town's draft budget proposes yet more spending that will result in property tax increases at a time when citizens are trying to make do with what they have.

Click on the chart to get a bigger picture.

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?

Chatham Selectmen Budget Review Today at 4, Town Hall Channel 18
· Pay Raises
· Debt Drop Off
· Schools
· FY11 and Beyond

IT'S YOUR MONEY. HOLD THE LINE ON SPENDING!

Cape Codder notes Chatham residents eyeing town spending.

Residents get involved
Chatham selectmen have begun poring over the town’s 2010 budget and it’s clear that asking residents for an additional $558,000 to fund a school shortfall doesn’t sit well with everyone. The fact that the tax rate will not go up, because the town is retiring some debt, is not enough to assuage concerns.

In addition to calling in the school committee to explain why the additional funds are needed, selectmen will also be looking at the town budget.

Selectmen chairman Sean Summers pointed out that pay increases for union and non-union members exceed $380,000, not counting school staff.

At least two residents, Francis Meaney and Phil Dupont, have requested both the town and school budgets (which are more than a foot thick) to see if increases are necessary.

Calling themselves “concerned taxpayers,” the two will be a regular presence at upcoming budget meetings. Meaney said although he has owned a home in town for more than a decade, he only moved to Chatham full time a year ago. He said he isn’t alone in wondering why the school committee is recommending a close to 10 percent increase in this dreadful economic climate.

“You say wait a minute. It doesn’t sound like the year we should continue spending as usual,” he said, adding that cost of living increases are given because of inflation, and right now the country is in a deflationary period.

Meaney said Chatham was “an extremely well-managed town” but there was a “bias” toward spending.

“Maybe right now the bias should be a little different,” he said. “Maybe this is the year we take a pause.”

In the meantime, selectmen will be discussing the budget, two, sometimes three times a week. Among departments on their radar screen are the permit office, harbormaster, park and recreation and information and technology. There were also questions about the fire department, which has added eight new firefighters in recent years, but still has an overtime budget of $330,000.

The following is the revised agenda for the February 4th morning meeting kick-off of Chatham Concerned Taxpayers.

1. Welcome and explanation of why we're gathering -- Fran Meaney.

2. Role of Selectmen, School Committee, Finance Committee and voters at the Annual Town Meeting in the FY10 spending program and the outlook for the balance of this fiscal year (five months left), FY 2010 and 2011 -- Chairman of the Board of Selectment Sean Summers.

4. PowerPoint presentation -- Phil Dupont. This will cover the growth of town spending, the names of the key decision makers, the proposed spending plan, cost of living, the schools and other matters at town meeting that can impact the property tax,

5. Discussion by attendees of what actions might be undertaken by concerned taxpayers

5. Volunteers for work assignments

6. Next Steps

7. Other matters

NOTE: It is essential that we get the email of everyone who believes this is a time for fiscal restraint. Email will be our principal mode of communication because it's fast and cheap. The website www.chatamct.org will be frequently updated with pertinent information as well.

Coffee, tea and donuts for all.

Meeting schedules for the Selectmen, School Committee and Finance Committee can be found on town websites. The main town website is http://www.town.chatham.ma.us/Public_Documents/index It contains a great deal of information. It has schedules of meetings and lists the names of people serving on town committees and public officials, except for the School Committee and the Superintendent: Their names and schedule can be found on the separate website http://www.chatham.k12.ma.us/

Also online at the main town website, anyone can sign up to be emailed the agenda for each Board of Selectmen’s meeting.

Here are the usual meeting schedules as they now stand:

Board of Selectmen, weekly, Tuesdays at 4 p.m., Town Hall
The Board will be scheduling special extra meetings on town spending in these tough times. The first is tomorrow, Tuesday, February 4, 1 to 3 p.m., Town Hall, Channel 18

School Committee
First Wednesday of each month at 7:00 P.M.
Elizabeth Reynard Library
Chatham Middle/High Schools
425 Crowell Road 02633
February 4, 2009
March 4, 2009
April 1, 2009
May 6, 2009

School Committee Policy Meetings
5:00 P.M. Superintendent’s Conference Room
Next on Wednesday, March 18, 2009

Finance Committee, Thursdays, 7 p.m., Town Hall, Channel 18.

Channel 18 broadcasts of the meeting of the Board of Selectmen and the Finance Committee are posted on the town websites promptly after each meeting and can be watched on an "On Demand" basis through the town website.

Because of the changing financial situation and the concern about holding the line on spending, additional special sessions are likely to be scheduled.

Taxpayer participation can make a difference. Show up, listen, ask questions, give views and be heard.

Tuesday, February 3, 2009
Selectmen meet on town budget, 1-3 p.m., Town Hall
Selectmen's regular meeeting, 4 p.m. Town Hall

Wednesday, February 4, 2009
Chatham Concerned Taxpayers, 8 a.m., Chatham Community Center (volunteer group)
School Committee meets, 7 p.m., 425 Crowell Road

Thursday, February 5, Finance Committee, 7 p.m., Town Hall

IT'S TIME TO "HOLD THE LINE" ON CHATHAM SPENDING, AS IT IS FOR EVERY WORKING FAMILY.

The Selectmen start a special series of meetings

All Chatham, Massachusetts taxpayers concerned about increased spending and higher property taxes in these very difficult times are invited to attend the first meeting of what we are currently calling Chatham Concerned Taxpayers. It's a get-together, not a membership organization or a club or an association, just a gathering of like minded people who think fiscal discipline and not adding burdens to the taxpayers right now are good things. Strictly volunteer, strictly nonpartisan. Details are below. We would appreciate an email saying you are coming and, by all means, bring a neighbor or two, to meet some other neighbors.

Chatham Concerned Taxpayers meet Chatham Community Center Wednesday, February 4, 2009 8 a.m. to 9:30 a.m.

Subject: Holding the Line on Chatham Spending and Property Taxes

Coffee, tea and donuts for all.
www.chathamct.org for more information
chathamct@comcast.net to let us know you're coming

Posted by Chatham Concerned Taxpayer on Sunday, February 1, 2009 at 12:10 PM | Comments (0)
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The schools have been working on their FY2010 budget for months and presented it to the Finance Committe tonight, Thursday, January 29th. Despite all their efforts to keep expenses down, their spending requests are up some 8%. The size of the increase is somewhat uncertain because some significant expenses, such as health care, were reflected in the 2010 budget for the first time. The Finance Committee spent almost three hours burrowing through the budget with the School Committee and the Superintendent but tended to got tied up with odd items with small dollar price tags.

The Chatham schools are known for their excellence and they attract students from other towns who elect to attend school in Chatham, which is a blessing for the town.

The big question is whether Chatham can afford this small school system whose pupils are dwindling. The schools have a capacity of about 700 students, but the youth of the town are much fewer in number than years ago. Indeed, 175 students from other school systems attend the Chatham schools to fill up what would be vacant seats alongside the 516 residents of Chatham. Those students generate so called "School Choice" money for the Chatham schools,so fixed costs of the system are spread over a broader group of students than would otherwise be the case. The trend is steadily downward, so teaming up with one or more adjacent communities, who are facing similar demographic challenges,seems to be the future.

While the schools clearly put substantial effort into their budget preparation, it does not appear that the economic crisis swirling through the nation and the state was a factor in their budget deliberations. As consideration of the overall town budget, that of the schools and all other departments, goes forward, pencils may well be sharpened all around.

Other towns are making major cuts in budgets involving staff reductions, salary freezes and deferral of projects. One nearby Cape school district committee chairman told the press she was trying to work the schools budget back down to fiscal 2009 levels. That may be a necessity in Chatham for all departments if the overall situation worsens as the May Town Meeting draws near. Property taxpayers may be faced with several override votes at Town Meeting that could raise their taxes substantially. Families with stretched budgets of their own won't want to see that.

The Board of Selectmen will meet with the Schools Department soon and the Finance Committee may hold a follow-up meeting.

We've prepared a draft agenda for this upcoming first meeting of those concerned about holding the line on spending and property taxes in Chatham in these difficult times. Let's get together and talk about the issues.

1. Welcome and explanation of why we're gathering. (5 min)

2. Role of Selectmen, School Committee and Finance Committee in FY10 Budget process

3. Comments by Chairman of the Board of Selectmen Sean Summers on state budget cuts and the outlook for the balance of this fiscal year (five months left), FY 2010 and 2011

4. PowerPoint presentation on the growth of town spending, the key decision makers, the proposed spending plan, Town sources of revenue, possible issues to be taken up at the Annual Town Meeting in May that may result in property tax increases.

Phil Dupont has prepared a number of very informative graphs and tables to help understanding of the rather Byzantine town budgeting process. Money comes in from various places, goes into various accounts and spending goes out the same way. The School Committee controls 30% of the spending and usually gives the Selectmen only a peek at best. This may change this year because the School Committee is asking for such a large increase while the Town Manager has kept all other departmental spending growth close to zero. That’s not to say real cuts can’t be made.

5. Discussion by attendees of what actions might be undertaken by concerned taxpayers

5. Volunteers for work assignments

6. Next Steps

7. Other matters

Coffee, tea and donuts for all.

This evening at 6 p.m., a special early time (usually at 7 p.m.), the Chatham Finance Committee will begin its review of the Schools spending proposal for the fiscal year beginning July 1. The Schools seek to spend $1.1 million more than last year and would force a substantial rise in the property tax. That's a 10% increase over fiscal 2009. Pupil enrollment for the coming year is at the same level as this year.

The Governor has just announced more cuts in local aid to schools, so that will require belt-tightening at all schools, including Chatham's. And who says things won't get worse?

The other departments of the Town, which are under the Board of Selectmen in the Town Manager's direct control are so close to holding the line to FY09 spending in the operating budget, with certain adjustments, that no property tax increase for existing residential and business property owners would be necessary to fund their FY10 operations.

If the Schools held to the fiscal 2009 budget there would be no need for an increase in the property tax for homeowners or businesses at all (except for new construction and improvements) -- unless special projects are approved at the Annual Town Meeting.

This important meeting is open to all. Attend to find out why the Schools are seeking a 10% spending increase in these tough times. Channel 18 will carry the session and the video will be posted on the Town website for later viewing.

The Finance Committee is a volunteer group of nine appointed by the Town Moderator Attorney William Litchfield who presides at all town meetings. Their job is to review the budget recommended by the Board of Selectmen to the Annual Town Meeting in May and to deliver their independent comments and recommendations to town meeting members. The Board of Selectmen is reviewing the budget in parallel and will finalize its recommendations on the budget and other articles for the Town Warrant (the matters to be acted on at the Annual Town Meeting) before April 1. So a great deal of reviewing has to be done in a two-month period.

Chatham has an open town meeting. That means any registered voter of the town can show up, speak and vote. This is unlike some large towns which instead have a representative town meeting, to which members are elected from districts and "represent" the voters in their district. Chatham is quintessential New England.

This past Thursday the Finance Committee met under the leadership of Chairman Coleman Yeaw to set up the schedule of meetings to review the "budget" for FY10. "Budget" is in quotes because it's not a budget in the usual sense, it's a spending proposal. All of the information contained in the Town Manager's Summary delivered to the Board of Selectmen earlier in the week was about spending. Hardly any mention was made of where the money is coming from.

Most of the money that pays for running the town comes from the property tax. There are substantial additional revenues such as the town's share of the state's hotel/motel tax and annual excise fees for motor vehicles registered in Chatham.

The selectmen and the Finance Committee members do get revenue as well as detailed spending information in impressive, big black-backed "budget books" about six inches thick, but that information is not generally available to the public, although it is public information. Ordinary taxpayers have to dig it out one way or the other, if they can. The information could be made available inexpensively by putting it on DVD discs since it is all in electronic form now.

Because there is so much to review in a short period of time and this fiscal year's spending plan is being presented at a time of financial disaster, the Finance Committee is wisely starting an informal review now, not waiting for the Board of Selectmen to finalize its recommendations. To do so would be a disservice to the taxpayers since their time of review would be so short.

All sessions of the Finance Committee are broadcast live on Channel 18, usually every Thursday during this period of Annual Town Meeting preparation at 7 p.m. at Town Hall and promptly posted on the town's website thereafter. For example, the meeting of Thursday, January 22nd is already posted and available for viewing. Check out the town's website where all videoed meetings can be found, including Thursday's two-hour meeting of the Finance Committee.

Chairman of the Board of Selectmen Sean Summers attended the meeting, as did a handful of Chatham taxpayers (three, actually). All four made comments during the meeting at the kind invitation of the Chairman stressing the need for fiscal prudence and restraint. The very rich growth of the town's spending over the past several years was supported in good part by the second home construction boom, which has pretty much faded away. With the financial burdens on taxpayers, should the town be imposing tax increases on taxpayers this year? Is it a time for a pause, a time for holding the line? Fiscal 2010 looks grim, but who can predict that Fiscal 2011 will be any better?

No one from the town's Finance Department attended the meeting.

Members of the Finance Committee made clear in their comments that they know this is a different time for Chatham taxpayers. Stock market values and savings have been devastated and homes aren't worth what they were a year ago. Taxpayers are shaken and are looking to save money where they can and to get good value for their dollars -- and that includes town services.

Far and away the biggest item in the Town Manager's spending plan is Education, which is almost 100% (but not quite) the Schools Department. Of the $32.757 million proposed by the Town Manager, $10.087 million is for Education (almost all of which is for the schools). The Town Manager has not conducted any independent review of the schools' request; only the School Committee has reviewed it. But that's 31% of the spending plan, an incredible increase over FY09 of more than 10%. So Chairman Yeaw has scheduled the schools for the first day of spending review, which will take place this coming Thursday, January 29 at 7 p.m., Town Hall and Channel 18. No doubt there will be a second and even perhaps a third day of review needed to get all the facts out so town meeting members will know whether they will support giving the schools what they are asking for.

The Town Manager's spending plan calls for a 4.3% increase over FY09 and does involve increases in the property tax. In addition, there may well be articles in the warrant not in the Town Manager's spending summary that if approved could mean even further increases in property taxes.

So the Finance Committee (as also does the Board of Selectmen) has a very serious challenge in dealing with a plan for significantly increased spending (and increased property taxes) at a time of state cuts in local aid and likely fall-offs in hotel/motel tax and other revenues.

Chatham's concerned taxpayers should show up and ask questions at meetings of the Selectmen (Tuesdays at 4, Town Hall and Channel 18 and extra meetings to be scheduled) and of the Finance Committee. Concerned taxpayers should show support for their representatives making the tough decisions necessary to avoid additional financial burdens on the taxpayers of the town.

The next several weeks are crucial in sifting through the facts to find out what's essential and what's not, what burdens the taxpayers should bear and what the town's departments, including the schools, can do without. Other Cape Cod towns are facing difficult decisions as are cities and towns across Massachusetts and the country, so Chatham is far from being alone in contemplating action which may very well be unpleasant or worse.

Town Manager Bill Hinchey presented an overview of the budget he has put together for Chatham's fiscal 2010 beginning July 1 to the Board of Selectmen, Tuesday, January 20th. He did a very professional job in describing in detail how he and department heads had gone through staffing and other spending to see what efficiencies could be achieved.

However, despite much talk about "cuts" to keep the budget under control, Hinchey presented a budget that is more than 4% higher than fiscal 2009's spending -- and he proposes an override at the Annual Town Meeting in May to add another $630,000 to operational spending, pushing the increase over FY09 to 6.3%.

In other words, there is no "CUT' in overall spending, no "holding of the line" in these difficult times. This seems like business as usual.

Since FY2001 the Chatham operating budget has grown 44% through the fiscal year ending this June, averaging over 5.5% growth a year. So proposing operating budget growth of 6.3% for FY10 is not exactly "belt-tightening" for the town.

Several members of our concerned taxpayers group showed up for the hearing and more had indicated they would view the hearing over Channel 18. The Selectmen’s hearing is (or shortly will be) posted on the town's webiste for "On Demand" viewing.

This is just the first step in the public budget process. Board Chairman Sean Summers indicated that the Board would be diving deeply into the budget and had not committed itself to anything – be it accepting the Town Manager's approach, accepting the School Committee budget (an increase of 10%, the highest it had ever asked for over the past six years!) or whether they would support an override for anything.

Because of the peculiarities of a Massachusetts law designed to restrain increases in property taxes to no more than 2 1/2% per year (absent a town meeting override vote), some Massachusetts towns have gotten into the habit of raising the levy -- and the town budget -- a minimum of 2 1/2% a year plus whatever additional spending could be supported by other revenues. Since Chatham has been the beneficiary of a great deal of expensive second-home building by non-residents since 2000, those additions to the tax base brought even more property under the levy, hence the operating budget growth from $21.8 million in fiscal 2001 to a proposed $32.8 (or $33.4) million for fiscal 2010 -- 50% higher than nine years ago.

Several members of the Finance Committee which reports to the Town Meeting on the budget the Selectmen wind up recommending to the Annual Town Meeting attended. Chairman Colie Yeaw invited Selectmen to attend their meetings and indicated the Finance Committee would coordinate closely with the Selectmen in scheduling interviews with School Department and other town officials. The budget process is starting about one month behind schedule, so the Selectmen will be doubling up their meetings to have their recommendations ready by April 1 to enable a timely printing of the warrant for the May Annual Town Meeting.

Selectman Len Sussman agreed they had many other important matters to discuss before the April 1 deadline, but that the budget in these difficult financial times was such an important document the Selectmen should do all they could to dig deeply into it to learn and see what savings can be achieved in both the "town" and the "schools" budgets. After all, it's one budget as far as the taxpayers are concerned.

Taxpayers took the microphone to oppose any idea of an override and to question the enormous budget increase being asked by the School Committee. Town Manager Hinchey indicated he could not speak in detail, that was for the School Department, but he did note that some 88% or so of their budget is personnel costs. Apparently, there are significiant salary increases in that budge which jumps by 10%, even though recently released Consumer Price data for 2009, which roughly parallels cost of living, showed only a 0.1% increase, the smallest increase in decades. The nation is currently in a deflationary, not an inflationary, period, so significant salary increases presumably related to "cost of living" are puzzling.

A new Selectmen's meeting schedule will be posted shortly. The Finance Committee weekly meetings on Thursdays begin this Thursday at 7 p.m. in the Selectmen's Room, Town Hall and will be shown on Channel 18 live and then posted on the town's website. A very important meeting will be held Thursday a week later, January 29th, to hear from the Superintendent of Schools and the School Committee.

This is apparently a novel thought, but should not there be an effort to hold the operating budget to the same level as fiscal 2009 and use whatever "room" there is in the property tax levy to add to the town's rainy day fund for a possibly even grimmer FY11?

The process is just beginning and taxpayer involvement is called for to show support for town officials' efforts to look out for those who pay the bills.

The presentation only covered planned spending. No town balance sheet or income statement showing sources of revenue was produced.

Today's Cape Cod Chronicle notes the involvement of the Chatham Republican Town Committee in the budget process in these tough times:

Last week, the Chatham Republican Town Committee adopted a resolution praising town officials for their budget-cutting efforts so far, and encouraging them to produce a balanced budget for all town departments, including the schools.

“We have enjoyed the fat years and now must cope with the lean,” committee Chairman Walter Bilowz wrote in a letter to the board of selectmen.

The Chronicle report generally struck a positive note, but misstated the amount of the growth in the proposed budget from FY09 to FY10, saying it was 2.1% when in fact it is over 4%. The error is understandable since the chart distributed by the Finance Department prior to the hearing carried that error. It was corrected in the PowerPoint slide presentation of Mr. Hinchey, but remains uncorrected on the town website, where it is part of the Town Manager's Summary Report.

The Town of Chatham is now working on its budget for fiscal 2010 which begins July 1. The first presentation of the draft budget will be made by the Town Manager to the Board of Selectmen this coming Tuesday, January 20, at 4 p.m. at Town Hall, 439 Main Street. It is an open meeting and anyone can attend. There's likely to draw a good crowd, so get there early if you want a seat.

Various discussiolns have been going on in several quarters for some time on how the town will deal with the financial crisis affecting all governments across the country. Spending trends have been analyzed and the situations faced by other cities and towns looked into. The Governor has warned that local aid from the state to cities and towns will be reduced because the state itself will have difficulties making ends meet. Cape Cod towns are projecting deficits of varying size ranging up to several million. Preliminary information for Chatham points to a $1.6 million gap, about $600,000 in the School Department and the rest in the other town departments.

The big question for every city and town is how to deal with the shortfalls. The first answer has to be to reduce spending to live within available revenues.

Cutting spending is very hard to do and there is not much enthusiasm for it. Indeed, there are constituencies for every program and they will be clamoring against any cuts in their programs.