Wednesday, March 02, 2011

Budget Message 2011-12

(Text as prepared for delivery to the Westport Board of Finance, March 2, 2011)

Members of the Board of Finance, members of the Representative Town Meeting, members of the Board of Education, and fellow Westporters, it is my pleasure and privilege to present to you the Town of Westport budget for the fiscal year beginning July 1, 2011.

This budget message is my sixth as Westport’s first selectman and one of the toughest. I won’t go into many of the operating details we have previously talked about in our workshops last week and in the new People’s Budget Workshop in January.

Suffice to say, we have made many operational improvements across all departments. These have made us more efficient and productive. The Munis accounting system, for example, now gives us a more accurate way of tracking overtime and we are able to budget better accordingly.

I thought about merely reading from my budget message from last year. But I’ll spare you of that, except for a couple of excerpts:

I said then that “Westporters are being called on to make some very difficult choices, choices that could well decide how Westport will fare not this year but for many years down the road.” That was certainly true then and maybe more so now.

I also said: “While there are many out of work and we are all doing with less, we are at last beginning to see signs of stabilization. Indeed, we are even seeing some faint signs of recovery.”

Indeed. I think even the most pessimistic among us by now acknowledges that we are on the road to improvement. Yes, we can say – and many do – but we don’t know if it will last. We don’t—but we are planning cautiously that it will.

And yes, these are still times of sacrifices. Not to belabor the obvious, however, my job – and yours representing the people of Westport – is to find the right balance.

Unlike private industry, municipalities have life and death responsibilities. Cut back on police or firefighters, or the workforce that plows our roads, and the consequences literally can be deadly.

No 911 caller wants to be told that their emergency has four or five other emergencies ahead of them, so please stay on the line. No one wants to see their local firehouse closed – whether it is Greens Farms or Coleytown.

If any of you are in doubt – and believe it or not, despite my repeated statements such as this – some still say I have not made clear my priorities. So let me repeat once again—my priority is public safety and keeping Westporters safe.

So I reject the notion that we need to be less safe – and cut our public safety personnel—because state or federal lawmakers are taking a bigger bite out of our pocketbook. Let me just say it isn’t the feds or the state who respond to your 911 call.

To keep the budget manageable, all but a couple of departments have come in flat or below last year’s requested budget. We talked about this in our workshops. The only change is we now have some details of Governor Malloy’s budget proposals.

The good news, if you can call it that, is that we will share in some of the increased taxes. We may get a small percentage of an increased sales tax. And we may get a slightly larger share of the conveyance tax. This could amount to several million dollars by our estimates. We’ll be watching this closely as it moves through the legislature.

But the governor has also proposed cuts that will impact us – including one that could mean the loss of $100,000 in revenue to the library from elimination of a statewide library book sharing program. We and our library users are big customers of this program. It won’t be easily shut down.

The budget I am presenting tonight is unchanged from what I presented in the workshops. It calls for a 3.34 percent increase on the municipal side, virtually all of the increase attributable to pensions and healthcare costs. There is still an opportunity to do some adjustments once I get feedback from you and the public.

Combined with the requested education budget, if it remains unchanged, this is a slightly more than 2 percent budget increase for the combined budgets.

It is an austere budget – because that is the direction you gave me. But I don’t think it is a particularly responsible budget. It once again gives short shrift to our infrastructure. You heard from Public Works Director Steve Edwards how we are falling behind in road paving.

We are not replacing equipment that needs replacing. We are not funding the capital and nonrecurring fund.

And everyone knows why, as I just said. It’s what I call the newest second most expensive department in the town of Westport after education. You could call it the pension and health benefits department.

Pensions, health care and what is called in shorthand – OPEB – which stands for Other Post Employment Benefits – are taking an increasing share of tax dollars and revenue collected.

We are not alone, of course. And actually we are better off in the amount of our unfunded liabilities than the state and many communities around our state. This year, we are contributing more than $10 million to our pensions. Health costs are almost the same. 

The pension contribution will fully meet what our actuaries recommend. We are putting in a $750,000 payment for OPEB, less than what is called for by the actuaries. But we hope to be able to fund more than this later in the year, depending on how revenues are going.

The RTM last night authorized a $1.2 million payment into the OPEB Trust for this fiscal year. Perhaps we can make a second payment before July 1.

Yes, there are some who are very critical of the requested OPEB amount. They say it’s too little. Believe me, I’d be the first one to fully fund the obligation. But to do so requires taking more money out of our reserves, making further cuts, or raising taxes.

I asked an RTM member after the meeting last night what would be his choice among these three. He said “raise taxes.” At the January Peoples Budget Workshop, several speakers said given these choices, they, too, would opt to raise taxes, hopefully only modestly.

It is interesting that these responses mirror a New York Times/CBS News poll this week on public unions and pensions. Asked how they would choose to reduce their state’s deficits, those polled preferred tax increases over benefit cuts for state workers by nearly two to one.

Given a list of options to reduce the deficit, 40 percent said they would increase taxes, 22 percent chose decreasing the benefits of public employees, 20 percent said they would cut financing for roads and 3 percent said they would cut financing for education.

So raising taxes slightly to fund our obligations and keep Westport as we know it certainly should be a consideration for this body. And I emphasize the word slightly.

I have been somewhat silent about exactly what we are doing to reduce pension and healthcare costs. And for good reason. Some of this is best done out of the spotlight. But I can assure you we are working hard on the issue.

As many of you know, we have only one of our four pension plans – the Public Works one – up for negotiation now. The other three are not due to expire for three and five years.

But we do have the option to make changes in the two nonunion plans. Our goal is to move to a defined contribution plan, certainly for new hires.

We will not reduce benefits for those longtime employees who have already reached their normal retirement date. But we are looking to seek a larger share of retirement costs from all employees. Effective July 1, there will higher medical costs for nonunion employees as well.

Before I close, I want to pay tribute to our town employees – and that includes those on the Board of Education side – for their perseverance in these tough times.

As someone who grew up in Westport and attended its schools, and whose children attended its schools, I know why Westport is so special. I know the role that our great schools play in attracting new residents to town and maintaining our property values.

I also know that it is the commitment of town employees who make Westport a very special place. I thank them and you for the privilege of leading Westport now and for the opportunity to make our town an even better place to live in the future.

Thank you very much.