Wednesday, March 07, 2012

Budget Message 2012-13

(Text as prepared for delivery to the Westport Board of Finance, March 7, 2012)

Members of the Board of Finance, members of the Representative Town Meeting, members of the Board of Education, Town of Westport employees, and fellow Westporters.

It is my privilege to present to you the Town of Westport budget for the fiscal year beginning July 1, 2012. You may have not been counting, but this is my seventh as Westport’s First Selectman. It is similar to recent years in that it shares a common theme – doing more with less.

In short, it once again is an austere budget. That word austere is more commonplace in our vocabulary. Only yesterday, The New York Times reviewed a new book by political analyst Thomas Byrne Edsall. Its title: “The Age of Austerity.”

In it, Mr. Edsall argues that America has “entered a period of austerity markedly different from anything we have seen before.”

That should be no surprise to us in Westport. We and our residents have been greatly impacted, despite our reputation as a wealthy community. The obvious reason—the livelihoods of many Westporters are tied to the finance or real estate industries.

Still, there are signs of some improvement, just as there are nationally. Last week, two office buildings in Westport changed hands, one for $9 million and one for $8.5 million. These are prices likely lower than years ago. But the point is some are seeing value in Westport real estate.

On personal property, teardowns seem to be on the upswing again. The other day a resident in the Compo Beach area sold a home for $3.4 million only to buy another in the area for just over $5 million. Of course, that is likely an exception. Home prices across the board are down. For many, these are still very difficult times.

So what does that mean for those of us responsible for governing? It means continue to look for efficiencies. It means looking for ways to continue to deliver superior services at affordable costs. It means being realistic in our budgeting and conservative in our forecasts.

Let’s look at conveyance taxes. Town Clerk Patty Strauss tells me that through February, two-thirds of the year, $840,000 has been collected in conveyance taxes this fiscal year. A year ago, we were at $1.1 million at the same point. That’s a 25 percent decrease.

But being conservative in our projections, we anticipated a drop in this revenue source. And the good news is we are on target to meet our reduced projected revenue on this line of $1.3 million for the fiscal year.

An increasingly important part of our budgeting process, like it or not, is relying on public private partnerships to fund the nice-to-haves.

A good example of this occurred today – the groundbreaking for the new Halfway House at Longshore. Here is a project funded by private donations by residents and tradesmen to build a structure for more than $200,000. Flags fly on the Ruth Steinkraus Bridge because of private donations. The Staples football field will be lit thanks to private donations.

Let’s look at some of our ongoing cost-savings and efforts to improve productivity. Department heads are doing this through utilization of overtime, part-time, and seasonal help.

Reductions will be accomplished in the Personnel Department with the elimination of the Personnel Administrator with some of the workload to be picked up by part-time help.  We are also working with the Board of Education on trying to consolidate some of the work of their personnel department and ours.

The police will reduce patrol by three through attrition and cover the patrol of the railroad parking lots with current staff assigned overtime.

A note about our first responders. All Westporters know how hard pressed our police, fire and EMS personnel have been over the past year. We had leadership changes in both police and fire. And their response to the extraordinary challenges they have faced in recent months has been nothing short of amazing.

Also on the public safety front, I and members of our police and fire departments have been holding ongoing discussions with several of our neighboring communities about shared services – everything from dispatch, housing of prisoners, training, and maintenance of vehicles. We hope this will lead down the road to efficiencies and cost savings for all of us.

Last night’s RTM vote to approve Westport joining a Council of Governments for the region I hope will eventually enable municipalities in the region to also achieve greater efficiencies through shared services.

Other areas of reduction: the Parks and Recreation Maintenance Division will eliminate a Grounds Specialist and cover that workload with seasonal and part-time help.  The Golf Maintenance Division will reduce a .75 full-time equivalent driver/laborer and perform the duties with seasonal and overtime for current employees.

Let’s look at some more of the challenges in putting together this budget. Higher energy costs resulted in increases of approximately 33 percent in heating oil and diesel fuel, a negative impact of $100,000 on the town’s side of the budget.

We had insurance increases in Liability and Workers Compensation of 15 percent and 5 percent respectively. We are working with our insurance carrier to see if these can be reduced.  The reinsurance market is increasing as a result of the catastrophes Tropical Storm Irene and Storm Alfred that hit the Northeast last year.

We are looking to offset some of the increase by increasing the Stop Loss amount from $175,000 to $225,000 and to reduce workers compensation claims by utilizing Safety Committees both at the executive and management level. We are encouraging representation of all employees in safety committee meetings. We want their direct input to management regarding safety improvements and accident prevention.

As to the Stop Loss, the Board of Education has already implemented the increase and we are awaiting a cost benefit analysis from CIRMA and USI before making our decision to increase the Stop Loss.

Getting to some of the 2012-13 number specifics. The majority of departments submitted flat budgets. This was in response to my directive for controlling costs and offsetting those expenses that are out of our control—such things as health care and energy.

The total town increase in spending of $2,204,007 represents a 3.08 percent increase over the 2011-2012 budget. The major increases include a $777,000 increase in road repairs, transfers to the Capital and Non Recurring in the amount of $500,000 and an $114,000 transfer to the Sewer Fund, $175,000 for police and fire vehicle replacement and $500,000 in additional health and wage increases.

I hope you and the RTM will be especially supportive of the road repairs increase. As you know, this is an area where we have cut back so much in recent years. Only multiple years of double digit increases on this line will get us back to where we need to be. Neglecting our infrastructure needs, whether it is roads or buildings, is a recipe for disaster.

When combining the municipal and the Board of Education budget request, the overall budget request is 2.37 percent over the prior year.

Of course, personnel costs – including pension and OPEB expenses – continue to be another driver of the increases. What have we done in this regard? The town has made substantial changes in personnel benefits. We have closed the Defined Contribution Plans for the Non-Union Supervisory and Non Union Non-Supervisory Pension Plans to new entrants effective Jan. 1, 2012.

All newly hired employees under these two groups will be covered by a new 401k Defined Contribution Plan.

The firefighters and the municipal employee union contracts we have in place will expire at the end of the 2012-2013 budget cycle and negotiations with the police union are set to begin with the expiration of that contract on June 30, 2012.

We have two open contracts, the Public Works contract which expired on June 30, 2009 has gone to arbitration and we should hear the results by the end of this month. At that time, we will open negotiations on a new contract since the contract in arbitration will expire on June 30, 2012.

The Municipal Employees union contract expired on June 30, 2011 and continues to be negotiated. We have a new union representing 15 town supervisors and we will be negotiating with that unit.

As you know, we have a new actuary firm that is helping us get a handle on not only on valuations and liabilities but we expect they will also be helpful in better managing costs such as health care.

Finally, I would be remiss if I did not acknowledge the hard work and recent retirement of John Kondub as finance director. And also the recent hiring of Gary Conrad as his successor who has hit the ground running. There is also another retirement that I want to note – that of Paula Castiglia in our Finance Department. She has been instrumental in the efficient day-to-day running of that department. Thank you, Paula.

I also want to take this opportunity to thank all town employees, especially our hard working department heads, who see to it that we are doing our best to provide not only efficient services, but services with a smile.

In sum, with our top notch schools, our first class senior center, our arts institutions, our beautiful beaches and parks, and our convenient location to New York, Westport remains one of the most attractive U.S. communities to live in. I thank you for your support in helping keep it that way – despite this so-called “Age of Austerity.”