Wednesday, November 05, 2008

"We Are Planning for Things to Get Worse"

(Remarks prepared for delivery before the Westport Board of Finance, Nov. 5, 2008)

I welcome the opportunity to bring you up to date on how Westport is faring in these tough economic times.

We’ve known for some time that the economy has been worsening and that Westport was not immune. The New York Times Sunday story was only belated confirmation to the world what we have long known.

With an estimated 20 percent of our residents involved in finance, Wall Street, real estate and related industries, the Times story was old news. I like to think by making us the poster child if you will of bad times in good places, that this—much like the bear appearing on magazine covers in years past—marks the start of a turnaround.

But that’s not something we can count on. We have been poring over the numbers and the changing statistics daily. The good news is that we appear, so far, to have been hit less than other communities.

The other good news is that we have showed a surplus in our just completed 2007-08 tax year. Finance Director John Kondub will go over the details with you. The bad news is that we are planning for things to get worse.

For years, under the direction of our late Finance Director Don Miklus, we always budgeted conservatively. That has continued under John Kondub. And that has served us well.

In putting together the current year’s budget, for example, we reduced our anticipated revenues to a level we believed was realistic given the times. We now are fairly certain we won’t meet some of these reduced revenue targets.

We have been scrutinizing tax revenues very closely. Monday of this week was the last day residents could pay their quarterly property taxes without penalty. Our preliminary count shows the percentage of billable revenues this year to be slightly below those of last year. In other words, there are some more people delinquent in their taxes.

What does this mean? It means we’re likely to get that revenue down the road, with interest, but that our cash flow is impacted. John Kondub can go into this in more detail with you.

As part of our process to review our operations in these difficult times—and to get a head start on the 2009-10 budget process, John Kondub and I over the past two weeks have met with every department head.

Our goal was to impress upon them, as if they didn’t already know it, the importance we stress to doing more with less. We’ve reviewed ongoing operations, capital projects, and what each department is projecting down the road. I’ve asked some of the department heads to be present tonight to answer any questions you may have.

I will tell you that the Department of Human Services—and Barbara Butler is not here tonight—is one of those departments whose activities are up as a result of the economy. They are fielding more requests for fuel assistance, housing assistance and counseling.

In our reviews, we’ve looked at big things and little things that will save us money. For example, the Police Department can defer $38,000 in mobile data terminal purchases until next year, even though they are four years old.

The Public Works Department has been using less costly road surface treatments in some areas, and we’ve come under some criticism for that. We’ll evaluate the surfaces after this winter.

We’re going to have a gain in our solid waste budget because we have been able to conclude a new waste removal contract at a lower rate for the last six months of the fiscal year than we had anticipated. We’re optimizing some street lights and timers to reduce use of electricity.

In the Parks and Rec Department, instead of spending a budgeted $30,000 on a new truck, we spotted one on the lot of a dealer in Norwalk that can do what we need it to do and the cost will be about $15,000.  Instead of paved cart paths on the golf course, we’re looking at pebbles and gravel.

We’ve cut back on the hours of some full-time employees and are not filling some positions as they open up unless absolutely necessary. Some positions will continue to remain open.

The idea is to save money without appreciably impacting the safety and quality of life of Westporters. One of our Westporters suggested we could possibly save money by sending out fewer police cars on patrol. A well intended idea but naïve. Again, let me state, we will not jeopardize the safety of Westporters.

We’re looking at revising some of our operations in the Assessor’s Office to ensure that we get the increased revenue in a timely manner from renovation projects that increase the value of a home or business.

The Town Attorney’s budget is running up, primarily because of litigation costs. In the last month alone, we’ve expended about $30,000 on three tax appeals. This is money we believe is well spent as hundreds of thousands of dollars of tax revenue are at stake.

We’ve spent about $133,000 on legal costs related to the Y application at Mahackeno and if appeals persist, we’ll spend a lot more.

In June, you know that I told you I was deferring a number of projects in the five-year capital forecast. We’ve provided you with a list to refresh your memory.

The appropriations requested since the start of the fiscal year have been limited to essentials—sewers, roof construction, as well as a request for approval of use of forfeit asset funds for tasers for the police department.

Last month, your meeting was canceled because there were no expenditures to approve. Tonight we also are not asking for new funds.

With the third November election behind us, it is essentially into year four for Shelly and me leading Westport. And it’s into a final year for some members of this board and others as well. We, and our employees, will be tested and expected to continue to deliver quality services to Westporters in a highly cost-effective manner.

Together, with goodwill and avoiding a temptation to inject politics into our work, we can be successful to the benefit of all Westporters.