Loading...
HomeMy Public PortalAbout12-07-2010 BFO report draft policy guidelinesTown of Watertown Committee of the Budget & Fiscal Oversight Reports of the Meetings of November 29 and December 6, 2010 December 7, 2010 The Committee convened on November 29, 2010 at 7 pm. Present at the meeting were Vincent Piccirilli, chair; Angie Kounelis, vice -chair; Cecilia Lenk, secretary; Town Manager Michael Driscoll, and Town Auditor Tom Tracy. Also attending was Charlie Brietrose, Watertown Patch. The purpose of the meeting was to develop the FY2012 Budget Policy Guidelines. Five councilors (President Mark Sideris and Councilors Susan Falkoff, Tony Palomba, Steve Corbett, and Cecilia Lenk) submitted written suggestions to the committee for consideration. The Committee reviewed each of the sections of the FY2011 Budget Policy Guidelines: Financial Policies; Ongoing Budget Practices; Cost-Savings/Revenues; Program Enhancements/Expenditures; and Budget and Financial Monitoring. The input received from members of the Council and the discussion of each section is summarized in the FY2012 Budget Policy Guidelines worksheet attached to this report. To complete its work, the Committee requested further information from the following: Tom Tracy regarding options on retirement and other benefits for new hires (LC); Raeleen Parsons and Steve Magoon regarding status of the ESCO agreement (III.A), Steve Magoon regarding a standardized system of impact fees (III.D) and a Comprehensive Master Plan for the town (IV.F); Steven Ward regarding the social worker/community health outreach worker (IV.C); and Susan Falkoff regarding clarification of one of her suggestions. The Committee agreed that the Chair would prepare a draft of the FY2012 Policy Guidelines for discussion at its next meeting. The meeting adjourned at 9 pm. The Committee reconvened on December 6 at 6:30 pm. Present at the meeting were Vincent Piccirilli, chair; Angie Kounelis, vice -chair; Cecilia Lenk, secretary; Councilor Steve Corbett; Town Manager Michael Driscoll; Town Auditor Tom Tracy; Director of Community Development & Planning Steve Magoon; and Treasurer/Collector Phyllis Marshall. The Committee discussed the draft of the FY2012 Budget Policy Guidelines prepared by the Chair, and the requested information it had received from Mr. Tracy, Mr. Magoon, Mr. Ward, and Councilor Falkoff. After further discussion and editing, the Committee recommended unanimously to present the final FY2012 Budget Policy Guidelines (attached) to the full Council for approval at the December 7th meeting. The Committee also reviewed the final Melanson Heath & Co FY2009 Single Audit Report, provided by Mr. Tracy, which was an open item from the November 23rd Council meeting. The Committee found the report satisfactory, and recommended unanimously that the frill Council accept this document. The meeting adjourned at 8 pm. Prepared by Cecilia Lenk Watertown's FY2012 Budget Policy Guidelines Submitted to the Town Council for Approval December 7, 2010 The Town Council is adopting these budget policy guidelines pursuant to Section 5-1 of the Watertown Home Rule Charter. Based on these guidelines, the Town Manager will develop budgetary goals and the Town budget for Fiscal Year 2012. I. FINANCIAL POLICIES A. Unreserved fund balance: In order to respond to emergencies and other unanticipated needs, preserve financial flexibility, and maintain favorable bond ratings, the Town should seek to maintain an unreserved fund balance (including stabilization funds) equal to 7-10% of the annual operating budget. The Council and the Town Manager will work to develop a formal multi -year policy on the unreserved fund balance, including the use of free cash if the unreserved fund balance is above the 7-10% target. B. Capital Expenditures: In order to maintain and improve its infrastructure, facilities, and equipment, the Town should seek to make annual capital expenditures (exclusive of enterprise finds) equal to at least 7.5-8% of the operating budget. C. Pension Liability and Other Post Employment Benefits: In order to achieve long -term financial stability and meet the Town's obligations to its employees and retirees, the Council, the Retirement Board and Town Manager will work to address the Town's unfunded pension liability and other post -employment benefits (OPEB). Establish dialog with Retirement Board and State representatives to consider options for pension reforms for new hires. II. ONGOING BUDGET PRACTICES In preparing the budget for FY12 and future years, the Town Manager should continue to use the following budget practices: A. Continue the Town's efforts within all departments to obtain grant funding from federal, state, and other sources, including the use college interns. B. Continue to analyze the Town's charges for licenses, permits, penalties, and fees to determine whether they should be increased or new ones instituted, while adhering to the principal that fees should not exceed the cost of services provided. C. Review the possibilities and cost implications of contracted services vs. staffing in various departments. Page 1 of 3 D. Support the possibilities of providing more services on a regional or inter -municipal basis in accordance with the council resolution. E. All department heads should seek to identify line items within their existing budgets where costs can be controlled and not increased. Look at other possible scenarios including spending freezes, level dollar and reduction budgets. Review the use of overtime in each department and establish consistent Town -wide policies. F. Continue to enhance the Town's website and use other technologies as cost effective means of delivering information and services, increasing public awareness, and encouraging public feedback. G. Explore cost savings by sharing personnel across Town departments. Work towards merging or combining the following functions to better serve both Town and School Departments: facilities management, human resources, finance, and information technology. III. COST-SAVINGS/REVENUES The Town Council believes that identification of cost savings and/or new revenues should be a precondition to additional expenditures. To this end, in developing the FY 12 budget, the Town Manager should: A. Move forward with an Energy Services Company (ESCO) agreement to implement plan towards reducing municipal baseline energy usage by 20% in 5 years. Obtain energy -related grants by becoming certified under the Green Communities Act. B. Public safety: Police, Fire and Dispatch together represent the Town's biggest expenditure after education. Proceed with a Public Safety study to determine how to best deliver the level of service citizens want, more efficiently. C. Implement the Town -wide Economic Development Program (including the newly rezoned Pleasant Street Corridor District), with a long- term goal to increase town revenue. The Program should include a marketing plan to prospective developers as well as the use of state and federal grants and redevelopment programs. D. Explore the feasibility of a standardized system of impact fees for projects subject to site plan review. Consider mitigation monies for larger scale projects. E. Actively seek Payment In Lieu Of Taxes (PILOT) agreements with each non-profit organization owning property in Watertown. Page 2 of 3 IV. PROGRAM ENHANCEMENTS/EXPENDITURES To the extent that resources allow, in light of the financial policies stated above, and adhering to the principle of first identifying cost -savings and/or new revenue, the following program enhancements and, if necessary, new expenditures should receive priority in the FY12 budget. Education program enhancements and expenditures should be considered subsequently in light of the recommendations of the School Committee. A. Continue the improvement program for the Town's streets and sidewalks, including street trees and planting strips. Pursue state/federal funding such as the Transportation Improvement Program (TIP) and School Safety Zone funding to improve traffic and safety. Examine the staffing structure of the Public Works Department to improve the ability to perform routine maintenance, complete work order requests in a timely manner, and strengthen the capacity to supervise contractors. B. Explore the need and possible Wilding for a social worker/community health outreach worker, including reaching out to the private sector for funding. C. Finalize non -municipal re -use of the former branch libraries, and explore the budget implications for re -use of the former police station D. Determine the need for and how to fiind future sewer and storm water infrastructure improvements. E. Create a Comprehensive Plan for the Town dealing with a broad spectrum of issues, including development, zoning, and transportation, in order to encourage Town government and its citizens to work in concert towards common goals. Incorporate all previous resources, such as the Economic Development Study, the Open Space Plan, the Pleasant Street Corridor District Study, etc. Include traffic and transportation resources and improvements, and a review of the Zoning Ordinance. V. BUDGET AND FINANCIAL MONITORING A. In order to improve its ability to monitor the implementation of the Town budget, the Town Council will receive quarterly reports on the revenues and expenditures during the fiscal year. B. The Town Council will receive a report on the use and balance of monies in the Council reserve upon each transfer, and a report each month that there is a change in Council expense line items. C. An early -warning system will be established to alert the Town Council if revenues fall below projections. D. The Town Council will receive quarterly updates on progress in addressing the recommendations in the annual audit report. Page 3 of 3 December 6, 2010 W atertown's FY2012 Budget Policy Guidelines Worksheet The Town Council is adopti ng these budget policy guidelines purs uant to Sectio n 5-1 of the Watertow n Home R ule Charter. Based on these guidelines, the Town Ma nager will de velop budgetary goals and the Tow n budget for FY12 . I. FINANC IAL POLICIES FY11 Guidelin e Draft FY12 Guideline Input & Discussio n I.A . Unreserved fun d balance: In order to respo nd to emergen cies and other unanticipated ne eds, preserve financia l flex ibility, and maint ai n fa vora ble bon d ratings, the To wn should seek to maintain an u nreserved fu nd balan ce (including sta biliza tion fun ds) equ al to 7-10% of the annual ope rating budget. The Coun cil and the Town Manager will work to develop a formal multi- year policy on the un reserved fun d balan ce, in clu ding the u se of free cash if the unreserved fund balan ce is above the 7-10% target. No cha nges FY09 was 6 .62%, F Y10 was 8 .58% Bonding agencies want to see 7-10% for financial stability. Discussed Coun cilor Palomb a's suggestion #1 to red uce the balance to 5-7%, decided it was not finan ci ally prudent to spe nd dow n free cash. I. B. Capital Ex pen ditures: In order to mainta in and improve its infrastructure, facilities, and equipmen t, the Town should seek to ma ke annu al capital ex pen ditu res (exclusiv e of en terprise funds) equal to at least 7.5-8% of the operatin g budget. No changes F Y10 was 8 .71%, F Y11 is 8 .15% The curre nt long-term debt is 6.77%. Discussed Co uncilor Palomba's suggestion #2 to reduce capit al e xpenditures to 3-5 %, decided it was n ot fi nancially pr udent to set a goal that wo uld not allow the Tow n to maint ain its infrastr ucture . I. C. Pen sion Lia bility and O ther Po st Employment Benefits: In o rder to ac hie ve lon g — term fin ancial stability and meet the Town's obligations to its employees a nd retirees, the Council, the R etiremen t Board and To wn Man ager will work to a ddress the Town 's u nfun ded pension liability an d other post- employment benefits (OPEB). A dd a n ew sentence at the end "Establish dialog with R etiremen t Board and State represent atives to conside r o ptions fo r pension reforms for new hires. " Our c urre nt pe nsio n liability is $66.5M a nd the fundi ng schedul e has been e xte nded from 2017 to 2022. The new OPEB liability study e nding 7/1/10 is bei ng fi nalized, and further work is needed to set up an OPEB trust fund. Disc ussed Co uncilor Corbett's s uggestion #3 a nd agreed to add that la nguage to this item, modified per information supplied by the Tow n A uditor . FY2012 Budget Policy Guideline s Worksheet 12/6/10 Page 1 of 5 II. ONGOI NG BUDGET PRACTICES - In preparing the budget f or FY12 and fut ure ye ars, the Tow n Manager sho uld co nti nu e to us e the following budget pr actices. FY11 Guideli ne Draft F Y12 Guideline Input & Discussion ILA. Continue the Town's efforts withi n all depa rtments to obtain grant fu nding fr om federal, state, and o ther sources, includi ng the use college interns. No ch anges Councilor Palomba's suggestio n #4a is already addressed by this item. II.B. Continu e to analyze the Tow n's ch arges f or license s, permits, penalties, and fees to determine whether they shou ld be increased or new ones in stituted, while adhering to the pri ncipal that fees shou ld n ot exceed the cost of services prov ided. No ch anges C ouncilor P alomb a's suggesti on #4b is already addressed by this item. II. C. Review the possibilities and c ost implication s of con tracted services vs. staffing in v arious departmen ts. No changes Whil e many opp ortunities h ave already be en done, dep artments need to c ontinue to e xamine opport unities for c ost savings by outso urcing . II .D . Su pport the possibilities and of providing more serv ices on a regio nal basis in accordance with the coun cil reso lu tion. Change to read ".. .o n a regio nal or i nter- mu nicipal basis ..." Co uncilor Palomba's suggestio n #5a is already addressed by this item, but added i nter -municip al. The Manager requested a new resolutio n to strengthen his ability d uring neg otiations . II.E. All departmen t heads shou ld seek to iden tify line -items within their ex istin g bu dgets where costs can be controlled and not increased. Look at other possible scenarios including spending freeze s, le vel dollar and reduc tion budgets. Add a new se nte nce at the e nd "Re view the use of overtime in each dep artment and establish consiste nt Town -wide policies." Discussed Councilor Corbett's suggestio n #2 a nd agreed to add his first se nte nce to this item. ILF. Continu e to enhance the Town's website as a cost effectiv e mean s of deliv ering in fo rma tion and services, incre asing public awaren ess, an d en cou ragin g public feedback. Change to read "...Tow n's website a nd use other technologies as cost effecti ve me ans.. ." Cou ncilor Lenk s uggested that other tech nologies be added, such as reverse 911 messages. New II.G. Explore cost savings by sh aring personn el across Town departments. Work towa rds merging or combining the following functions to better serve both Town and School Depa rtmen ts: facilities management, huma n resou rces, fin ance, and in formation techn ology. Discussed Cou ncilor Corbett's suggestion #1, Preside nt Sideris' s uggestio n #3, a nd Co uncilor Falkoff's s uggestion #3 and agreed to add both these as a new item in sectio n II. Add IT as a pot ential f unction identified last year. Disc ussed C ouncilor F alk off's suggesti on #1 as a new it em in sectio n II, b ut decided there was no need to make this a specific goal. FY2012 Budget Policy Guidelines Worksheet 12/6/10 Page 2 of 5 III. COST-SA VINGS/REVEN UES - The Town Council believes that identification of cost sa vings and n ew re ve nues should be a precondition to additional e xp enditures . To this e nd, in developing the F Y12 budget, the Town Manager sh ould: FY11 Guideline Dr aft FY12 Guideli ne I nput & Discussion IILA. Complete an e nergy -use baseline in ventory for municipal buildi ngs, vehicles, and street and tra ffic lighting and create a pl an to red uce energy use by 20% in 5 years. Rewrite as: Move forward with an Energy Servic es C ompany (ESCO) agreeme nt to impleme nt plan towards reduci ng mu nicipal baseline energy us age by 20% in 5 ye ars . Obtai n energy -rel ated grants by becomi ng certified under the Gree n Commu nities Act. Disc ussed Cou ncilor Corbett's s uggestion #4 a nd agreed to inc orporate into this item. Add cha nges to reflect becomi ng a " Green Comm unity" and contracti ng with an ESCO. Added i np ut from the DCDP Director 011 status . BIB. Pu blic safety: Police, Fire and Dispatch together represent the Tow n's biggest expenditure after education. Exami ne how to best deliv er the level of service citizens wa nt, more efficien tly. Change "E xamine how ..." to "Proceed with a Public Safety study to determine how..." Discussed Councilor P alomba's s uggestio ns #3 & #5c. Co uncilor Kounelis felt we sh ould m aint ain existi ng fire & police staffi ng levels, while Piccirilli and Le nk felt that the p olicy sh ould specify a le vel of service, not a le vel of staffmg . Discussed President Sideris' suggesti on #4 and agreed to add th at language to this item . III.C. In stitu te a formal To wn -wide Econ omic D ev elopmen t Program (including the newly rezoned Pleasant Street Corridor District), with a lon g- term goal to in crease town reven ue. The Program shou ld in clu de a marketin g plan to prospectiv e developers as well as the u se of state and federal gran ts an d redev elopment programs. Cha nge "Instit ute a formal.... to "Implement the..." Discussed Cou ncilor Corbett's s uggestio n #5. Since the economic de velopment study is nearing completio n, cha nge to "impleme nt" . Reviewed st atus with DCDP Director. III.D. Explore the fe asibility of a standardized system of impact fees for projects su bject to site plan review. Consider mitigation monies for larger scale projects. No changes Reviewed st atus with DCDP Director, a nd there is pe ndi ng legislatio n on impact fees which may affe ct this . New III.E. Activ ely seek Payment In Lie u Of Taxes (PILOT) agree me nts with each non-profit organization o wn ing property in Watertown. C ouncilor Kounelis suggested that implementing a PIL OT program be added as a revenue item. Re viewed additio nal informati on on PILOTs provided by the Tow n A uditor. FY2012 Budget Policy Guidelines Workshe et 12/6/10 Page 3 of 5 IV. PROG RAM ENH ANCEM ENTS/E XPENDITURES - To the extent that resources allow, in light of the fi nancial policies stated above a nd the principle of first ide ntifying cost -s avings and new reve nue, the following pr ogram enhanceme nts and, if necessary, new expenditures sh ould recei ve priority in the FY12 budget. Education program enha nceme nts a nd e xpe nditures sho uld be co nsidered s ubseque ntly in light of the rec omme ndati ons of the School Committee. FY11 Guideline IV. A. Repair and impro ve the Town's streets a nd sidewalks a nd enha nce its trees a nd planting strips. Con sideration should be give n to f unding such repa irs, improvements, and e nha ncements from a v ariety of sou rces, includi ng t ax reve nues, debt and a bettermen t program. Strengthen capacity (including staffing) and carry o ut ro utine maintenance of the street trees and other trees on pu blic lan d an d, through the joint efforts of the Tree Warden an d D epartmen t of Public Works dev elop a comprehensiv e tree maintenance /replacement Program. N. B. Strengthen the Town 's capacity to address facilities management, through re gular sta ffing or contract serv ices. The Coun cil and Town Manager will continu e discussion s on reorgan iz in g the staffing structure of the Public Works D epartment to include a fa cilities man ager/engin eer. IV .C. Explore the nee d and possible fu ndin g fo r a social worker/community health ou treach worker, in clu ding reaching ou t to the private secto r for fun din g. IV .D . Explo re the budget implica tions of the re- use of the former branch libra ries. N.E. Determine the n eed for an d how to fun d future sewer and storm water in frastructure improv ements. Dr aft FY12 Guideli ne Rewrite as: Co ntinue the impro vement program for the Town's streets and sidewalks, incl uding street trees and planting strips . Pursue state/feder al funding such as the Tra nsportati on Impro vement Program (TIP) a nd School Safety Zo ne fu ndi ng to impro ve traffic and s afety. E xamine the staffing structure of the Public Works Department to impro ve the ability to perf orm routi ne mai nte nance, complete work order r equests in a timely m anner, and stre ngthen the capacity to supervise co ntractors. Delete this it em No changes R ewrite as: Finalize non -municipal re -use of the former bran ch libraries, an d explore the b udget implications for re -u se of the former police station . No changes Input & Discussio n Discussed Co uncilor Falkoff s s uggestio n #2, and the P ublic Works C ommitte e Report 10/12/10 item 2 .b . recommendatio n for additional staff. The street & sidew alk reconstru cti on program is seen as a high priority by the public. Need to address the DPW work order backlog in all DPW divisio ns, as well as the s upervisio n of co ntractors for the numer ous projects. This item has been s ubsumed by items IV .A. and II .G . J ail Di versi on/Edinburg FY11 grant has n ot been re newed for F Y12. He alth Departme nt Director sees need to address large number of hoardi ng/condemnation issues. Discussed C ou ncilor Corbett's suggestion #6, President Sideris' suggestio n #2, and Co uncilor Palomba's suggestio n #5b. Add language to i ncl ude the police station, and reflect progress on the branch libraries. Stormwat er Advisory Committee has started to exami ne this iss ue. FY2012 Bu dget Policy Guideline s Worksheet 12/6/10 Page 4 of 5 New IV.F . Create a Comprehensi ve Plan for the Discussed Preside nt Sideris' suggestion #1 a nd Town de ali ng with a broad spectrum of iss ues, incl udi ng developme nt, zoni ng, a nd Council or Lenk's suggestion #1. This wo uld incorporate all the previous st udies tra nsportati on, in ord er to enco urage Tow n that have been do ne . g over nment a nd its citizens to work in c oncert Add ed inp ut from the DC DP Director . towards commo n goals. Inc orp orate all pre vious Added "tr affic" in last sente nce as s ugg ested by resources, such as the Eco nomic Developme nt C ouncilor Corbett. Study, the Ope n Space Plan, the Pleasa nt Street Corridor District Study, etc. Include t raffic and transportation reso urces and improvements, and a review of the Zo ning Ordinance . V. BU DGET AN D FINANCIAL MONI TO RING FY 11 Guideline Draft FY12 Guideline I nput & Discussion V.A. In order to improv e its ability to monitor the implemen tation of the Town budget, the Town Cou ncil will receive quarterly reports on the revenu es and ex pen ditures du ring the fiscal year. In additio n, the Cou ncil will receiv e mon thly reports on the use and balance of mo nie s in the Counc il reserve and other Coun cil personnel and expen se line items. An early-warnint system will Chang e s eco nd sentence a nd reformat as three guidelines: A. In order to improve its ability to mo nitor the implementatio n of the Tow n budget, the Tow n Coun cil will recei ve quarterly reports on the revenues and expendit ures du ring the fiscal year. B. The Town Council will receiv e a r eport on the use and bala nce of monies in the Council reserve u pon each transfer, and a report each month that there is a change in Co uncil ex pense lin e items. C. An early -warnin g system will be established to alert the Town Council if reve nues fall below projec tions Council or Palomba's s uggestion #6 is already addressed by this item. Discussed changes to the seco nd sentence to reflect c urre nt practice. be established to alert the Coun cil if rev enu es fall below projection s. V.B. The Town Coun cil will receive quarterly u pdates on progress in addressing the recommendation s in the ann ual audit report. No chan ges, but reformat as V.D . Councilor Palomba's suggestio n #6 is already addressed by this item . FY2012 Budget Policy Guidelines Worksheet 12/6/10 Page 5of5 Proposed Budget Guidelines Input for Fiscal Year 2012 Submitted 11/24/10 by email from Councilor Susan Falkoff I have a few comments/suggestions: 1. II. add a G: Ongoing evaluation of whether expenditures are furthering the departmental goals. 2. IV. A. delete the phrase about betterment programs since we decided against them. Do we already now have a comprehensive tree maintenance/replacement program? If so, delete this language. If not, do we still want this? Are we working toward it? 3. add F. Explore opportunities for cost -savings by sharing personnel across departments. Submitted 11/19/10 by email from Councilor Cecilia Lenk: I suggest adding either to IIIC or as a new point under III: 1. Create a Master Plan for the Town that update the Town's zoning to both strengthen Watertown's neighborhoods and improve our mix of commercial and residential properties. Submitted 11/24/10 by email from Council President Mark Sideris: Explore the possibility of the following items: 1. funding a Comprehensive Master Plan for the town 2. hiring a consultant to market vacant town properties 3. combining operations within the School Departments and the Town Departments 4. moving forward with a Public Safety Study From Public Works Committee Report 10/12/10 item 2.b. The backlog of Forestry Division work orders was discussed, as was coordination between the Tree Warden and the DPW. DPW staff and the Tree Warden are content with the coordination, but implementation Is limited by insufficient staffing to keep up with the volume of tree -related work orders. The Chair suggested that additional capability in DPW be added as a 2012 budget priority guideline, and the Committee unanimously voted to recommend it to the committee on Budget and Fiscal Oversight. 11/24/10 Committee on Budget Policy and Fiscal Oversight Re: FY12 Budget Policy Guidelines Following are my suggestions for discussion in developing the FY12 Budget Policy Guidelines: 1. Work towards combining the following functions to better serve both the Town and the School Department: facilities management, human resources, and finance. 2. Review the use of overtime town -wide and establish a consistent policy. Work towards eliminating the use of overtime for higher paid employees with management responsibilities (address union issues as required). 3. Review options for pension benefit reform for new hires. Retain consultant? 4. Seek grant funding to reduce municipal energy consumption. (See III.A.) 5. Focus on implantation strategies of the Economic Development Study (2010/11). (See III.C.) 6. Explore the budget implications of the re -use of the former police station. (See IV.D.) Stephen Corbett Proposed Budget Guidelines are for Fiscal Year 2012 Submitted by Councilor Palomba Tuesday, November 23, 2010 1) The Town should maintain an unreserved fund balance (including stabilization funds) equal to 5- 7%of the annual operating budget. 2) The Town should develop a capital budget (exclusive of enterprise funds) equal to at least 3-5% of the operating budget. 3) The Town should maintain the existing personnel for the police and fire departments. 4) In an effort to increase available revenue, the Town should: a) Apply for federal, state, and foundation grants. b) Review all Town charges for licenses, permits, penalties and fees to determine if these should be increased. 5) In an effort to reduce and/or maintain the cost of providing services , the Town should: a) Under take a concerted effort to provide more services through regionalization or Inter -municipal agreements, and b) Conduct a department -wide survey of need for additional physical space to determine the use of existing used buildings and space. c) Maintain present personnel level in the fire and police departments. 6) The Town Manager should present quarterly reports on the revenues and expenditures during the fiscal year and updates on the progress of preparing a Town audit.