Brent B. Bean, II, President
Westfield City Council
59 Court Street
Westfield, MA 01085
Dear President Bean:
I am writing to follow-up on our telephone conversation relative to how I have calculated the levy increase of 1.25 percent. It is my understanding certain City Councilors are confused on this matter. The confusion is understandable, particularly when referenced against the fact that this is the first rate-setting process many Councilors have undertaken.
Calculating the Levy
The Auditor, when preparing the Estimated Budgeted Revenues & Expenditures, has always begun the exercise by using the levy limit from the previous fiscal year, not the actual levy. Additionally, at her own inquiry, she did a look back to 2006, as to the normal practice of the city and the practice has been consistent every year and very much likely for years before that which of course would include budgets that a number of us over the years had voted in favor of and without similar posturing I might add.
For background for the new councilors, most of those years, 2003, 2004, 2005, 2006, 2008, 2009, 2010, and 2013 were 2.5 percent increases. So what is the difference today… the shift factor. As a reminder, they were as follows; 2005 (2.00), 2006 (1.78), 2007 (1.75), 2008 (1.71), 2009 (1.71). Since 2010, the shift has continued a precipitous decline to 1.63 where it has remained since 2012.
The Council was provided in June of 2014, the proposed FY 2015 budget, and the levy number that was to be used. This number changed only slightly with this recent submission by an amended new growth number (from DOR) of $14,036. The FY 2015 proposed budget used the following number: $63,571,972 and for the 1.25 percent increase the new number is $64,380,883 versus the proposed 2.5 percent of $65,161,271.
The purposes for this relate to the intricacies of Proposition 2½ and reporting related to excess levy capacity. This is not something new, nor is it an attempt to misrepresent the levy.
Additionally, as so eloquently stated Thursday evening, on items of immediate consideration, “that the Mayor or a representative of the office be available to speak on the item’s behalf…” I would submit to you that the Auditor (who is appointed by the city council) was in attendance to answer any questions the Council might have had, yet her services were not called upon by the Council therefore resulting in the confusion of certain city councilors. Of course, this all could have been resolved if only the Council availed themselves of her services.
I have been very consistent with my budget practice and the message. I will address the needs of the City, which include delivering services to our citizens, maintaining our infrastructure and providing an appropriate level of funding to fulfill our most important obligation, to our city’s children through the school department annual budget. When I feel that we have fulfilled that obligation and adequately have a cushion for the upcoming fiscal year, I then have worked with members of the Council to provide relief. The levy history is as follows… 2011 (1.5 percent), 2013 (1.5 percent), 2014 (2 percent) and proposed 2015 (1.25 percent). 2015 would represent the deepest reduction that we have proposed and represents half of the June proposed FY 2015 budget. I would suggest we stay on this course which has led us to where we are today. I will not, while in this office, shirk my responsibility to the City and its citizens as a whole. The reality is the City isn’t flush with cash as some have claimed. For a look into the future I offer the following for your review.
You were provided previously a draft of the free cash requests that likely will be forwarded to you in the near future. And of course the appropriation of a sum of money into the Health Insurance Trust Fund and the Health Department budget for disposal of trash amounts to nearly $3.5 million dollars. This would leave in the free cash account approximately $2.8 million dollars. Hardly a sum anyone should be comfortable with after reviewing the rest of this correspondence.
OPEB & Long-Term Fiscal Health
At the same time we have addressed a number of outstanding concerns and achieved some stability with our financial standing. I am mindful of the weight our unfunded liabilities pose to the financial standing of our city. With every passing year, the OPEB liability becomes increasingly more important to the city’s ratings outlook and its financial health. Because of this importance, I have recommended that we appropriate up to $450,000 to the OPEB Trust this year. That would represent approximately 3 prcent of the annual appropriation for health insurance. Some councilors after years of complaining about how I have ignored this liability now want to suddenly change course to suit their own political fortunes. Well, you can’t have it both ways. I agree it is an issue of growing importance and relief at the state level is not on the horizon and we must begin to address it, not ignore it. In the spring of 2015, I will present to the Council strategies to address the OPEB issue for the future.
Additionally, the level of reserve funds is also of great concern to the financial standing of our city. It is not by coincidence that we presently have the highest bond rating and level of reserve funding in the city’s history. It is important that we do not take a step back by dipping into the stabilization fund to finance future budgets. As recently as 2007, we had as little as $200,000 in our stabilization account.
We have achieved this success while at the same time we have secured financing for a new school, addressed our most significant facilities issues, upgraded our fire apparatus, replaced our aging sanitation fleet and have embarked on a recreational facilities improvement effort. I would argue it has been the budget philosophy stated above that has resulted in this standing.
School Technology
Many on the Council had taken great pains in the spring budget exercise to learn the challenges facing our city. One of the most significant concerns was the state of technology funding in our schools. One of the items in the free cash request list I sent to you included our first down payment on what to me was a Council priority. I have the Information Technology Department and the School Department preparing for an allocation of $250,000 dollars to kickstart the enormous technology purchasing effort needed to bring our schools into the 21st century. We owe it to our children to begin this multimillion dollar needed upgrade.
Capital Repairs
City Department Radio Infrastructure. This system, nearly twenty years old, represents the city departments’ entire radio communication infrastructure. That would be Police, Fire, Public Works, School and Water and to some degree Gas and Electric. A recently submitted design and engineering proposal to bring a new city radio system online to replace the presently aged out system is $209,000. This item was estimated at $150,000 on the list that I sent you. The actual construction and acquisition cost of the build-out is likely to exceed $2 million.
Bullens Field Renovation. This past year we commissioned a report on the condition of the bleachers and supporting structures and lights at Bullens baseball/football field. Those of you who have been around for many years will recall that the football field bleachers, similarly constructed, were condemned in the early 1990s. Hoping to avoid a similar fate at the baseball field, I will be requesting free cash to fund the design for repair and eventually we will need funding for construction repair. A renovation and ADA upgrade will likely cost $1.5 million dollars.
Operational Concerns Going Forward
Fire Department Overtime. The self-imposed promise of “no action” by the Finance chairman will result in an exhaustion of Fire Department overtime funds by mid-January. The Department has six vacant positions and is still awaiting a valid civil service list for hire from the state. Additionally, seven firefighters are currently out on long-term disability. Delaying action on this item would cause apparatus shut-downs, most likely at Little River Substation.
Senior Center Opening. The opening of the Senior Center will result in additional costs, both in terms of personnel and operational expenses.
FY 2016 Approved Raise Cycle. Lastly and likely the most costly future item in FY 2016, will be the payment of the last year of the three year contract which represents a 3 percent raise for most of the collective bargaining units. I plan to have a draft FY 2016 budget for your observation prior to the next meeting to demonstrate the precarious nature of our situation once you begin to peel the onion back.
Future Projects
Westfield High School Science Lab Project. Of course heavy on my mind, and it should be on yours, is preparing this City’s financial position to accommodate the renovation of Westfield High School. The proposed STEM wing and required main facility upgrade could cost the City upward of 42 percent of a $30 –$40 million project which represents the likely MSBA reimbursement rate of 58 percent which is where we could be in 2017 when we expect this project to be authorized.
Conclusion
I know this is long, but it is incredibly difficult to be brief when so many issues remain to be addressed. All of these items, taken together, paint an incredibly challenging picture for our city moving forward. I do not relish the position of requiring additional taxation, but I believe it’s important to share with you and our taxpayers the entire picture as we know it today.
Lastly, let us not lose sight of the fact that we are arguing over an approximate amount of $4 per month on the average homeowner. To represent this argument as the Mayor being a force of evil looking to raise everyone’s taxes and that the City Council is here to save the day is wholly inaccurate.
As it relates to technical questions about calculations on the levy, excess levy capacity, and such matters, please contact the City Auditor for any clarification you might require.
Thank you for your attention to this important matter.
Sincerely,
Daniel M. Knapik
Mayor
