Wow! There’s a lot going on in the city right now. It looks like another busy year ahead.
I’d like to talk about a couple of issues related to government organization, hiring practices, and spending.
First, last week the council approved the creation of a combined dispatch department that will answer emergency calls and dispatch for both police and fire. This sounds like a good idea, and many politicians and leaders in the departments have been trying to do this for years. The state is encouraging consolidated emergency services and even regionalized services. Note: many larger states have huge 911 departments that handle very large territories and populations. Massachusetts on the other hand, has many call centers that manage small territories and small populations.
The economies of scale and the ability to handle spikes in volume are two good reasons for us to move in the direction of regionalization. The first step in regionalization is to get the infrastructure and staffing in place, and get our own departments working with the new system before we bring others into it.
This all sounds good and seems to make sense, but I thought we also ought to look at the budget before we proceeded to create a new department – since we are struggling to make ends meet right now, and we’re not adequately paying down the debts we already have. We ought to look at what competing regional centers have for operating costs and revenue models (we get one 911 call every 50 minutes on average, and our cost per call is expected to be about $50). Maybe we could never compete with them? Maybe our regionalization plan is unrealistic? I asked council to send the issue to the finance committee for review. That motion got rejected and the issue only went to the Legislative & Ordinance Committee. Then I made a motion to request that the City Auditor prepare a cost/benefit analysis. That motion was defeated, with council arguing that there was no time for delay, the City Auditor is busy, and that the departments themselves could give financial information to the L&O Committee. So, the police and fire departments prepared a very nice presentation, and they addressed lots of logistics, planning, and operational questions. They did a nice job. They gave the L&O Committee a summary budget sheet that showed savings of over $1 million. This number was reported in the news and used as a selling point by L&O when they made their recommendation to council. Nobody really challenged any of the assumptions. Well it turns out that upon further review the “before” and “after” numbers in the presentation were not “apples to apples” and contained “red herrings”. When you remove the “red herrings” and look at total cost to the city, the real impact to the city budget is an additional cost of approximately $300,000 per year plus bennies. We’re hiring a department manager, three new dispatchers, and three new policemen. That’s a big difference. And, that’s something the auditor would have picked-up on immediately if a proper cost/benefit analysis and budget preparation was done. I hope in the future (in the near future when other departments restructuring efforts are proposed) that we take advantage of the accounting and financial expertise we have in the Audit Department before we deliberate and vote on the creation and funding of departments.
Second, as mentioned above, this new department needs a manager. I think we ought to be looking for someone with management experience. Common sense? Well, the job description only requires “supervisory” experience (along with specific experience related to emergency services). I proposed an amendment that adds “2 years management experience preferred”. This was rejected. A manager has different responsibilities than a supervisor. Hiring someone who is not experienced or capable as a manager is Peter-principaling them right from the start. I think this is a bad idea. We should get an experienced manager who can take-on the responsibilities of this new department and help, or take the lead in, selling the consolidated dispatch concept to neighboring communities.
Same discussion goes for other managers or executives we’ll be hiring in the coming months. We should be seeking fully qualified experienced professionals. There are lots of very talented people who are currently unemployed. We should have large pools of candidates for every important job. We do not need to settle.
Finally, back to some spending issues. As mentioned above, the consolidated dispatch center is going to cost a bit more than we are currently spending. The storms cost more than we budgeted for this year. In case you haven’t noticed, there’s a building boom going on with government-owned properties in Westfield. What we don’t have is a good plan to pay for all this. Same story as last year, we have over $300 million in obligations. We take in only about $120 million, and about half of that comes from the state and federal governments (taxpayers). Over 70% of the budget is labor and benefits. About 5% is reserved for debt payments. Try to figure out how to pay-off $300 million with only 5% of $120 million revenue. I can’t make it work, and nobody I’ve asked has been able to show me a plan that makes it work. Even with normal revenue growth (maxing out prop 2 ½ every year, new development growth, and increases in fees) the math doesn’t work. We need to develop a realistic long-term plan. We need to control spending. We can’t keep agreeing to labor contracts that we can’t afford – especially when we have no realistic plan to honor the long-term commitments we’re making in the contracts (with regards to health and pension benefits).
This week, we had a meeting about the Green Building repairs. We agreed to $15 million in spending last year to replace a bunch of boilers and fix up some of the problems in the city buildings (we’ll get reimbursed for about $8 million of that from the state [really all of us taxpayers]). Now, we need another $17 million to replace piping, remediate asbestos and other nasty stuff, fix leaks, replace windows and lighting, and upgrade the HVAC and fresh air systems in several schools. There is no doubt that this work is needed, nor that it will deliver a better and healthier environment in our schools.
Just so you know, there’s another $40 million in repairs and enhancements in the pipeline – and that’s just to city-owned facilities, that’s not including street repairs, neighborhood water and sewer, and other big expenses.
The big question in my mind is “How are we going to pay for it?”. We’re tapped. We’re in debt over our heads. Where’s the money coming from?
Relate this to your own home and family. If you roof was leaking, windows were awful, and your heating and air conditioning systems were on their last legs and grossly inefficient, I don’t think anyone would disagree that you needed to fix things. Question is how to pay for it. If you go to the bank and try to borrow money, the banker will ask to see your income and expenses, your assets, and your liabilities. He’ll do some math and then decide whether or not you have the capacity to repay the loan. If you took in $120 thousand per year, had over $300 thousand in debt, and had $6 thousand in the bank, what do you think the banker will do? Well dig a little deeper… you spend $119 thousand per year on expenses – most of which you can’t seem to cut, you depend on state and federal support for half of your income, you only have the $6 thousand in the bank because grandma gave you a $2 thousand Christmas gift and you didn’t pay some of your operating expenses over the last couple of years. Now what? I think the banker would say: “You’ve got big problems. Show me how you’re going to make this work. You’ve seen this coming for years, why didn’t you spend the money on maintenance? How are you going to control expenses? How are you going to increase income? How are you going to lower your long-term debt?” I think you’d get rejected. You’d get rejected not because you didn’t have a justifiable need, but because you couldn’t prove you had the capacity to meet your obligations.
Multiply all those numbers by 1,000, and you’d be roughly in the same shape as the city.
The only reason the city is able to pay for this is because we don’t have to answer those questions right now. Governments get to pass the buck. Governments get to sign loan documents or labor contracts and say “don’t worry about it, let the next generation of taxpayers pay for it”. This has to change. The debt is snowballing.
Please get involved in your local government. Show up to meetings. Ask questions. Communicate with the mayor and your councilors. It can make a difference.
Dave Flaherty, City Councilor
