The Deliberative Session

If you attended the deliberative session on Saturday, you might have thought that the most pressing problems facing the town were moving the bandstand and making the Parks and Recreation Director a full-time position. The real issue is getting control of spending and facing up to our serious financial situation. A committee of interested people can resolve the issues involved in moving the bandstand and even raise the remaining $2,500 to move it. Making Parks and Recreation a self-supporting entity would be one way to restore the position without cost to taxpayers. However, we will not be able to resolve our financial problems unless we understand them, develop a plan to address them, and make the difficult decision to tighten our belts and work together.

Steve Felton, Patsy Tucker, Police Chief Tony Randall, Fire Chief Steve Heath, and Fran Newton all addressed the Warrant Articles that will help us build capital reserves. Warrant Article 14 calls for the establishment of a Capital Improvement Plan (CIP) Committee, Article 8 calls for the establishment of a $125,000 capital reserve fund for roads, and Article 10 calls for the establishment of a capital reserve fund for Fire Department equipment.

Why do we need a Capital Improvement Plan? Chief Randall made the case when he said that we have put off replacing equipment for so long that we now have to pay the piper. Steve Felton described this situation in financial terms. The town has a little over $7,000 in capital reserves and $20,000,000 in accumulated depreciation. As a piece of equipment, a building, or a road ages, it loses value. The $20,000,000 is an estimate of how much value all of the town's equipment, buildings, and roads have declined in value over the years. Normally, businesses and governments put away money to replace and repair these things, but Ashland has not, and so we have to find ways to fund fund these things as they need repair or replacement. A Capital Reserve Plan is a form of long term planning. It identifies and prioritizes capital expenses so the town can plan how best to deal with these expenses.

What are these expenses? Last year, we leased two police cruisers, and we purchased a sidewalk plow with attachments and a defibrillator. These items added $23,000 to this year's budget This year, the town is asking voters to approve Warrant Articles to lease a loader for the Public Works Department ($28,420/year for 5 years), repair the fire department roof ($50,000), purchase police radios ($10,000), and lease a tractor for the recycling station ($15,000 per year for four years). The cost this year is $103,420 and the total cost is $257,300. The actual cost of repairing the Fire Station roof is unknown at this point because the engineering studies have not been done. $50,000 is not based on an actual estimate.

Why is this a problem? These kinds of expenses cause spikes in the tax rate, and they increase future budgets, and they can take financial and personnel resources away from other important projects.

Planning and saving for these expenses allows us to prioritize large expenses, gives us more options in terms of purchasing and financing, reduces the cost of financing, and limits dramatic increases in the tax rate. However, as taxpayers, we would have to accept the concept that the cost of operating the town includes our yearly expenses plus a portion of our long term expenses.

Our problem now is that we have $20,000,000 in accumulated depreciation, and we have no idea how much money it will actually cost to replace or repair the items that have decreased in value, nor do we know when we will have to replace them. There are several warrant articles that will help us begin saving for things we will need. Article 8 would establish a $125,000 capital reserve fund for roads. As Fran Newton of the Budget Committee pointed out, it will cost $1,000,000 per mile to repair Thompson Street, Smith Hill, and West Street. $125,000 is only a start, but a necessary start. Article 10 would establish an $8,000 capital reserve for Fire Equipment. The purpose of this article is to spread the cost of 400 gallon water tank over two years. The tank is for use in fighting forest fires and reaching homes in town that are hard to access with other equipment. Article 13 establishes a non capital reserve fund for the repair and maintenance of the town clock.

Developing a good Capital Improvement Program takes several years, a great deal of work by the members of the Select Board, the Budget Committee, the Planning Board, and townspeople. Following the plan takes political will and cooperation. It will also take a number of years to get the town on a solid financial footing. During this time, we will have to accept higher taxes and lower budgets. The alternative is to continue to operate without long term planning and not only the ability to choose how we deal with our financial problems but lose our identity as town.