Ashland's Financial Situation - A Fire Department Roof Waiting to Collapse

Ashland's financial situation can be compared to the situation with the Fire Department roof.  Instead of repairing the roof every 10 years or so as is recommended for roofs of this type, we put off the repair until it became a crisis.  A 10-year maintenance plan would have been the safest and most cost-effective approach. We could have repaired the roof this past summer, but we chose to put off the repair until Spring, increasing the risk to the members of the Fire Department and very expensive equipment.  This is basically the same approach we have taken with the budget as a whole. 

The only difference between the Fire Department roof and the town's financial situation is that the roof will be fixed this Spring, but our financial situation will take years to rectify.  For many years, the town focused on funding normal operating expenses while ignoring capital improvements like the roof and the Collins Street bridge, which subsequently became  costly emergency situations.   

The Fire Department roof and the Collins Street bridge are just the beginning.  There is a backlog of millions of dollars in capital improvements that will need to be made in the next 5 to 10 years, but we can barely afford to pay for the town's current normal operating expenses.  The best way to deal with this situation is to conduct a complete, independent analysis of the town's finances.   This analysis will tell us exactly what our situation is and provide a detailed plan for the most cost effective way to deal with our long-term finances.

In the meantime, we can support the budget being developed by the Budget Committee.  The committee's goal is to present a budget, including the normal operating expenses plus cost of the warrant articles that will be about the same as last year's budget, minimizing any new property tax increase.  The recommendations of the CIP Committee will also be included in the budget.  While the CIP Committee has not had time to develop a complete plan, they have made recommendations that will begin to address some of our most pressing needs, develop some capital reserves, and invest in energy saving improvements that will ultimately provide a positive return on investment.  This proposed budget will necessitate cuts in the town's operating budget.  Whether there are corresponding cuts in services will depend on how the town and department heads decide to manage the situation.

Beginning to develop capital reserves and planning for long-term needs will not eliminate the risk that emergency situations will arise but will reduce the financial risk.  Furthermore, our taxes will still increase next year because of decreasing revenues and increases in school budget and county and state taxes.  It is also likely that we will have to cut operating expenses again next year while we continue to find more cost-effective ways to provide services.  However,  if we support the proposed budget and the complete independent financial analysis and develop a good working draft of the Capital Improvement Plan, we will have a much clearer idea of the path forward.  Ultimately, we need to get to the point where we can afford to fund both our normal operating and our long-term expenses. 

There are Many Positives in Ashland

It’s so easy to get caught up in the town’s problems – high property taxes, economic woes, increasing distrust or lack of faith in our governing body, crumbling roads and bridges, and a fire department roof that is in critical condition.  But it’s important to also stop and look at the positive.  At the recent financial forum, a member of the audience spoke about Ashland’s charm and how we should do more to market this.  Today, an acquaintance spoke of the all good the town does for those in need, e.g., the fire fighters auxiliary collecting gifts for Operation Santa for Ashland kids in need, Food for All, Got Lunch, etc.  And so I would like to point out a few other things. 

Take the Christmas lights that Sherry puts up year after year.  Look at the whiskey barrels with flowers, also thanks to Sherry.  Look at the beautiful flowers that the garden club plants every year around the monuments.  We have a July 4^th celebration and fireworks that are the envy of many other towns in New Hampshire.  Thanks to Patty and the rest of the committee for your years of service.  We had a health fest that received rave reviews from those who attended.  Appreciation goes out to Steve Felton and the budget committee for the difficult work they do and especially for the financial forums which brought not only valuable information to the town residents about our financial situation, but also giving us a voice.  Thanks to Steve Heath and the other volunteer fire fighters for keeping us safe.  I have witnessed on at least two occasions since I moved here when the town came together to raise money for folks who had experienced great hardship.  I highly value our award-winning school and the amazing staff that we are blessed with.  I know I’m leaving out many other things and people, and for that I apologize.  In fact, I would like to hear more about them.

In the last two years, I have become increasingly involved in the affairs of this town (and I know there are those who are not happy about this), as are several others, because we have followed the lead of our town administrator, Paul Branscombe.  I ask you to take a moment to inventory all that he has done for the town.  Today, drive down Main Street and look at the beautiful banners, an effort he led.  If you attended the music in the park this summer, thank Paul Branscombe.  Look at the HEAL grant that the town was awarded and know that it was because Paul took a suggestion to apply for the grant and moved it forward.  Paul works tirelessly, always looking out for the best interests of the town.  He brought in an energy audit.  He inspired cost saving and ecologically sound measures at the transfer station.  He has brought a new level of transparency to the town with his regular communications.  Observe any Select Board meeting to see how the selectmen continually turn to him to answer questions.  The list is endless – negotiations with Time Warner Cable, rapid action on the Collins Street bridge, exploration of grant opportunities, financial concern and oversight of the budget, etc., etc.  I know his contract is up for renewal, and I sincerely hope for the sake of Ashland’s future that this happens immediately. 

Yes, we do have to face a number of serious problems in town.  But there is so much good and we need to hold on to that if we are to overcome our differences and solve our problems.

Fran Newton

Blog Publication Policy

I wanted to remind writers that Ashland Speaks will not publish letters that contain personal attacks.

Short-Term Versus Long-Term Budgeting

The key issue facing voters concerning the budget this year has to do with how we balance short-term and long-term needs.  The Select Board's budget places more emphasis on short-term operating expenses; the budget being developed by the Budget Committee will place more emphasis on long-term capital needs. 

The Select Board's budget for 2013 is $2,820,867, a $140,000 increase over 2012.  Most of the increase will go the the repair of the Fire Department roof.  In addition, they are currently submitting warrant articles totally approximately $308,000.  If voters approve all the warrant articles, the total increase in the budget will be $448,000 (not all in 2013).   This increase along with the increases in the school budget, county and state taxes will almost certainly cause another increase in taxes again next year and do nothing to help control taxes in the future.

The Budget Committee has agreed in principle to fund the budget at the 2012 level or  $2,680,000 including the cost proposed warrant articles.  This will mean that the town's operating budget will be reduced and the amount recommended for future capital expenses will be increased.  Taxes will still increase next year, but the increase will be more manageable, and we will be taking the first toward stabilizing tax rates and making Ashland more financially sound.

The difference in the budgets has to do with two different approaches to dealing with long-term debt.  The fact is that our anticipated long-term expenses are very high and are increasing for three reasons:

• We currently have only $125,000 in reserve repair and replace equipment, roads, and buildings.
• We have delayed making needed purchases and repairs for years so that we will have to spend several million dollars over the next 5-10 years.
• Instead of replacing and making repairs when they are most cost effective, we wait until there is an emergency situation.

While developing a budget is a complex process, the formula for doing so is simple:

Cost of running the town = short-term operating expenses + long-term capital improvements. 

This means that the actual cost of operating the town is equal to the amount of money it takes to operate the town annually plus the future replacement/repair costs of all our capital assets calculated on a yearly basis.    Our problem is that for years the town has operated without putting any money in reserve for long-term expenses. 

The way the town is currently operating is as follows:

Cost of running the town = short-term operating expenses + immediate/emergency needs

We have replaced some equipment and made some repairs, but there is a very large back log.  Estimates range from $2.3M (CIP estimate) to $16M (accumulated depreciation).

If we were to begin to save for these anticipated expenses, the minimum we should put away is $230,000 each year, so that we would have $2.3M in 10 years.  The board is requesting $125,000 for roads, and $1,500 for the town clock, but that leaves us short a little more than $100,000.  We could count the Fire Department roof and the bucket loader as a capital expenses, but neither of those expenses is included the CIP estimate, which means that we need $230,000 in addition to the roof and the loader.

The board's budget also assumes tax payers are willing and able to pay more taxes next year and for many years to come.

Taxes have increased over $1M since 2009, which means that the town, the school, the county, and the state have asked for more money each year during the worse economic conditions since 1929.   The assessed property value has remained fairly constant during that same period and there has been no significant change in the tax base (residents and businesses), which means that the same tax payers are bearing the burden of these increases.

The idea behind a level funded budget is that tax payers cannot afford to pay more than they are paying now and are willing to make some changes to begin to stabilize tax rates over the long term and help get the town on a solid financial footing.

A level funded budget budget will not provide an immediate solution to the town's financial problems.  Those problems have developed over a long period of time. Taxes will still increase, and we will still be subject to dealing with large long-term needs and emergency situations.  However, a level funded budget will help begin to stabilize tax rates and lessen the impact of financial emergencies and long term capital investments.

Does this mean a decrease in services?  Possibly.  However, the Select Board has a number of options to limit decreases in services including outsourcing services, reorganizing departments, establishing cooperative agreements with other towns, cutting non-essential services, limiting over-time, reducing hours, refinancing long-term debt, using volunteers, creating efficiencies, increasing revenues, looking for grant opportunities and promoting economic development.  Through these actions, we can limit cuts in services over the short term.  We can restore and even increase services when the town is on a more solid financial footing. 

An improving economy, economic development that is occurring now, and the reductions our in long-term debt over the next 5 years will help us in our efforts if we also reduce our spending and increase our savings.

Ultimately, voters must make the final decision:  More taxes, more long-term debt, more long-term financial risk - or more stable taxes and increased long-term financial stability.





 

An Anonymous Question

The following question was received yesterday.

What is happening to this town? We always had problems, 

but now we are becoming laughing stock. Why? 

Financial Forum II

Last night Steve Felton Chairman of the Budget Committee presented the second financial forum on the town budget.  The session was a continuation of the forum given in late September.  Mr. Felton explained the town's current financial situation, the town's budget proposal, and the general direction the budget committee is taking on preparing the budget to be presented to the townspeople.  I encourage people in the town to watch the presentation on Public Access television.

Mr. Felton's explained the complexities of the budget, but I wanted to present the highlights here.  The simple narrative is:  We have almost no savings, we do not have enough cash to meet expenses and must borrow, we have no emergency funds, we are deep in debt, our revenue stream is flat, we have millions in long term expenses we need to prepare for, the select board's budget plus the warrant articles is higher than last year's budget, and the budget committee wants to cut the town's operating budget and increase capital reserves so that the budget is the same as in 2012.

The facts are are follows:

Key Trends

•  Since 2009 property taxes have increased by $1,066,766, an $807 increase on a $200,000 house.
• 33% of the increase was from increases in the town budget

Current Financial Situation 

• $125,000 in capital reserve for roads; $0 in reserve for other needs
• Minimal cash on hand; will have to take out a TAN early in 2013 to pay bills
• Long term debt between 70 and 80% of municipal expenditures
• $10,791 in unassigned funds (emergency funds)
• Assessed property value flat since 2009
• Revenues other than property taxes continue to go down

Capital Improvement Needs

• Town CIP Request - $2,308,000 over 10 years
• Town Accumulated Depreciation - $16,107,781

 Select Board's Proposed Budget

•  $2,820,867; $140,615 over 2012; $475,557 over 2009
• Warrant Articles $308,000
• Total if warrant articles are all approved - $3,128,867

Budget Committee's Proposal

• Budget + Warrant Articles = 2012 Budget 
• Cut the proposed operating budget and add more capital reserves 

Why the Select Board Will Not Allow Public Comments

Below is one of the questions I recently sent to the Select Board.   The following is a transcript from a recording made at the Work Session on Wednesday morning.

Question:  "Please have the members of the board provide a detailed explanation of the reasons for banning public comments at the Select board meetings. Please have them present the facts upon which they based their decision.

Jeanette Stewart: "There weren't any facts that we based our decisions.   It was just that Paul had recommended  that we discontinue public comments at the meeting, and after careful consideration, we decided that that is what we were going to do."

This response from the board a good example of why we need public discussion.  The board avoided answering my question.  First, the board members did not answer the question.  Jeanette Stewart did not provide any facts because as Stewart said, "There weren't any facts."  Nor did board members explain their reasons for making the decision other than it was a recommendation made by the Town Administrator.  Stewart indicated that the board made the decision after "careful consideration," but she did not explain what the considerations were or how one considers making a key decision without facts.

How the Ashland Select Board Has Systematically Supressed Public Participation in Town Government

At Monday night’s Select Board Meeting in Ashland, Select Board Chairman Jeanette Stewart announced that the board would no longer allow public comments at their meetings.  Instead, the public must submit questions and comments in writing two weeks in advance.  This action is the board’s latest attempt to suppress public discussion.  I was ejected from the meeting as I was trying to explain the other actions this board has taken to exclude the public commentary and public participation in town government. 

Since Jeanette Stewart became chairman, the board has removed one of two public discussions from their agenda.  Before that, the public was allowed to make comments prior to and after the business portion of the agenda.   Up until Monday night, the public could speak but only after the board made its decisions.  Immediately after the last election, the board moved the work sessions from Monday night to Monday mornings, effectively excluding many members of the public from attending.  They also changed the location of the meeting to the conference room in the town hall, a  room with very limited space and access.  Furthermore, the board announced that they would no longer allow public comments at the work sessions.  The board promised that no votes on important issues would take place during the work sessions and that they would provide a recap of the discussions at the Monday night meetings.  In fact, the opposite is true – we hear little about their work session discussions, and votes on important issues are routinely taken.

Complex and difficult issues are rarely discussed at Monday night meetings.  As an example, the decision to prohibit public comments was made at the last work session.  The topic was not even included on Monday night’s agenda.   Instead, the board decided to announce their decision at the end of the meeting after the public comments were concluded.  However, the issue came up earlier than they planned when a member of the public said that she understood the board had made a decision at the work session to exclude public comments.  Jeanette Stewart replied, “How do you know?  You weren’t at the work session!”  Stewart then said she planned to announce her decision after the public comments.  When I tried to continue this discussion, I was ejected from the meeting.

It is my understanding that the board decided to eliminate public comments because they have received comments from individuals outside of Ashland indicating that the perception is that our Select Board Meetings are “a circus.”   Apparently, Ms. Stewart, Mr. Preston, and Mr. Golden believe that the problem lies solely with the public and thus, the best way improve their meetings is to do away with public discussion.  I would submit that the board is often responsible for this environment.  If you watch Monday night’s meeting on Public Access television, you will see how the board treats the taxpayers in the town of Ashland.  They do not set a good example for civil discourse and are often rude and dismissive.  Sometimes they erupt in anger, make false claims and accusations, provide incorrect information, and goad the public to anger.  Their decision to exclude public comments is an example of their negative attitude towards the public.  

Had I been allowed to continue speaking Monday night, I was going to propose that we as a town develop ground rules for public discussion, and that the town moderator facilitate the discussions.  That would allow the public to speak without having the board control the discussion.  Ironically, I agree that some of the meetings get overly contentious.  Part of this is simply the nature of the democratic process.  John F. Kennedy said, “The unity of freedom has never relied on uniformity of opinion.”   Solving the problem by excluding public comments only exacerbates the underlying tensions that are at the heart of problem.  Ashland, like many towns, is in the position of having to face serious economic problems that can only be solved by facing the issues, and working together to solve them. 

Economic Development and Ashland's Financial Crisis

At Candidate's Night last February, all of the candidates for selectman (except for Phil Preston who did not attend) spoke about the importance of economic development for Ashland.  Jeanette Stewart promised to establish an economic development committee.  It is now December, there is no economic development committee.  At the recent economic development forum held in Holderness, the message was clear: towns have to be prepared for economic development.  There is plenty of help and support available from the state and other public and private organizations, but unless the Select Board considers economic development a priority, nothing will happen.

Ashland needs sustainable economic development in order to resolve its current financial problems, create a stable financial footing for the future, and provide the town with basic services to improve the quality of life.  It would be nice not to drive to Plymouth or Tilton to get medical services, medication, clothing, household goods or healthy foods and baked goods. There are several new businesses starting town, and the Squam Landing project is going forward.  However, it is likely that the revenues generated from these ventures will be consumed by spending on necessary capital improvements.
Those who attended the first Budget Committee Financial forum learned that we have a cash flow problem, approximately $20M in accumulated depreciation,  little cash in the general fund for emergencies, long-term debt that amounts to about 70% of the budget, no long-term financial plan, and little money in capital reserves.  We have put off making large capital expenditures for years and are now beginning to see the consequences of that delay.

The Collins Street Bridge had to be replaced and the Fire Department roof needs to be replaced.  It was known that both needed repair or replacement, but the town chose not to address these issues until they became very serious problems. Rather than having the political courage to ask the town for additional funding to repair the roof this year, the Select Board decided that the members of the Fire Department should get up on a dangerous roof and "sweep" off the snow this winter.

Unfortunately, we will need to pay millions more for equipment, buildings and roads over the next 10 years.  Should we continue to wait until we have no choice but to replace or fix things, or should we begin to plan, save, and encourage economic development?

Last year we made a start at addressing our long-term needs when voters approved putting $125,000 in a capital reserve fund for roads and $50K toward the Fired Department roof.  If we continue with the road fund, over the next 10 years, we will have $1.25M which may be enough to repair/rebuild the now crumbling Thompson Street and Smith Hill Road, but by then others will likely be in need of major repair.  This does not even begin to address the $2.3 million in capital expenses identified thus far to the CIP committee.

We cannot solve our financial problems in one year, but we have to increase our efforts to do so by reducing our operating budget, putting more in capital reserves, reducing our long-term debt, and building our emergency cash in the general fund.  The Budget Committee will be conducting Financial Forum #2 on December 12 at 6:30 in the Elementary School Cafeteria.  At this event, the committee will provide more detailed figures providing a better picture of our financial picture and some options to resolve our financial crisis.

It is already clear in my mind that we need sustainable economic development along with sound financial strategies to recover from years of having no financial plan and Select Boards that are focused strictly on the present moment.  Whether it is clear or not, we have all been paying the price for this lack of strategic thinking, and we will continue to do so for a very long time unless we make some very difficult decisions this year and going forward.  Strong and effective leadership is needed if we are to work collaboratively to restore Ashland's financial health and promote sustainable economic development. 

Did Dan Golden Resign?

We received this comment from an anonymous source.

So did Dan Golden resign or not? I hereby say that I resign - 

get someone else in here as selectperson but then he went 

on to the private part of the meeting??? if he goes I hope 

he takes the rest of them with him.

We Are Open for Business

"Ashland Speaks" is open for business.  The Select Board has decided to exclude public comments from its agenda and is requiring that residents submit their comments and questions in advance.   The Coalition has always believed that transparency and public participation strengthen the democratic process.  We are again making the blog available for those wishing to enter into the public discussion of the issues.

A Time for Action

After the March 2012 election, in a spirit of cooperation and constructive action, we made the decision to suspend the Ashland Speaks Blog and Coalition for Action.  I have personally refrained from making comments at the Board of Select meetings, despite many concerns, that might in any way seem controversial.  I told Jeanette Stewart on the night of election (where she had defeated me in my bid) that I would work with her.  I watched and waited for the creation of the Capital Improvement Plan committee (promised by Ms. Stewart during the campaign and voted for in the election), which was delayed for four months after the election.  I still wait for the promised economic development committee, also promised by Ms. Stewart.  I listened to her at the first Board of Select meeting after the election as she announced that there would be no discussion of “history” because there were too many important matters to attend to going forward.  I have now observed more than nine months of meetings waiting to hear discussion about any of those “important” issues.  Alas, now we are in a position of being banned from making any comments at the BOS meetings. 

To be sure, we have been told that we can submit comments and questions two weeks in advance of the next meeting.  I suppose that legally, the Board can make this decision.  But, even if the issues are addressed, there is absolutely no opportunity for discussion in real time.  I can envision a scenario whereby one comment addressed two weeks after submission will lead to a new comment addressed two weeks after that, and so on, leading to endless discussion.  Is this efficient?  So where do we go from here.  I submit that in a truly democratic society, the public’s voice must be heard.  The Ashland Speaks blog is just such an avenue.

The Ashland Coalition for Action was established for the express purpose, among others, to create transparency in local government.  I’m sorry to say that to date we have failed.  In light of recent actions, it is time to renew that purpose.

Fran Newton