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.