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Financial Plan Working Group Keeps Searching
“There are no bad ideas” ~ Phil Totino, Co-Chair
 

By David Hamacher


     August 22, 2007 — As a follow-up to their meeting three weeks ago, the Financial Plan Working Group (FPWG) met this afternoon at Town Hall to mark the progress made since their last meeting and to plan critical next steps in the process of corralling the ‘structural deficit’ that plagues Hopkinton and most other neighboring towns.
     Co-chair, Mr. Phil Totino brought the meeting to order just after 4:00pm with a review of the action items mapped at the previous meeting. Principal Assessor, Mr. Bob Bushway reported that he had given revised commercial revenue projections to Town Accountant, Ms. Heidi Kriger who then tweaked the financial projections model with those figures as well as reconfigured several other assumptions.
    Mr. Gary Daugherty, Fire Chief and acting Town Manager, had been tasked with investigating what other towns have done to address the gaps between their revenues and expenses. From Milford to Southborough, to Northbridge to Holliston, Mr. Daugherty reported that budgets had been increased, some have a dual tax rate, streetlights have been shut off, teachers and town staff positions have been cut, some teachers were reinstated in Holliston, Southborough doesn’t have a stabilization fund, and their recent override failed. “I think it runs the whole gamut and it includes everything that we’ve done,” he said.
     The question regarding the 10% assumption in annual increases for utility costs was raised and Mr. Totino responded. “I went back five years in reviewing the schools’ costs and found that compounded annually, the increase was 11%. Five years was the farthest I could go back for the schools. So I looked at my personal costs and found that for the past five years, utilities did increase annually at the same 11%. I have natural gas and the costs have exploded. When I went back another five years, the costs were basically flat.”
     “So what do we do with this assumption now?” Mr. Totino asked. “Do we take the 11% or do we take the average?”
DPW Director, Mr. J.T. Gaucher added, “The assumption should include fuel costs as well. I think the assumption for both the fuel costs and utilities should be 6%. So the model will be adjusted for the revised assumption.
     Mr. Totino then reported on all of the suggestions he had received at and since the last meeting. He detailed the starter list of 16 ideas for revenue enhancement, and 9 ideas for expense reduction, and then invited all members of the town boards and committees who were present to add to the list today. “Listen, there are no bad ideas,” he said. “Let’s get every possible idea out there on the table, we’ll investigate them, and move on with the ones that make sense.
      During the discussion, the list for revenue enhancement grew to 21 items with a few overlapping, and the list for expense reduction grew to 11, ranging everywhere from lobbying the state to repeal the telecom tax exemption, selling off pieces of Fruit Street property owned by the Town, selling naming rights to buildings/halls/fields to leasing space for cell phone towers on the revenue generation side.
     On the expense reduction side there were ideas such as restructuring health insurance premiums, combining services with neighboring towns, instituting cooperative purchasing, developing wind and solar power sources, and looking into reducing litigation expenses.
       Put as action items for the next meeting, now scheduled for Wednesday, September 19th in town hall, were for team members to research the cost/benefit and timing of ideas for closing the revenue/expense gap, reconcile the previous Legacy Farms projections with the internal projections, re-run utility costs projections using 6% annual increases and for school business manager, Mr. Geoff MacDonald to explain budget increases scheduled for FY 2012 and, provide the projected change in number of school employees so the attendant benefit packages could be adjusted downward, given the projected student enrollment decline for the next ten years.
      Mr. Totino repeatedly reminded the group of his earnestness in demonstrating to the public his desire to show that every idea for both revenue enhancement and expense reduction had been both explored and properly vetted. Please forward your sincere idea suggestions for either side directly to Mr. Totino at ptotino@comcast.net .

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