Friday, February 28, 2014

Southbridge Town Council: Budge It On Town’s Budget

Ken O’Brien

The gravy train is coming to an end folks!

For those of you who have been asleep for the past four months, we found out that the landfill wasn’t the $100 million bonanza we were originally promised.

For three years I’ve been trying to wake you up to the fact that bemoaning the tax rate when it is set in December is a fruitless exercise. That tax rate is effectively set in May when the Town Council adopts the budget.

Nothing better illustrates the abject profligacy of the town council in managing Southbridge's finances in recent years than the following remarks by Town Council Chairman David Langevin at the Council’s most recent meeting on February 24.

video


Think about that for a minute. Last year we spent $350,000 more than Webster on snow-plowing and removal. That’s over 1/3 of a million dollars! (P.S. I'd love to know what those "rumors" were to which Chairman Langevin alluded.)

I’m going to take a little credit here.

When I started this blog I began comparing Southbridge to other local communities in relation to property tax rates. Two years after I started doing that our Chief Assessor added that comparison to his annual presentation on setting the tax rate.

Now the Council Chairman has adopted that practice by comparing our snow removal spending to that in a neighboring town.

This is not something revolutionary.

When I was the Director of Research for The American Stock Exchange I regularly prepared studies of how our Exchange handled the trading of a given stock relative to comparable securities. In this way we were able to determine our efficacy in handling such trading on behalf of the management of those companies. We called this practice “peer analysis”.

As we enter our next budgetary cycle, and, effectively, the setting of our next property tax rate, perhaps councilors should consider applying this practice to a broader range of the budget’s line items.

Take a look at things like staffing and payroll at the town hall, in the police and fire departments, and DPW relative to comparable communities. Evaluate contracted services relative to other towns. Compare variable and fixed costs. (Please suggest other areas for review - and don't neglect the school side.)

In other words, do some basic comparative financial analyses to justify your budgeted line items before you send us a tax bill to pay for them. 

To help get you started I’ve prepared the following interactive chart to help you select other communities to compare to Southbridge. If you don’t like the choice of towns, no problem. Just click on a given town and you’ll get a list of other comparable communities in Massachusetts as well as other states. You can also modify the selection criteria to suit you. Finally, you can click on “[details]” to get more information on any given town.

Southbridge Statistical “Peers”

City, State 1
Go To
City 2
One
Person Houses
65+
College Grads
Average
Commute
Minutes
Median
Family Income
Non White
Pop.
Poverty
Prop. Crime
Seasonal Housing
Viol. Crime
29.7%
15.1%
12.5%
       25
$41,863
14.8%
17,214
15.4%
19.9
0.3%
4.1
31.7%
16.7%
15.9%
       26
$48,898
5.2%
16,415
11%
22.8
2.8%
7.4
32.3%
16.1%
15.2%
        25
$47,164
6.9%
20,770
9.6%
25.9
0.4%
5.9
28.8%
15.5%
13.5%
        24
$49,358
3.2%
12,497
7.9%
21.9
0.6%
3.2
25.9%
12.4%
17.7%
        29
$56,763
2.1%
11,691
8.6%
13.6
2.5%
3.2
23.6%
11.2%
17.7%
       27
$58,973
3.4%
13,352
7.8%
7.3
0.4%
2.9
24.6%
16%
17.8%
        25
$62,564
2.8%
12,784
6.3%
13.5
0.5%
2.7
28.6%
17.2%
13.3%
        26
$41,061
3.7%
11,299
9.4%
13.5
1%
4.3


1. Click on town to find peers for that community in MA and other states.  2. Click on “[details]” for more detailed information about given community.

The town’s budget is the most critical document with which you deal every year. Here’s a mechanism to help you analyze it from a meaningful perspective.

Go to work. You wanted the job, now do it. I’m sure that I’m only one of many who is tired of paying the freight for the gravy train.

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