Governor’s Budget

Last Wednesday Governor Romney released his proposed budget for Fiscal Year 2007. While we have a long way to go before the state’s budget is finalized, community leaders throughout the state got a first, important, look at what they can expect to get in the form of state aid just as the process of preparing local budgets moves into high gear.

For the second year in a row the State’s revenues have increased significantly. The Governor is proposing ending the diversion of lottery money, directing 100% of the proceeds to cities and towns as the legislation establishing the lottery intended. Chapter 70 aid to education will increase by approximately $166 million dollars, and the Governor is offering a change to the formula which determines a community’s share. He wants to add an “ability to pay” component to the formula, giving it equal weighting with property value. It is not yet clear whether Milton, which has long been unfairly treated by the current formula, will benefit.

Despite this good news the sad fact is that state aid remains below what it was 5 years ago in fiscal year 2002, just before the recession. The Massachusetts Municipal Association estimates total local aid to be $400 million less than in that year on an inflation adjusted basis. Since that time Massachusetts communities have cut thousands of jobs, more than any state in the country, and have raised property taxes to prevent even larger cuts.

But what about the picture for Milton? The Patriot Ledger reported on the budget numbers for South Shore communities (the numbers for Milton were incorrect). A chart listed Milton as receiving a 20% increase, one of the largest south of Boston. Milton received a $232,000 increase from last year in Chapter 70 education aid. But the total is $200,000 less than we received in 2002 (close to $700,000 if adjusted for inflation). We join half of the commonwealth’s communities receiving less education aid today than 5 years ago. We also received a $388,000 increase in Lottery Aid resulting from the end of diversion. And in probably the most pleasant surprise, we received a $500,000 increase in PILOT, or payment in lieu of taxes for the large amount of land in the town owned by the state.

This new money for Milton, which began last year with a small award of $9,000, is the result of a great deal of hard work by many people. The idea of securing money as recompense for state land from which we can derive no taxes has been discussed and proposed for many years. A few years ago a committee of Milton residents formed to aggressively pursue both PILOT and a better Chapter 70 funding formula at the State House. Calling itself “Fair Funding For Milton”, the group consisted of Laurie Stillman, Glenn Pavlicek, Beirne Lovely, Ada Rosmarin, Jim May, and Natalie Monroe. They took their case to then House Speaker Tom Finneran as well as to anyone who would listen. Their persistence helped make it possible for Senator Brian Joyce and Representative Walter Timilty to have Milton added to the list of communities eligible for these funds. The sum of $500,000 is significant and these individuals deserve the thanks of the community.

In total Milton would receive an increase of $1.1 million in State Aid under the Governor’s budget. This is certainly an improvement over recent years, even though it is still less than we received in 2002. Unfortunately that’s not the complete story. Each year when the state budget is discussed media outlets cover the local aid numbers and do a good job of reporting each community’s total. What they never discuss is the fact that with the state revenue comes state charges, or what they call “assessments”. Each year the state deducts from the local aid amount the cost of various charges incurred by the state on behalf of communities. Milton, for example, will this year pay $1.5 million for MBTA service. We’ll pay almost $200,000 toward the costs of County Government. And we’ll pay $1.5 million for the cost of Retired Teachers Health Insurance. This item alone increased by $385,000. When you look at the numbers proposed under the Governor’s budget and compare it to 2002 you see a less rosy picture than looking at local aid alone.

-----------Local Aid-----------Local Aid Assessments -----Net Local Aid

2002------$8,596,535-------------$2,454,729----------------$6,141,806

2006------$7,464,011-------------$3,015,970----------------$4,480,863

2007------$8,564,962-------------$3,460,870----------------$5,104,092

The proposed local aid for Milton is roughly $30,000 less than it was 5 years ago. This is a significant difference when you consider that even a modest factor for inflation makes that an $850,000 dollar difference in today’s dollars. But the real problem is what I’m calling Net Local Aid. This is the amount we can actually spend on our local budget. While state aid is essentially flat compared to 5 years ago, assessments charged by the state have grown over $1 million. And the amount of money we can actually spend on local needs is over $1 million less than five years ago, and only $623,000 more than last year.

Sorry for all the numbers, but I’m afraid the coverage on this topic might be unintentionally misleading. We are going to be faced with another difficult budget year. A number of town departments – Schools, Police, Fire—have submitted budgets which seek to recover from losses over the last few years. The increased state aid, while a small help, is not going to get us there. If we want to reduce class sizes in the schools, put more Police on patrol, and properly staff our Fire Department, we’re going to have to consider the first operational override in five years. The Town Administrator has proposed an intriguing option to address our town finances which I’ll address at another time. The presentation of this can be seen here:

http://www.townofmilton.org/Public_Documents/MiltonMA_BComm/06%2001-27%20Strategic%20Fiscal%20Plan.pdf

One final point. The Governor has been touting increased revenues during the past two years as justifying a tax decrease as voted in 2000. At the time that vote was taken the state was rolling in money. We’d had years of ever growing revenues. The state had a full rainy day fund. Communities generally had sufficient levels of personnel to conduct the basic business of government. Since then 6,500 employees have been cut, even after many cities and towns raised property taxes. Before the legislature considers any tax cuts, the state should use any growth in revenue to return local aid to the inflation adjusted level of 2002. Let’s not sacrifice our ability to fund necessary local services to the campaign resume of a Presidential candidate

DPW RFP - Finality!

On Monday January 9th, it appears the Board of Selectmen will be voting on the possible issuance of an RFP. This comes almost 9 months after a Milton resident offered to develop the DPW yard in response to the recommendation of the town’s Community Development Plan.

It is important to remember that should the Selectmen vote to issue the RFP—thereby officially seeking development proposals from all interested parties—the town is not in any way obligated to go forward with any concepts submitted.

At the last Selectmen’s meeting on December 19th, the subject of the RFP for the DPW Yard took up much of the long meeting. Twelve to fifteen residents--both supporters and opponents of issuing an RFP—addressed the Board during Citizen’s Speak. The Selectmen met with the Chair and a member of the Citizens Advisory Committee and painstakingly reviewed that committee’s recommendations. The Town Administrator presented his thoughts on the CAC’s recommendations and how they might be incorporated into a revised RFP. The Selectmen and consultant Jon Witten then discussed issues.

Opponents of issuing an RFP were largely abutters and their arguments often focused on concerns about the Milton Centre LLC proposal. These concerns are not really an argument against issuing the FRP, however, since its purpose is to seek ideas from all quarters, and it does not represent a decision making point on the initial conceptual idea which began this process. Some of the claims and concerns raised by abutters were as follows:

Predatory Development/Inside Job

It was suggested that the Town is the victim of a predatory developer with an inside track on final decision-making. A predator takes what it wants from a victim powerless to resist. The Town of Milton is neither a victim nor powerless. As a town we retain all the administrative, political and legal authority necessary to make our own decisions about what we want. The charge of an inside job is equally far-fetched. Are we to believe that somehow the majority of the Board of Selectmen, The Planning Board, The Warrant Committee and 2/3rds of the Town Meeting are all parties to what would constitute both an unethical and illegal activity? After all, an inside job could not be orchestrated without the Selectmen and Town Meeting members being involved. Opponents would do well to distance themselves from this conspiratorial tale.

Why the Rush? Let’s Plan!

I find it hard to fathom how taking 9 months to decide to take the first, non-binding, step to seek ideas for the DPW Yard is a rush. As for planning, the Community Development Plan deals specifically with the DPW Yard site. Now I know the CDP is not a master plan. But neither is it a housing initiative as opponents once claimed, nor an effort dealing only with commercial re-development, the latest effort to mischaracterize it. Communities all across the state have used the CDP process to plan all manner of commercial development, unrestricted in any way, and perfectly in keeping with the program’s intent. A community Master Plan is certainly more comprehensive than a CDP. It would look at virtually every parcel in the town. But the CDP did look at certain areas of Milton carefully. It did evaluate the DPW Yard and surrounding area and it did involve citizen participation in the process. A Master Plan would cost hundreds of thousands of dollars and take years to complete. Forgive me for thinking this is part of the attraction for those who oppose commercial development at the DPW site. Seeking proposals now follows the recommendations of our current planning for the area in question.

Let’s Do More Residential!

Some of the very same people who claim it is premature to issue an RFP without more planning, at the same time assert that residential development would be the best choice for the DPW site. So much for the need for planning! The RFP under consideration invites ideas for both commercial and residential development. So that decision does not need to be made now. I’m on record as supporting commercial development at this site, if possible. The reason is simple. We not only need more revenue, we need more diverse revenue sources so that we can alleviate as much as possible the future burden on the homeowner. Some pooh pooh the value of a commercial development that would produce $500,000 annually in tax revenue. They divide it by the number of households in town, or compute how many weeks of payroll it would cover. The underlying logic of this view is that only a commercial development at the DPW site that would, all by itself, solve our lack of tax diversity is worth considering, and that otherwise we should just not bother. I reject this view. It poses a false dichotomy. We must make progress toward increased commercial revenue through multiple efforts. We’re looking now at intense re-development in the Central Avenue business district. The Milton Village area offers similar opportunities. And we should undertake the long overdue updating of our master plan with a greater willingness to consider commercial development than we have in the past. So we don’t need to accomplish our task with one development. But we do need to consider the consequences of letting this opportunity slip away. The residential development of the DPW Yard will remove more or less permanently from consideration one of the few large parcels of land remaining in Milton suitable for commercial development. Such action would be astoundingly shortsighted.

Traffic

One opponent offered a traffic analysis. This analysis has been posted at the opponent’s website since last summer. It concludes that traffic would increase by 33% on Randolph Avenue for the type of development proposed by Milton Centre LLC. It employs trip generation data from the Institute of Transportation Engineers. Unfortunately none of the calculations are shown, so it is not possible to determine how the conclusion was reached. Making calculations based on this data is complex, and requires a great deal of experience and training to use it properly. In any event, it is no substitute for a Traffic Impact Analysis which will have to be done in some form before anything is done at the DPW site.

Traffic is indeed potentially one of the most series issues to be dealt with. The Randolph Avenue and Reedsdale Road area does have high daily traffic counts today. I live on Reedsdale Road. I travel these roads every day –in the morning, at noon and at the end of the day. Those traffic counts are driven by the peak hour times of morning and evening rush hour during the work week. Part of any traffic analysis would be an assessment of a development’s impact on those peak hours. And part of any analysis would also include ideas for traffic mitigation and control. Potential traffic concerns are not a reason to refrain from issuing an RFP.

Lost Revenue from Abutters

Neighbors of the site have many times stated that a development of the Milton Centre LLC type will reduce the values of their homes and thereby reduce tax revenue to the town, making commercial development less of a revenue aid.

On the first point, it is simply not the case that this is a likely result. Whatever becomes of the site as a result of this process, it will certainly be more attractive than the old, quasi-industrial DPW Yard. Provided that care is taken with buffers, that the effects of light and sound are minimized, and that we properly assess and mitigate the traffic impact, there is no reason to believe that what has been offered as a certainty will in fact occur. Yes, perhaps some homes on Artwill street have been on the market for some time, with reduced asking prices, as at least one speaker noted. However, concluding that this is caused by the prospects of development at the DPW site ignores the slowdown in house price appreciation generally, rising mortage interest rates, growing housing inventories and time on the market. A friend in Milton has had her house on the market for 6 or 7 months now, and she doesn’t live anywhere near the neighborhood in question.

The second point, loss of total town revenue because of a decline in value of some homes, is simply not true. Any homeowner whose home value declines can apply and potentially receive an abatement. The abatement is funded by an Overlay Reserve fund maintained by the Assessors office. Should the abatement result in a lowered tax assessment on the property, and future lower taxes, that still does not effect the total tax revenue of the town. The town is entitled to collect the prior year’s tax levy plus 2 ½%, plus any new growth. A loss in value in some homes merely results in a reshuffling of the tax burden.


Reuse and Feasibility Study

The CAC recommended a Reuse and Feasibilty Study before issuing an RFP. Opponents obviously supported this idea. The Town Administrator, Selectmen and Consultant Jon Witten discussed this issue.

There are two important purposes for doing such a study, as described by CAC committee member Mark Boyle. The first is to assess the feasibility of potential uses for the DPW Yard against a set of components or criteria. The second is to engage citizens in the process and build support for any eventual recommendation.

In his comments on the CAC recommendations the Town Administrator recommended performing these two steps after submissions based on the RFP were received. The rationale is as follows. A Reuse and Feasibility Study performed before issuance of an RFP evaluates all potential uses and impacts for the DPW site. Partly for that reason it can be expensive (costs ranging from $75,000 to $250,000 were cited) and there is some question whether the benefits of the study justify the costs. The site in question is not appropriate for many kinds of uses. The general concensus seems to limit the options to dense housing, a commercial development of small to medium size or a mixed use project incorporating both. Given this fact, it seems more appropriate to evaluate the actual proposals we receive rather than spend money evaluating theoretical uses we don’t want or for which there may be no interested developer.

The process would work as follows. Once the proposals are received, they would first be evaluated for “feasibility”. This would be done by a committee, perhaps assembled by Consultant Witten. They would assess the proposals based on the elements suggested by the CAC in its recommendation. Those proposals deemed feasible by the evaluation committee would be forwarded to the Selectmen. The Selectmen would then do their own assessment and involve the public in meetings to discuss community character, impact, financial benefit, etc.

This approach garners much of the benefit of a Reuse and Feasibility Study without the attendant cost. Jon Witten, the experienced consultant hired by the Board of Selectmen, agreed that this was a valid approach to the process which he has seen used with a potential project of this size.

All in all, the December 19th meeting was a very important one for a community looking for alternative sources of revenue. It represented the culmination of a 9 month process of “preliminary investigation” which ought to result in the issuance of an RFP. Then we can decide as a community what we want to do.