ROSA - 2001 Candidate's Forum


					Ridgefield Open Space Association Elections Committee Candidates’ Forum – October, 2001 Board of Finance Eight questions were submitted by ROSA’s Elections Committee to all four candidates for the Board of Finance: Republicans Andrew Bodner and Joe Savino, and Democrats Mike Jones and Joanne Murray. Many of these questions do not relate directly to ROSA’s primary mission of open space preservation. However, the ability of the Finance Board to manage the town’s finances effectively and efficiently will have a direct bearing on our ability to protect our remaining open space land. 1. The town has taken on a large amount of school bond debt to finance multiple simultaneous school building projects. What is the Board's role in long term fiscal planning? Bodner: Per the Town Charter, the BOF is "the chief financial and budget-making authority of the town with a primary responsibility of establishing and maintaining the town in a sound overall financial condition." Long-term fiscal planning is central to this process and an important function performed by the Town Controller under the direction of the BOF. The Board is responsible for evaluating the Town’s capacity to issue new bonds or change the mill rate and making recommendations on how to finance new capital expenditures. Neither the Board nor Voters can develop considered, well reasoned opinions about the financial impact of capital projects like building a new school or acquiring open space such as the Bennett’s Pond property, or financial engineering like refinancing Town bonds, without having a long-term forecast of anticipated future revenue and expenses on which to assess the impact of any proposed new expenditure. From my CFO experience, where I managed and raised several hundred million dollars of budgets, I know that small changes in long-term assumptions have dramatic effects. The Board is responsible for ensuring that the forecasts are prepared using conservative assumptions and presented in a clear and understandable form that fairly reflects and fully discloses the underlying assumptions. Jones: The Board of Finance has three crucial roles: (a) to determine the best source of the town’s funds (taxes, bonding, town surpluses, etc.); (b) make sure the town collects any and all revenues to which it is due; and lastly (c) make sure the taxpayer’s money is spent carefully and prudently. It is vital the Board accomplish all three of these tasks equally well. It is equally obvious the current Board has failed at all of them. Here’s just one example. For a number of years the town’s funds have been invested at very conservative, low-return investments. My preliminary numbers suggest these ultra-conservative investments will cost the town about $400,000 in 2001. Maximizing the town’s return on these investments is obviously part of the long-term planning duties, and the Board has failed at this task. The Board of Finance has become the heart of the "old boy’s club" of Ridgefield, and my opposition is promising more of the same. That is the last thing Ridgefield needs! We can’t take any more after-the-fact budgeting; quibbling over program details; personal attacks on programs and people they don’t like; and an "analysis-paralysis" which leads to a lot of wrong answers. We need new faces, new voices, and a new professionalism in our Board of Finance. That’s why Joanne Murray and I are running as a team -- because trying to change the Board with one vote is an exercise in futility. For maximum results, I’m asking voters to select BOTH Joanne and I, to work together for a better Board of Finance. For example, we need a Board which understands cash flows, profit and loss, and modern financial management techniques. We need a Board of Finance which communicates with the other Boards and makes them aware of the impact of their decisions. We need a Board which operates in a modern, professional and business-like manner and is able to collaborate with the other Boards and Commissions. It wouldn’t be bad to have a woman’s perspective on the Board, and it sure wouldn’t hurt to lower the average age of the group, either. We haven’t had a modern and effective Board of Finance for years, but we will, starting on November 6th. Murray: As defined by the Town Charter, the Board of Finance has the responsibility of keeping the town in a sound financial condition. To do that, the board must take a proactive role in planning for the future. The Board of Finance must work with the other arms of town government to set (at a minimum) a three-year financial plan of funding needs. If we had planned for the population growth (instead of debating the accuracy of the experts’ projections), we may have been able to avoid the need for the "bundle". The board must not operate exclusively to minimize short-term costs. The board must balance short-term and long-term financial effects. Savino: The town charter section 10-2 defines the key duties and responsibilities of the Board of Finance. "It shall be the chief financial and budget making authority of the town with a primary responsibility of establishing the and maintaining the town in sound overall financial condition." I believe that the Board is responsible for maintaining the towns short term and long term financial strength and ability to meet its obligations. 2. Should the Board of Finance be involved in the capital budget-making process from the beginning, or wait to act on the finished product, as it does now? Bodner: Advocates would have a better understanding of potential BOF concerns and the BOF would have a greater understanding of the underlying assumptions if the BOF were involved earlier in the process. In a small Town largely run by volunteers, it is a shame that turf concerns have resulted in the present "Here is the Finished Product" approach. Better communication between the BOF and other Town Boards and groups are one of my key campaign pledges. Take open space as an example. Today you can estimate the available land for open space purchase now and in the future. The number of acres is finite. So you can anticipate the needs for open land purchase and factor that into long range financial planning. Jones: The way the Board works now is dysfunctional, disrespectful, inefficient and unprofessional. It must communicate with the other Boards and Commissions BEFORE the budgets are prepared, not after. Imagine a highway with no posted speed limits. Before a cop stops you, it would logical to ask what the speed limit might be. If the cop was the Board of Finance, their answer would be, "We’ll tell you when you go over it." That’s just a nutty way to run a $70 million business. Before anybody else in town, the Financiers know how the town’s cash flow is changing. It knows about the rate of tax collections and defaults. It knows about growth in the grand list. It knows about the ebbs and flows of our long-tern cash commitments (investments and spending). It alone knows all the updated statistics which make budgeting possible. But heretofore, it has kept that information secret, and that is wrong. It makes enormous sense that the Board should be able to provide financial guidelines to the other Boards and Commissions BEFORE they start their budget deliberations, WHILE they evaluate their options as well as AFTER the final package is assembled. But, to date, our Board has not. That will change after November 6^th. Murray: The Board of Finance, the Board of Selectmen, and the Board of Education (if applicable) must jointly be involved in the planning of future capital expenditures at the point of concept/inception. If significant additional expenditures are needed, the town should rely on the referendum process to decide whether or not to move forward with the project. Once the decision is made to fund a project, the Board of Finance must plan to secure funds in order to minimize the financial risks. Of course, the Board of Finance has the responsibility to assess and to communicate the financial implications (best, worse, and most-likely cases) of each major project. Savino: When the economy was booming, the town grand list was increasing 3% annually, the town had little debt and a large surplus, the Board of Finance’s current management approach worked well. The current economic environment and 150 million debt require a more positive, proactive management approach and partnership with other town boards. This is best achieved by working together with other town boards on both short term and long term capital planning, with a tighter focus on delivering more value for the least possible cost. 3. The current Board of Finance devotes a considerable amount of time to reviewing line items in town budgets, although our Charter does not provide for line item vetoes. Is this their proper function? If not, should detailed reviews of department budgets be undertaken, and if so, by whom? Bodner: The Charter is clear that the Board’s objective is "prudent management of the overall fiscal situation and not how or where specific amounts are budgeted." The Board is also charged with monthly departmental budget reviews to ensure that the departments are operating within their approved budgets. As the Town’s chief budget making authority, reviewing budget details is a financial function that is clearly a BOF responsibility. This doesn’t mean setting the Town agenda, which is the Selectmen’s role. It does, however, mean careful review to ensure that what has been proposed can be accomplished within the proposed budget; and also monitoring actual expenditures to ensure that money is being spent cost effectively and consistent with the voter approved budget. There is no other financial watchdog group charged with this responsibility and it an important function of the BOF. Jones: This is a simple question with substantial implications. In my mind, the Board does not have and should not have a line-item veto. However, the Board has created one by having the individual department heads and commissions report to them with their detailed budgets. This must stop. Those Boards and Commissions should make the policies and decide how their funds should be spent. The job of the Board of Finance is only to determine if the total sum is affordable, and what the source of the required funds might be. This is best done by communicating in advance what the total available funds will be, and the implications of crossing the line between affordable and extravagant. Murray: It is not the Board of Finance’s responsibility to perform line-item vetoes. That is the responsibility of Board of Selectmen and the Board of Education for their respective budgets. As defined by the Town Charter, "The board’s objective in these considerations is prudent management of the overall fiscal situation and not how or where specific amounts are budgeted. Therefore, any changes made to the budget requests…shall be limited to total amounts at department, board, commission or agency level and shall not address specific items." (Article X, Section 10-3, Paragraph 3) Savino: Per the Town Charter (Section 10-3), the Board of Finance recommends the final town budget and mill rate that Ridgefield citizens vote on. In order for me to feel comfortable asking the taxpayers to pay for something I need to know all prudent financial due diligence has been exercised. I also need to understand the results that are expected for the investment. The Board of Finance should hold management accountable for delivering promised results. Although I don’t want to micromanage other town boards, questions do need to be asked so that taxpayers understand how all the money is being spent and how it is benefiting them. 4. Should specific measures be taken to guard the town's AAA bond rating? How financially significant is this rating? Bodner: The Town’s AAA bond rating is a proud statement that the Town makes to the world, as well as to ourselves, about how great a Town Ridgefield is. In reflecting well on the financial integrity of the Town, it improves real estate values and makes the community feel good, and therefore we should do our utmost to maintain the rating. Having said this, let me note that the10 to 15 basis point higher interest rate that would result from a downgrading to AA would only impact the remaining bonds to be issued. This would mean an incremental $50,000 per year in interest expense, which in the context of our $75 million, going to $100 million budget, is financially insignificant. Jones: The town’s bond rating is determined by the two major factors: the spending the town plans, and the ability of the town to pay for that spending. Fortunately, Ridgefield is a wealthy town, and our ability to pay for the funds we have borrowed is undiminished. At either our current and projected levels, there is no risk to our highly-valued AAA rating. But there is another risk: one to our elderly. Taxes are going to climb 40% in the next five years, no matter who is on the Board of Finance. At that rate, many of the town’s elderly will not be able to afford to live in their family’s traditional homes. Many may give up altogether, and move to other towns. This cannot be allowed to happen. When elected Joanne Murray and I will work hard to develop and implement a fair, sustainable and meaningful senior tax credit. I propose the source of those funds be some of the tax revenues generated by the development of the commercial property at the south end of Bennett’s Pond. Murray: The board definitely should act to protect the town’s AAA rating. Many investors are required only to keep AAA rated bonds to be part of their portfolio. Other investors simply desire the security of that rating. The challenge, however, is to determine what are the specific actions needed to guard the rating. Members of the current board argued that the rising debt associated with the "bundle" would cause the town to lose the AAA rating – that did not occur. Debt alone is not the issue. The town’s ability to pay off the debt is. I believe the way to protect the AAA rating is to keep the town as a desirable place to live – provide good schools, preserve open space, and manage the taxes rate so that residents and business want to stay in town. Savino: (a) Specific measures for protecting the towns bond rating start with maintaining strict accounting standards on expense and capital. Since the school building projects are 120 million of the town’s 150 million debt, the town should hire an owner representative to ensure that the individual building project plans, cash outflows and building milestones are being met, and the projects comes in on time and on budget. Additional focus should be given to labor contracts to ensure pension funds remain as strong as they currently are. The budget process should be an on-going facility for improving the delivery of town services in the most cost-effective way possible. An annual review is simply inadequate. (b) The top bond rating has tangible and intangible benefits. The quantifiable benefits include a lower borrowing cost on town borrowing. In addition, the town’s financial strength will help us negotiate better terms from our suppliers, since there is no perceived credit risk. The intangible benefits to the town is a AAA rating helps real estate values and attracts new employees to Ridgefield as we compete for the best talent. It is also a source of town pride to be one of only ten towns in Connecticut to have a AAA rating. 5. Should a special open space fund be created to finance future land purchases? If so, what means would you use to fund it and how much should be appropriated annually? Bodner: My personal view is that Open Space is an important Town issue that should ultimately be put forth to the Town residents in the form of a referendum. If the issue came before the BOF, the question should be evaluated in the context of its impact on the total proposed Town budget. As I stated before, this should be and can be anticipated so money can be planned for in the future to be available for this need. It does not necessarily require a Trust as much as a good strategic plan for purchasing land. At this time, however, the whole open space question rests with the Board of Selectmen, who are charged with setting the Town’s priorities. Jones: Actually, there is a special fund and it already has been funded by the Selectmen. Sadly, the funding is a pittance -- $10,000 by my memory. The town should have a substantial and consistent approach to open space preservation. These funds should be budgeted annually, just like the town budgets for road repairs. I propose the Open Space funding come from the additional income generated by improved returns on the town’s investments -- this might generate $250,000 annually. This is another example of solid, consistent and thoughtful long-term planning, which both the current Board and my opposition seems to be unable to understand. At the same time, the Town’s willingness and need for Open Space is not open-ended. The Bennett’s Pond property is a brilliant acquisition. The efforts on McKeon farm are noteworthy, and I can thing of other important properties, down towards Branchville and on Silver Spring Road, that are deserving of protection. But the town cannot protect every tree or field in town, nor should it be asked to. Nonetheless, in the spirit of the question, I think the town should budget as much money for open space as it budgets for road repairs, which recently has been about $1 million annually. Murray: There should be a special open space fund created to finance future land purchases – we definitely need to plan for this. The financing should be a combination of private and public funds. We should strive to generate incremental revenue dedicated to open space preservation, without raising taxes. One way is to rebalance expenditures in the current budget. Another idea is to institute a one-time fee (on a graduated scale), paid for by the buyer (not seller) of property in Ridgefield. Preserving open space and curbing growth rates are important, and fiscally responsible, goals for our community. Savino: Given the demands of the school expansion and staffing, servicing the current debt and maintaining our current town services, I don’t think it is feasible at this point to start a town funded open space fund. However, I am in favor of continued targeted land acquisitions through a combination of private, state and some limited town funding. While on the Planning & Zoning Commission, I sponsored and voted for raising the town open space objective to 30%. I have always supported targeted land purchases such as Brewster Farm, Ippoliti, the 100+ acres at the high school, Great Pond, and most recently Bennett’s Farm. The Conservation has a list of potential properties such as McKeon’s Farm, which with the help of some private and state funding, should be the Towns next potential acquisition if the price and funding are right. 6. Is the present system of tax concessions to seniors adequate? Should changes be made? Bodner: This Town should do everything reasonably possible to ensure that the projected tax increases do not result in forcing any seniors to leave the Town. I support programs directed at assisting those in need and I also believe that the Town should develop more senior citizen housing options. Jones: Picking up on my earlier comments, the present system is not adequate, and is going to become even less adequate as the tax burden increases. Last year, the Board of Finance discarded a reasonable and prudent elderly tax credit which had been approved by the Selectmen. Finally, after great deliberations, an increase of $37 a year was approved. Well, you don’t have to be a financial expert to know that this year’s tax increase will devour that $37 in the blink of an eye, leaving our seniors in even more precarious positions than they are now. This is a good example of "straining at a gnat but swallowing a camel," a process at which the current Board excels. Real change is hard and requires more that $37 of window dressing. We need a sustainable, affordable tax credit in the $2,000 annual range. We should fund it from the general budget, just as we repair our roads and staff our schools we have to keep the seniors in our town. This is not a courtesy or a good attendance award; this is a do-or-die decision to protect the character of Ridgefield. Murray: The majority of seniors to which I have spoken feel that there should be increased effort to ensure that seniors can afford to stay in Ridgefield. Obviously, the benefits of the current credit will diminish as the tax burden rises. One suggestion is to develop a credit based on needs. The logistics of assessing income might be very cumbersome, but is worth analyzing further. Another idea is to create a credit for the elderly based on number of years of residency in town. I support tax fairness for those elderly, and will work in partnership with the Board of Selectmen to develop a plan that will be both fiscally responsible and fair to seniors. Savino: The present system of tax benefits needs to be improved immediately. It is the seniors who made this town what it is today and they should not be forced out by escalating taxes. Seniors contribute in numerous ways to the community. There are several programs in the elderly tax benefits. Let me go through what I think we should do with two of the key programs. First is the current $787 elderly tax credit. The town grand list has consistently grown tax revenue over a million dollars per year. We can easily afford to raise this benefit $100 per year (annual cost $110,000) each of the next three years and then index it to town grand list growth. This would represent a 40%+ increase. There is no income means testing on this program today nor should there be. This should then be indexed to grand list growth. The second key program is the town elderly deferment. This program sets a means test of $55,000 in annual income as a requirement. This level should then be indexed to the inflation and adjusted annually. We also need to lower the interest rate charged to elders who defer their taxes. I am also proposing is to change the rules which states that you have to own your home for one year before becoming eligible for the elderly tax credit. This language has unfairly penalized longtime Ridgefielders who have sold their home and downsized to a smaller townhouse. The rule should be if you are a resident for 1 year you could claim the tax credit once. In addition to tax credits as a Board of Selectmen I proposed expanding Ballard Green by 12 units. This needs to be done now since the seniors have waited too long. The combination of increased tax credits and additional senior housing will result in longtime residents remaining in Ridgefield. 7. Last February, the Board of Finance refused to allow a referendum vote requested by 17% of the electorate. How accountable should the Board be to the will of the voters? Bodner: The Board is elected and fully accountable to the voters - The voters should expect and demand that members perform professionally. The will of the voters speaks every election where Board members can be voted on and off the Board. However, without defending the current Board, with whom I agree on some issues and disagree on many, I would like to point out that serving on the Board is a time consuming, volunteer job. I think that anyone willing to devote the time and make a sincere and diligent attempt to execute the responsibilities of the position should be applauded. Jones: Of all the issues in town, this is the one which I found most alarming and it was the prime catalyst which motivates me to run for this Board. That meeting was just one example of the dysfunctional manner in which our Board operates. Sadly, Messrs. Savino and Bodner promise more of the same, and that’s a shame. Let’s be perfectly clear about this. According to state law, Ridgefield has a constituted "legislature" and it is called a town meeting. The state says the town meeting (and it’s extended form, the town-wide referendum) is THE final authority of government in Ridgefield. The petition should have gone to the people, regardless of the feelings of the Board. But it gets worse. In my mind, the Board of Finance violated the town charter by disavowing that petition. It attacked 400 years of New England history by undermining the sanctity of the town meeting/referendum. By claiming they knew more than the voters who signed the petition, they imposed the will of the few onto the many, which is a direct attack on democracy. Most egregiously, at subsequent meetings they publicly gloated about their success at stopping the referendum, in the name of protecting the financial health of the town. I hear my opposition suggest that the Board wasn’t 100% wrong -- that maybe their concerns about costs, law suits and lost tax revenues had merit. Well, maybe they did. And if they did, it was up to the voters to decide, not five grumpy old men. I trust democracy… the real question is why my opposition doesn’t? Murray: The Board of Finance should be 100% accountable to the will of the Ridgefield voters. Period. Savino: The Board of Finance is an elected body and is accountable to all Ridgefield citizens. The fact there are two new Republicans, Andrew Bodner and myself running for the Board of Finance shows the electoral system works and the accountability is there. 8. It has been said that the current Board of Finance has attempted to set public policy by usurping decisions that should be made by the Board of Selectmen and/or the Town Meeting. Please describe your view of the appropriate role of the Board of Finance within Town government. Bodner: Repeating what I have said above, the Selectmen set the Town agenda and priorities, not the BOF. In fulfilling its fiduciary role of chief financial and budget making authority of the town, the BOF must review and question proposed budgets. As with all levels of government, there are checks and balances to ensure that no one branch of government can have too much power and usurp the will of the people. The role of the BOF is part of that check and balance system. As is true in all levels of government, performing this balancing role creates tension between government branches, but I believe that all of the Town’s elected officials share the common goal of ensuring that Ridgefield remains the finest community in Connecticut in which to live and raise a family. Jones: Speaking globally, the Board of Finance is the third leg of the triumverate of town government; the Board of Education and the Board of Selectmen are the other two legs. The Financiers offer a counter-balance to the enthusiasms of the other two Boards, and help keep taxes stable and Ridgefield affordable. But the Financiers have struggled with their mission and their processes. For example, they apparently have no knowledge of, nor interest in Robert’s Rules of Order. Their understanding of the Connecticut Freedom of Information Act is clearly deficient. Their blatant violations of the town charter demonstrate a certain unwillingness to learn. Add this all up, and you have an in-bred group of people who fail in their sworn duty to represent the best interests of the town. This ends on November 6^th. When Joanne Murray and I are elected to the Board of Finance, it will signal the beginning of a new age of professionalism, planning and perspicacity. The old-boy’s network will crumble, and a new team -- dedicated to getting the voter the best value for their dollar -- will be seated. And then Ridgefield will finally begin to get the government and leadership it has so long desired and deserved. Murray: The Board of Finance has the responsibility to protect the financial soundness of the town, not to set the town’s objectives and goals. If the town – the voters, the Board of Selectmen, and the Board of Education – chose to support a project, it is the role of the Board of Finance to implement that policy in a fiscally responsible manner. The board must ensure that the voters understand the financial risks and impacts associated with each policy so that our community can make educated decisions. Savino: The Board of Finance is the town’s chief financial and budget making authority. The Board recommends to the town the recommended spending and mill rate for public vote. In my view, the Board of Finance’s role is one of positive, proactive partnering to assist the other town boards in delivering the best possible service to Ridgefielders for the least possible cost. Although the board is responsible for doing prudent financial due diligence, the Board should not get into micro management of individual town departments. The Board of Finance needs to improve communications with both the public and other town boards. This also means more proactive meetings and dialogues with the various town boards to discuss short term and long term funding requirements as well as how results will be measured and reported to the public. In the end we all want what is best for Ridgefield.