Our suggestions to the Council on this year's budget

Many of our members showed up at the Legislative Council meeting on March 24th to offer constructive criticism of the Mayor’s proposed budget. We’ve collected those comments here for you and for the Council as well.

Town Fleet

As we all know, gasoline and diesel prices are skyrocketing and we need to meet this challenge head-on. As such, we would like to see the town

• downsize the vehicles in the fleet, matching the duty requirements of the staff to the smallest possible vehicle for the task;
• purchase fuel efficient vehicles or ultra fuel-efficient hybrids as vehicles are replaced and set a minimum fuel-efficiency rating for any vehicle purchase;
• consider investing in fully electric vehicles for staff travel on surface streets and for short distances; and
• require staff to carpool when using town vehicles or making trips for which we are paying mileage reimbursements.

Also, we’re aware of at least one instance in which a town employee was discovered to be siphoning gasoline from his/her town vehicle when it was parked overnight as his/her home. We recommend that all Town vehicles be parked on Town property overnight and on weekends to discourage this practice and to ensure the safety of the vehicle.

Quinnipiac

In addition to the PILOT funds it receives, New Haven has done a good job of making direct arrangements with Yale University to mitigate the financial burden a growing private school can place on municipal resources.

• Hamden is home to Quinnipiac, another expanding private university, but it seems that we have an increasingly fiscally unbalanced relationship with Quinnipiac as they acquire more properties, which reduces our property tax income, and increase their student population, which places additional stress on our resources.
• One such aspect is policing: Unlike other private schools, Quinnipiac utilizes our Town’s police force on its campus rather than its own. If the university has no imminent plans to establish its own campus police, we would like to suggest that the Town work with Quinnipiac to establish a fair annual rate for the use of our police officers on their campus. This will ensure that the students continue to have the same level of service but will also provide the Town and taxpayers with an equitable solution.

Energy Use – On-site generation

We would like to see the town install or contract solar arrays to generate electricity on-site at as many of our Town buildings as possible. The benefits of this are many-fold:

• The Town either produces a portion of its own energy or is paying a far lower rate per kilowatt hour than the currently negotiated rate with UI (as even in the case of contracted solar, we are not having to pay electricity delivery fees), saving money.
• The State has revisited its regulations and made it possible to offset the energy consumed from the grid with excess energy produced and given to the grid, making on-site generation extremely attractive on seasonal buildings (i.e. schools). This not only saves the Town money, but could be an additional form of revenue for the Town.
• Green energy credits (“recs”) made from producing our own energy can be sold on the open market, making the Town money.

There are also numerous opportunities to use solar-thermal as well, as it can be used to pre-heat water tanks for the ice rink to 180 degrees. The same technology could be used in the schools and other municipal buildings for showers, kitchens and sinks.

Energy Use – Efficiency

As we all know, energy is getting more expensive and we, as a town, can’t afford to waste it. As such, we would like to see the town

• pursue a performance contract (the last one proposed, though not accepted, would have actually made us money); or
• in lieu of a performance contract, conduct energy audits on every Town building, including those under the control of the BoE and gather recommendations for reducing energy use across the board;
• create and enforce a no tolerance policy for employees of the Town or BoE plugging in electronic devices not required to do their job;
• invest in low power-consumption PCs (such as those by Zonbu) as computers are replaced (such as those using solid state hard drives); and
• invest in and use software to control turning on and off all computers and hardware on the network.

Idling

The Town’s fleet consists of more than 100 vehicles (not including school buses operating throughout Town) and we spent approximately $410,000 on gasoline & diesel fuel last year. A government study published in 2006 estimated that from 2 to 30% of a vehicle’s fuel usage can be attributed to unnecessary idling. Obviously, many factors affect how much fuel is consumed while a vehicle idles, but regardless, any amount of unnecessary idling is illegal, wastes money, and contributes to air pollution.

• State law prohibits any non-emergency vehicle from idling for more than 3 minutes, unless the outside temperature is below 20F (includes diesel vehicles, cars, commercial trucks
• Residents regularly witness Town vehicles idling anywhere from several minutes to hours while their occupants read, complete paperwork, talk on their mobile phones, or simply go about tasks completely outside of their vehicles.
• Based on our total projected fuel usage for 2007/2008, if all Town vehicles followed the State’s Anti-Idling regulations, the Town could save from $8,000 to $120,000! (Savings does not take into account any savings we might also realize if our contracted school buses stopped idling while waiting outside of our schools.)
• Reducing idling also saves money by reducing wear and tear on engine parts because an idling engine is not operating at its optimal temperature. Letting a vehicle idle for more than 10 seconds wastes more fuel than shutting it off and restarting it.
• Thousands of dollars in savings can be realized without any budget items being cut by simply enforcing the existing State law both internally within Town departments and through policing.

Litter & Blight

I want to take this opportunity to speak in support of the new Litter Enforcement Agent position. The position has been needed for many years and provides a valuable service to the community. By addressing citizen complaints, and providing on-site education on recycling, solid waste disposal, bulk trash handling, electronics recycling and hazwaste handling this will help the town reduce litter and blight and increase recycling efforts.

I share the concern expressed by others that revenue is overstated in the Mayor’s budget. But I note that although the Litter Enforcement Agent is carried as an expenditure in the Legislative Council budget, page 94, there is no corresponding revenue projected from his activities. Is this an oversight, or do we need additional Council action to establish penalties, lien rights, etc.?

Also related to revenue, I would like to draw your attention to the “anti-blight” fines revenue in the Planning & Zoning budget, page 132. Planning & Zoning claimed that they collected exactly $10,000 in anti-blight fines this year, yet they only project revenues of $2,500 for next year, but the Mayor says they will collect $10,000. Clearly, the numbers do not add up. WIth increased enforcement staff, now is an ideal time for the town to take steps to impose higher blight fines and implement stricter compliance and collection procedures to maximize the ability of our Zoning & Litter enforcement officers to reduce litter and blight in our community. Perhaps the Council should consider adding community service to the penalty for littering.

I urge the council to closely examine and maximize this potential source of revenue. Reducing litter and blight can help us save tax dollars, bring in badly needed revenue, improve the morale of our residents and make Hamden a more desirable place for families and businesses to move to.

Increase Recycling

I am very concerned that revenue has been overstated in the proposed budget. As a result it is crucial that we reduce costs. One way is to cut the cost of garbage disposal to the town by increasing recycling. We should set recycling goals for our schools and private residences. I also believe we need an enforceable ordinance, which requires businesses to recycle as well.

• We are currently paying $59 per ton to dispose of waste that is not recycled. On 7/1/08 it goes up to $60 per ton. This rate will continue to rise a dollar per year until 2010 when the current contract ends. Hamden has had one of the lowest rates in the State for a very long time. It is reasonable to expect that our yearly rate will be even higher when the new contract is negotiated in 2010. Last year the town paid over 2 million dollars, to dispose of approximately 36,000 tons of waste that was not recycled.
• The State of Connecticut’s Solid Waste Management Plan has set a goal of a 58% recycling rate by the year 2024. We are currently at 25-30%. Increasing recycling in the schools can help us meet this goal and reduce our waste expense as well as educate our children on the importance of the wise use of all of our resources. Every school has a BOE rep who can assist them with this goal. This could become a creative interdisciplinary endeavor involving science, math, art and English classes. This is a controllable expense that we can all work to reduce!
• I am asking the council to require the BOE to make a commitment to develop a plan with collection goals for the schools and require the public works Director, working with the Recycling Coordinator and any other necessary personnel, to develop a plan to increase and enforce compliance at private residences. This is an area where funding even more hours for enforcement personnel would pay dividends in waste expense savings. Although not strictly a budgetary concern, it also would be in the public interest to begin the process of preparing an ordinance to require recycling at our commercial properties, and at the least, at businesses—such as coffee shops and some restaurants—which use recyclable packaging in abundance.

State Education Funding

Since the education budget is over 50% of the town budget I think it is crucial that we develop a more aggressive and effective advocacy program for Hamden to receive its fair share of ECS state funding.

I don’t know exactly how this is best accomplished, but it strikes me that our State legislative delegation could be doing a better job on this. Do they have a conflict of interest because they represent wealthier communities like Cheshire and Woodbridge? Could this Council and the Mayor be putting more pressure on them? It also seems to me that litigation might be the only way for Hamden to get treated fairly. Are we participating in the lawsuit that several towns have initiated against the State? If not, why not?

I obviously don’t have all the answers, but I would appreciate it if you would tell us what the plan or strategy is to address this issue? What are the short term and long term goals?

Transfer Station

I would like to ask the Council to take a look at the number of employees assigned to the transfer station and determine if it is necessary to have that many employees for the limited operations there. Most of the times I’ve been there, I observe three employees apparently just sitting around, waiting for someone to come in. Occasionally, one will want to see my license and will then follow me around like I’m a criminal for using the transfer station, but there is really no consistency even with that.

I would like to suggest that the Council consider decreasing the operating hours and/or reducing the staffing at the Transfer Station.

Animal Control

The Mayor’s recommendation of a pay raise for Animal Control Officer Chris Smith is perhaps the single-most offensive aspect of the Proposed Budget.

• Mr. Smith was hired a year ago with no experience in animal control; and there is absolutely nothing in his record that would merit one of the handful of pay raises proposed in the Mayor’s Budget.
• To the contrary, in light of his role in the recent “dog-dumping” scandal, Mr. Smith should consider himself lucky that he is even still drawing a Town paycheck. At a minimum, he should have been suspended without pay pending an independent investigation of that incident.

Therefore, I urge you not to approve the Animal Control Officer’s proposed 3% salary increase. In the unlikely event that you do think it is warranted, I would suggest that you make the increase contingent on Smithʼs name being cleared of any wrongdoing in the ongoing investigation.

Police Revenue

I’d like to draw your attention to a potential source of increased revenue from our Police force.

Let me begin by saying that I understand that our force is understaffed, and I am very thankful for the services and protection they provide us on a daily basis.

• But we have many issues with vehicles breaking a myriad of laws on a regular basis. It is certainly a Town-wide problem, but it is particularly common and noticeable in the more densely populated areas of Southern Hamden.
• If you refer to page 146 of the Mayorʼs Proposed Budget, you will see a revenue line for fines for parking tags. Does this include revenue generated from the enforcement of any other type of non-moving violation, such as illegal parking or idling?
• Unfortunately, I was not able to make an inquiry with the department about the breakdown of revenue before tonight, but it seems that either all non-moving violations are lumped into this one revenue line, or the revenue has been negligible in previous years.
• I would like to suggest that the Mayor, the Council and the Police department work together to make increased ticketing for non-moving violations a priority. Unlike fines for moving violations, the revenue generated from non-moving violations remains in Hamden, and the opportunities are seemingly endless. The Council should also consider increasing the dollar amount of these fines.
• I’m sure all of us can recall a time when we saw someone illegally parked on a sidewalk or blocking a fire hydrant. It seems probable that while our officers are on their regular patrols that they will encounter the same things. If they take five minutes to write an additional ticket between calls every month, they have the potential to generate thousands of dollars in revenue and improve the quality of the Town they serve.

Mileage Reimbursement

I am a member of HART and I would like to make an observation and comment about the Town’s mileage reimbursement policies and expenditures.

At page 59 of the Proposed Budget, the Mayor proposes an aggregate mileage reimbursement figure of $12,000 – which is significantly lower than that requested by the Finance Department ($17,750) or last year’s budgeted amount ($18,900). Hopefully, the Mayor’s reduction of this figure, which covers multiple employees, is an acknowledgement that he will no longer be seeking to be reimbursed for personal mileage, or even mileage driving to and from work.

In light of the controversy over the Mayorʼs mileage, I encourage the Council to do more this budget season than simply approve an annual mileage expenditure figure. We need the Council to pass a Resolution that re-states the obvious: that mileage reimbursement is available for qualified employees ONLY for town business-related trips, not including commuting to and from work.

It is disappointing that such a Resolution is even necessary; but because the Mayor has justified his personal mileage claims by citing the alleged statements of one or more Councilpeople –- and the Finance Director has reimbursed him without question -– it is now necessary for the Council to set the record straight. No single Councilperson or group of Councilpeople ever has the authority to establish town policy in the absence of a formal vote. And there has been none authorizing the Mayor or others to be reimbursed for personal mileage. The Mayor and Mr. Betz know better, but they are apparently intent on defying you and the citizens until you act.

Community Services

As much as I would love to see expenditures reduced where possible, I need to point out an important area where the Mayor’s cuts appear to have gone too far.

At page 27, the Community Services Budget has a line item for “eviction costs” – which, according to the Proposed Budget, are required by state statute for “moving fees, monthly storage fees, auctions, and legal advertisements associated with individuals who have been evicted.” Last year $27,000 was budgeted; already $25,916 has been spent with a total fiscal year estimate of $34,000. Given the worsening economy one would expect at least as much expenditure in the coming year. However, the department budgets slightly less ($33,500). The Mayor takes it a step further though, and proposes only $30,000.

Given that this is not a discretionary expenditure, and given the troubled economic times in which we live, it seems foolish to look for savings in the “evictions costs” account. A similar pattern of budgeting is present for the line item for “general assistance services”. These expenses are for “temporary housing and utility assistance”. While the town may have some discretion in these expenditures, it would be cruel to cut back on these services at the very time they are most needed.

Overstated Revenues

Here are some of the more egregious examples:

1. In the Town Clerk’s budget, at page 203, the Mayor says that the Clerk will collect $1.25 million in real estate conveyance taxes, even though she has only collected $844,551 so far this year and only projects $1.0 million for next year. In this severely depressed real estate market, it seems that the Mayor’s prediction of 25% growth in conveyance taxes is completely unrealistic.
2. In the Assessor’s Budget, at page 12, the Mayor is projecting $450,000 from a “personal property audit”, despite the fact that the current year’s effort has only produced $112,000 to-date, and the Assessor has provided no prediction for the coming fiscal year.
3. Also in the Assessor’s Budget, the Mayor is projecting $400,000 from the “motor vehicle audit”, despite the fact that this enforcement initiative—which was to have netted over $1.0 million in the current year—has brought in $0 to-date, and the Assessor apparently declines to offer any projection for the coming fiscal year.
4. In the Building Department Budget, at page 22, the Mayor is projecting $2.7 million from building permits, despite the fact that in the current year only $626,000 in permit fees have been collected to-date, and the department’s own projection for next year is only $1.0 million. Given the significant slowdown in construction in the economy as a whole, it is difficult to understand the Mayor’s thinking on this item.

Pension Fund

The Pension Fund contribution is critical to the success of this year’s budget process. It occupies one of the few budget lines large enough, in and of itself, to enable meaningful tax relief. In the limited time we have tonight, I want to attempt, in summary fashion, to set out some little-known, or commonly misunderstood, facts about the Pension Fund and the town’s pension obligations, and then—very quickly—offer a suggestion as to an appropriate level of funding for ‘08-09.

Because the Pension Fund contribution is so critical, this is not the last youʼll hear from us on this topic. But as you head into interviews and deliberations, we wanted you to be sensitized to the issues at play.

First to the facts:

1. Hamden is not required even to have a Pension Fund. In contrast to laws applying to private sector pension plans, there is no aspect of State or Federal law that requires a Connecticut municipality to build up a fund to provide a source or security for its payment of retirement benefits. Nor is there any provision of any of the Town’s collective bargaining agreements that requires the Town to establish a Pension Fund.
2. If we choose to have a Pension Fund, we are still not required to fund it in any particular amount. None of our collective bargaining agreements require that we fund our pension plan in any specific amount. Indeed, the Notes to the Hamden Retirement Plan’s Financial Statements confirm that the Town makes contributions to the Fund “at the discretion of the [Legislative Council].”
3. Although we employ actuaries to analyze the strength of our Fund in relationship to our pension benefit obligations, their recommendations as to funding are simply suggestions based upon their assumptions. In other words, there’s nothing compulsory about what our actuaries tell us. They’re not mediators, arbitrators, judges or legislators. They simply make suggestions based on assumptions that we (in theory) provide. So if and when they give you their suggestions for Fiscal Year 08-09, they should also state their assumptions. And if they don’t, you should ask them!
4. Our actuaries appear to be applying unrealistic and outdated assumptions when developing funding recommendations for Hamden.

Let me highlight just two of the most critical:

First: they assume that they should apply the same standards to our municipal Fund as are applied to a private sector fund.

There is a common misconception that a municipality’s pension obligations must be secured and funded in the same way as those of a private company. And because the actuaries routinely apply private sector fund modeling to municipalities such as Hamden, we receive insufficient recommendations.

Because a private company can go out of business and cease to exist at any moment, when such a company maintains a defined-benefit pension plan, it is logical for it to aggressively build up a fund of sufficient size so that, at any moment, it can pay all benefits contractually due over the life expectancy of the current and retired employees. If that private employer shuts down before its pension fund is fully endowed from an actuarial standpoint, vested pension beneficiaries could be left high and dry.

By contrast, a municipality, such as the Town of Hamden, will never go out of business. The Town can and will honor its pension benefit responsibilities each year because it has the power to tax.

Therefore, there is no need for a fund to be built up to protect public employees’ vested retirement benefits, as there would be for private sector workers. Our Hamden employees can, and should, rest assured that their benefits will be paid because Hamden will always be “in business” with the power to tax!

I believe that our actuaries’ contribution recommendations are based on a private employer model that seeks to provide our employees with more assurance than they could reasonably need or expect. One of the best perks of town employment is the security of knowing that your employer can always create its own solvency!

Second: Our actuaries assume that our current Pension Fund needs to have an indefinite life.

The absurdity of continuing to build up the Pension Fund becomes even more graphic when you consider that Hamden has now, officially, closed the door on its defined-benefit pension plan. All new hires are now enrolled in the MERS defined-contribution plan managed by the State. As the Mayor has accurately stated, “This assures that, over time, Hamden’s unsustainable pension plan will simply go away.”

So now for the first time in the history of our pension plan we can calculate, actuarially, when Hamden will pay it last retirement benefit, and how those payments will change over time. Should the “closing” of our pension plan change the actuaries’ recommendations, even under a private sector model? Logically, they should.

This is an important question to ask since the Mayor’s proposed contribution is based on a theory of “catching” the actuaries’ recommendation. Yet that recommendation that we are trying to “catch” almost certainly predates the “closing” of our pension plan.

The Mayor is not stupid. So I’d venture to guess—both from his abandonment of pension bonding and the deceleration of contribution growth—that he has “seen the light” on this issue, but feels unable, politically, to pull back any further since differences in pension fund philosophy was a defining campaign issue in 2005.

I hope you have an opportunity to talk with our actuaries about these and other assumptions. I’m sure you’d find it enlightening.

So here’s our recommendation: We should contribute no more than $6.0 million to the Pension Fund in Fiscal Year 2008-2009. This is roughly the figure necessary to “freeze” the Fund at its current level.

By budgeting only what is needed in a given year to meet our current benefit responsibilities, we can create a system that is both rational and fair. By contributing $6 million to the Fund this year, rather than the $13.5 million proposed by the Mayor, we can save taxpayers at least $7.5 million… or nearly 2 full mils! That should be sufficient to avoid a tax increase in the coming year, or even give taxpayers a timely break, and make all of you (or at least all who support it) local heroes.

One final “procedural” note: In developing HART’s position on the Pension Fund over the last year or so, I attempted to speak with Hamden’s actuaries about these concepts. They were quite willing to do so, but informed me that Mr. Betz had instructed them not to speak with me about the Pension Fund. As a result, I was compelled to retain another actuary for review purposes; and that actuary would only speak with me “off the record” for fear of being perceived as interfering in a professional peer’s client relationship.

As you know, in my letter of February 27 to President Gorman concerning Budget procedures, we requested an opportunity for the public to interview department heads and others at the time they are questioned by you. President Gorman informed me that he could not grant that request – reasoning that the public has full access to department heads outside the budget process, and that public inquiry would burden the already time-constrained budget process. I understand his concerns, and respect his decision. However, in a case like this, where the administration, affirmatively prevents citizens from speaking with personnel on whose recommendation budget proposals are based, I must object.

Miscellaneous Items

1. In the Economic Development budget, at page 36, it appears that Mr. Kroop is getting a 60% pay increase (from roughly $50,000 to $80,000). We are not necessarily saying that Mr. Kroop should not receive a raise, but certainly not one of that magnitude. However, it does look like something is going on here that is not apparent on the face of the Proposed Budget. Likewise, at page 35, the line item for the “grant writer” (presumably Mr. Marchand) appears to be going from $34,440 to $49,500 as proposed by the Mayor. Again, an enormous “raise”, but something else is certainly going on here. Were these employees previously paid from federal block grant funds, and that source has dried up?
2. In the Election/Registrar budget entire categories of expenses seem to have been eliminated by the mayor. See page 47. Have these important expenditures been transferred to another department?
3. In the Finance Department budget, at page 60, the Mayor has cut insurance expense by over 15%. Is this justifiable? It would be great if it was, but I have my doubts.
4. In the Personnel Department budget, at page 130, a new position of Asst. Personnel Director is requested. The Mayor funds this at $30,000, which is half the requested full-time salary. Does this mean he is endorsing only a part-time position, or does it contemplate that other funds are coming from elsewhere, such as the Retirement Board? In any event, this position, full or part-time, seems unnecessary since the Department has been functioning fine without an Asst. Director for quite some time now.