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Thread: Should We Elect the Finance Committee?

  1. #1
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    Post Should We Elect the Finance Committee?

    The following OpEd was submitted by The Board of Selectmen:

    Should We Elect the Finance Committee?


    A group of citizens has submitted a petition for this year’s Annual Town Meeting that would change the method of selecting Finance Committee members from appointment by the Board of Selectmen to direct election by voters. These citizens have stated that electing members of the Finance Committee would increase diversity and accountability. While Wayland has never elected the FinComm, about 14% of Massachusetts communities do use this method. How should we evaluate this proposal?

    Perhaps some context is a good place to start. Wayland first established a finance committee in 1879. Throughout the past 133 years, it has always been appointed. This practice mirrors that in 244 communities across Massachusetts. By contrast, just 31 communities have chosen to elect their finance committees, while six towns rely on some combination of appointment and election. Methods of appointment vary from town to town. Some communities, like Bedford, have an appointing committee consisting of the Moderator, chair of the Selectmen and chair of the Finance Committee. Others vest appointing authority for the finance committee (and often with other committees with major responsibilities like a personnel board or building committee) with the Moderator. Wayland vests the appointing authority with the Board of Selectmen.

    The duties and responsibilities of finance committees (sometimes called advisory committees) vary. The responsibilities of Wayland’s Finance Committee (as defined in Sec. 19-3 of the Town Code) are in part an executive function and in part advisory to the town’s legislative body:
    • To prepare and present the omnibus budget,
    • To prepare and present a capital improvement plan, and
    • To develop information, provide comments and publish recommendations on all town meeting warrant articles (not just financial articles).
    The Finance Committee also sets broad fiscal policy and establishes guidelines that inform the budget process and assure the town has a strong financial position. The qualifications to do this work include accounting and finance expertise, attention to detail, an understanding of municipal finance and processes, good judgment, fairness, and objectivity.

    Although the Board of Selectmen appoints members of the Finance Committee, the FinComm reports to Town Meeting. This system has two distinct advantages over other methods. First, the Selectmen thoroughly vet all candidates to confirm their professional experience, technical expertise and educational background in order to assemble arguably one of the most professional and astute collection of citizens in the Commonwealth. Second, because the Board of Selectmen is a multi-member public body, the interview and appointment process is conducted at a public meeting. A Moderator is not subject to the Open Meeting Law, and is free to appoint whomever he or she chooses and using whatever criteria he or she sets. In addition, transferring the appointment power in whole or in part to the Moderator will change substantially the nature of the position (now almost exclusively seen as the neutral party assuring all points of view are heard fairly at town meeting) and with it, the interest of citizens in seeking the position of Moderator.

    Petitioners will argue that the members of the current Finance Committee have placed too great an emphasis on long-range financial planning and too little sensitivity to the current economic climate and challenges faced by a portion of our citizenry. They point to the recent Special Town Meeting where recommendations were rejected by the voters. Instead of acknowledging these decisions as the essence of direct democracy, they favor a far-reaching change in the structure of town government they believe will institutionalize a shift in fiscal policy. It is offered strictly for political expediency.

    Wayland has a well-earned reputation for careful scrutiny and thoughtful consideration of any change in town government. The two most recent examples are the bylaws creating the town administrator position in 2004 and the department of public works in 2008, both of which were the by-product of extensive study, public hearings and debate. The end products were, by the nature of such a process, compromises in which no faction was completely satisfied nor dissatisfied.

    We challenge the petitioners to explain why a similar process isn’t requested instead of the article to elect the FinComm. A study committee can examine the duties of the FinComm. It can consider the implications of various modes of selection on the character of the membership of the FinComm. A study committee can evaluate the appropriateness of shifting the budget-making power to the executive branch and retain the budget and article review process with a committee reporting to the legislative arm of town government (Town Meeting). It can debate hybrid approaches that might include some element of appointment to preserve the professional expertise of the FinComm, while electing some others to assure that the perceived responsiveness of an elected member is included in the budget review process. In short, a study committee can develop a recommendation as to the best division of roles and the appropriate means of choosing citizens to serve.

    Our board believes Wayland is best served by rejecting the petitioner’s article to elect the Finance Committee. The STM vote last fall reflected differences on the amount and the pace of distributing tax relief. Wayland is better for having had that debate, and the voters spoke.

    But we should not displace the process that has provided strong fiscal management because of a single rejection of the approach to best use accumulated cash reserves. We see first-hand some of the challenges of electing certain positions. The FinComm tends to draw qualified people who want to serve Wayland, but not necessarily citizens who would step forward if the position were elected. We often see important elected positions uncontested in Wayland, and it is unclear if enough people would choose to run to fill the positions needed.

    The work of the Finance Committee has a steep learning curve, given the complexities of municipal finance and the role of the FinComm here to construct the budget each year. Election could result in greater turnover and loss of experience. We agree with the petitioners on one important point – the change to an elected FinComm will result in a greater sensitivity to short-term political considerations and economic conditions. We submit that this dramatic change will be detrimental.

    Although we disagree with the petitioners on this issue, we welcome the interest of citizens committed to improving town government. An informed and engaged electorate can only help improve Wayland’s processes and practices. We encourage all interested citizens to come together for a dialogue on the structure of town government that assures effectiveness, efficiency, accountability. Not since 1990, when a proposed town charter was rejected by voters, has a comprehensive proposal been put forth for consideration. We shouldn’t resort to a piece-meal approach to governmental structure designed solely to cement temporary shifts in public opinion on fiscal policy.

    Wayland Board of Selectmen
    Tom Fay, chair
    Sue Pope, Vice-Chair/Clerk
    John Bladon
    Steve Correia
    Joe Nolan

  2. #2
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    My understanding is that one town with an elected Finance Committee (Easton, I think) struggles to find candidates to run. As a result, most or all of the current members have actually been appointed by their Board of Selectmen to 1-year terms (to fill the seats not filled by the "failed" election). This awkward process has been repeated for at least several years. (If anyone has better information than this, I look forward to any corrections that are warranted.)

    The study committee proposed above would be the perfect body to look into the experience that various towns have had with the different approaches and advise Wayland Town Meeting members accordingly.
    Last edited by Jeff Dieffenbach; 03-20-2012 at 02:20 PM. Reason: Correction of town with elected Finance Committee

  3. #3
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    Residents Andrea Wagner (wife of School Committee member Shawn Kinney) and George Harris recently wrote letters to the editor in favor of an elected Finance Committee. Each is lacking in its own special way.

    RESPONSE TO WAGNER: Andrea Wagner, the lead petitioner for Annual Town Meeting Article 4, which proposes to change the mechanism of selection for Finance Committee (FinCom) members from appointment by the Board of Selectmen (BOS) to election by residents, makes in her letter several statements deserving of attention.

    1. While it is technically true that the FinCom is accountable to the BOS, there has to my knowledge been not a single example in the last fifteen years (and probably long before that) where the BOS removed a FinCom member. This includes at least one FinCom member whom I recall as being somewhat confrontational to the majority view of the BOS. It wouldn't surprise me if most FinCom members have never even considered that they might be removed for any reason, much less a disagreement over the Town's finances. Simply put, being a FinCom member feels like being accountable to the Town and not the BOS. In my opinion, this is not a reason to change what has long been and continues to be an effective structure of our government.

    2. FinCom members do not have a conflict of interest--to say so misunderstands the meaning of the concept. No, what FinCom members have is a bias. Or put another way, and experience base. There is simply no reason why they should recuse themselves from opining on the article in question.

    3. The petitioners are disingenuous when they cry foul over the exclusion from the Warrant of their statement that more than 'twice as many towns elect Finance Committee members as use Wayland's present method.' This statement would be much more even-handed and fair if it noted that neither Wayland's current approach nor the petitioner's proposed approach are nearly as common as other methods of (non-elected) appointment.

    4. Ms. Wagner apparently struggled to come up with four numbered points to support her introduction. Point 3 is merely a repeat of Point 2, and Point 4 is merely a repeat of an element of her introduction.

    The petitioners are silent on the experiences that the small fraction of towns that elect their Finance Committees have had. The one instance that I know of, Easton, has not had a good experience. Rather than make a hasty leap from a sound system into an unknown, why not study how other towns have found their various FinCom seating methods to work and proceed in an informed fashion?

    RESPONSE TO HARRIS: This comment is written in response to this week's letter to the editor by George Harris, who neglects to disclose that he is a former member of the Board of Selectmen.

    Mr. Harris reveals that he does not know Chris Riley. First, who knows what allegiance Mr. Riley has to the Finance Committee. The Chris Riley that I know has allegiance to Wayland, to be sure, but having served in a capacity doesn't remove one's ability to reflect on that service. Second, anyone who knows Chris Riley would be shocked to hear "tax to the max" ascribed to him. That would be akin to one calling Mr. Harris an adherent to "forgive and forget."

    Who is Mr. Harris to judge what metrics are "correct" when comparing towns? The opinion of the Tax Foundation is interesting, but irrelevant. No, what's important is what people as a whole think. While tax rate and tax bill are BOTH important, the latter (tax bill) is what comes out of people's pockets. Tax BILL is what drives the level of services that a town can offer, not tax rate. Mr. Harris has on several occasions claimed that Wayland spends too much. Perhaps he might enlighten us as to where and what he might cut?

    Wayland has a high tax rate because it chooses to offer services comparable to those in peer towns such as Acton, Belmont, Boxborough, Carlisle, Concord, Dover, Lexington, Lincoln, Needham, Sherborn, Sudbury, Wellesley, and Weston with a lower housing cost of entry than most of those towns. The RESULT is our tax rate--nothing more.

    Mr. Harris, who is not to my knowledge a real estate agent, says that real estate prices "are higher in these [peer] towns because buyers are willing to pay more for perceived value." That might be true, or it might be true that those buyers are getting more ACTUAL value in the form of preferable settings, larger lots, and bigger homes. We simply don't know what would happen to the price of a Wayland home were it to be picked up and plopped down in a peer town.

  4. #4
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    Great point that I hadn't heard before about an elected Finance Committee, by Michael Tichnor in the Wayland Town Crier.

    Quote Originally Posted by Michael Tichnor
    Equally important, requiring FinCom volunteers to run for election would add a significant burden, particularly during the busy budget preparation season.
    More generally, if we look at different ways to seat a Finance Committee, at one end of the spectrum, we have election. At the other end, we have appointment by a single individual, typically the Moderator. In the middle, we have appointment by a group. This might be the Board of Selectmen or this might be a committee that includes membership from the Selectmen and other boards. It's not at all clear to me why Wayland would want to be out at one of the extremes, particularly without any study of how those extremes have worked out for other towns.

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    A funny thing happened on the way to town meeting. We discovered that decisions about millions of dollars are made without the knowledge of taxpayers and the Finance Committee.

    At the March 28th meeting of the FinCom, concerned residents identified a significant difference in the FinCom’s understanding of the “Unclassified” payments for line item 32B Insurance (page 53 in the 2012 Annual Town Meeting Warrant) compared with how this money was used. More importantly, this was a significant difference between what taxpayers approved in the budget.

    There are 2 elements included in our health insurance obligation: 1) the cost to provide health insurance to our existing employees and 2) the cost to fund future insurance benefits for employees, OPEB (other post employment benefits).

    While we have an estimated $50M liability, the state is NOT mandating any payments to OPEB and actuarial calculations detail “recommended” payments over 25 years.

    As published by the FinCom in the 2011 Warrant (page 11) “The State has not mandated that communities begin payments toward OPEB; however, as part of our financial management plan, the Town has been making payments of approximately $1 million per year since FY2009”

    Every year we have approved insurance expense of approximately $6M-$7M, representing the current expense plus approximately $1M to fund the OPEB liability.

    At the same time, we heard comments about the insurance savings that were negotiated in recent collective bargaining agreements. However, the insurance budget line item continued to grow. Where were these savings?

    Our town employees and officials negotiated these savings in good faith, expecting the benefit to be passed on to the taxpayers with a positive impact on our tax obligation.

    Unbeknownst to the FinCom these savings were never factored into the budget. These savings were instead used to pre-pay our OPEB obligation without their approval or the approval of town meeting! The FinCom is now struggling with how to reconcile huge OPEB payments against what they assumed to be $1M annual payments.

    Accelerating the funding of this obligation put a significant undue burden on our current taxpayers while our tax rates grew. This cost should have been shared over time. Additionally, these payments happened without our informed consent!

    As a result, $6M of tax savings that should have been shared with taxpayers was used to fund this obligation without approval.

    Why did this happen? –

    1. We do not have a sufficient budgeting process to ensure the proper PUBLIC vetting of major expenditures.
    2. The CURRENT structure of town government does not provide for accounting oversight, nor written policy and procedures to ensure appropriate controls.
    3. There is a lack of coordination with our annual audit and other financial reporting.

    How do we fix this? –

    1. Improve the Financial Oversight of town government with an elected FinCom and an Independent Audit/Review Committee.
    2. Only approve budgeted line items that have been properly scrutinized and publically vetted.

    Attend Town Meeting on MONDAY, APRIL 9th and vote for these changes that will lower your taxes without impacting services!

  6. #6
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    Quote Originally Posted by Tony Boschetto View Post

    How do we fix this? –

    1. Improve the Financial Oversight of town government with an elected FinCom and an Independent Audit/Review Committee.
    2. Only approve budgeted line items that have been properly scrutinized and publically(sic) vetted.
    Tony how do you know that an elected FinCom will improve financial oversight? It certainly appears from the few communities that follow this method that their oversight is certainly not better than ours and seems in many cases to be much worse. Some communities can not even get people to run.

    The idea of getting more volunteers in town to form an audit committee seems daunting. Even among the petitioners this year there is a huge overlap and not enough unique individuals to form this committee let alone to see that they would all be qualified.

    Will you please let me know who is the one to turn to to ensure the line items have been "properly scrutinized and publically(sic) vetted"? I have attended plenty of meetings and watched more on WayCam but you seem to have a different standard.

    Thanks
    Last edited by Kim Reichelt; 04-02-2012 at 03:54 PM.

  7. #7
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    I was questioned about this post this evening by Ed Collins. Ed took this post out of context to try and repudiate my comments. I tried to clarify my response. I would like to point out a lack of candidates for the FinCom position as a further to my above comment.

    I think the lack of civil discourse is a a huge issue as I pointed out tonight. I hope that certain parties will end the attacks and move on with a congenial discourse.

    Ben

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