Myth: Brookline’s Structural Deficit.
By Jim Conley • Feb 11th, 2008 • Email This Post to a Friend •
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“The OSC also concluded that even with an override, the town will face an on-going structural deficit [emphasis added] in the coming years as health care and SPED costs continue to grow at rates that exceed revenue growth and under-funded retiree benefits add additional financial burden.” - from the Brookline Selectmen’s Over-ride Study Report
Folks, there is no structural deficit facing Brookline’s finances. A structural deficit is not a result of a cyclical policy implemented by the government but is the deficit that exists when the economy is in equilibrium.
In other words, it’s a deficit not brought about by downward shifts in revenue or increased costs, but by factors outside the municipality’s control. But decreasing revenue (particularly in non-property tax sources) and rising costs (in debt service and personnel benefits) are creating an operating deficit in Brookline’s municipal budget.
And those operating factors can be controlled. But the Brookline selectmen have chosen not to control them - and that’s where the problem lies.
Need more proof there is no structural deficit? Well, late last year the selectmen published the results of a credit advisory by their beloved Moody’s, the bond rating agency that scores Brookline Aaa [read the report], which says that a draw down from the town’s reserve fund:
“reflects planned usage of free cash balances for pay-as-you-go capital projects, rather than a structural deficit.” [emphasis added]
It says something about our town administration that a structural deficit can be trotted out and then stabled away when it fits their needs. And it says even more about the process that led to the breathlessness over the town’s finances by the selectmen’s study group.
We have a structural deficit alright, but it’s a deficit of competent management and a dearth of executive oversight. It makes no sense to provide an $8 million bailout without changing the structure of the executive management team first.
Jim Conley is publisher of On Brookline.
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REPRESENTATIVE TOWN MEETING’S UNACCOUNTABILITY
The Municipal Corporation that is Brookline with its Representative Town Meeting (RTM) form of governance can be compared in several ways to publicly traded corporations. Compare our part-time Selectmen with their day jobs to a board of directors. The Selectmen are elected by voters resident in our Town for three-year staggered terms; a publicly traded corporation’s board of directors is elected by its stockholders frequently, in recent years, for three-year staggered terms. Our Town’s CEO is its Town Administrator, appointed by the Selectmen, with a three year contract that the latter apparently drafts; a publicly traded corporation’s board of directors appoints its CEO, who usually also sits on the board. Our CEO Town Administrator’s contract provides similarities to a publicly traded corporation’s CEO’s contract, with golden parachutes. But our CEO Town Administrator does not have the benefit of stock options. However, our CEO Town Administrator has the benefit of having to please only a majority of the Selectmen in order to be assured of reappointment with yet another golden parachute. Yet our CEO Town Administrator lacks the hiring and firing capacity of a CEO of a publicly traded corporation. But our CEO Town Administrator cannot be ousted by voters resident in our Town for not doing a good job. The CEO of a publicly traded corporation usually has a financial stake in the corporation, particularly in the form of equity, whereas our Town’s CEO Town Administrator relies upon his generous contract (while residing in another community). In recent years we have seen a number of CEOs of publicly traded corporations resign or be forced out. But this has never, in recent years, happened in Brookline, where our CEO Town Administrators seem to serve until they are ready to retire.
Yes, the voters resident in our Town can vote out Selectmen seeking reelection, but only at most two in a single election. So Town Administrator can expect to continue in his job by “pleasing” a majority of the Board of Selectmen. In a city form of governance, the voters can vote out the Mayor in a single election. But with RTM, all of the Selectmen cannot be voted out at one time!
A significant difference from a publicly traded corporation for our Town with its RTM is the TMMs in the role of a legislature. But TMMs are ineffective because they are required to meet only once a year, although they usually meet a second time in a special meeting. Even if TMMs could be effective, they are elected to three year terms that are staggered such that all TMMs cannot be voted out at one election. (In a city form of governance, an elected Council of up to 20 members can meet fairly regularly, and on short notice, to consider residents’ concerns. Compare this to 240 TMMs with day jobs and their availability in an unpaid role.)
The need for this Override did not come about solely because of events this past year. The question is, have our Town’s elected Selectmen and TMMs served us well over the past several years in addressing its financial situation? It is not unheard of for a publicly traded corporation to take action by reducing expenditures in various ways, perhaps because the stockholders and the market insist upon it. For our Town the “stockholders” are the voters resident in our Town, who are also the primary “market.” Yet voters resident in our Town fail to get out and vote in sufficient numbers to effect CHANGE in the Selectmen and TMMs and perhaps in the form of governance.
STRUCTURAL DEFICIT, INDEED!
It is RTM, the structure of our Town’s governance, that is the deficit. Should a community of 55,000+ be ruled by elected part-time Selectmen and (unpaid) TMMs and appointed unpaid volunteers? Should we revert to a volunteer fire department? Or rely upon a posse or vigilantes for police protection? Or have a town dump where political activists may caucus?
WHAT ABOUT THE CITY OF NEWTON, YOU SAY?
Today’s Boston Globe has a front page article on the CITY of Newton and its problems with a new high school project that may require a huge override. So, you might ask, if Newton has a CITY form or governance rather than a RTM as in Brookline, why and how did this happen? My response is that there can be greater accountability in the City of Newton than in the Town of Brookline. Next year Mayor Cohen comes up for reelection (if he decides to run) and the City of Newton has the opportunity to vote him out if voters think he has not done a good job. That would result in the ouster in one election cycle of the head of Newton’s executive branch. Here in Brookline because of staggered terms, it would take three, count ‘em, three elections to oust all of our currently sitting Selectmen. And there will be a few Aldermen in Newton coming up for reelection who may have supported this school project whom Newton voters can vote out. That election in Newton next year will be a referendum on the high school project.
Reading the Globe article with care, the publicity suggests that in a City voters can contest the Mayor and the Aldermen more readily than in Brookline. Just think of the conversion of Brookline’s Town Hall into its ownTaj M’Hall. We can’t point our fingers at a Mayor; no, we have to point at five Selectmen who in turn might point fingers at another Selectman. Meantime, our 240 TMMs can shrug and say it’s not their fault, whereas in Newton fingers can be pointed at a few Aldermen. Meantime, we cannot get in touch with our part-time Selectmen who are busy with their day jobs. And our Town Administrator is limited in what he can, and might not want to, do as he builds up retirement benefits.