2011 State of the Town
January 4, 2011
Good evening and welcome to the annual Organization Meeting of the Westfield Town Council. Thank you to all the residents, former Council members, Board of Education members, volunteers and employees who came out tonight.
To the members of the Town Council, I would like to thank each and every one of you for your hard work and dedication to the community. As we begin the new year, our responsibilities are numerous and varied, the issues are complex, and the stakes are high. We must persist in our efforts to balance the needs and expectations of our fellow residents with our finite resources in order to provide the most cost-efficient level of municipal services possible. I am confident that working together, we will succeed in our efforts to guide this wonderful community through these challenging times.
And to the families of the Town Council members – you, too, deserve a thank you. I know your loved ones’ service takes time away from them being with you. Your support is essential and your sacrifice is deeply appreciated.
It is always important to recognize that Westfield is indeed a very unique and fortunate town. Unlike most towns, our elected officials serve wholly as volunteers. The town council and I receive no salary, no expense budget, and no benefits, affording great savings to the taxpayers. Our only compensation is having the distinct honor of serving the residents of this great town.
Earlier this evening, this body appointed many individuals to serve as volunteers on the various boards and commissions of the Town. Let me express my deepest appreciation to all of you who have agreed to dedicate your time and talents serving your fellow residents. And to all those who just completed their terms on these boards and commissions, thank you for your efforts and achievements during your tenure.
To my ever-patient wife, Debbie, and our children - Drew, Hope, Shane and Troy – and my nephew, Chase, thank you for your love and encouragement. I know I couldn’t do this without your ongoing support.
To the department heads, you have represented your respective departments with passion and professionalism. I know that you have had the difficult task of continually finding new ways to execute my administration’s “do more with less” initiative, and I know how much you are committed to maintaining a high level of service. Your efforts and achievements during these challenging times are evident and appreciated.
Finally, to each and every resident of Westfield, thank you for your individual contribution to making Westfield the truly unique and remarkable town that it is. I am honored to serve as your Mayor.
One of the reasons I entered public service is that, as a business executive and a fiscal conservative, I am of the belief that all levels of government must relentlessly pursue cost efficiencies in the delivery of their respective services. In 2006, during my first budget cycle as Mayor, it was clear to me that spending at all levels of government were on an unsustainable course, and so began the pursuit of “doing more with less”. In 2006, the largest chunk (48%) of the budget was allocated to salaries and wages, so it was simple logic that one of the first steps to sustainability had to be reining in the largest expense. In addition to pursuing reasonable collective bargaining agreements, all positions were assessed. Consequently, since 2006, a total of 49 positions have been eliminated, reduced, or no longer funded through property taxes. Salaries and wages have now been reduced to only 41% of the municipal budget.
Let me take a moment here to say a few words about Westfield employees. In the most fiscally challenging climate in decades, the employees understood the severity of the budget situation and really came through for the residents. All 5 collective bargaining units in town as well as all non-union employees contributed to preserving services and easing the tax burden on the residents. From 0% raises to “givebacks” to furloughs to taking on additional duties, I applaud our employees’ cooperative spirit.
As Mayor, I am often asked by my fellow residents why, with all the success in reducing costs and expenditures over the past 5 years, why do property taxes rise at all? Let me remind everyone that, while the Westfield Town government is charged with the responsibility of collecting property taxes, the Town does not manage or keep everything it collects. In fact, it manages and keeps the least amount – only 18% of what it collects - to pay for municipal operations. That’s just 18¢ of each dollar. (21% of the property taxes you pay are sent to the County of Union and the remaining 61% is turned over to the Board of Education.) To illustrate, in 2010, the average assessed home paid $13,400 in property taxes. Of that, only $2,400 was retained and managed by the town of Westfield. Imagine, even if the entire municipal government was completely eliminated, the average assessed home would still be required to pay $11,000 in property taxes!
Keeping in mind that this discussion pertains only to the 18% that the town retains, my answer to the property tax question is two-fold.
First, there are the statutory and required expenditures that the town does not entirely control but is obligated to pay, such as the state-mandated library appropriation, which is $2.45 million for 2011, and the Rahway Valley Sewage Authority assessment, which is $3.3 million for 2011. As you can see, we do not start the budget year at zero. Today is January 4 and already we have at least $5.78 million in obligations on our plate. In 2006, statutory/required expenditures comprised 29% of the municipal budget. In 2010, they comprised 42% of the budget.
Second, the budget consists of not just an expenditure side, but a revenue side as well. And not all revenues to support the budget are raised by taxation. In fact, in 2006, 44% of the revenues received were from non-tax sources. Because of the downward trend in non-tax revenue receipts, including significant reductions in the Consolidated Municipal Property Tax Relief (“CMPTRA”) funding, non-tax revenues comprised just 35% of the 2010 budget. Last year alone CMPTRA funding to the Town was cut by nearly a million dollars. So, even with the significant budget cuts we made on the expenditure side, when non-tax revenues decline and non-discretionary costs rise, the tax levy (which is simply the difference between anticipated non-tax revenues and anticipated expenditures) is impacted.
In 2010, there was a 4% cap (with certain exemptions) on any increase in the tax levy. In 2011, the allowable cap has been cut in half to 2% (with limited exemptions), which presents us with greater challenges than ever before.
While the 2011 budget picture certainly appears bleak and we have a lot of work to do and difficult choices to make, I am convinced that there is much to remain optimistic about.
First, as I indicated before, economic sustainability is the goal. We have come so far in controlling the expenditure side of the budget without eliminating any services. In fact, since 2006, departmental operating budgets have actually decreased overall by a total of $66,000. By rolling up our sleeves and scrutinizing every line of the budget, by keeping personnel costs in check, by adopting a debt-management plan, by operating under the “pay as you go” financial model, by looking for ways to enhance non-tax revenues, and by making very difficult choices, we have kept the Town on solid financial ground and strong in spirit during the most complex and adverse economic climate in many decades. The choices we have made over the past 5 years in pursuit of fiscal sustainability have enabled our Town to weather this prolonged economic storm better than most.
Second, our local economy is healthy. As many of you know, i am often in the central business district and I am happy to report that the downtown area has been bustling. Just last week, I gladly waited 40 minutes for a table at lunchtime at a downtown restaurant! You may have heard me say in the past, “if you can’t find it in Westfield, then you don’t need it!” And so, beginning in 2009, i introduced the “Westfield First” initiative, asking all of you to consider shopping and dining in Westfield first, before taking your hard-earned dollars out-of-town. In this way, you not only support our local merchants, professionals, service providers and eateries, you also contribute to the larger community beyond Westfield’s borders. It is a known fact that walkable town centers are good overall for the environment. It is amazing that throughout this prolonged economic slump, the downtown area has managed to sustain an average occupancy rate of close to 95%. When vacancies have occurred, new businesses have moved in. Renovations have been made. In a number of instances, some of our established businesses used these opportunities to move into larger quarters. I want to thank all the residents who have put “Westfield First” and contributed to the success of our downtown.
Third, it is good news that the state is finally taking definitive action to cut their own spending and advocate for policies that will assist towns in managing their budgets, such as the recent passage of legislation that changes the binding arbitration process. While I am very concerned about the loss of CMTRA funding, I also understand that the state needs to take extraordinary measures without delay in order to right its fiscal ship and set it on a sound, sustainable course. After all, correcting the ruinous fiscal affairs of the state will ultimately benefit the Town of Westfield and its residents.
Last, but not least, I am optimistic about the future because Westfield is not just about the current economy or an annual budget or your local government’s efforts to meet the difficult challenges before us. It is so much more than that. It’s about the people who, with great pride, call Westfield their hometown. It’s about the parents who choose to raise their families here. It’s about the wealth of beautiful neighborhoods; tree lined streets, municipal parklands, recreational facilities, and educational, cultural and spiritual opportunities. It’s about the hundreds if not thousands of volunteers who generously give of their time and talents to coach and guide our youngsters in sports, scouting, and other extracurricular activities. It’s about our senior citizens, many of who contributed to making Westfield what it is today and stay in town to be close to the families they have raised here. It’s about community spirit. It’s about an appreciation of our blessings.
In closing, I want to assure my fellow residents that I will do everything within my power to make sure that all that makes Westfield the extraordinary place to live, work, and visit - will endure beyond these difficult times.