[RP TownTalk] Town's Financial Situation/Executive Order Freezing Hires/Expenditures

Tue Apr 26 16:09:06 UTC 2016

Thanks for raising this issue, Jonathan.

I went to last night's meeting hoping to hear more conversation about this
(especially about the impact of a freeze on the town's ability to continue
engaging in a legal battle over the plans for ANOTHER 7-11 on Route 1), but
was sorely disappointed when the agenda was shuffled and a Purple Line
discussion was moved to the front of the agenda.  I actually really
appreciated the conversation (and was horrified by the new design that the
Governor's office is shopping around), and I stayed for 90 minutes before
having to head home -- without the conversation about the town budget even
having begun yet.

So a few things:

1) Please make sure that revisions to the agenda are announced beforehand,
so that residents can adjust schedules as needed.

2) What was discussed last night? I'd love to hear a report from the Mayor,
given that there were no minutes being taken of the meeting.

3) As an aside, I asked the Town Clerk to consider live-streaming meetings
in the future (which can be done for free) so that those residents without
local cable (myself included) can participate in these meetings from home
or while traveling.

-Heather

On Saturday, April 23, 2016, Jonathan Ebbeler <
jebbeler at efusionconsulting.com> wrote:

> All –
>
>
>
> The agenda was re-posted late yesterday with an item under the Mayor’s
> report that deserves some clarification in advance of the Worksession.
>
> In response to the Mayor issuing an executive order this week freezing all
> hiring and all spending requiring direct authorization unless it directly
> impacts the health, safety, and welfare of the town, a request was made and
> honored to modify the agenda so that the public was made aware of what will
> be discussed at Monday’s meeting.
>
>
>
> In 2010 GSA indicated that the lease-purchase option they had on the USDA
> building on River Road made economic sense to purchase.  Their current
> lease was at ~$8.5mil/year with anticipated increases of an additional
> ~$2.5mil.  They had an option to purchase upon the lease expiration in
> February 2015 for ~$30.6mil.  Clearly it shouldn’t surprise anyone that the
> federal government realized that they would break even in 3 years on a
> building that has a Fair Market Value of $60-75mil.
>
>
>
> The 112th Congresses in 2012/13 authorized the appropriation for the
> purchase.  In 2015 the GSA purchase of the USDA facility was the single
> largest real estate acquisition (as measured by money) the agency did all
> year.
>
>
>
> The original Purchase and Sales Agreement dated June 14, 2010 between Hub
> Realty College Park I, LLC and Government Properties Income Trust (GSA) was
> duly filed and public via the Securities and Exchange Commission (SEC) Form
> 8-K filed June 18, 2010.
>
>
>
> The sale of property from a non-government entity to a government entity
> takes the property off the tax rolls.  The potential impact of the sale was
> effective 2015 so it impacts our current fiscal year with a little over 2
> months left and in perpetuity.  This equates to an approximate $400,000
> shortfall this year and going forward.  On our current budget that is
> roughly 5.7%.
>
>
>
> I do not have additional information to report and requests for current
> up-to-date income/expense/budget statements have not been provided so I and
> the rest of Council are left looking at the information provided as of a
> month ago.  The town uses Quickbooks for accounting and the requested
> reports take a few minutes to produce; I am unsure as to why the request to
> see updated financial information in advance of Monday’s meeting has not
> been satisfied.  I fully realize the reports may not be reconciled or
> balanced but having to look a month back to make choices is frustrating and
> counterproductive.
>
>
>
> In looking at the FY16 budget I am confused why a 5.7% shortfall that is
> normally a non-event for any business or organization has a significant
> enough impact that an Executive Order was issued freezing all hiring and
> signifying mayoral pre-approval over all expenditures.  This year’s budget
> did include balancing the revenue with $552,055 (to be offset with capital
> costs of constructing a new town hall for $5.5+million). This isn’t the
> first time the town has had lost revenue issues.  In my time on Council the
> town additionally lost a six-figure Community Development Block Grant and
> also a $500,000 state grant towards the construction of the new town hall
> due to non-performance and forgetting monies have expiration dates and time
> out back to the state coffers.
>
>
>
> I am personally upset by the recent turn of events because I have been
> working almost a year on Economic Development projects that have come to
> fruition (dependent upon having Committee money for town grants remain
> unencumbered).  We currently have 4 requests by local businesses equating
> to around $1mil in new and expanded development projects.  I sincerely hope
> this does not impact any of those:
>
> -Ernie’s Lock façade improvements (unsolicited request from the owner
> aware of our grant program)
>
> -Bikram Yoga 2nd Floor Expansion to offer a new Wellness Center (so happy
> to see new businesses doing well enough to expand within a couple years of
> opening)
>
> -Town Center Market Patio Expansion (they are bursting at the seams Th/Fri
> nights)
>
> -New Beverage/Food establishment at the corner and second bay of the first
> floor at Town Center (this is almost a year in the making)
>
>
>
> The issue to be discussed on Monday has a very real, and very immediate
> impact to every constituent in town and I hope everyone understands the
> seriousness of the issue and the community comes out to ask some tough
> questions.  The Mayor and Council have direct  accountability (at least
> under our current structure and form of government) on financial matters to
> the residents and we owe a complete and clear explanation of what happened,
> what impacts there will be in the immediate and projected future, what
> mitigation will be done now and in the future.
>
>
>
> In any organization things happen, but when they do, I believe it
> imperative that screw-ups aren’t swept under the rug, or otherwise hidden
> or obfuscated, and problems get discussed and solved rather than focusing
> on finger pointing.  Please come out Monday night at 8PM to Town Hall to
> listen, opine, and question the financial health and stability of our
> town.
>
>
>
> Respectfully
>
>
>
> Jonathan
>
>
>
> Jonathan W. Ebbeler
>
> Councilman – Ward 1
>
> Chair, Economic Development Committee
>
>
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>
>
> Actual vs. Budget Prorated as of 2/29/2016
>
>
> https://www.dropbox.com/sh/inrbh8tw0kdwdqb/AACMuhlBfclEuRQTJ1oYZ15Ga/FINAL%20Budget%20vs%20Actual%202-29-16.pdf?dl=0
>
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