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TOWN OF NORTHBOROUGH 63 Main Street Northborough, MA 01532-1994 (508) 393-5040 Phone (508) 393-6996 Fax
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February 13, 2012
Governor Deval Patrick
State House, Room 360
Boston, MA 02133
Dear Governor Patrick:
On behalf of the Town of Northborough, I respectfully request your support for several legislative reform initiatives, outlined in the attached, that could prove invaluable to cities and towns struggling to control costs during these difficult financial times. As you are well aware, municipalities throughout the Commonwealth have experienced repeated cuts to local aid—cuts which have significantly hampered our ability to deliver public safety services, maintain our public infrastructure and support the education of our citizenry, all of which are vital to our economic competitiveness, business growth and the state’s long-term prosperity.
While we are pleased that the Governor’s fiscal 2013 state budget proposal level-funds unrestricted general government aid at the original fiscal 2012 amount, these levels still pose hardships to communities facing significant increases in obligations such as health insurance, pensions and debt service, which are expected to outpace any revenue growth resulting from the slowly expanding economy. Furthermore, due to the sustained economic downturn nationally, cuts in local aid have been compounded by shrinking property tax bases, the loss of federal funds and reduced grant opportunities.
The legislative priorities, listed below, would provide municipal leaders with tools necessary to effectively manage dwindling resources. Many of the rules, regulations and state laws that are in place today hinder a community’s ability to be creative and innovative, and many may in fact create inefficiencies, redundancies and waste in the use of the limited financial and human resources that are at a municipal manager’s disposal.
We respectfully request your support for the proposed reforms outlined on the following pages, which reflect the Town’s Legislative Priorities, as identified by Northborough Officials, the Massachusetts Municipal Managers’ Association and the Massachusetts Municipal Association. We believe that addressing the items below would serve as a starting point for meaningful reform that would enhance the quality of life for residents and taxpayers throughout the Commonwealth.
We would be pleased to provide additional information or meet with you or your staff if you think this would be helpful. Again, thank you for your consideration.
I would also like to take this opportunity to thank you for your leadership and commitment in advancing meaningful municipal employee health insurance reform. The landmark Municipal Health Insurance Reform Act signed into law in July 2011 provides a means for municipalities to make cost-saving plan design decisions outside of collective bargaining while providing a voice for municipal unions throughout the process. We view passage of Chapter 69 of the Acts of 2011 as the most significant reform law to benefit Massachusetts municipalities in several decades, and recognize your efforts in bringing this reform to fruition.
Sincerely,
Kenneth J. Amberson, Chairman
Northborough Board of Selectmen
STATE LEGISLATIVE ISSUES
February 2012
- Restore Circuit-Breaker Funding
The Town’s top priority for fiscal 2013 is the full restoration of funding to the state’s special education reimbursement program known as the “circuit breaker” program which provides reimbursements to school districts that must provide high-cost programs for special education students. Under the program, the state target is 75% reimbursement for the cost of special education placements that exceed a minimum threshold. Cuts in fiscal 2010 and 2011 left reimbursement rates in the 40-45% range, but the availability of federal stimulus funds targeted to special education helped to offset the loss. The Governor’s proposed fiscal 2013 budget would level-fund the circuit breaker account at fiscal 2012 levels (approximately 55-60%).
Although a portion of the cuts in circuit breaker funding has been restored, the reimbursement that is currently in place still does not adequately reimburse districts for mandated services. More importantly, circuit breaker funding should be available to relieve special education transportation costs. Specialized transportation is often very expensive and is a mandated component of special education regulations. At the present time there is no relief for the increased costs in special education transportation.
Last year Representative Alice Peisch of Wellesley filed bill H1942 which called for special education transportation costs to be phased into circuit breaker over a three year period. Representative Garrett Bradley of Hingham filed bill H2574 which called for a study on how state revenues could be used to fully fund circuit breaker. We urge your support for this and similar legislation involving circuit breaker funding that will ultimately benefit all students in our public schools.
A 2011 study conducted by the Massachusetts Policy and Budget Center (available at www.massbudget.org/reports/pdf/Cutting-_Class.pdf) emphasized that rising health insurance costs as well as mandated special education costs in school districts have caused budget difficulties, making it necessary to absorb the costs in other school related accounts. A conclusion of this report is that present foundation budgets are not adequate and greater state funding is needed.
Why is this initiative a top Legislative Priority for the Town of Northborough?
Fiscal 2010 cuts to circuit breaker funding resulted in a loss of $476,000 in reimbursement to Northborough’s K-8 schools. These cuts were further felt in fiscal 2011 and resulted in a loss of $512,646. While partially restored in fiscal 2012 to a level of approximately 55-60% reimbursement above foundation, a significant gap remains from the state reimbursement level of 75% in place until 2009.~With the loss of federal stimulus funds in fiscal 2012, the K-8 school district will absorb the entire impact. Because special education services are mandated, schools will have to make cuts in other operational and programmatic areas to meet their obligations.
In fiscal 2011, special education transportation expenses for the Northborough K-8 Schools totaled $238,259. An additional $130,750 in transportation expenses was spent at Algonquin Regional High School (Northborough-Southborough Regional School). These costs were completely funded through the school budgets.
- Reauthorization of Chapter 90 Funds
Reauthorization of the Chapter 90 program is critical to fund the repair and maintenance of local roads and bridges. The State funds this program by issuing bonds and notifying each community of its Chapter 90 allocation by April 1 of each year. The April 1 notification date is essential because communities need time to plan and make maximum use of the funds during the full construction season. In the past, late notification led to unnecessary and costly delays in projects.
Last year, the annual Chapter 90 distribution was increased from $150 million to $200 million. While this increase provided some additional relief to cities and towns struggling to provide well-maintained road systems, it fell short of the requested $300 million. Based on research and extensive surveys of municipalities, the Massachusetts Municipal Association (MMA) estimates that the actual need for Chapter 90 is at least $300 million a year, as cities and towns maintain 90 percent of the roadways in Massachusetts. The Transportation Bond Bill expected to be filed during the current session would again provide $200 million in funds for local roads and bridges, matching the current year funding level.
The cost of maintaining this essential infrastructure far outstrips the current and proposed authorizations. The Town of Northborough supports the MMA’s call for passage of a three-year, $300-million-a-year Chapter 90 bond authorization in time to meet the statutory April 1 deadline to notify communities of their annual allocation. A three-year authorization is critical to a municipality’s ability to plan and manage its infrastructure maintenance and improvement operations.
Why is this initiative a top Legislative Priority for the Town of Northborough?
The Town of Northborough relies almost exclusively on its Chapter 90 allocation to fund its annual road maintenance efforts. Over the four- year period from 2007 to 2010, the Town received on average, $363,000 per year for the repair and maintenance of approximately 93 miles of roadway. In April 2011, that authorization increased by $102,362 to $469,731 for fiscal 2012; however, this increase was not sufficient to meet the backlog and is partially offset by rising labor and material costs. The Town urges an increase in the bond authorization amount and annual allocation as the actual needs are much higher than the Chapter 90 authorizations as evidenced by a significant backlog of projects. However, it is critical that the Legislature act swiftly, even if its new authorization were to remain level. The availability
of funds by early spring is important due to the relatively short construction season. Further, absent Chapter 90 funding, the Town has no other funding source for its much-needed roadway repairs for the 2012 construction season.
In addition to the top two legislative priorities above, the Town is also including the following bulleted list of additional (secondary) issues and initiatives that we hope you will support.
- Departmental Revolving Funds: Section 53E 1/2 of Chapter 44 authorizes cities and towns to establish one or more revolving funds for individual municipal departments and to set a limit on expenditures from each fund. Annual reauthorization is required for each fund by Town Meeting upon the recommendation of the board of selectmen, in the case of a town, and by the city council upon the recommendation of the mayor/city manager, in the case of a city. We are asking the Legislature to adopt H1450 to eliminate the annual approval requirement and replace it with a one-time authorization by the local appropriating authority that would be revisited only to change the dollar limit or revoke the authorization.
- Capital Project Fund: Amend Chapter 44, Section 20 through the adoption of H1440 to allow up to $25,000 remaining in a capital project fund, after the project is complete, to be appropriated for the purpose of retiring any debt incurred to pay for the capital project. The remaining balance could be used to pay the debt that was issued.
- Insurance Proceeds from Public Safety IOD Claims: Amend Chapter 44, Section 53 to allow for the use of insurance proceeds from public safety injured-on-duty (IOD) claims in a manner consistent with property insurance claims whereby claims below $20,000 may be spent without appropriation. Currently, when a public safety employee is unable to work due to IOD status, any wage-replacement insurance revenue must be treated as general revenue while the respective employee’s department’s appropriation must accommodate both the wages of the injured employee and any costs of covering that employee’s absence.
- Modernize Procurement and Public Construction Laws: The following suggestions would reduce the direct financial and administrative costs of dealing with overly restrictive and out-dated purchasing and public construction regulations and laws. A major cost factor in public construction is a requirement that Towns pay “prevailing wages” that are often greater than the wages paid by local contractors. In addition, this requirement involves far more paperwork than local contractors are prepared or willing to take on for a one-time project. It is ironic that a law, which was initiated to encourage the award of contracts to local tradesmen, would have an opposite effect. There should be legislation that would exempt construction projects of $100,000 or less from the prevailing wage law.
We urge you to address the long overdue problem of excessively high public construction costs within the Commonwealth.
- Impact/Mitigation Fees: The state needs to develop a fair system of assessing the cost of new developments on municipalities and allowing them to recoup some of these costs from developers. The process for negotiating mitigation funds from developers is time consuming with results that vary dramatically from municipality to municipality, and from developer to developer. There should be one set of rules for all to follow. It is expensive and time consuming to create a local by-law that accomplishes most of what should be authorized and standardized at the state level. Many other states provide municipalities the ability to charge impact fees on new developments in order to mitigate the capital costs associated with growth. A constitutional change will allow Massachusetts to utilize this
technique of growth management for funding infrastructure and facilities such as schools. This modification to the State constitution, which will benefit municipalities and their residents, is long overdue. We urge you to support the actions necessary to have the State constitution properly amended.
- Amend Community Preservation Act: Currently, the CPA does not allow CPA funding to be used for the rehabilitation of existing outdoor parks and other recreation resources that were not acquired using CPA funds. Nor can funds be used for any maintenance of recreational areas. This prohibits many recreational projects that would expand the use of existing parks, playgrounds and sports fields. Adoption of H765 and S1841 would amend General Laws, Chapter 44B, the Community Preservation Act, to allow projects relating to recreation uses to be eligible for Community Preservation funds would provide an important tool to promote healthy communities.
- Ambulance Billing: Adopt H3917, an amendment to prohibit insurance companies from paying patients- rather than ambulance service providers- for certain emergency medical service calls. The bill would prevent insurance companies from directly reimbursing patients for ambulance services, which would leave it to the consumer to turn around and pay the municipality for the EMS expense. This practice is confusing and can force municipalities to track down payments. The bill would also clarify that municipalities have the authority to set ambulance fees.
On behalf of the Town of Northborough, thank you in advance for your consideration of these important issues and initiatives.
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