Report of the Municipal Experience Working Group
Town Financial Organization Study Committee
October 11, 2006
Overview
The Municipal Experience Working Group [MEWG] was charged with surveying other communities in Massachusetts, in order to see if their experiences with alternative financial structures and operations could be informative to the work of Arlington’s Town Financial Organization Study Committee [TFOSC].
Process
The MEWG determined that an expansive survey of communities in Massachusetts was not practical. There are many possible “peer” communities to Arlington, and a broad survey would not provide the depth of understanding and perspective that was desired from this activity. Therefore, the MEWG chose three “peer” communities to Arlington for their similarity in type of community (developed suburb), type of government (town), population, and availability of contacts. The MEWG wanted to contact a range of individuals including employees (such as a Finance Director and Town Administrator), leading elected and appointed officials (such as Town Moderator and Finance Committee Chairman), and residents (such as Town Meeting Members). It was important to select individuals with “inside knowledge,” such as a Finance
Director, as well as those with a regular informed citizen’s perspective, such as a Town Meeting Member.
The MEWG conducted telephone interviews with 3-4 contacts in each town. In most cases, the contacts were assured that neither their identities nor the identities of their communities would be shared with the TFOSC. A standard set of topics and questions was used to guide the conversations:
· The strengths and weaknesses of a town Financial Director or CFO position
· The merits of elected versus appointed positions such as Treasurer or Assessor
· The integration of town and school financial administrations
· The driving force behind the budget process
· Cost savings and / or improved effectiveness resulting from particular financial structures or operating policies
· Other changes in the area of financial management that were considered or implemented
Results
Each community surveyed had its particular set of issues, historical events, or individual personalities that caused it to develop a particular financial structure and operation. So while it was not readily apparent that there were common experiences from these communities that could provide clear direction to Arlington, some common themes did emerge.
The strengths and weaknesses of a town Financial Director or CFO position
Interviewees were either neutral or somewhat positive about this type of position. In a number of cases, towns had established these positions after having the responsibilities of this role performed by an individual within the town management structure, such as an Assistant Town Administrator. Interviewees in one community stated that the size of their budget and operations caused the position to be formed. A common theme from a number of interviewees was that the specific individual in this role, rather than the position itself, caused them to have a positive regard for the position.
The merits of elected versus appointed positions such as Treasurer or Assessor
In general these positions did not generate much opinion from the interviewees. Some viewed the number of elected positions in Arlington – including these positions - as outdated, since in many cases they have been replaced by appointed positions and consolidated into the existing financial management structure of the town. These interviewees generally favored financial structures of appointed “professionals” compared to those with elected “politicians.” Others expressed concern about the concentration of power over financial management issues in consolidated financial structures, and favored organizations with more balance and independence.
The integration of town and school financial administrations
There was no consensus regarding the integration of town and school financial administrations – from the integration of operations such as payroll and purchasing to planning and budget preparation. A number of interviewees mentioned the implementation of common computer hardware and software platforms as a desirable level of integration. However, a common theme, and a common concern, was that town and school financial operations appear to require unique sets of skills and experience and may not lend themselves well to consolidation. Sorting through these appearances to uncover the reality of the situation was a frustrating experience to some of the interviewees.
The driving force behind the budget process
Statutory regulations govern the development of the budget, and this is the responsibility of the Town Manager or Town Administrator in the communities contacted by the MEWG. However, the MEWG wanted to determine if other town bodies such as the Finance Committee or other positions played a significant role as well. In each case, though, the interviewees pointed to the Town Manager or Town Administrator as the key driving force behind the budget. In most cases, they viewed this as one of the most important roles for these positions, and their assessment of the overall success or failure of the Manager or Administrator was tied closely to that person’s role in the budget process.
Cost savings and / or improved effectiveness resulting from particular financial structures or operating policies
There were few opportunities for cost savings or improved effectiveness identified by the interviewees. In fact, in those communities that had undergone a financial structure reorganization expecting to reduce the number of total position, they either maintained or increased the number of positions. Few interviewees could point to operating metrics that were in place to measure productivity or effectiveness. At the same time, many of the interviewees noted that particular departments were examined periodically due to the belief that there were opportunities for reducing costs. Regarding the information systems infrastructure, multiple interviewees noted that a common financial management system was very important to their efforts to maintain or reduce costs, and provide opportunities for integration between the town and school administrations.
Other changes in the area of financial management that were considered or implemented
The only potentially significant changes that were identified involved the transition from a Town Administrator to a Town Manager form of government. The reasons for considering this alternative were focused on creating a more direct reporting relationship between the town department heads and the administrative head. Arlington’s Town Manager form of government already establishes these reporting relationships.
Summary
The series of interviews with peer communities yielded a number of themes for consideration by the TFOSC:
· A financial director position is useful for the development of a balanced budget and control of operating expenses, and the functions of this position may also be the responsibility of an Assistant Administrator, Assistant Town Manager, or other individual within the town administrative structure.
· Extensive consideration of elected versus appointed positions for Treasurer or Assessor may be of limited value, though a basic understanding of the statutory responsibilities of these positions may be of benefit.
· The integration of town and school financial administrations may be difficult in a practical and political sense. However, the use of common financial management infrastructure such as systems software is important for expense management and reporting.
· An extensive financial reorganization may increase operating expenses due to the expansion, rather than reduction, in staff.
Respectfully submitted,
Municipal Experience Working Group
Allen Reedy, chair
Charlie Foskett
Steve DeCourcey
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