It gives me a great deal of pleasure to present the 2003 Annual Town Report to the citizens of the Town of Arlington. The Town Report is a record of what occurred during the calendar year 2003. Please take the opportunity to review the reports of the various departments. They offer considerable information on the wealth of services offered through the town’s departments.
Financial Overview
The year 2003 started out with a very bleak financial outlook. In January, the newly elected governor, Mitt Romney, cut state aid to cities and towns through his powers under section 9C. The Town of Arlington’s Fiscal Year 2003 budget was further reduced by $915,000. This occurred in the middle of the fiscal year causing little time to make up the shortfall. The Town and School had, however, begun the process of reductions in the Fall of 2002. The Town had a hiring freeze and the School department, which could not change classroom instruction in the middle of the year, froze all unnecessary spending. Further budget cuts were not needed as the school committed to turn back $250,000 and the Town committed to turn back the difference of over $700,000 through reduction in spending.
State aid had been reduced by $1.4 million in Fiscal Year 2003. Fiscal Year 2004, which started on July 1, 2003, saw an astounding additional loss of $1.9 million in State aid. In the course of a two-year period the Town saw a reduction in it’s State aid of $3.3 million. This coupled with local receipt levels being predicted as flat and increasing fixed costs to operate the Town indicated a substantial systemic fiscal problem. Without a drastic change in the economy it is predicted that the Town could be faced with shrinkage of services for several years to come. The deficit in January was approximately $8 million. This dramatic deficit was due to several factors including: increased costs in some of the fixed programs (such as health insurance and pensions), a reduction in investment incomes and other revenue streams as a consequence of the economy, and the loss of state aid due to State budgetary deficits. These
factors, when coupled with the increasing demand for services, have caused considerable constraint on the Town of Arlington’s budget.
Given the stagnant economic climate, the Board of Selectmen felt that the Town and School services should be reduced by half of the deficit and the other half would be requested through an override. The Board of Selectmen, working with the School Committee voted to place an override in the amount of $4 million on the ballot for June 2004. Of this amount, the School Department would get $3 million and the town would get $1 million. Unfortunately this override failed.
Services in 2004 have been drastically reduced in all departments. On the Town side, the hardest hit were the Library, Council on Aging, Public Works, Police and Fire Departments. Most departments were faced with a reduction in staff and/or expenses.
While the loss of State Aid and its impact on the budget has been devastating to the town, I would like to highlight several other areas which have a significant impact upon our budget: the cost of health insurance, pensions, and solid waste collection and disposal.
Health Insurance
The dramatic increase in the Town’s health insurance is due to several factors; in particular medical inflation and the number of enrollees within our plans. Medical inflation is running in the double digits in the United States and considerably higher in the Boston Metropolitan area. The constantly increasing cost of prescription drugs and new treatments, which allow people to live longer, are the major factors contributing to this skyrocketing inflation. The downturn in the economy has caused employees whose spouses have either been laid off from work or have had their health benefits changed to enroll in the town’s plans; causing our enrollment to increase. Health insurance has been increasing at double-digit rates for the past several years and is anticipated to do so into the
future. Efforts to reduce these increases are ongoing and currently the Town Manager’s Office is working with the employees to bring about changes in the cost of health insurance through the collective bargaining process.
Pension
The Town of Arlington offers a contributory retirement system with a defined benefit schedule. Employees contribute a portion of their salary toward their pension and the Town is required to pay a fixed benefit upon their retirement. Pension contributions are invested so as to fully fund the employee’s benefits upon retirement. The State requires each contributory retirement system in the Commonwealth to fully fund any unfunded liability by the year 2028.
The Town of Arlington was well on its way to accomplishing this requirement prior to this scheduled date. However, investment assumptions made and reductions in investment earnings have dramatically altered the financial outlook. This means that the amount of outstanding unfunded liability has increased. In order to comply with State law the Town must increase the amount of the appropriation over the next several years. Working with the Arlington contributory Retirement Board, the pension schedule was revised so as to provide less of an impact in the Fiscal Year 2004 budget, only increasing by $700,000. This required the Board to extend the funding schedule until 2024.
Solid Waste
The cost of disposing our solid waste at the NESWC facility is another major financial concern that the town has struggled with over the years. The NESWC Committee (North East Solid Waste Committee) is a group of twenty-three communities that jointly built and financed the construction of a Solid Waste facility in North Andover (WNA) to dispose of our trash. The contract is due to expire in 2005. The Communities have an obligation to negotiate in good faith with WNA to dispose of any future trash at the facility. The Town Manager’s office worked diligently with these communities and the Committee to negotiate revised contracts that will benefit the Town of Arlington. At the Annual Town Meeting in the Spring a new contract was presented and approved by the Town Meeting. The contract was a major
improvement from the existing contract. The new solid waste disposal contract is directly between the town of Arlington and WNA. It is a five year contract which has a fixed cost per ton and no annual tonnage guarantee. This will drop the tip fee from $140 per ton, with a guaranteed annual tonnage of 24,065, to $64 per ton in the first year. This alone is a savings to the town of $1.8 million. Coupled with a reduction of the amount of trash that the town now generates this is a substantial savings. Although there is a slight increase in cost per ton each year, the town is now assured of a stable cost until the year 2010.
Symmes Hospital Property
In 2001 the Town purchased the Symmes Hospital buildings and 18 acres associated with the property through a debt exclusion in the amount of $14 million, $7.1 for the acquisition and the remaining for the operation of the site. Over the course of the next two years a dedicated and hard working advisory committee met with numerous stakeholders to develop a plan of action for the development of the site. The result to date has been the acceptance of an Urban Renewal plan by the Town Meeting and the development of an RFP to solicit proposals for development. The goal was to provide a medical/ office space presence, affordable housing and open space preservation. The committee did a remarkable job of accomplishing this while maintaining a neutral revenue picture.
Street Lighting
Two years ago the town of Arlington purchased the street lights from NSTAR at no cost to the Town. Since that time we have been working with the Sustainable Arlington Group to present a plan for the replacement of the streetlights with a more economic light fixture. In 2003 the Board of Selectmen approved the recommendation of the Town Manger to replace the existing mercury vapor street lights with high pressure sodium light fixtures. The replacement project will also install fixtures so that the light is cast downward and will not shine up into the sky. This could save the town over $100,000 in energy costs per year. The cost of replacement will be subsidized by energy conservation grants from NSTAR. It is anticipated that the payback on the project will be less
than 1 year.
Permanent Town Building Committee
The Permanent Town Building Committee, of which the Town Manager is a member, worked with several architects to design 4 municipal buildings this year. The committee hired the firm of Carell Group Inc. to design the Park Circle Fire Station. The firm of Design Partnership of Cambridge, inc. designed two of the remaining elementary schools, Thompson and Stratton, and DRA Architects, the architectural firm that designed the Peirce School, drafted the final documents for the Dallin School replacement. The committee additionally worked on the final checklists for the Peirce School and Hardy School projects.
Early Retirement Program
The Board of Selectmen adopted an early retirement program in November 2003. The goal of any early retirement program is to reduce the number and cost of employees. However, due to the severe reduction in personnel in Fiscal Year 2004 the Board limited the early retirement program to two people. The early retirement program saw the loss of two employees in the Public Works Department.
Personnel Changes
The Town saw the retirement of a long-time department head during 2003. Mr. Alan McClennen, Jr., Director, Planning and Community Development, retired in July after admirably serving the town for 29 years. The impact Mr. McClennen had on shaping this community can be seen in every section of town. He was instrumental in developing the existing Zoning By-laws, the creation of the Donald R. Marquis/ Minuteman Bikeway, the Reed’s Brook renovations, the Symmes Hospital project, the Massachusetts/ Pleasant Street reconfiguration, the Arlington Heights project, the moving and development of the Jefferson Cutter House as a focal point in the center of town, among many other projects too many to name here. Many of the activities he participated in are recalled in the annual reports presented in this report. We wish him well in his retirement. Two new department heads joined our ranks during 2003. The new Director of Planning and Community Development, Kevin O’Brien, has been the
Assistant Director for the past 18 years. He brings remarkable experience and energy to the position.
Mr. John Sanchez replaced Richard Bento as the Director of Public Works. Mr. Sanchez joined the Town in April 2003 and brings with him over 14 years in public works experience, the most recent as Director of Public Works in the Town of Billerica.
The year 2003 was once again one of personnel changes in the Town Manager’s Office. The town created a new position entitled, Purchasing Officer, to replace the position of Assistant Town Manager/ Purchasing Agent. Mr. Dominic Lanzillotti was hired for the position. He brings with him 14 years of purchasing experience from the City of Worcester. The Purchasing Assistant position was vacated during the year and reduced to a part-time position. As of the date of this writing the position remains vacant.
The Town also welcomed the naming of a new Town Manager in December. Mr. Brian Sullivan will assume the duties of the Town Manager in January 2004. Mr. Sullivan has over 29 years of municipal government experience and most recently served as the Town Manager in the neighboring community of Winchester.
I would like to take this opportunity to thank the Town’s many employees for their time and service to the Town of Arlington. I look forward to working with each of them during the next year.
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