Town Manager’s Report
Tuesday
October 18, 2005
Maine Municipal Association Convention Highlights:
MMA held its 69th Annual Convention from October 5-October 7. The theme this year was Back to Basics…Efficient Services and Economic Vitality. The highlights of the programs were almost the book ends to the convention. Jack Shultz spoke at the Wednesday luncheon about small town successes in economic vitality. His book Boomtown USA speaks of the 7 ½ Keys to big success in small towns. I have ordered the book to further review and share with the Council and CEDC. Overall, small towns too can enjoy long term prosperity with carefully planned and executable steps. As I listened, I used the steps to inventory Gray.
The second highlight was on Friday. Commissioner of Education, Susan Gendron spoke of the future needs of the work force and what we must do in today’s core curriculum to prepare students. She talked of the demographic changes and emerging industries which we must prepare for through thoughtful collaboration and partnerships between and among municipal, state and private resources. The two areas that we are to continue to focus on, Math and Science, are the very skill points that China has targeted with their goal of every high school graduate learning calculus and being prepared for post secondary education to continue their life long training.
The balance of the Friday session covered the Essential Programs and Services model as a result of the tax reform bill. Again, this was to assure that the participants had a grasp of a very complex two part approach. The first was how EPS works and is to be used as a benchmark for equalizing expenditures. The second was how the State is currently funding the EPS model. I have asked the MSAD #15 to provide the Council with the ED281 form which they had to file with the Department of Education and it sets forth the benchmarking for our District. While this is more than a simple form, it might also be an excellent opportunity for the Council and the Directors of MSAD #15 to meet in more than one joint session to review the comments of the Commissioner as well as receive further insight to the
EPS model.
Additional sessions attended include the Internal Controls and Cash Handling, Performance evaluations, Developing Sound Financial Policies, State of the State’s Finances and LDI Spending Limitations. There were some technical classes on the use of the computer software that is on our desk tops such as power point and outlook. I was able to obtain a copy of the handout to the cancelled program Persuading and Influencing through Leadership and will review the evaluative system it employs. I was able to join Councilor Skip Crane who also attended some of the sessions on Thursday.
Many of these topics will be the subject of future Staff meetings as well as aspects that might improve both policy development, internal procedures and committee work.
As an aside, one session conducted by Commissioner Wyke, Maine Department of Administrative and Financial Services, conducted a review of the State’s finances indicating the State had moved to aggregate all of their heating fuel purchases and locked in at a substantial savings based upon their projections for next winter. Their lock in price was $2.189 or about $.47 more than what we have pre-purchased our fuel oil, or $1.719 per gallon.
Mayor Barry Timson of the City of Hallowell spoke about their Council’s monthly meeting and provided some insight as to making their meetings more efficient and productive. Copies of this handout will be given to the Council. Hallowell is a city of #2,500 people and meet only one time per month. While there are differences between our Town Charter and their city charter, we might be able to work better together to achieve the level of productivity he refers to.
State of the State Finances:
I will distribute to each Council member, the media and the MSAD#15 a copy of the pie chart Commissioner Wyke provided participants. It breaks out the FY 06-07 expenditures and the categories that make up the $5,686,800,000 budget for the State.
Some of the key points she raised were:
*The “structural gap” is the difference between the Revenues and State Expenditures after inflation adjustments.
*Education and Human Services are the lion share of expenditures with $2.660 B for Education and $1.857 B for Health and Human Services. These represent some 79.5% of the total expenditures.
*The remaining $1.162 B covers all other departments including Legislative Expenses.
*Generally 84% of the $5.7 B is pass thru to other entities like county and local governments (46%) and MSAD’s.
*About 12% can be controlled by the legislature for state government.
*Maine is quickly shifting from a manufacturing dominance to a services dominance and the tax structure does not reflect this.
*Best investments of the State is in higher education to reshape the future workforce but there is no real money for that.
*Economic Development resources are limited. Pine Tree zones target employment categories but that’s not enough. State will eventually eliminate the BETR tax payments.
*Medicaid and Medicare reimbursements are still back logged. Estimates are up to a year before prior back log is resolved. However, current reimbursements 87% of all applications are being processed timely.
*Back log of about 12 weeks is expected for heating and energy cost reimbursements under the State Heating Assistance Program for this winter. Will impact small oil dealers and distributers….More reliance on General Assistance.
*The North East Grid is dependent upon natural gas which will spike this winter. This is expected to cause further electrical adjustments and higher costs for consumers.
The Bottom Line as I understand it:
*Maine faces a major shift from manufacturing to service dominated employment.
*Long term education must prepare today’s students for new and emerging technologies and employment such as Biotech and Communications industries Improved business skills for the trades must continue such as electricians, plumbing, construction and the like.
*The current tax structure of the state is not keeping pace with the changes in the industries but rather based upon an old manufacturing model.
*Short term fiscal challenges will slow the state’s progress in meeting the new challenges….and opportunities will be missed.
*Continued reaction to poor legislative policy and decision making in Augusta will split the state politically just about in half; a poor environment for the changes and leadership needed.
*Maine will continue to have a larger graying population and the disparity between the economically capable and incapable will grow larger.
Much of the above mirrors what the Town of Gray faces in the future.
Thank you for the opportunity to attend the Convention on behalf of the Town of Gray.
Respectfully Submitted,
Mitchell A. Berkowitz
Town Manager
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