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Letter To The Editor: Budget Approaches That Should Be Considered By Madison’s Government

In an open letter to the First Selectman, Madison resident Charles Elliott makes several specific recommendations, including imposing fees for service, attracting industry, reducing school budget, and addressing anomalies in assessments.

 

Editor's note: This is a letter drafted by Madison resident Charles Elliot last year. He has provided updates to it and has asked that it run again this year as we consider the town's budget. See footnotes at the end of the letter for this year's updates.

 

The Honorable Fillmore McPherson

First Selectman

Town of Madison

Eight Campus Drive

Madison CT 06443

 

Dear Mr. McPherson:

 

My wife and I have enjoyed our seasonal residence at 12 Parker Avenue for over forty years.  While our permanent residence is in South Carolina, we do have two grandchildren in the Madison Public Schools.

 

Past year’s difficulties in obtaining voter approval of both the Town and school budgets prompted thoughts on new approaches to both possible revenue increases and cost reductions for the Town.  Let me add that my experience includes six years on a local school board in Westchester County, New York; over twenty years as a pharmaceutical industry executive, and fifteen as a locational and economic development consultant.

 

Here are my suggestions for your consideration:

 

Revenue Increases

  • Fees for parking at railroad station and meters for downtown.  Most Westchester communities and many in Connecticut charge annual fees for parking near their commuter railroad stations.  They also have provisions for daily parking.  Meters are common for downtown shopping areas.  I gather that the railroad station lot is owned by the State, so negotiations at that level may be necessary.

 

  • Fees for local government programs, including the Senior Center, summer concerts, and for participation in athletic and other extracurricular school activities.  Many communities in Connecticut have instituted such fees to offset the rising cost of providing such services.

 

  • Automatic gates and related toll-collecting methodologies for the East and West Wharf town beaches.  From personal observation, the West Wharf beach kiosk is staffed, at most, about half the time during the summer.  Is this cost-effective?  Beach communities in our area in South Carolina have automatic collection systems for beach parking; I suggest that the Town investigate same.

 

Any such system undoubtedly would require some form of land swap with Ric Duques so that the Town can regain control of mooring posts and adjacent beach frontage.

  • Raise revenue from Town-owned properties.  Per the Appraisal Resource data base, the Town owns 79 properties.  I suggest an analysis to determine whether all are necessary and, then, sale or lease of excess properties not needed.  This analysis certainly should include the two acres (more or less) at the Griswold property for which commercial development is allowed by the covenants governing the property.
  • Examine assessment practices to correct, by the next revaluation, instances where properties currently appear to be underassessed.  A prime example involves the Madison Beach Hotel property at 88 West Wharf Road and comparison of this property to other beach front properties of approximately the same size.  The above-referenced hotel property was sold in 2006 to Mr. Duques for $5,357,680 and is assessed (at 70%) at $3,710,000.  The land alone, 40,436 sq. ft., is valued at $l,750,306  or $43.30 per sq. ft. By contrast, most other privately owned beachfront properties of about one acre or more (I identified ten others) are assessed at square foot values in the mid-30’s.  Two glaring exceptions are the Madison Beach Club property at 128 Island Avenue ($18.05 per sq. ft.) and property at 251 Neck Road ($13.12 per sq. ft.).  I do understand the principle in appraising property that larger properties generally, but not necessarily, are appraised at lower unit values than smaller properties.  However, the valuations attributed to 128 Island Avenue and 251 Neck Road certainly seem to be understated.  This observation pertains, in particular, to The Beach Club, with 200 feet of shoreline compared to the hotel with its 40 feet of pebbly sand. Please note that I telephoned the Town Assessor, on October 7, 2010 at 3:40 p.m. to request a meeting to review the above findings.  As of October 18, when I had to leave our unheated house, the courtesy of a return call had not materialized.

 

  • Review the possibility of Payment in Lieu of Taxes (PILOT) programs for properties not now paying taxes or which enjoy dramatically reduced assessments.  Hammonasset Park is a prize asset of the State of Connecticut.  However, I do not believe that Madison receives property tax revenues from the State.  Perhaps an agreement could be reached whereby Madison shares in the admission fees levied by the State.  And the Madison Country Club enjoys a low assessment ratio on its property, 4% I believe, vs. the usual 70%, under a program designed to preserve open space.  Why not attempt a PILOT program for this acreage?
  • Selectively attract industry to the Town.  Unlike almost every other community, Madison has virtually no industrial base to provide tax revenue; the sale and subsequent demise of Garrity Industries leaves only a welding operation on New Road as an industrial operation.  The town consistently has rejected applications for industrial use, including, as I recall, an upscale R & D operation some years ago.  But…can we afford to continue “business as usual “?  Surely, some vacant land parcels could be identified for economic development without compromising the Town’s quality of life.

Reduce Cost

  • School expenditures account for, by far, the greatest part of Madison’s budget.  Personnel expenditures represent 70-80% of the school budget.  The school lobby is entrenched.  But Madison taxpayers need to be certain that the proper cost/benefit balance is achieved in the schools.  To this end, I think a small but high-powered blue-ribbon panel be charged with a “zero-base” budget analysis of each non-instructional position in the school system, applying (at least) four questions to each position:
  1. What is the purpose of this position?
  2. Can it be combined with another position?
  3. Can it be out-sourced at a lower cost?
  4. What would be the effect of eliminating the position?

Instructional staffing in the elementary and middle schools is primarily a function of class size, but some savings could be obtained by use of volunteer classroom aides.  In the high school, staffing is related to electives offered; elective courses should be subjected to the same scrutiny as non-instructional staffing.

The results of the committee’s work should be completed by budget time in the early spring.  Please note that I tried to obtain an organization chart for the school hierarchy but was told by the receptionist/clerk that no such document existed.

  • The same approach can be applied to the town budget, although I think substantial reduction in personnel expenses were achieved in the final, approved budget last year.  Still, opportunities for out-sourcing and sharing of services with neighboring towns deserve in-depth study.

Summary

Unlike most American communities, Madison has virtually no industrial base.  The Town relies primarily on residential property for tax revenue.  At the same time, the Town’s boundaries include properties – such as Hammonasset, the Madison  Country Club, and Town-owned properties - which produce little/no tax revenue for the Town.  The Town’s recent acquisition of the Griswold property serves to put upward pressure on the annual mill rate. With this in mind, this letter presents budget approaches that should be considered by Madison’s government in order to bring down next year’s mill rate.  Revenue-raising measures include:

  • Imposition of fees for services.
  • Producing or increasing income from government-owned properties in Madison as well as properties that enjoy very favorable assessments under local/state laws.
  • Addressing anomalies in assessments of real properties that result in lower income for the Town. 
  • Attract industry that enhances the tax base without a commensurate increase in expenditures
  • The major possible cost reduction involves the school budget.  The Board of Finance should advise the Board of Education that it will insist on a zero-base budget next year.

In conclusion, I hope that the Town will take steps such as outlined above, to assure Madison taxpayers that Town and school budgets reflect intense cost-benefit analysis.

Sincerely yours,

Charles K. Elliott, Jr.

Madison, CT

 

Author’s note, Updates as of April 2011

 

Since this letter was written, I have determined that the State of Connecticut has made statutorily-mandated PILOT payments to Madison in the range of $500-$600,000 annually for the past three years.  The PILOT concept certainly could be extended to other tax-exempt properties and properties enjoying low assessment rates.

 

While the number of teaching positions in the schools has been reduced, per the proposed budget for next year, this action is a function of declining enrollment.  I see no evidence of zero-base budgeting for the non-instructional segment of the school budget.  And, while the school has initiated fees for participation in some sports programs, these could be expanded to include other extra-curricular activities.

Herb February 13, 2012 at 10:19 PM
Eileen, The Madison Beach Hotel (MBH) is appraised at $9,896,000. There is one other property listed under the heading of MBH, that being appraised for $830,700. Can you please provide a list of the properties that increase the value to $14,636,800? They are currently not listed as a part of the MBH. Can you also tell us what the MBH paid on it's current tax bill (January's payment). Thank you
eileen banisch February 13, 2012 at 11:32 PM
Herb - just go to visionappraisal.com. The amount of the appraisal of the main property is 12,396,700, the house on the west side of west wharf is the 830,700 to which you are referring, and the "fish house" property across the street is appraised at 1,409,400. The three total $14,636,800. Multiply times 70%, then by the 19.43 mill rate, and they will pay $199,075 a year in taxes. There was also a story in the paper last week referencing the approximately $20 million jump in the grand list.
Charles February 14, 2012 at 12:42 AM
Annual taxes of $182,784,358.00 for the Madison Beach Hotel?
Charles February 14, 2012 at 12:47 AM
Word has it that Duo Dickenson and the new football field people have been sending out e-mails to the residents to vote in favor of the budget which includes nearly $1,000,000 for the new stadium.They want a real loud crowd there to drown out the folks speaking out against yet another big bloated budget. Should be interesting once again, but there is no way Duo is fooling us again..
tom February 14, 2012 at 11:47 AM
Drew, in the past decade we have completely lost our civility. If you do a little research http://www.formsofaddress.info/USO.html#USO002 (about 30 seconds)you will see there are proper ways to address public officials, and there is a reason for it. First and most important you are addressing he office as much as the person. A respectful start to a letter assists in having the recipient finish reading the letter and possibly even consider your points. As important as this Mr McPherson is a veteran who served his country, that in and of itself should entitle him to be addressed respectfully. Civility a casualty of the digital age and informal media approach. Call me old....
Janet February 14, 2012 at 01:24 PM
I also now see that there is a substantial surplus from last year's tax revenue. And yet the town and BOE are still asking for increases. Anyone who opposes these budget increases should speak up on Thurs. night.... there is strength in numbers.
Drew P February 14, 2012 at 01:50 PM
He is an elected official...there is nothing honorabe about that. Especially since he has only been in office for 2 years.
tom burland February 14, 2012 at 02:49 PM
Drew. 5 min or 30 years it doesn't matter it is the position. It must be terrible to be such a bitter disgruntled individual. Being an elected official is an honorable endeavor. Not to say a number of elected officials are not dishonorable. You will not find a more genteel, respectful individual than Mr. McPherson, he is a true gentleman. Now that does not mean I agree with every decision he has made or position he has taken, in those cases I respectfully disagree. To call those that have served our country and our town for many years, please include all the years he has served as a volunteer, as anything less than honorable is very questionable
tom burland February 14, 2012 at 02:57 PM
Charles' letter is an outstanding example of good public debate , it offers facts and solutions. It is nice to see someone put their opinion out there in a way that will be thought provoking. While there are elements I don't agree with and things that can't be done it is a letter that promotes dialogue by offering suggestions. The basic premise of question what you are spending and thinking of new ways to raise revenue. GE had/has a process called workout many companies have similar process. You state a problem then come up with approaches to solve the problem with no negative comments or name calling. This enables the power of building on others ideas and encourages people to participate without fear of being called an idiot. Something I try to do but admittedly struggle with
BL Davis February 14, 2012 at 03:03 PM
Eikeen: In case you can't read what you actually wrote, your first comeent was that the hotel would pay an astounding $182,784,358 in property taxes! Glad you finally corrected your math. Because you are a member of the Board of Assessment Appeals, your original calculations are frightening!
eileen banisch February 14, 2012 at 03:20 PM
Barbara: Calm down. It was a typo - cut and pasted from the calculator. You are certainly familiar with typos - my name is spelled EiLeen, not eiKeen.
Andrew A. February 14, 2012 at 03:25 PM
Boy - Barbara Davis and Herb Gram jumping ugly about an innocent typo! No wonder the MPOA has completely lost all respect in Madison.
Matt February 14, 2012 at 05:46 PM
Sitting at a desk in town hall does not make one honorable by default. Nor does some book about how to speak like people did 200 years ago make one honorable by default. I prefer to base my adjectives on the reality of person's actions in office.
BL Davis February 14, 2012 at 09:02 PM
Andrew A. For your information, Eileen has never admitted to an error and appears to be angry that her grossly incorrect number had to be corrected. I didn't see any "Thanks for catching that" from her. As a matter of fact, many Madison residents look to MPOA for correct information and to uncover hidden costs in the Budgets in their proposal form. Trust but verify is a good policy..
Andrew A. February 14, 2012 at 09:28 PM
My Dear Barbara: Look above - with apparent humor, not anger, 24 hours ago she wrote (quoted below): "eileen banisch 3:46 pm on Monday, February 13, 2012 Barbara: I stand corrected. I was looking at the mill rate posted erroneously on the Vision Appraisal site. So they're paying $11,500+ MORE than I thought...that's even better!"
charles Elliott February 14, 2012 at 10:41 PM
Janet, I never had a reply to my letter. Since my year-round residence is in Mt. Pleasant SC, I will not be at any Madison meeting until we return to Madison in May. If you are Janet Nicolini, I know that you are in substantial agreement with many of the issues I've presented and in a better position to advocate for them. Please feel free to contact me at Chazel303@aol.com
Drew P February 14, 2012 at 11:19 PM
I'm not surprised you didn't get a reply to your letter--it's just the type of person MR. Mcpherson is...I guess that is considered "honorable"
Janet February 14, 2012 at 11:36 PM
Yes Charles, I am in agreement with many of the issues you presented, with the exception of metered parking, which just frankly just annoys me whenever I want to stop and shop in a town. It really shocks me that no one on either of our esteemed Boards of Finance or Selectmen are questioning the schools budget or asking for the next closure plan, which surely will be needed soon and "should" reduce the budget substantially. It is the big White Elephant in the room, and our officials are showing no signs of tackling it. I asked one member of the Board of Finance and she did not address my direct questions, and proceeded to tell me that Madison residents have it much better than other surrounding towns when it comes to our tax bills. I'm sorry, but that's not good enough. I too am a "part time" resident but am close by, so I do come up for meetings and referendums. I have no children in the school system and I was socked with a huge tax increase a few years back because I live one block from the water. I am all for quality of education, but I don't buy the BS that there are no places to cut without sacrificing quality. Take one look at the non-teaching staff roster on their website. I will be sure to vote NO to any budget increase request, and I hope all those who feel the same way come out and vote the same way.
charles Elliott February 16, 2012 at 04:04 PM
Tom, thank you for your comments. I hope that residents will focus on the key points in my letter: Intense scrutiny of the non-instructional part of the school budget; review revenue-raising opportunities for the 79 town-owned properties; address anomalies in land assessments (e.g., Madison Beach Club land assessed at $18/sq. ft. vs. Madison Beach Hotel land @$43--or $35 if parking lot is included); determine feasibilty of PILOT programs for properties that benefit from low assessments or are tax-exempt. Charles Elliott
Pem McNerney (Editor) February 16, 2012 at 04:13 PM
Charles E., thanks again for writing the letter! I appreciate you taking the time to come up with detailed suggestions and presenting them in the form of a polite letter. Thanks everyone for the comments and just a reminder that, for those of you who are able to go, there is a public hearing tonight at 7:30 p.m. at Polson School on the budget. The selectmen have presented their budget, and, after the public hearing tonight, the Board of Finance will review it, so there is still time for input on it for those who care to provide it. Here is a story about the meeting tonight: http://patch.com/A-qQHr
Liz Neighbors February 17, 2012 at 10:59 PM
Democracy is built on civilized debate. When people deliver their opinions in a courteous manner, whether in a public meeting, on the street or in the newspaper, all sides will benefit. It's telling that some of the negative comments here are from those unwilling to disclose their full names. While our Madison schools have a zero tolerance policy for bullying, we should expect the same from adults discussing the budget.We need to model positive respectful behavior so our children will learn by example. Check your comments and see how proud you would be to have school children speak this way in class. It's just something to think about.
Matt February 17, 2012 at 11:17 PM
I would be very proud to have my children share my opinion in school. When you have something useful to ad to this discussion, come on back. Whining about people's screen names has nothing to do with this discussion.
Liz Neighbors February 18, 2012 at 06:23 PM
It is not about the opinion, it's how one expresses it. Thank you.
Pem McNerney (Editor) February 18, 2012 at 07:12 PM
I agree with you about the importance of engaging in civilized debate. Credit goes to you Liz for not only pointing that out, but also for going to the budget hearing the other night, and covering it as well. Much appreciated!
Pem McNerney (Editor) February 18, 2012 at 07:15 PM
Matt, about your earlier point about the train station, I do believe you are correct. That is not an option at this point. Also, by way of an update, the selectmen recently approved a schedule of fees for people using the senior center, so it seems that was a good idea. A revaluation is planned soon, so perhaps town officials will look at areas where properties appeared to be undervalued. It'll be interesting to keep an eye on that and thanks, Charles for pointing out some of that information.
Janet February 18, 2012 at 08:13 PM
Pem, if you look on Zillow, my house is worth 60% of what the town assessor says its worth. We who are south of the Post Road are getting miked, so I hope the revaluation corrects some major imbalances.
Janet February 18, 2012 at 08:16 PM
Sorry...My point is that there is a lot of over-valuation on the current Grand List...
Matt February 20, 2012 at 06:46 AM
What is this schedule of fees. And more importantly, I can't wait to see the list of who is exempt from it.
BL Davis February 20, 2012 at 03:01 PM
Liz: It is about the opinion. It is about the truth or the lack of truth in the opinion. A falsehood, no matter how politely stated, should not be acceptable to you or to anyone else. Of course, civility should be maintained, but civility alone is not the standard for judging the validity of an opinion. I personally am offended when "name calling" is the chosen response to an opinion or even suggestions that a writer is not "civil" if his or her opinion is not in agreement with a misinformed popular belief. Civility must be balanced with facts and truth.........
George February 20, 2012 at 05:09 PM
I'd like to see a break down on how much the town spends in legal fees regarding property evaluation appeals.

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