School Audits Demand Immediate Attention & Action

This week, the Boston Globe ran an article in the NORTH section about how $1.6 million in the Hamilton-Wenham Regional School District (HWRSD) financial accounts was "found" by a newly hired financial accounting firm.

The findings came as little or no surprise to many town officials, taxpayers, parents and especially to Enough Is Enough (EiE), the fiscal watchdog group that was formed three years ago in Hamilton and Wenham to stave off the school district's process of "budgeting by overrides" which resulted in burdening residents of Hamilton and Wenham with two of the highest property tax rates on the North Shore.

According to the article this was the third time in the past year that the HWRSD was found to have significantly more money that had been indicated.

One of the other two cases involved funding that the HWRSD allegedly needed in order to pay for a new boiler for the Cutler School.  Faced with the urgency and need as expressed by the School Committee (SC) that no funds were available, voters, along with support from EiE, overwhelming approved bonding at both Town Meetings to help pay for the project.  Now we are told that the funding was unnecessary and that the district paid $794,000 for the heating system out of existing funds.  The question now is whether the SC will continue to seek the bond approved by the voters FOR THE BOILER and attempt to divert those funds to other projects…such as work on the High School auditorium…a project that was previously rejected by the voters.

According to the Globe article, SC chairman Alexa McGloughan praised the work of the new financial accounting firm, stating "I think we have finally cracked the code on how to demystify school accounting" and that she felt that new accounting practices would lead to better efficiency.

Enough Is Enough has responded by saying it wishes that Ms. McGloughan felt the same way about the thorough and lengthy (400 pages) and complete OPERATIONAL AUDIT REPORT that was completed last year after having been overwhelmingly approved by voters in both towns.  That report clearly supported a previous report (The Blue Ribbon Report) that found that the HWRSD costs nearly $2 million more per year than comparable school districts.

The difference with the OPERATIONAL AUDIT is that it clearly paved the way for correction of the school cost discrepancies with specific recommendations.  Unfortunately, the SC and district have failed to implement the audit's numerous COST-SAVING recommendations and initiatives, choosing instead to implement the few COST ENHANCING initiatives from the report.

This failure to improve the efficiency of our school district, after being handed a $90k Operational Audit roadmap, is unacceptable.  Combine that unwillingness to act on the Operational Audit with the recent financial audit which uncovered $1.6 million, and according to EiE, "that suggests better efficiency is not, as suggested within the article, a primary concern of the School Committee".

"You're going to create a better budget going forward if you know where you're coming from," McGloughan stated.

I believe that should be a naturally true statement and hope that the SC will not continue to ignore the cost reducing recommendations of the Operational Audit when preparing their budget.  It's been more than a year since the Operational Audit was unveiled.  It's time to implement many of the recommendations that until now have been ignored... ignored similarly to the financial accounting that  recently uncovered the $1.6 million.

QUESTION: Does anyone else wonder much we paid to have the new accounting firm straighten out the books and in so doing find the $1.6 million?  Talk around town is that the firm spent more than 200 hours on the project.

Unethical Behavior at Hamilton Town Meeting

The fall Special Town Meeting took place in Hamilton on Saturday, October 30th, at 9:00 am in the auditorium at the Hamilton-Wenham Regional High School. Any concern about a quorum was quickly dispelled and the meeting began right on time with 321 voters (75 make up a quorum) in attendance. This now marks the third Town Meeting that has been held since changing the day and time to Saturday mornings. I seem to recall those opposed to the change claiming that quorums would be problematic, but thus far that has not been the case. Another nice feature is that the meetings have been completed in single sessions, rather than multiple nights as was often the case before.

But I digress.

This town Meeting went along with nary a hitch. Articles were introduced, debated and voted upon. Perhaps the most controversial article was the Estate Overlay District bylaw. This article, introduced by Peter Clark of the Planning Board, brought numerous citizens to the podium to speak for and against the motion. In the end, a vote count requiring a 2/3 majority was necessary and the motion passed 185-79.

Which brings me to the topic of this blog...UNETHICAL BEHAVIOR.

As it turns out, at least one of our residents was so hell-bent on defeating the above motion that she attempted to influence the results by VOTING TWICE. This individual was observed voting against the motion on one side of the auditorium and then ambling over to the other side and attempting to cast her vote against the motion a second time. I do not know if her second attempt was tallied by the vote counters on the other side of the auditorium, but her behavior was reported to a vote counter at the time and then to the Town Manager and two Selectmen after the meeting. The Town Moderator was also apprised.

The woman in question is a long time resident of Hamilton and has even served on at least one town board. She has been known to accuse others openly and publicly of unethical conduct. And yet there she was, displaying her own warped and unethical conduct and commiting what is commonly called "voter fraud".

The morning after Town Meeting I ran into another resident and member of one of our town boards and told this person the story. When asked who the individual was that had commited the "voter fraud" I explained that I would rather not say. To my surprise, she then asked me, "Was it 'Sally Roberts' (not her real name)?" It was! This would seem to suggest that this ethically challenged individual is someone who is thought to be generally dishonest, or that others were already aware of what this person had attempted to do at Town Meeting.

All this begs the question...is there a way to prevent this kind of thing from happening again in the future? Until Saturday's meeting, I would never have imagined that such a thing could take place in our town. We need to see that it never happens again. A simple solution would be to require all voters to remain in their place (no roaming around or leaving the meeting) until all the votes have been tallied. Solving the problem will be the responsibility of the Town Moderator.

As for the woman that displayed such unethical behavior? Well, after she reads this she will have to live with the fact that others either already know who she is or that they may find out on their own. At the very least, that should prevent her from ever doing it again. People will be watching.

Enjoy the short video below...

Can You Hear Me Out There? (Is This Mic On?)

Have you heard the latest?

The Hamilton Board of Selectmen (BoS) voted on Monday, November 30th, to increase the property tax rate from $15.23 per thousand to $16.25 per thousand (of assessed value).

That's right...INCREASE.

Here's their reasoning for raising your taxes 6.7% during the worst economic recession most of us have ever experienced:

According to the Hamilton Board of Assessors and the BoS, the total value of property in Hamilton has decreased by 4.1 percent this year. Of the total, 95 percent is residential, 4 percent is commercial, and 1 percent is personal. They say that the average single-family home values have decreased by 4.4 percent since fiscal 2009. When property values decline (they say), the tax rate on real estate automatically increases (a 4.4% average in this case for residential property owners and a 4.1% total increase for all property) to keep the tax revenues "neutral". If you subtract out the 4.1%, the net rate increase is 2.6% which is roughly the equivalent of the 2.5% levy growth.

That's their explanation.

Let's analyze that. First of all, it assumes that when you get your next property tax bill, your home will be assessed at 4.4% less than last year.

Anyone care to bet on that?

If it's not, then you should join the hundreds of other homeowners and get in line down at Town Hall to file for an abatement. To apply for an abatement, you must file within 30 days of receipt of your January tax bill.

Secondly, the explanation assumes that the tax levy must rise by 2.5% in order for taxes to be "revenue neutral". That's simply ridiculous. The 2.5% increase is ALLOWABLE, it is not REQUIRED. It's not a statute. It's a permissible entitlement that has come to be expected, but it should not be during these recessionary times. I blogged and conducted a poll about this last September [click here] and 86% of the respondents to the poll indicated that they would be willing to accept cuts in services in order to see a 0% increase in their property taxes for one year.

Lastly, the BoS's explanation that "when property values decline, the tax rate on real estate automatically increases" doesn't seem to account for the fact that when property values were rising, our real estate tax rate also increased. At least then we were seeing equity growth in our homes. Increasing taxes, even as the equity in our homes diminishes, simply adds salt to the wound.

And it goes even further than that. Higher tax rates (and Hamilton's are the highest on the North Shore) are driving buyers away from our town in favor of neighboring communities with much lower rates. Additionally, the high costs are driving residents away (read: Voting With Your Feet)...if only they could sell their homes. Which they can, but at discounted prices as compared to other towns.

And so, even as values decline due to the exceedingly high property taxes in Hamilton, your Selectmen have voted to increase your taxes...causing values to decline even more...and so on.

You have heard the term "enough is enough". Apparently our elected officials have not.

"Hello?...Is the mic on? Can you hear me out there?"