Budget Committees: In some communities they are a major player, in others they assume an "advisory" role
(from Maine Townsman, January 1993)
by Jo Josephson, Assistant Editor

Budget Committees. Budget Boards. Budget Review Committees. Finance Committees. Warrant Committees.

By whatever name you call them, they're busy these days, burning the midnight oil, scrutinizing and commenting on the budgets that their fellow taxpayers will act upon come town meeting time.

Whether you agree with their recommendations or not, it is refreshing to know in these days of state and federal mandates, that municipalities can choose to have a budget committee . . . or not to have one. Which is to say, budget committees are creatures of home rule.

There is no State statute requiring municipalities in Maine to have a budget committee. And while many municipalities do have some form of a budget committee, there are probably more that do not.

They are "a wider circle than the board." They are "seven extra people to make sure the town spends what it can afford." They serve as a "piece of town meeting." They serve as a "pre-town meeting." Such are the comments of municipal officials whose communities have formed budget committees.

If an item is not acceptable to the budget committee it probably won't be acceptable to the voters at town meeting say some, which is to say, they serve as a "red flag" for the elected officials.

But then, a good budget committee can make for a rather bland town meeting, if everything has been thrashed out in advance, say those who choose not to have them. Some, like South Berwick Town Manager Jim Kotredes (soon to be in Millinocket), argue that "the town meeting is the ultimate form of budget committee."

Then there are those who, when asked why they don't have one, say: "Well we've just never thought about it." Or, "It hasn't ever come up." Or, "It would slow things down."

This article looks at a few of the budget committees currently operating around the state. It looks at them in terms of their membership, size and structure as well as their relationship to the whole budgetary process, right through town meetings.

In doing so, it occasionally looks at how finance committees in Massachusetts, where state statutes mandate that most towns have finance committees, are constituted and operate.

It draws this information from the Massachusetts Finance Committee Handbook, which is published by the Association of Town Finance Committees in Massachusetts. The handbook has been developed to assist communities in the formation and structure of their committees and to educate committee members about their responsibilities.

The Creation Of Budget Committees.

As noted above, budget committees in Maine are creatures of home rule. They can be created by local ordinance or charter by the legislative body (town meeting); they can be created by the elected officials (board of selectmen or council); or a community can decide it doesn't need one.

If they are created by local ordinance or charter, they are referred to as "standing" committees." If they are created by the elected officials, they are known as "ad hoc" committees, and, as such serve at the pleasure of the elected officials.

While it is not known how many municipalities in Maine have budget committees, a look at the municipalities that have charters by MMA's Geoff Herman last year (see Municipal Charters, MAINE TOWNSMAN, August 1992), finds that of the 75 municipalities in Maine with charters, 18 or approximately 25 percent of them have budget committees. Budget committees can be found in municipalities of all sizes, from less than 1,000 to over 10,000 population.

Five of the towns surveyed for this article: Kennebunk, Bar Harbor, North Yarmouth, Mechanic Falls and Veazie, have created their budget committees by charter. Troy, Durham and Newfield have created them by ordinance. In Bridgton and Milbridge they serve at the pleasure of the elected officials.

The Maine Municipal Association has developed a "model" ordinance for the creation of a budget committee in municipalities with a selectman-town meeting form of government.

It should be noted that while not officially recognized as budget committees, there is a growing number of so-called "self-appointed budget committees" sprouting up around the state these days. Known as "concerned citizens" and "taxpayer associations," many have had considerable impact on their town budgets. For a discussion of these groups and some advice on how to work with them, see the October 1991 issue of the MAINE TOWNSMAN.

Membership: Elected Or Appointed

Of those municipalities surveyed for this article, more than half: Kennebunk, Mechanic Falls, Veazie, Troy, Bridgton, and Milbridge, appoint members to the budget committee. The rest--North Yarmouth, Bar Harbor, Durham, Newfield--elect them, either through secret ballot or a show of hands from the floor.

Herman's article notes that of the 18 budget committees created by charter, one-third are appointed by the council or board of selectmen, one-third are elected by the voters and one-third are filled by a mixture of appointment and election.

Elect or appoint?

North Yarmouth Administrative Assistant Scott Seaver says he thinks that by being elected the budget committee's opinions carry more weight.

In Durham where people are elected to the budget committee by secret ballot, Administrative Assistant Damaris Diffin says that the best of possible solutions she would like to see is one-third of the members representing the school board, one-third representing the elected town officials, and one-third representing citizens-at-large.

In Bar Harbor, a nominating committee composed of the town meeting moderator, the chairman of the retiring warrant committee and two other voters appointed by the moderator nominate a slate of candidates to be elected by a show of hands at the annual town meeting.

If a vacancy should occur in Bar Harbor, the warrant committee itself appoints the new member.

In Troy where the members are appointed, Selectman Judy Rock says, "We try to appoint people who know how government works, who have a sense of reality; that means we try to appoint people who regularly go to town meeting or are former members of the board of selectmen."

"We also look for diversity: people who live on the main road as well as those who live on the back roads. It's important to get a critical mix of people especially when it comes to the roads budget, " says Rock. And then she adds "You can make a safe committee of clones, but then you will be setting yourself up for a fall at the town meeting if you do."

In Kennebunk, where members are appointed, town manager Rick Erb says the selectman look for people with financial experience like certified public accountants and business owners.

Massachusetts communities have had finance (budget) committees since the late 1800's. According to the Association of Town Finance Committees in Massachusetts only 25 percent of those responding to its recent questionnaire on finance committees elect their members.

Respondents said it was difficult enough to find good people and pointed out how much more difficult it would be if those good people had to run for the job. Of those who appoint their members only 42 percent said they had the "pick of the best brains in town" while 40 percent of them said they "have to scratch to keep the roster full."

The survey also revealed that 46 percent of the towns excluded town employees from serving on the finance committee and 42 percent excluded members of other boards.

  Size And Structure

The Association of Town Finance Committees in Massachusetts also notes that when it comes to the number of members on a finance committee, "if it were merely a rubber stamp . . . a three or five person committee would suffice." It suggests that the committee's members should be numerous and should be rotated to bring in new points of view and that there should be enough members to form three to five subcommittees.

That said, MMA's Herman found the size of the charter-created budget committees in Maine to be large compared to other municipal committees. According to him, a 15-member budget committee was common, with membership on some going as high as 25 elected members.

The size of the committees surveyed for this article, however, was less than seven with two exceptions. Bar Harbor has 22 elected members; Milbridge has 20 appointed members.

While most committees meet and operate as a single entity, Bar Harbor is unique among those surveyed. Not only does its committee comment on the budget, it comments on all articles in the warrant except those dealing with elections, and as such it is called the "Warrant Committee."

It is also unique in that it has a two-page set of by-laws. Among its many provisions is one providing for the creation of five subcommittees: Education; General Government; Public Works and Capital Improvements Program; Health, Welfare and Recreation; and Protection. The 22 members, minus the chairman and the secretary, are each a member of one subcommittee.

Milbridge's 20 appointed members include a broad representation of the community, both public and private. Not only does it include the three member board of selectmen, the chairman of the planning board and the principal of the elementary school, it also includes the fire chief, members of the business community and a geographical representation of the taxpayers; that is, those who live on the main roads and those who live on the back roads. The current chair is the principal of the elementary school.

The Power And The Process

As Herman noted in his article, budget committees are commonly granted special and early access to the budget documents and supporting materials, the manager's and the council's attention and a privileged status during the public input and hearing process.

Beyond that, says Herman, the budget committee's role as designated by charter goes no further than making formal recommendations to the legislative body with regard to each appropriation proposed in the municipal and school budget. It should be noted here that while State law says nothing about the establishment of budget committees, it does state (See Title 30-A M.R.S.A. Section 2528 (5 B)) that if a municipality is to vote by secret ballot on an article requesting an appropriation of money by the municipality, the article and ballot must include a printed recommendation by the municipal officers.

Furthermore, the statute states that if there is a budget committee that has been established by charter or a vote at town meeting, the recommendations of the budget committee must be included as well.

That said, all of the municipalities contacted in this survey view the role of their budget committee as "advisory."

But what does that mean?

For some it means meeting one night a year with the manager to go over the proposed budget, for the purpose of commenting on it but in reality for the purpose of understanding it.

For some it means meeting independently of the elected officials and/or the manager for up to two months before meeting jointly with the elected officials, going over the proposed budget and most everything else in the warrant and making recommendations.

For some it means meeting jointly with the elected officials right from the start for two nights.

For some it means theirs are the only recommendations appearing on the warrant. For some it means their recommendations are printed along with those of other committees and boards. For some it means sharing the stage at town meeting with the elected officials; for others it means taking no unified role at the town meeting.

Under Massachusetts' law, the finance committee "shall consider any or all municipal questions for the purpose of making reports or recommendations to the town."

According to the Association of Town Finance Committees in Massachusetts, of those towns responding to their recent questionnaire, 24 percent of the finance committees report only on the budget, 59 percent report on all articles in the warrant, and 12 percent report on all articles except those dealing with zoning. It also found that only 19 percent have the selectmen also making recommendations.

A closer look at the role of the budget committee in five Maine towns follows.

North Yarmouth (pop. 2,429)

"Over the past few years, the role of the budget committee in North Yarmouth has changed from a 'yup looks good' by a one meeting committee to a group that does its homework, meeting throughout the year," says Administrative Assistant Scott Seaver.

Not only does the budget committee meet quarterly with Seaver for financial updates, the committee has also appointed three of its members to attend and speak up at all school budget meetings held by its local SAD (51) and to report back to the town on projected school expenditures, adds Seaver.

While the committee is purely advisory, Seaver says that does not mean they have no impact. Like many other small towns in Maine, only the recommendations of the budget committee are printed in the warrant. You can't miss them as they are set off in bold type.

Seaver cites a recent example of the clout the budget committee carries where the selectmen and budget committee disagreed over whether to put money into a highway capital improvement fund. The selectmen said no; the budget committee said yes. The voters went along with the recommendation of the budget committee.

The North Yarmouth Budget Committee also includes a report of its own in the town's annual report. A recent report not only noted the projected increase in spending and where it was coming from, but also spelled out some of the non-fiscal recommendations it had made to the board of selectmen, such as:

-simplifying the format for the budget in the town warrant;

-scheduling early in the town meeting the vote on all money items;

-giving some thought to changing the fiscal year;

-notifying the school board to hold the line on spending.

Troy (pop. 802)

In Troy, the budget committee sees itself "as a group that will look a little harder at the financial status of the town and make recommendations for a reasonable budget," says Selectman Judy Rock. Troy's budget committee meets independently of the board of selectmen. But not quite. At least one member of the board is always there to answer questions and pull data for them, explains Rock.

Noting that the group has an elected chairman, vice-chairman and secretary, and sets up a schedule of about five meetings to review the budget, Rock says the current process is a far cry from the days when the budget committee only met once for the public hearing on the budget. Rock says the budget committee carries "a lot of clout" at town meeting, so if the selectmen cannot get the budget committee to recommend an article, they figure it will probably not get through town meeting. On the other hand, says Rock, rarely does the budget committee disagree with the selectmen.

She recalls however the time the committee disagreed with the selectmen on a request for capital improvement for the roads but went along with it, knowing the town meeting would shoot it down. "It was," reports Rock.

"The ideal committee should be critical which is different from being adversarial," says Rock. "It should not be a rubber stamp," she says, "because rubber stamps are unsafe, because rubber stamps set you up for a fall at town meeting."

"If we have done our homework, they usually agree; it's when we shoot from the hip, they shoot us down," adds Rock.

In Troy, only the recommendations of the budget committee are printed in the warrant.

"There is nothing that prevents us from including our own recommendations; but that would indicate that there were differences prior to the meeting and stir things up before the meeting. If there are any differences, it is better to do the fighting at the meeting," argues Rock.

Rock says that while she does not believe the committee can take a stronger role during the budget preparation, she would like to see the budget committee taking a stronger role at town meeting.

"It shouldn't be only the selectmen who have to justify the expenditures; it would be nice for the voters to hear from the budget committee members as well," she says.

Troy is unique in the way it handles requests from social service agencies. It requires every outside agency that wants money to present the signatures of ten registered voters along with its request. Rock explains that often the people most served by the agencies don't come to town meeting and the system winds up being unfair. The signatures go a long way toward ensuring there is local support, she explains.

Kennebunk (pop. 8,004)

Town Manager Rick Erb says the term "advisory" has a lot more teeth than the name implies in Kennebunk. "Unlike the selectmen they are in a position to concentrate their whole attention on budgetary matters," says Erb.

Kennebunk is unique among the towns surveyed for this article in that in publishing their recommendations, the votes of the selectmen and the budget board are spelled out in the warrant, noting how many selectmen and budget board members were for and how many were against their respective recommendations. "If there are differences, the selectmen want them noted, " explains Erb.

But Erb says that 90 percent of the time the two boards are in agreement by the time they get to town meeting. He believes they are in agreement because the two boards not only receive the same materials at the same time, but from the outset, they review the budget together, simultaneously, sitting in the same room.

"It's beneficial to meet together; it allows for an exchange of expertise and knowledge, " says Erb. The joint meetings are held weekly over a two-month period. "The differences are resolved at the joint meetings and not on the floor of the town meeting," notes Erb. "I like to go to town meeting with similar recommendations from both boards."

Both boards also share the stage at town meeting, where dissenting members (the minority) of both boards are given time to share their views. Like North Yarmouth, the budget board in Kennebunk issues its own report in the town's annual report.

Kennebunk is also unique among the towns surveyed for this article. Its charter contains a clause providing the budget board the power to " . . . propose budget articles for consideration by the annual town meeting."

 Mechanic Falls (pop. 2,919)

"When we go to town meeting, the voters are more likely to adopt the recommendations of the seven-member budget committee than they are the recommendations of the council or school committee," says Town Manager Dana Lee.

"People trust the budget committee because historically the budget committee has recommended a lower figure," explains Lee.

But the two committees seem in synch these days, if a look at the town report is any indication given the number of "Council and Budget Committee So Recommends" that appear in it. And it doesn't appear to have taken much time to reach that consensus of opinion: approximately two meetings of two hours each, according to Lee.

But all this does not mean the budget committee is a "rubber stamp," stresses Lee.

The reason for the consensus, says Lee, is that both groups work together on the budget simultaneously. Like Kennebunk, they are treated as equals; both receive the same information package one month in advance of their joint meetings.

In the past the council and the budget committee went over the budget with him separately. "The result was that the budget committee was suspicious that it was getting different information from him than the council was," says Lee.

Lee says he strongly believes in treating the two groups as equals. "The budget committee should not operate in a vacuum; the budget committee should meet jointly with the council," says Lee.

Lee says that the joint meetings treat the budget committee members as "peers" producing a "social mandate" to come up with the same figure. "It's rare they disagree," says Lee.

While the two meet jointly, the wording of the charter provides them with the flexibility to meet separately.

Bar Harbor (pop. 4,443)

Bar Harbor is one of the towns included in this survey where the budget committee meets separately from the elected officials. But the goals are the same of those who meet jointly: to go to the town meeting with a unified report, says Town Manager Dana Reed.

He acknowledges that some think that attitude takes the excitement out of the town meeting. "But historically the town meeting in Bar Harbor has paid a lot of attention to what the budget committee recommends," notes Reed.

Unlike the town council which only meets for three nights on the budget, the (budget) warrant committee in Bar Harbor holds about eight meetings before it has a joint meeting with the council. Eight meetings means the committee studies the issues in depth, says Reed.

This year the meetings of the warrant committee will begin in mid February, as spelled out in the charter, and end in early April. "This year, for the first time, the warrant committee will be starting off the season with an orientation meeting devoted to procedures and responsibilities," notes Lee.

To the uninitiated, the budget process in Bar Harbor is a complicated procedure that is spelled out in detail in the charter. It begins with the manager sending the proposed budget to the council, which tentatively adopts the budget with or without amendments. A public hearing is set and held by the council, which then sends its recommendations to the warrant committee, which then goes on to hold a series of its own meetings.

As noted above, the Bar Harbor Warrant Committee is unique in that its 22 elected members are divided into five subcommittees. Each committee is charged with the responsibility of studying its part of the budget, in depth, before it meets with the rest of the committee.

As such, members of the education subcommittee attend school board meetings and meet with the school superintendent. Members of the general government subcommittee meet with the town manager, assessor, and finance officer, etc.

After doing their homework as subcommittees, the warrant committee meets together over the course of about six weeks. The chairman of each subcommittee chairs the meeting devoted to its respective area. It is during these meetings that they vote on their recommendations.

By the time April rolls around, the warrant committee is ready to meet jointly with the council and make its recommendations.

After this kind of immersion it is not surprising to learn from Reed that "the warrant committee is a training ground for future members of the town council."

The warrant committee's recommendations appear in the warrant, but its role doesn't end there. At town meeting they present a united front, seated together at a table in the front of the meeting. While not up on the stage with the council, they are seated just below it, taking the lead on the individual motions.

York (pop. 9,818)

This article would be remiss, if it did not note the recent exception to the advisory role of budget committees. In November 1991, the citizens of York adopted a charter which created a budget committee with broad powers including the final authority to determine not only the dollar amount for each article in the municipal budget but the school budget as well.

The charter was taken to Superior Court where it was ruled that the provisions pertaining to the school budget were in violation of State law but that they did not conflict with Maine municipal law. The case has now moved to the Maine Supreme Court whose final ruling is awaited this spring [Since the time that this article was written and published in the Maine Townsman, the Maine Supreme Judicial Court has upheld the Town of York charter provisions that give the budget committee authority over the school budget. See School Committee of Town of York v. Town of York, 626 A.2d 935 (Me. 1993).].

Resources

Available from the Association of Town Finance Committees, 84 State Street, 11th Floor, Boston, Mass 02109. 617-749-1924 is Massachusetts Finance Committee Handbook by Stewart Debard, $20 includes postage. Primarily geared to Massachusetts's local government.

Finance Committee Primer by Edward H. Dlott and Patrick J. Hyland, $10, includes postage. Of a more universal nature posing basic questions to be asked when probing the municipal budget in any state.