Look For the 2012 Hamilton-Wenham Free Press

The 2012 Hamilton-Wenham Free Press will be delivered shortly to all residences in both towns. The Free Press is a complimentary newspaper provided by Citizens For Fiscal Responsibility, aka Enough Is Enough.  The paper includes timely information regarding upcoming issues for the Annual Town Meetings, political commentary, local community projects, property tax charts and data for the North Shore and more.  There's even a tasty chili recipe!

This year the paper has expanded from eight pages to twelve as more and more citizens have written articles of interest about the goings on and important issues in our towns.

Contributors this year include:

Terrill Jennings, Julianna Kallas, William Dery, Edwin Howard, Jack Lawrence, Kerry Mackin, Bruce Wadleigh, Robert Sica, Leigh Keyser, James Kent, Betty Gray, Lee Fremont, David Thompson, Joseph Palermino, Bob Gray, Rick Mitchell, Jay Burnham and Ron Powell.

Be sure to look for this year's Free Press in your mailbox and read what your friends and neighbors and thoughtful citizens have to say about the two great towns we are so very fortunate to live in.

Enjoy!

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.

What the Internet Can and Cannot Do

It is often said that “the only thing new in the world is the history that you don't know". This saying kept going through my brain when a home valuation web site named Zillow was launched to a lot of buzz a couple of years ago.  The press, as usual, carted out the same tired (and wrong) prediction that it has made for fifteen years: that home valuation sites like these will put Realtors® out of business or at least greatly reduce our fees.

Actually, over the last fifteen years, the opposite has transpired: it doesn’t matter whether you are talking about law, medicine, accounting, mortgage or real estate; the more that the public uses the Internet to gather information, the more they turn to professionals before they make major decisions. That’s because there is a huge difference between gathering information and interpreting it.

Over ten years ago, a friend of mine penned a Real Estate Internet Warning that seems even more relevant today than it did then:

REAL ESTATE INTERNET WARNING©

“Despite advertising claims to the contrary, the Internet is NOT an experienced Real Estate Professional. It cannot consult, counsel, advise, have knowledge of local laws and market conditions, make judgments, "own" the result, or most importantly, understand your individual goals and needs and care about you as a Client. Furthermore, while the Internet can provide information, it cannot interpret it.”
                                                                               . . .Mollie Wasserman

The reason that the press keeps getting it wrong is that they do not make the distinction between information and knowledge. As John Tucillo states in his book The Eight New Rules of Real Estate, “Information is a collection of facts or observations about reality. Knowledge is actionable”.  In today’s information age, consumers can increasingly get all the information that they want or need, but it’s useless unless someone with expertise in the field can provide the knowledge to allow them to correctly act upon it.  Information, without the context of a pro who can share the day-to-day knowledge of the industry, is just data.  If a consumer were to act on it without context, they could very well reach incorrect conclusions and achieve undesirable results.

As my colleague (and fellow CyberStar™) Margaret Rome so eloquently stated on her blog regarding Zillow: “This site depends on public records for its data. But public records will not show factors, like recent additions and improvements or the condition of the interior, that affect price. Public records can also be wrong; a friend of mine checked her house and said she wants that fireplace she’s supposed to have, but will not give up the second bathroom they didn’t count.  If the information about a house is wrong, how valid is the price estimate?  Besides, price is only one factor in buying or selling your home, and getting to the settlement table means avoiding traps and overcoming obstacles.”

A top agent will be experienced at:

• negotiating the terms of your contract,
• making sure only qualified buyers troop through your home,
• meeting and dealing with appraisers, and
• working with home inspectors and lenders to be sure you are protected from start to finish.

In other words, technology is a fabulous way to gather data and can do functionary tasks better, faster, and cheaper than any human being ever could. But the danger does not lie in understanding that technology. The danger is that by itself, the Internet can never provide the fiduciary counsel required in areas such as medicine, mortgage lending, law, and real estate.

Please remember that while the Internet can provide information, it can never interpret it.  And here's the straight scoop: A Realtor's® true value is not in helping you find a home, or getting you numbers regarding comparable sales, though we certainly have the tools to do so.  Our TRUE value is in using our experience and expertise to get you the best value once you find your home or the most money in your pocket when it comes time to sell.

To obtain an accurate assessment of any data you're receiving online, please contact me direct at: (978) 233-2828.


Thank You!

My Annual 10 Real Estate Predictions for the Upcoming Year

A simple answer to any questions about the real estate market in 2012 is: If you want to know what the housing market will be like next year, ask the government. At this point, low mortgage interest rates only exist thanks to its efforts and job recovery is essential to real estate recovery.

But if you were to ask me, I predict:

1.  Foreclosures and short sales will play a key role in U.S. housing.  The U.S real estate market is poised to be hit by another surge of bank repossessions.

2.  Buyer confidence levels will remain low due to election-year mud-slinging. 

3. Expect a fight over the home mortgage interest deduction.

4.  Rates will remain low through the year. 

5.  Builders will begin building…slowly and cautiously…and their primary pool of buyers will be those that have sat on the sidelines and now believe that if we are not at the bottom, we are close enough to make a move without significant negative consequence…especially considering today's prices for new construction.

6. Many lower end move-up buyers will remain cautious, wary of further market reductions and/or fear of job loss.  Consumer confidence will be tied to unemployment numbers.

7.  We will see a rise in home sales in terms of units sold.  The baby boomers began turning 65 in 2011, which will cause a rising number of retirement-driven listings.

8.  There will be little or no appreciation in home values.

9.  Homebuyer's real estate tools will become even more mobile… everything from smart phones, iPads, netbooks, portable scanners, e-signatures and more.

10.  On the commercial front... retail, office and industrial vacancies will decline as more tenants seek, and receive, landlord concessions.

All in all, I predict a slow and steady recovery in real estate for 2012.  Consumer confidence is the key to a turnaround in the market. The government has to stimulate the jobs recovery and when it does, the real estate market will follow.

Have a great year and remember this...2012 may be the BEST year ever to buy a home, with incredibly low interest rates and property prices.  Don't be one of those that in 2013 or 2014 says: "I remember when I could have bought that home for $X" or "I missed the opportunity of a lifetime in 2012."

Best regards,

Jay 

School Committee Relents...Agrees to Return $500k to the Taxpayers

HALLELUJAH!

I frankly do not know what else to say.

Somebody lend me a defibrillator.

The Hamilton-Wenham Regional School District School Committee tonight (June 23rd) astonishingly RE-VOTED and re-certified the fiscal 2012 budget to include the so-called $500k "give back" to the towns for last year's over-funded school budget (approximately $1 million).

There is no further need to discuss the controversy, anger and angst that has now been extinguished by this momentous decision. All that is left is to offer kudos and congratulations to the School Committee for having stepped up at the last minute to end the issue in a right, fair and just manner and also to those community leaders and citizens that helped play a major role in this positive outcome.  You know who you are.

This also means that Hamilton will not need to hold the Special Town Meeting that had been scheduled for next Monday, which is likewise a good thing for our community.

THANK YOU again, School Committee, for doing the right thing.  I would agree with Hamilton Selectman Jeff Hubbard who said:

"I think this is a night where we can turn the page."

Now...

...about of those fiscal recommendations from the Operational Audit?

(Hey... you didn't think we'd let you off the hook that easily did you?)

This Is the Truth...These Are The Facts.

To borrow a quote from my friend Barbara Anderson...

"There are two kinds of people, from various perspectives, reading this column: 1. People who want to know the truth; and 2. People who would rather not know until it's too late."

This week's blog article explores the belief that the Hamilton-Wenham Regional School Committee is a liability to our towns, our residents AND our schools. Their budgeting ineptitude, autonomy and arrogance for at least the last 10 years has resulted in a property tax rate that is one of the highest on the North Shore and a school district reputation that is in steep decline.

Follow along for a minute to see how the School Committee's many poor decisions have resulted in the unfortunate position we now find ourselves in.  Here are the facts:

School override after school override (aka: "overandoverrides"). Since 2001 the school district has demanded nine Proposition 2.5 overrides. Eight have been granted. The cumulative cost to the taxpayers for those eight overrides = $43,970,000.  "Budgeting by Override" never was a sound accounting process and was most certainly unsustainable.

Loss of property values. The overrides have resulted in Hamilton and Wenham having two of the highest property tax rates on the North Shore. This means that many home buyers are circumventing Hamilton and Wenham in favor or surrounding communities, many with equally good schools. The end result is a significant loss of value in your home and your equity.

Highest per pupil cost.  Two independent reports have concluded that residents in Hamilton and Wenham pay about $2,000 more per pupil in our school district than in peer school districts.

Blue Ribbon Report on school district costs. The Blue Ribbon report, and a subsequent update to the report, indicated that our school district costs residents $2 - $4 million more per year than comparable school districts in Massachusetts.

School Superintendent departure. In a move some have called "fleeing from a sinking ship", former School Superintendent Marinel McGrath resigned and took a position in Andover, MA. Her assistant superintendent and business manager, Paul Sysmanski, also departed... moving first to Billerica and then over to Andover to join with McGrath again.

New School Superintendent. In a rush to replace McGrath, despite calls to slow down and seek an interim superintendent, the School Committee unanimously approved the hiring of Dr. Raleigh Buchanan and granted him a three-year contract at a significantly higher salary than that of his previous position as Superintendent in Haverhill.  Residents were told that we needed to offer a high salary in order to attract the best candidates.

School Operational Audit. Hamilton and Wenham voters overwhelmingly supported funding an Operational Audit of the School District to determine what was wrong and where efficiencies could be found. The audit report suggests that savings of up to $15 million over 5 years are possible and offers 125 financial recommendations. The School Committee has all but ignored the cost-saving recommendations and has focused solely on implementing the cost-enhancing recommendations. The School Committee has resolutely claimed the audit is "flawed"...EXCEPT when it supports their agenda of additional spending.

2012 School Budget Season. The School committee's WORKING FINANCE GROUP, after determination that the 2011 district budget was OVER-FUNDED by more than $1 million, recommended a so-called "give back" to the towns of $350k.

The School Committee refusal. The School Committee ignored their own WORKING FINANCE COMMITTEE'S recommendation and voted to give nothing back to the towns... Nothing.  Zip.  How's that for "compromise"?

The School Committee violates the Open Meeting Law. The School Committee was forced to admit they violated the State's Open Meeting Law on numerous occasions during the budget season, despite, as their attorney stated, all members having been trained in procedures and processes of the law.

Towns boards seek return of unspent funds. Town officials (ALL members of both Boards of Selectmen and Finance and Advisory Committees of BOTH towns) requested the School District return $500k in unspent taxpayer funds (half).  They cited additional approved state funding of $120k and a Latin teacher salary ($77k) with no Latin teacher. Recognizing that the district was OVER-FUNDED by more than $1 million in 2011, the Selectmen and FinCom members felt that requesting only the return of $500k represented an extremely fair compromise proposal.

The School Committee's refuses. Again...No willingness whatsoever to compromise.

School budget rejected by voters. Voters at the Hamilton Annual Town Meeting approved the motion to give back $500k to the taxpayers and rejected the School Committee's budget, requiring the School Committee to certify a new budget and resubmit it for consideration.

School Superintendent reviews delayed. For various reasons, the yearly reviews of the Superintendent of Schools were delayed repeatedly until AFTER both Town Meetings were over.  Once they were released, it became abundantly clear that the School Committee had been on a collision course with Dr. Buchanan.

Another School Superintendent departs. Less than one year into his three year contract Dr. Buchanan abruptly resigned claiming "irreconcilable differences" with the School Committee, the result of scathing reviews by most members of that committee...the same committee that unanimously and emotionally approved his hiring one year ago. (Cost to the district to buy out his contract: $115,000.00)

Middle/High School Principal moves on. Matt Fox accepts a job as Middle School Principal in Marblehead.

Another School Principal looks to move on.  Winthrop School principal Carrie Vaich sought a new position and was named a finalist in Newburyport and at the Rollinsford Grade School in NH.  After Newburyport chose the other candidate, she chose to remain in Hamilton.

School Committee incumbents are voted out of office. All three open positions on the School Committee are won by new candidates...sending a clear message, one would think.

A School District in trouble.  We now have no Middle School principal, no High School principal and no full time Superintendent (Peter Gray, thankfully, is serving as acting superintendent...for the time being.)

School Budget "re-certification". As a result of the Hamilton Town Meeting vote, the School Committee certified a new budget, this time with only a $300k "give back" instead of the $500k approved by the voters and recommended by town officials.  The SC has referred to this amount as a "compromise proposal"...suggesting that the STARTING POINT was $500k, instead of $1 million, which is the ACTUAL OVER-FUNDED AMOUNT.  This means Hamilton will have to hold a Special Town Meeting later this month and incur the additional COSTS, INCONVENIENCE and ANGER of the residents.

This last decision was perhaps the most unfortunate and misguided act yet by the HWRSD School Committee. A significant opportunity was lost by the blindness of all but two committee members (newly elected members, I would point out).  Had they not been so blind, they surely would have understood that most of the divisiveness, the mistrust, and the angst of the residents of Hamilton and Wenham could have been eliminated had they simply agreed to what the majority of COMBINED VOTERS OF BOTH TOWNS expressed at the two May Town Meetings: Give us back just HALF of our unspent tax funds.  Half...that's all we're asking for.

The truth... there it is.  The facts...there they are.

As Barbara's quote at the beginning of this article stated, it may be too late for those of you who do not want to know the truth.

But I sincerely hope it's not.

Please plan to attend the Special Town Meeting on June 27th at the Winthrop School at 7:00 PM and let your voices, and your votes, be heard again. 

Vote NO to the proposed school budget at the Special Town Meeting.

Thank you.

4 Reasons Why The School Committee's "Compromise Solution" is NOT

I thought about titling this blog: "Hello?...Wake Up!"  I may still.  Or perhaps I'll just insert the wake up notices wherever I feel they are appropriate.

But I digress...the main issue of this blog concerns the results of the Hamilton-Wenham Regional School Committee's (SC) meeting of June 9.  It was at that meeting that the SC voted to "re-certify" the school district budget as a result of voter opposition to their original budget at the Hamilton Annual Town Meeting in May.

You may recall that the 2011 school district budget was OVER-FUNDED by more than $1 million and as a result, by unanimous consent of both Hamilton and Wenham's Boards of Selectmen and Finance Committees, the 2012 school budget approved at the Hamilton Town Meeting required a "give back" (or reduction from the towns) of $500k from the district, or just half of the unspent funds.  Sounds like a fair and reasonable compromise, right?

Unfortunately, the School Committee has now (once again) chosen to defy our town officials and the taxpayers by choosing to certify a new budget with only a $300k give back.

They are calling it a "compromise solution".  Here are just 4 things to consider regarding the SC's so-called "compromise solution":

1.  This spring, the SC's Working Finance Group voted to give back $350k to the taxpayers for OVER-FUNDING the 2011 school budget.  The lone dissenting vote on that committee came from SC member Richard Boroff who was subsequently trounced at the polls in a re-election bid.  (Hello?...Wake up!)  The Finance Working Group's recommendation was ignored by the full School Committee who chose instead to keep the $350k...without any kind of compromise.

2.  Both Hamilton and Wenham's Boards of Selectmen and Finance Committees originally voted to accept the $350k figure recommended by the Finance Working Group until it was discovered that the state would be providing an additional $120,000 in funding AND it was discovered that the 2012 school budget included, among other things, a salary for a non-existent Latin teacher (approximately $77,000).  At that point, all the same town officials then voted to increase the amount of the give back to $500k, again unanimously.  (Hello?...Wake Up!)

3.  The School Committee had the opportunity to end this entire issue had they agreed to give back half of the taxpayers' unspent funds.  If they had agreed to the $500k, we would be done.  It would be over.  No more Special Town Meetings.  No more arguments and fighting over what rightfully BELONGS to the taxpayers.  But instead, the SC has once again arrogantly chosen to go to battle and burden the residents of our towns with more expense, inconvenience and angst.  (Hello?...Wake Up!)

4.  Lastly, $300k is simply NOT a "compromise solution".  The SC may like the sound of that, but it's a misnomer.  You see, when it was shown that the school district had been OVER-FUNDED by $1 million in fiscal year 2011 and the Towns asked for just half of that amount to be returned...THAT was a compromise solution.

The $300k figure agreed to by the SC this week "compromises" the actual compromise solution, which is simply to give back half of what was overcharged to the taxpayers.  (Hello?...Wake Up!)

$500k is the compromise solution.  Even a third grade math student could figure that one out.

******************

UPDATE: 6/14/11: The following is an excerpt from a white paper provided by the Hamilton Board of Selectmen and the Finance Committee days before Hamilton's Annual Town Meeting in May.  It seems appropriate to revisit the statement as we head into another Town Meeting, faced with the same issue:

"At the risk of oversimplifying, the entire question of which approach to support could be boiled down to one question: do voters/taxpayers want to put money into the District's E&D fund for either potential problems in FY12 or for expenses in FY13, or do voters/taxpayers want to keep the money in their own pockets and fund the District as needed based on the merits of those needs as they arise?  The FinComs and BoS of both towns believe that voters/taxpayers would prefer the latter."

*******************

I want to personally offer thanks and kudos to SC vice-chairman Roger Kubel and new SC member Bill Dery for eloquently expressing what I have attempted to communicate above and for trying to make the other members of the SC understand what the real, and fair, compromise solution is.  It appears however that the remaining incumbent members learned little from the Hamilton Town Meeting's voter's wishes regarding the original budget OR the election results on their own board.  (Hello?...Wake Up!)