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Decision Date Set for Merged Finance Departments

There's a proposal on the table to merge the finance departments for both Hamilton and Wenham, and Selectmen are scheduled to meet early next month to possibly make a final decision.

Leaders from both towns are headed towards making a final decision early next month about whether to combine the finance departments of Hamilton and Wenham.

The move wouldn’t combine the money but instead the finance administration functions. Under the proposal, Hamilton Finance Director Deborah Nippes-Mena would head the department.

, when the Boards of Selectmen from both towns heard about the plan that calls for combining both departments and then using the savings to hire a payroll and benefits administrator.

A combined Board of Selectmen meeting has been scheduled for Dec. 5 at . That’s where Selectmen from both towns will hear the answers to many of the questions that were raised the last time both boards met and heard a preliminary outline of the proposal.

The Dec. 5 meeting, Wenham Town Administrator Jeff Chelgren said, would be a time to “possibly consider some action by the two Boards of Selectmen on this issue.”

“The issue is important to both of us,” said Molly Martins, chairman of the Wenham Board of Selectmen when the board met earlier this week. “We both have similar concerns.”

Chelgren said that many of the answers would be available in writing next week, in advance of the combined meeting.

Since both boards met together to hear the proposal for the first time, the boards should meet together again to hear the answers to the questions and further discuss it, said Wenham Selectman Patrick Wilson.

In Hamilton, Town Manager Michael Lombardo is compiling the answers to many of the Selectmen’s questions there, too.

Lombardo said he is hoping a final decision on whether to go ahead with the plan by mid-December or late December at the latest.

“We can’t leave this hanging out there,” he said.

The plan is not proposed to cost either town any more, but instead use the savings to hire a payroll and benefits administrator – “a more junior person” that, in Hamilton, can free up Mena to do more “big picture things” and help develop more financial reports for the Finance Committee and public, Lombardo said.

“This is a tremendous opportunity for us,” Lombardo said.

Lombardo also noted that Wenham is “under the gun” since for a job with the Salem school department earlier this month.

An employment ad for the position, which is listed as an interim job, is running on Monster.com and in The Eagle-Tribune. It sets a deadline for applications of Nov. 28.

“It’s not just a Wenham problem, it is also our problem,” said Jennifer Scuteri, chairman of the Hamilton Board of Selectmen, noting that the town’s existing staff and workload has put the finance department in an “unsustainable position.”

While Wenham “might be in a slightly worse position,” Scuteri said, “this could be a win-win for both.”

Scuteri said, if the plan moves forward, she wants to make sure the split in costs for the new department are allocated equally to both Hamilton and Wenham.

“I think residents are going to want to see we spent some time on that and it is fair,” she said.

Some possible methods include calculating the split based on the current finance department budgets, looking at how many bills each department currently processes or looking at the split in property values in the two towns, she said.

When the plan was unveiled, Wenham Selectman John Clemenzi had the most questions. This week, Hamilton Selectman Jeff Hubbard raised one new question - he wanted to know how many functions in the finance department could be shifted to outside companies. Some payroll duties are already handled by outside companies, Mena said.

“I think it is going to be a battle bringing on another staff member,” Hubbard said, adding that he sees it as a “difficult sell.”

Two deal killers to the merger are if Wenham does not switch from VADAR – it’s finance software – to MUNIS, which Hamilton uses and also if Wenham does not choose to have Mena head the new department and wants to post the position, Scuteri said.

Lombardo said the transition to the new department cannot happen at the same time the towns would be recruiting and hiring a new department head.

The decision is important, and significant, for both towns, Martins said.

“I think it has a lot of potential but we want to go into it with full information,” she said.

Bob Gray November 18, 2011 at 11:54 AM
Overall this proposal has merit and looks like it will benefit both towns but do we need more time to examine all the issues involved? Lets not rush this thing. Wenham could easily hire and intrim person if Debra could not handle both towns during our budget season. Food for thought: Why don't we research having one Town Manager for both towns if the Town Administrator for Wenham decides to leave !!!!
Michelle Bailey November 19, 2011 at 12:55 AM
If we merge the Finance Dept. it will be a "first in the state"...just like our trash program. If we had one Town Manger we would have to fully merger of the towns. Why are we pseudo-merging the towns? If we want to merge them, let's study the issue and make a well informed 3-5 year plan to do so. In 2009, the Mass. Dept. of Revenue did an extensive study of a possible merger and more shared services in Hamilton and Wenham. At that time, it was determined the total cost savings for a full merger would not benefit Wenham. That study also determined merging of the finance departments would not benefit the town. What has changed? The study also found the towns could save over $500,000 annually with a regional police department. Let's look at the big dollar figure areas to make real changes.
Ron Powell November 19, 2011 at 03:10 AM
I seem to remember that study. I thought that the DOR stated that if the towns used a 57:43 percent expense contribution split for Hamilton and Wenham (more closely aligned the town's respective populations) that Hamilton would benefit by $354,574 and savings to Wenham would be $368,138. So a full merger under those conditions makes sense for both towns. Honestly, the biggest challenge for merging the two towns' finance departments is making sure that both are using the same financial software system. I seem to recall that the offices in Hamilton use MUNIS, while the ones in Wenham rely on VADAR.
Robert Gates (Editor) November 19, 2011 at 03:30 AM
The state Department of Revenue's June 2009 "Enhanced Regionalization and Merger Analysis" of Hamilton and Wenham is now attached as a PDF, above, to this story.
Mary November 19, 2011 at 03:42 AM
People need to go back and read the DOR report very carefully. It was very specific in its summary of the idea of a "shared" finance department, and the conclusion was that it was NOT a savings opportunity as the workload would not decrease as two separate reports, filings, etc. would need to be maintained - even if a common system was used - so the workforce would need to be maintained - yet we think we can now do it with 1 less finance person? - what changed? Also - the transfer of Wenham's information from VADAR was identified as a very complex project requiring specific conversion software to be created, and a project manager to be assigned to manage the transition project - but now "we'll do it with a grant that we "may" get - and no mention of the project manager - so again - what changed? It almost sounds like some who are interviewing for jobs with other towns are rushing this through to say "see what I did" - and we could be left in a mess? And supposedly we do not need to replace the finance headcount and we already have the required players - so why can't they just "cooperate and work together" and prove the principle using the existing separate systems - versus rushing to sign agreements and re-org departments and launch new software? All in all - what changed from the DOR cautions - and why can't they work together "now" - again - sounds like someone is rushing this through when we don't need? Food for thought.
Michelle Bailey November 19, 2011 at 04:08 AM
Ron...the population split between Hamilton pop. 7764 and Wenham pop. 4875 is more like a 61:39 split. The analysis you refer to is on p. 54 of the report and was based on equalizing the savings to both towns using the 57:43 split. Note that a regional finance department is not part of their recommendation. In order for an enhanced regionalization to work, Wenham taxpayers would have to pay more per capita than Hamilton taxpayers for the same services. That doesn't seem fair.
Ron Powell November 19, 2011 at 07:31 PM
You are correct about the DOR report: "In general, there is no inherent reason why finance-related positions or functions cannot be consolidated between or among communities in order to share costs, or contracted out at a cost savings." "However, critical to an assessment of costs and benefits of any shared arrangement is an understanding that the volume of work will not diminish. Because the towns would remain as two separate legal entities, shared finance-related departments would have to maintain two sets of records on two different financial management software systems. Submissions to DOR, other state and federal agencies would have to be replicated as well. As a consequence, for shared personnel, workloads would increase. From another perspective, each is now expected to fulfill, in part-time hours, the job that previously required a full-time effort." "Although, under a full merger scenario we projected overall savings $185,583 in the finance department, it was associated with the elimination of almost four full positions. We do not see that opportunity here." In other words, according to the DOR, merging the two departments only makes sense in the case of a full merger between the two towns. The only potential cost savings in this case would be eliminating the position of a finance director, and effectively adding to the work load of Deborah Nippes-Mena. I also see the two different financial software systems being a big obstacle.
Ron Powell November 19, 2011 at 07:40 PM
I'm trying to wrap my head around what exactly is being proposed that would be different from what the DOR described in its report. It looks like the role of Finance Director would significantly change, and that a new and separate position would handle payroll and benefits administration. I see a merging of the two Finance departments as potentially increasing the workload for staff members. (Personally, I think that if Hamilton wants to consolidate any town responsibilities, it should start by making the Finance Director and the Assistant Town Manager one and the same person.)
Ron Powell November 19, 2011 at 08:50 PM
That stated, what is being proposed here is a bit different from what the DOR was imagining back in 2009. What is being proposed here is to redefine the role of the Finance Director to have more "big picture" responsibilities such as forecasting, budget projections, budget overviews, and expanding Nippes-Mena's role to treasurer/collector. Payroll and benefits administration, as well as preparation of financial reports for FinCom and the Selectmen, would be handled by someone else. The plan has some merits, but I have my doubts. For one, it makes much more sense for the Town of Hamilton to recognize cost savings through merging the Assistant Town Administrator and Finance Director positions into one position than it does to make a lateral merge with the Wenham Finance Department. I think that it is safe to say that the merger will not eliminate any workload, and, according to the DOR, will actually add to the workload unless the towns pursue the full merger. I think that we should give advocates a chance to explain the plan and make their case. It might be premature to take it up for a vote on 12/5, though. I think that we need to take a step back, take a deep breath, look at what we are trying to accomplish, and determine if this is the best way to get it done.

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