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Final Decision Still on Hold for Finance Department Merger

The Hamilton and Wenham Boards of Selectmen and Finance Committees have put off a final decision about a proposed merger of the two finance departments until at least next week, when many of the questions about the proposals are expected to be answered.

The is on hold for at least a week as government leaders continue to work on the answers to many of the questions that have been raised about the proposal.

The answers to those questions, according to Wenham Town Administrator Jeff Chelgren, are being developed while the fiscal 2013 budget is also being developed in both towns.

The Boards of Selectmen for the final time to make a final decision about the proposal. That meeting has .

"So the competition for time is significant and we felt that we needed an extra amount of time in order to be as thorough as possible in our responses," Chelgren said on Tuesday.

Last week, when both boards met to discuss the possible merger, Wenham Selectmen Chairman Molly Martins said the driving force behind exploring the merger was due to “too few people doing too many things and wearing too many hats.”

As a result, Martins said that Wenham has to constantly backfill with consultants to eliminate staff overload and  maintain services.

By the end of the last meeting, Martins was parsing disparate opinions by saying, “Can we all agree philosophically that this is a good thing to do and drill down from there?”

The proposal comes after Wenham has faced the recent departure of the former Finance Director Nicole Hagstrom and Assistant Treasurer Bethany Bodengraven.

Wenham has been running a job advertisement for an interim finance director and is still accepting applications. The position will remain open until the merger talks are completed, Chelgren said. There have been three applicants so far, he said.

"It doesn't have a deadline," Chelgren said.

Proposed Benefits of the Merger

Chelgren, Hamilton Town Manager Michael Lombardo and Hamilton Finance Director Deborah Nippes-Mena told selectmen last week that although there are some costs associated with the merger - including Wenham switching its finance computer systems to software called MUNIS and the hiring of a new payroll and benefits administrator - the long-term savings and risk management will be a benefit to both towns.

Additionally, having one dedicated person for human resources and benefits for all town employees and the School District - a newly created position that is part of the plan - would greatly reduce the risk when dealing with things such as sexual harassment training, Lombardo said.

Mena said Hamilton uses MUNIS and is “in the cloud,” which allows for data to be shared and makes it accessible anywhere, anytime. Data recovery in the event of a disaster or emergency would be only a matter of days, as opposed to weeks or months, because data is stored at a second off-site location.

If the two finance departments combined, there would be a period of approximately six months where the VADAR (Wenham's existing finance software) and MUNIS systems would have to exist in tandem, but the major conversion proposed would take place in July 2012. After the transition, Mena said she was confident she could supply both towns with the financial data needed to make decisions.

To purchase the MUNIS software for Wenham, Hamilton and Wenham would apply for the New Innovation Challenge Grant for regionalization projects. The $4 million grant deadline is Jan. 15.

Hamilton and Wenham, if the finance department merger moves forward, would seek $220,000 to cover the transitional costs of the merger.

Chelgren said town leaders in both communities are confident they will be awarded the money, attributing earlier funding success with the as an example.

In a phone interview, Lombardo said town leaders are still in the process of putting together the grant submission.

All of the transitional costs would be included in the grant request.

Chelgren and Lombardo both said that legal, financial and labor counsel review showed an initial agreement with the proposal. Letters from both Wenham Town Counsel Paul Weaver and certified public accountants Powers and Sullivan were made available.

The plan is not without questions and its critics. Last week, when both Boards of Selectmen and Finance Committees met, concern about conflict of interest and confidentiality - among other things - were raised by Wenham Selectman John Clemenzi, Wenham FinCom member Ann O’Connor, Hamilton FinCom member Joe Santarelli, Hamilton FinCom Chairman John McWane and Hamilton Selectman Jeff Stinson.

Town attorneys also reccommended that, in order to eliminate any potential conflict of interest with the new position, very specific criteria for the duties of the new finance director would need to be clearly identified and presented in an intermunicipal agreement reached between both towns.

If the reorganization plan is successful, Mena would be relieved of her day-to-day accounting functions in Hamilton and would head the new merged finance department and have more timeto assist town officials and boards to make informed long-term decisions. Many of the accounting functions would be “pushed down” to support staff positions.

Mena said during last week's presentation that the estimated total shared expenses – if joint - would be $605,229, up slightly from the current $598,311. 

Pros and cons debated

Wenham FinCom member Michael Lucy questioned whether there had been any thought given to what happens if the grant money did not materialize.

“How would Wenham pay for this?” asked Lucy.

Santarelli was concerned about instances when either one of the towns or both were in a crunch mode for a financial deadline.

“There will be no time to reflect and put critical thinking into the issue,” said Santarelli.

Wenham FinCom member Ted Richard asked, whether Wenham could "survive with MUNIS on its own if we went back to just hiring a separate finance director?”

Currently, according to Mena’s calculations, Wenham is paying $73,000 annually for VADAR and would pay just $28,000 annually for MUNIS software. The conversion, however, would require hiring outside consultants which is a one-time larger expense.

Clemenzi spoke out several times at the most recent combined selectmen meeting last week, stating he had strong reservations about the timiong and cost of the proposal. He further questioned why the combined finance director position would not be posted and asked if labor counsel had been asked about the decision not to post it.

“I’m just not convinced at this point,” said Clemenzi. “I’m still looking for the baseline cost and I’m not finding it here [in the data presented].”

Martins asked members to prepare a list of questions immediately after the presentation. It is those questions that are expected to be answered when both Boards of Selectmen and Finnace Committees meet next Wednesday, Dec. 14 at 7 p.m. at Wenham Town Hall.

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