Editor’s Note: This letter from the Framingham Business Association was sent to the City of Framingham’s Mayor and its City Council chair in April, and then submitted to SOURCE for publication.
FRAMINGHAM – The vast consensus among leading economists, business leaders, and politicians is that we are potentially facing the worst recession since the Great Depression. Commercial and residential real estate owners report record delinquencies as banks scramble to manage defaulting loans. The decline in business revenue is unprecedented and the level of business failures is predicted to be the same (especially among small businesses).
The US has just completed one of its greatest economic expansion in history. And during this period of time the urgency to prudently manage expenses and run businesses, households, and governments at maximum efficiency has not been felt or necessarily needed. We, as a community, can no longer afford to operate from a position of excess abundance (as it no longer exists). It is time to re-examine our distinction between “want” and “need”.
We must be assertive, creative, collaborative, and resourceful in the operations of our economy. Our community cannot afford any less than an intense all-hands approach that critically analyzes each and every expenditure and explores creative solutions to preserve essential
Businesses cannot just engage in mass layoffs, and municipal governments cannot just continue to raise taxes and water/sewer rates. Global layoffs cause a negative financial ripple effect in the local economy, and municipalities cannot over tax businesses that are struggling and perhaps not profitable now and in the near term.
Operational health and sustainable profitability is a simple two pronged formula: maximize revenue and minimize expenses. Maximizing revenue is far easier during a time of economic abundance. A recession, however, is a much more challenging environment. And in order to survive, sustain, and eventually thrive, the focus must be on prudent expense management and
budgeting. For example: renegotiate vendor contracts, recapitalize debt, liquidate surplus and unused assets, re-examine insurance policies, postpone non-essential programs, consolidate jobs or utilize technology to more efficiently provide services, and reduce labor costs by (a) freezing new hires, raises and bonuses and (b) implementing schedule and job description efficientcies.
Our mindset should be akin to wartime rationing. Further, our local government should maximize their intellectual resources by restructuring its finance, budget, and economic development committees to include experienced business people and leaders that have worked through previous fiscal downturns. A person who has never been to war has little basis to opine on battle tactics.
The Framingham Business Association as a consortium of experienced Framingham business owners and operators are requesting action from its members and from its government partners.
We ask that city leadership take an assertive position in immediately making substantial reductions in Framingham’s operating expenses and maximizing its efficiency and returns on investment of time and resources.
We are available to work with you and offer our experience and advice in running an operating business (which is what this City is) in a very challenging economic environment.
On behalf of the many members of the Framingham Business Association, we thank you for your service and consideration,
Francis J. Venuto
Official Representative of the Executive Committee of the Framingham Business Association