Wednesday, February 16, 2011

Budget Negativity and Misinformation Out-of-the-Gate

Some recent comments on this Site by people who haven’t a clue about municipal finance suggest a rocky Budget season ahead.  This Budget cycle is different from prior budget cycles because there’s been reval and we’re suffering through awful economic times that affect everyone.   There are those who, for whatever personal reasons, are spewing ridiculous, unfounded allegations that set a negative tone for the season and do a disservice to the taxpayers because they can ultimately threaten the long-term stability of the Town. 

Three of those allegations were made in a post dated February 11 at 3:26 p.m. 

First, how the heck did anyone come out of that Board of Finance Meeting with the idea that the Town has a two million dollar surplus?”   This person is very confused and there was certainly no overbudgeting as implied.                       

Every year, there is a sum of money that the Town and School don’t spend in the budget appropriation process.  What’s appropriated is not necessarily what has to be spent.  If a bid comes in lower than expected, there’s a money savings.  If the price of goods comes in lower than expected, money is saved.   This is called prudent fiscal management.  In the last fiscal year, that variance was about two million dollars or a little more than 2% of the entire Budget.  Some people have an allergic reaction to saving money. 

This two million dollars “to the good” would all fall to surplus if all anticipated revenues were received but that’s not what happens; there may be an operating surplus but there also may be offsetting revenue deficits.  If there is a surplus, some of the money is allocated elsewhere.  For example, $457,000 of the surplus from the BOE went into its Capital Reserve Fund.  Smart fiscal move.  

Second, the Town Auditors did not “report the town to the State” as alleged by this poster who clearly missed the clue truck.  The Town notified the State that the Auditors needed an extension.  There is a process for this and it is being followed.  Nothing is being lost.

Third, the allegations that “someone conveniently did not report the ambulance barn bond” and “we’ve been getting the wrong bond rating because of it” are absolutely untrue.  The temporary Ambulance Barn funding was rolled into the permanent financing and the Town’s Bond rating is where it should be – super excellent – thanks to good fiscal management.

Let’s look at the bright side.  Somehow, the Town has managed to preserve our quality of life and sustain our values.  I’d say those are major feats in this economy.  We can all go back some years and, using 20-20 hindsight, come up with things that might have been done differently.  But that perspective must be put in context.  The real question is, “Did the Mayor and the Council make the right decisions based upon the information that they had at the time?”  I am pleased to say that they did. 

Whoever you are out there posting this junk, please knock it off.  Educate yourself before you make these spurious and destructive allegations.    If you need help, contact Director of Finance Ray Jankowski or Greg Miller at the BOE.  There are also former elected officials who are willing to help you understand municipal finance.

These are difficult times.  We need those who are well-intentioned to work together for the common good to preserve the quality of life that we all enjoy in New Milford.