Now that the election is over, I've been unmuzzled, and intend to speak out often and without restraint.
Let's start with the town meeting and the shameless political move made there by supporters of one candidate that resulted in a dumb financial decision.
At the end of every fiscal year, the town has an account called "free cash." It's the amount equal to the difference between what we brought in (taxes, fees, etc.) and what we spent. The town also has an account called "reserve fund." That's a sort of "rainy day" fund that can be used for unexpected - and usually big - items.
The state finance people wisely encourage towns to have a properly sized reserve fund to cover unexpected items to avoid a sudden bump-up in real estate taxes to pay for those items. And they say a town shouldn't spend its free cash account below a certain level because you may have an unexpected increase in some budgeted item - or an unexpected decline in some revenue source - that you'll need that cash to pay for. An example would be larger than expected outlays for major storm damage.
The town ended the fiscal year with more than the minimum necessary in free cash, so the selectboard, with the concurrence of the finance committee, recommended using some of it to pay for a few nonrecurring items and transferring $75,000 of it to the reserve fund.
One of the most contentious issues facing the town in recent years has been the continually increasing losses incurred by the water company. The finance committee squarely raised the issue for consideration by the voters by suggesting an upfront appropriation of $75,000 for the water company, rather than following our past practice of pretending that the water company would charge enough to its users to cover its costs and then "discovering" at the end of the year that there was a shortfall. (The whole issue of the water company and what to do about it will be the subject of future postings. Many townspeople - including me -are outraged.) That $75,000 appropriation was to be included in what would be covered by real estate taxes. Why? Because there's no sign that the shortfall is going away. It looks like it will be around forever, and you don't use free cash to cover something that's ongoing. That's like borrowing on your credit card and saying "well, I don't want to pay for it now; next year I'll tighten by belt."
But because one of the candidates for selectboard wanted to project an image of being a cost cutter, his supporters moved to pay that $75,000 out of free cash rather than through real estate taxes. Those supporters didn't object to any of the other expenditures in the budget. It was just a political move, not a fiscally responsible one. And those supporters carried the day at the meeting (Another reason why we need a larger quorum requirement at town meeting.)
Result: We put off an issue that should have been dealt with forthrightly; and we had to reduce the amount of free cash we put into the reserve fund. Let's hope our new selectman brings a bit more fiscal responsibility to selectboard meetings.
News about Egremont and what's going on there, with a particular focus on local government activities. Your comments on postings are strongly encouraged. This blog is intended to be a forum for ideas and thoughts from everyone.
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- Richard Allen
- I'm a retired New York City lawyer who tries to look to the future with an eye on the past, to apply cold hard reasoning to public issues and to stay true to the basic libertarian philosophy: If something doesn't affect my health or safety, don't legislate it; leave me alone and I'll leave you alone.
6 comments:
Richard
Welcome back. I hope you don't take offense to my comment on the eagle leter to the editor. Like you I say what I mean and I am willing to suffer the consequences for my words. Bruce Cumsky feels I was way off base and that Judy was misunderstood by me. I have to say that I don't quite agree with you about this water issue. I feel that it should be 100% funded by the users. As I said in the eagle, whether you take it out of the front pocket or back pocket we are still paying for water that we'll never get to drink. I'd like to share a story about Davy Crockett. I probably don't have enough space left so follow the link and keep scrolling down until you see the Davy Crockett speech.
http://blog.theteapartycandidate.com/
My wife tells me I mixed up "reserve fund" and "stabilization fund." But the point of the posting is unchanged.
Richard
I fear that we will be the only people to contribute to this blog. If the town meeting is any indication of town participation then we are wasting our time. The good news for me is that I have the time. I don't agree that the town made a dumb decision. They made an uninformed decision. More accurately a misinformed decision. To say that they made a dumb decision is to call them ignorant. They are not ignorant. Ignorant people choose not to pay attention to the information. The town was very aware of the choices they had. unfortunately they only had the two choices before them. Take it out of the front pocket or the back pocket. If I were writing the articles for the warrant, or making a recommendation as the finance committee I would have given them a different choice. The option to raise the funds from the water department was never even considered. What a unique idea, charge the people who actually use the service. If instead of raising 150k from the water users they raised 225k then there would be a surplus rather than a deficit. I know this would have been an unpopular decision for the finance committee to make, and even harder for the select board, but it is the right decision and one of the options that should have been discussed. You have to remember that when the town was voting on the water dept. they were told that it would not cost the taxpayers anything, this as per Mr. Cumsky. Now that we have a water company with 214 meters attached to it the taxpayers are on the hook for 75k per year. Divide that by 1200 townspeople it is just over $60.00 per person. If I am a family of 5 then that is 300 dollars a year that I have to pay for water that I cannot drink. In all fairness the people who were being put on the public system were misinformed as well. They were told that the water would affordable. I guess this is what was meant by affordable. The only person at the town meeting who had it right was the fellow who called it what it was, welfare. So the people on the town water supply are asking the taxpayers to subsidize their welfare water.
KevinZurrin
In general, I agree with you. The agenda (legally called the "warrant") for the town meeting had two successive items that the voters were supposed to choose between: the first was the one that passed, with the taxpayers funding $75,000 out of real estate taxes. The second, which wasn't considered because the first one passed, would have theoretically required the water company to raise the entire $225,000 from water revenues. The finance committee's report (distributed prior to the meeting) set forth the choice and expressed its view that the water commissioners were unlikely to actually raise the $225,000, so the taxpayers would end up paying the $75,000 anyway. But all that wasn't explained very well at the town meeting. I voted against the $75,000 and would have then voted for the next item because I think the message that needs to be sent to the water commissioners is that they should set rates to cover their expenses. I agree with you that that is their mandate, but they refuse to do it because, in Ogden's words, "the water users pay very high bills." There seem to be only two ways to change this: elect water commissioners who will bite the bullet and set rates (and assessments) to cover the water company's costs; or dissolve the water company and have the users dig their own wells.
Certainly agree that users should pay fully for this system. It's a disgrace that they don't and that our elected officials don't fix the situation.
How many of the users are second home owners or businesses?
Is it possible to dissolve the water company? How would this be done?
Anon
It isn't up to the elected officials to do something, it's up to the people who vote at the town meeting.However, I will say that the board of select and the finance committee should have better informed the people that there were two articles.
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