Monday, March 13, 2017

FUND BALANCE POLICY AMENDMENT


I have reviewed the video of the Town Council video for the meeting on March 7, 2017 and have several concerns about this new policy change that was not mentioned during the discussion.

1.     The first concern is that under the new policy the School Budget is not utilized to compute the 12.5% requirement.  This is the crutch of the amendment.  If we have an emergency that the town needs to utilize these Undesignated Funds, what is going to happen to the School side?  Who is going to be responsible for the School side?  The Town needs to remember that the State has a history of never paying the full 55% they are obligated to pay.
2.    Next, there was no mention of our Debt Services and Lease pay account in computing the 12.5%.  If the town is forced to use the Undesignated Funds and these account are not considered; we could be facing defaulting on our bonds and leased requirements.  This would affect our credit rating and we would lose the ability to borrow money to recover.
3.    According to the Sun Journal and the Finance Director, this amendment reduces the amount of tax dollars the town must keep in reserve by $1.11 million dollars.  If that is the case, what is the town planning on doing with these funds?

This appears on the surface to be “Creative Accounting”.  Manipulating figures means that you are playing “Russian Roulette” with taxpayer’s dollars.  So let’s say, this scheme goes south, who is going to have to save the day; the taxpayers are going to be hurt the most.

Are we really going to put them in that position?


Larry Fillmore