Saturday, June 13, 2009

Damage control.....

Interesting Guest Editorial by Earle Reed in tomorrow's Observer Dispatch - New Hartford has charted course for its financial recovery.

He starts by saying:
In 2005, I was elected town supervisor with a total budget of $12.6 million and a fund balance of $5.4 million. It was clear that having a fund balance that was almost 43 percent of our budget was unnecessary. Instead of raising property taxes like so many of our neighbors had done or were about to do, we opted over the next several years to manage an increasing budget by not punishing our residents with a tax increase simply to bank funds. We made a concerted decision not to accumulate funds at the expense of increased fiscal pressure upon our constituents.
Hmm! Supervisor Reed wants us to believe that this was all part of 'the plan'. They merely had the taxpayers in mind...they didn't want to 'punish' town residents with a tax increase. Isn't that nice of them.

Let's take a close look at the result of their 'plan' now that we know the actual 2008 ending fund balances. We'll compare the actual fund balances at year-end 2008 to the dollars that were projected to be used from the Fund Balances to offset 2009 expenditures.

There are four (4) major funds in the Town of New Hartford. Here are the funds with the dollars budgeted for 2009 to offset the expenditures as compared to the actual 2008 fund balances as reported to the State Comptroller's office (click on the graphic for larger print):

Assuming that the town would want to keep the $250,000 fund balance that was available at year-end and assuming that the fund balance hasn't been further depleted by now, it looks like by the end of 2009, we could have a possible shortfall of $1,234,321. The positive balances left in General Part-Town and Highway Whole-Town cannot be used to offset the shortfall...that would be called co-mingling funds...illegal.

Supervisor Reed goes on to say:
So what might be a “reasonable” fund balance for a town our size?
Good question, Supervisor Reed. We think it might be prudent to at least keep enough fund balance to cover the amount that the town board plans to use to offset budgeted expenses each year!

Looking at the adopted budgets and the year-end transfers, it is clear that there were no checks and balances to monitor all the "inflows and outflows." They didn't have a plan...they were 'flying by the seats of their pants' when it came to running the Town of New Hartford. Their only plan was to keep the taxpayers happy until the bonding was secured for the improvements to Larry Adler's private development. Remember the Town Crier ad that said VOTE YES means no tax increase. They lied! Unless they really curtail ALL unnecessary spending and the sales tax revenue spikes for the remainder of 2009, we predict there will most definitely be a tax increase for 2010.

We are providing a copy of the 2009 adopted town budget and a copy of the 2008 Annual Financial Report that the town filed with the State Comptroller's office in May 2009.

Tomorrow, we will share the February 2009 letter from Standard and Poor's that Supervisor Reed mentioned in his guest editorial. Supervisor Reed left out a few words that tell a slightly different story than the one he wrote.

4 comments:

Boxer said...

Earle is the quintesential LIAR! He refuses to get his facts straight.

I wonder who wrote the Guest Editorial for him? Heather Mowat or Frank Basile?

Anonymous said...

The guest editorial was obviously not authored by Earle himself because it's a far cry from, "I dropped the ball", with no other explaination.

Looks like Heather has begun to justify her salary by giving cover to this incompetent Supervisor and Board. Each and everyone of them needs to go, no exceptions!

Anonymous said...

Let's see if I got this right:

Earle came into office with a large rainy day fund.

He spent it in sunny weather, and now that it's raining economically, he has no rainy day fund anymore.

Thanks, Earle. You're a bozo. Good bye, and it looks your henchmen Boob Payne is going to be replaced by your bosses... the people.

Anonymous said...

So called rainy day funds should be kept at a mininum. They are designed to provide the means to balance a budget when initial estimates turn out to have been too low, much ike a contengency fund. The real questions in New Hartford are the details related to spending.Although some have been explained in the OD, much has not. For example, what could an outside accountant possibly have done to earn over $100,000? And, what of the Town Attorney costs? To my knowledge, there still has not been a full, detailed accounting of expenditures. Until that is accomplished, how can the taxpayer have confidence in this Board?