it would appear that the Town of New Hartford finances are in a state of disarray.
Budget Director Heather Mowat addressed the town board at last Wednesday night's meeting and asked for board approval for some budget transfers and also some reductions in budgeted expenses. Ms. Mowat explained to the Town Board that she met with all department heads and requested that they cut the spending in any budget lines they could in an effort to control spending for the remainder of 2009.
According to the spreadsheet prepared by Ms. Mowat and provided to Concerned Citizens through a FOIL request, the overall reduction in budgeted expenses after budget transfers and cutting expenses for each fund are as follows:
General Whole Town.......$ 302,073
General Part-Town.........$ 205,118
Highway Part-Town........$ 223,935
So a total of $ 731,126, or a little under 5%, was shaved off the 2009 budget that originally totalled $14,965,503.
We will go through some of the budget reductions and notations on the spreadsheet in our next blog. For now, we will just give you the bottom line as it relates to the fund balances.
Each year when the budget is prepared, it is customary for the town board to include a certain amount of fund balance(s) to offset some of the expenditures and thus keep the tax rate down. The fund balances are budgeted monies that are not spent by the end of each year; at year-end all accounts are brought to a $0 balance and any unused money is the "rainy day" fund, if you will.
The 2009 Summary Sheet that was included with this year's budget outlines the amount of fund balance the town board projects will be needed to offset expenses. When the 2009 budget was adopted last November, the town board planned on using the following fund balances to offset expenses:
General Whole Town................$ 1,170,444
General Part Town...................$ 156,618
Highway Part Town..................$ 280,364
The good news...with the cuts to the departmental spending, it is anticipated that less fund balance will be needed to balance the 2009 budget. The anticipated need for dipping into the "rainy day funds" is now as follows:
General Whole Town................$ 868,371
General Part Town..................$ 361,736
Highway Part Town.................$ 56,699
The bad news...there isn't enough fund balance left in two (2) of the accounts (General Whole Town and Highway Part Town) to cover the anticipated needs of the town through December 31, 2009.
We looked at the fund balances as of December 31, 2008 as reported in the 2008 Annual Update Document that is required to be filed with the State Comptroller's Office by May 15th of the following year.
The December 31, 2008 fund balances and possible shortfalls are as follows:
General Whole Town................$ 250,179, leaving a possible shortfall of $ 618,192 with possibly nothing left to offset next year's budget.
General Part Town...................$ 672,007, possibly leaving a balance of $ 310,271 that could possibly be used to offset next year's budget.
Highway Part Town.................$ -33,692, leaving a possible shortfall of $ 90,391 with possibly nothing left to offset next year's budget.
Of course, at this point, these are preliminary numbers; the numbers could change if there should be any further reductions in spending or conversely more unbudgeted spending; or, if there are less revenues realized than anticipated; or conversely if there are more revenues received than anticipated.
At any rate, as it stands at the moment, there are only two ways to solve the problem, bond again or increase next year's tax rate to cover any shortfalls and the likelihood that there may be a lack of fund balances to offset next year's expenditures.
To be continued....