Today's Observer Dispatch article, New Hartford reserve fund back in black, seems to have some misinformation.
According to the Observer Dispatch article, Tyksinski said:
"the town’s recent finances were helped by an inflated third quarter sales tax check from the county. That check was about $200,000 larger than projected and meant the town could see 4 percent more than the $4.9 million budgeted for revenue in 2010."Inflated third quarter sales tax check? Don't think inflated is the proper word for the actual sales tax received last month.
For the third quarter of 2010, the town received $1,449,264.46. However, for the third quarter of 2009, the town received 1,476,244.07. In other words, the town received $26,979.61 less sales tax revenue for the third quarter of 2010 than they did in 2009; where did the $200,000 increase mentioned in the article come from?
And for the record, exactly $5 million was budgeted for anticipated sales tax revenue for 2010, not $4.9 million as stated in the article. The 2010 budget anticipated sales tax revenue break-down was as follows:
As we pointed out in an earlier blog, What a Revoltin' development this is!" even with increased sales tax revenue received at the County level, the Town of New Hartford's share as a percentage of the whole is decreasing approximately 1% each year.
However, for arguments sake, let's assume that the town receives the exact same amount of sales tax revenue for the fourth quarter of 2010 as it did in 2009. If that holds true, the town will only receive a total of $4,968,419.48; short of the $5 million that was budgeted and only slightly more than the amount actually received for 2009 [$4,953,600.45].
Using that scenario, the town will be short $31,580.52 of anticipated sales tax revenue versus the budgeted amount for 2010. Where are they getting a possible 4% increase over the 2010 budgeted amount?
Perhaps predicting a 4% increase before the check is in the mail next February is a little bit premature, eh?
We also have some other issues, but we will wait for the year-end numbers. It should be interesting!
Oh and by the way, according to that same article:
Municipalities generally keep 5 to 10 percent of their annual budget as a reserve for emergencies. With New Hartford’s 2011 budget of $4.3 million, it should have a reserve of about $219,350 to $438,000.It is unclear as to what part of the Town of New Hartford 2011 budget was used to come up with a figure of $4.3 million. We should be so lucky as to only have a $4.3 million total budget as the article seems to imply! The police budget alone is over $3.3 million! The article is probably referring only to the General Wholetown portion of the budget for 2011; not the total budget.
At any rate, the town board needs to develop a formal policy as to how much should be kept in the "rainy day fund". Flying by the seat of their pants just doesn't seem to be working!