Notes on the proposed budget

The annual blood sport of spring has commenced — the Winsted Hunger Games (or as legally known, budget preparation). If you have not had an opportunity to review the proposed budget, please take the time to study it. Please also remember that the proposed budget is not the final budget upon which you vote — it is the starting point for discussion. During my presentation earlier this week, a few recurring issues were raised that require clarification.Most important is the recognition that due to the three factors that I described (insufficient water and sewer revenues; accounting irregularities; and overestimated revenues), the town budget is expected to have a cash shortfall at year end of approximately $1.9 million. What will likely happen at that time is that, as in this current fiscal year, revenues from the next fiscal year will have to be utilized. This cycle will continue until a sufficient cash supply (fund balance) can be accumulated to carry the town through the months of June and December, when, due to the tax collection cycle, on-hand cash is limited.The question of the $1.2 million used from this year’s revenues to support last year’s expenses was raised during the presentation. Again, that money is a cash issue, not a budget issue. In fact, had the funds not been needed to pay those previous bills, that money would be part of the town’s current cash on-hand. With that cash on-hand, the $1.9 million shortfall would only be $700,000.The issue of the approximate $500,000 Water and Sewer Fund deficit was also raised. That deficit, though, is due to overestimated water and sewer revenues and the lack of any rate adjustments for nearly a decade. Those operational funds leading to that shortfall are included in the town payables used to arrive at the previously described $1.9 million shortfall (which is also reduced as described in the previous paragraph). With the proposed corrective action taken by the Water and Sewer Commission (new rates), the use of General Fund property tax dollars will no longer be needed to support water and sewer operations. The cash deficit is reduced further by that amount, down to $200,000.With that smaller amount, it may be much easier to correct the cash issue within one year, rather than the two-plus years described.The issue (however erroneous) about overspending also continues to be raised. The town’s current expenditures to date are approximately $21 million. Using last year’s fourth quarter as a guide, expenditures for the balance of the year are estimated to be $10.2 million, or final expenditures of $31.2 million. The current budget has a total expenditure amount of $30.9 million. As described at the presentation, the Town staff will implement $300,000 of cuts during the final quarter, bringing the final expenditures in line with the approved budget: $30.9 million.The proposed mill rate increase to support the proposed budget is 4.77 mills, raising the current mill rate from 25.43 mills to 30.20 mills. Due to the revaluation, this mill rate, while generating the same amount of revenue as last year’s budget, actually results in LOWER property taxes for most residents. I urge you to examine your “reval-ed” assessment, multiplying that value by .0320 to determine your real property taxes as part of the proposed budget. If you need assistance in that task, please contact me and I can assist you.The town must address the current fiscal condition. The budget should be the guiding document for the policy and vision of the town. You, through your vote on the budget, will play a key role in that vision: Do you want to control that future yourself and work to develop a new budget, or, as perhaps hinted earlier this week, throw up your hands, say “I don’t like what’s proposed!” (but not offer an alternative, at least so far), abdicate control to outside agencies and fold?If you have any questions about the budget process or the budget itself, I encourage you to write, call or visit. Honestly, not many people do (I think because so many people already know everything), so I enjoy the chance to explain local government. It can be confusing, but it can be understood.As I said in my budget narrative to the Board of Selectmen, I look forward to continuing the budget process and serving the community.Dale Martin is the town manager of Winchester.