Guest view: New Hartford has charted course for its financial recovery

By EARLE C. REED

Special to the Observer-Dispatch

Posted Jun 13, 2009 @ 03:38 PM

The town of New Hartford is complex. Not only do we have two villages within our borders, but we have three separate fire districts and a police department and courts system that are able to manage the unique circumstances of policing the commercial hub of Oneida County that generates nearly 70 percent of its sales tax.

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.

Previous newspaper reports commented on isolated individual funds and accounts of the town, but spent little time commenting on the overall fiscal health of the town. Unaudited figures at the end of 2008 provide a $2.4 million fund balance and in February 2009 Standard and Poor’s, a bond rating agency, stated, “The stable outlook reflects our expectation that the town will maintain reserve levels that are commensurate with the rating category.”

The state Comptroller’s Office in 2001 commented on the 2000 change in law by stating, “A fixed percentage (of fund operations) or a fixed dollar amount is not specified in the legislation because a fixed percentage might be insufficient for small units and excessive for large units, while a fixed amount might be excessive for small units and insufficient for large units. A ‘reasonable amount’ of unappropriated reserved fund balance, may be retained for each fund, consistent with prudent budgeting practices, necessary to ensure the orderly operation of the government and the continued provision of services.”

We have begun the process of building those depleted fund balances by cutting individual department expenditures while prioritizing necessary expenses. In addition to the recent hiring of an experienced municipal certified public accountant to oversee these efforts, the board acted at its last meeting to create a committee to expedite a thorough analysis of what that “reasonable” fund balance should be.

There is no doubt that the last half of 2008 and 2009 has brought challenges not seen in recent history.

We have a global recession that is affecting our community with a decreased generation of income from sales tax, mortgage tax and interest on our bank deposits. This, combined with the soaring costs of medical, retirement and gas, places the same economic impositions on the town budget as it does every family within our community.

Finally, the Town Board and I are committed to continue working diligently in maximizing every dollar that comes into the town’s coffers, while pursuing every cost efficiency possible.

At the same time we will continue managing our fund balance and budget to ensure the stability and sustainability of our fiscal health while maintaining the services our residents have come to expect.

Earle C. Reed is supervisor of the town of New Hartford.