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.”
So what might be a “reasonable” fund balance
for a town our size? 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.
