(10/1) Hello! As summer comes to a close, I hope everyone is sliding comfortably into their fall routine. School is back in session, it will soon be time to begin cleaning the yard and clearing the garden, and (best of all!) there will be cool fall nights sleeping with the windows open! By
the time of publication the new Town Council will be seated and our most immediate challenge will be dealing with additional reductions of in-coming revenue. You may have already seen some headlines or heard some discussion on this issue, but I would like to share my understanding of where we are and where we might
Due to ongoing budgetary shortfalls at the state level, municipalities can expect a 90% reduction to their share of "highway user fees." For Emmitsburg, this represents an approximate $140,000 reduction in revenue - or about 8% of our current, FY2010, budget. These numbers are not exact, but
I believe they are in the ballpark. This reduction obviously punches a hole in the budget as approved in June 2009. The current budget was already around seven percent less than the previous year. These additional cuts mean the budget may now be down as much as fourteen percent from the previous year.
I think all of us would be challenged by a fourteen percent reduction to our income - so these are not insignificant changes! Most of the initial round of cuts (when planning the current budget this spring) was borne by the Capital Improvements Program (CIP). The CIP generally covers
repaving of streets and replacement or purchase of equipment such as vehicles, parks equipment, and the like. The question then becomes, how do we make up for additional, lost revenue? A FY2010 CIP budget of approximately $50,000 was maintained for projects requiring immediate attention, but, obviously, this list
should also be subject to further review in the light of current circumstances.
At this point, my expectation is that this latest hole in the budget can be filled through the transfer of funds unspent from the previous year's budget. Each year budgets are crafted in such a way that the amount you expect to "collect" exactly matches the amount you project to spend. Of
course, the reality is that the town government has historically had higher revenues than expenditures… The monies "left over" from Fiscal Year 2009 will be rolled over to the current budget once the auditors have closed the books on last year's budget. I believe the Auditors' Review and Budget Transfer Amendment
will take place at the November 2 Town Meeting.
This "budget transfer" is an often overlooked process that takes place year after year and has allowed us, for example, to establish a "rainy day fund" of approximately $566,000. The transfer may receive a bit more attention this year because it will indeed be necessary to fill the widening
gap in our current budget. Unfortunately, this short term solution is really a "one off," and we can't anticipate that any remaining funds at the close of this budget year will be available to offset deficits in the following year's budget. Indeed, it may be unrealistic to expect these monies to offset EXISTING
deficits if the state and county continue to cut their historic contribution levels to our municipal budget as their own revenues continue to fail as we all work our way through the current budget cycle…
Beyond absorbing last year's excess to make up for the current year's shortfall, the rainy day fund does indeed exist to shelter us from these admittedly "rainy days." I would support the transfer of up to twenty percent of that fund, currently approximately $110,000, in any one fiscal year
to help cover these deficits that are largely related to the current downturn in the economic cycle. Beyond these actions lie structural cuts and "revenue enhancement."
My first recommendation in regard to structural cuts would be to reverse the recent decision to increase the number of contracted, resident deputies from two to three. The decision to increase the coverage was made when revenues (especially related to new home construction) were strong - and
we all know those days are gone for the foreseeable future. A return to the historic level of resident deputies would represent a savings of over $100,000.
Additional cuts to town employees' pay, work hours, or staffing levels are not my preferred way to re-allocate funds - although I, like many of you, have been working without the prospect of a raise from my current employer and face the likelihood of furlough days in the near future as we
enter our slow winter season… Obviously, many of us are facing similar strains to our own budgets at home - therefore, I don't feel any increase to tax rates can be considered until all structural costs and potential service reductions have been publicly and aggressively reviewed.
But, as of today, all is not doom and gloom! I believe we can struggle through the current, and even the following, budget year utilizing a toolbox of potential, incremental counter-measures that will see us through without layoffs or tax increases. I've tried to outline my vision of how we
can ratchet down as conditions demand and am certainly open to your questions and suggestions. Please contact me directly or consider sharing your opinions with the entire Town Council at an upcoming meeting.
Read other articles by Chris Staiger