According to documents obtained by Woodstock Times and interviews with a town official, the problem stems from two actions: first, an inadvertently excessive transfer of unexpended funds from the 2010 budget to reserves — which are restricted to uses such as capital improvements — in the current year’s spending plan; and second, an appropriation of funds that exceeded anticipated or available revenue.
The transfer created a deficit of approximately $220,000 in the 2011 general fund and of roughly $120,000 in the current year’s highway fund. Those two spending lines account for the lion’s share of the town budget. Meanwhile, the town’s revenue from various sources, including interest income from investments, state aid, and county tax receipts, has declined precipitously at a recessionary time when fixed expenses, such as retirement benefits, have risen.
Woodstock supervisor Jeff Moran assumed responsibility for the budget problem in a May 18 interview. “I’ll take full responsibility,” he said. “I am the chief fiscal officer. I am responsible.”
In recent e-mails to the town bookkeeper, Pam Boyle, the town’s accountant, Mary Kimball, of the Kingston firm Kimball & O’Brien, outlined the gist of the problem. On March 28, Kimball wrote, “Due to the town’s overzealous transfer of funds for 2010, the Town has a couple [of] critical issues. The Town’s budget has a major shortfall for 2011 and also (short of a miracle) there won’t be funds to appropriate for the 2012 budget.”
The budget squeeze came to the attention of town officials during Kimball’s recent preparation of the town’s Annual Report for the current year, which is on file in the town clerk’s office. It is reportedly impermissible for such reports to cite a negative fund balance. In that vein, in a March 26 e-mail Kimball said that discrepancies between actual balances and totals listed in the report “represent a very serious problem for 2011.”
In the future, said Moran, the town should delay transfers of unexpended fund balances to reserves until the beginning of the following year, at which time the amount available for transfer is a certainty, since all of the town’s expenditures for the current year will be complete. In the past the town has authorized such transfers before the end of the current year, when it prepares the following year’s budget. At that earlier date the amount of an unexpended fund balance can only be estimated.
“For our 2012 Annual Report we should get the current year set in stone before we transfer any unexpended fund balances,” said Moran, who is not seeking reelection this fall. “At the end of this year the Town Board should resolve to transfer unexpended funds to reserves next February or March, as opposed to December of this year, so that we will be working with a history rather than a ‘guess-timate.’”
‘We’re not broke’
Although the town must grapple with the immediate problem of paying its bills for the remainder of 2011 and the longer-term challenge of formulating a 2012 budget that voters find acceptable, councilman Bill McKenna emphasized that the situation, while serious, is not dire. “The sky isn’t falling,” said McKenna in a May 18 interview. “We have very healthy reserves. We’re not broke. Woodstock has been here before and made it through. It’s not the end of the road.”
Moran struck a similar tone at the Town Board’s May 17 meeting. “The town has a very lean unexpended fund balance, but it’s not a giant problem,” he said, acknowledging the “overzealous” transfer at the end of 2010. “We must watch our spending. In looking at the projections with our bookkeeper, I’m not overly concerned, but again, we must watch our expenditures. There is no need to reduce staff at this time.”
As with any budget, the options for curing a deficit fall into two broad categories: increasing revenue, or achieving savings through reduced spending. Possible sources of increased revenue in the current year include a rise in mortgage and sales tax receipts that the county distributes to municipalities, which could occur if the overall economy continues to improve.
In the category of spending reductions, Moran noted at the board meeting that Woodstock’s outlay for liability insurance premiums was expected to fall by about 6 percent in 2011, thanks to the efforts of the town’s insurance committee. The town will also achieve a savings on the repair of the VanHoagland bridge, which it owns, in two ways: by transferring the $568,000 repair cost from the highway capital reserve fund rather than borrowing that amount, and by assigning the repair work to the highway department instead of to an outside contractor.
Other savings are expected to result from the elimination of the full-time position of town planning specialist and the resignation of the chief building inspector, Paul Andreassen, whose vacant position the Town Board has thus far elected not to fill. At the May 17 meeting the board temporarily assigned Andreassen’s duties as head of the Building Department to municipal code assistant Ellen Casciaro, with a commensurate pay increase for Casciaro. Other duties of the building inspector, however, such as the signing of various certificates, must be delegated elsewhere, as Casciaro currently lacks the Civil Service designation required for that role.
At the same meeting the Town Board took a step to alleviate the shortfall in the general fund by approximately $50,000, yielding a revised deficit of about $170,000. Correcting a previous mistake, in which the town had paid retired police chief Harry Baldwin more than $49,236 in accrued sick leave and unused vacation time from the general fund, the board transferred that amount to the general fund from an employee benefit reserve fund, from which the outlay should have been drawn in the first place.
In an apparent expression of concern over the budget shortfall, McKenna at the May 17 meeting cast the sole vote against three spending measures related to the construction of an accessory parking lot on the Upper Comeau property. ++