Templeton Re-Cap data

Templeton Re-Cap data

The following documentation has been provided by our current town accountant:

All,

We have all been trying to figure out how the town is having the issue regarding the budget and the recap.  Jeff Ritter pointed out to me the FY12 budget in relation to revenue.  The FY12 budget used $686,628 of Free Cash and $212,126 of Stabilization funds in order to balance the budget.  As you probably remember the Accounting Consultant Matt Angel at last Friday's Selectmen meeting mentioned that if the town continues to use one time funds (Free Cash, Stabilization) the town’s money concerns will never be fixed.


After a little research it is quite clear that the use of one time funds Free Cash, Stabilization have been used for a number of years.  After examining the tax recaps for FY02 through FY12 with the exception of FY05, Free Cash and Stabilization have been used as a funding source every year through FY12.  The recap in the state’s Gateway system only has records back to 2002.  The recap in the State's Gateway system has records back to 2002.


                                         2002            2003              2004           2005           2006
Free Cash                  220,403.00    377,582.04     143,493.00      0.00         582,421.00
Stabilization                39,392.64     118,190.45
24,468.00
0.00
27,963.00

FY07 Free Cash used 784,151.00          Gen Fund Budget 4,064,358.00
FY08 Free Cash used 403,637.00          Gen Fund Budget 3,686,661.00
FY09 Free Cash used 665,959.00          Gen Fund Budget 4,883,566.00
FY10 Free Cash used 882,486.00          Gen Fund Budget 5,160,573.00
FY11 Free Cash used 380,007.00          Gen Fund Budget 5,101,816.00
FY12 Free Cash used 686,628.00          Gen Fund Budget 5,277,527.00
FY13 Free Cash used 189,081.00          Gen Fund Budget 4,627,447.00…12% reduction from FY12

The Town Clerk’s certified town meeting minutes for ATMs has similar language for authorizing the use of Free Cash.  It is generally the last article.  As you can see the funds are used to balance the budget and not for other items.


To see if the Town will vote to appropriate from available funds in the Treasury, a sum of money to be used by the Board of Assessors in fixing the tax rate to meet appropriations made for the fiscal year ending June 30, 2007 or take any other action relative thereto.

On a motion duly made and seconded the Town voted to Appropriate from Certified Free Cash the sum of Seven Hundred Eighty Four Thousand, One Hundred Fifty-One Dollars ($784,151.00) to be used by the Board of Assessors in fixing the tax rate to meet appropriations made for the fiscal year ending June 30, 2007.

Obviously knowing why this has happened doesn't fix the current problem but should help for future budget years.  The real question is, who made the decision to use Free Cash, former Town Accountant, past administration, past Select Boards?  Again, it doesn't fix the problem but should shed some light on the budget process and the fact that more people should be involved and have input.

Thanks


Fred Aponte

Accounting

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It appears from this documentation that the structural deficit in the budget has been about $500,000 for years. In 2005 the tax rate was set late so Free Cash could not be appropriated. Free cash was not certified in time to use it to pad the budget.

If you look at the chart  and the figures for the general budget, last year shows a 12 % budget reduction from FY 12.  Now look at the 5 year Levy limit . Next year, the town will raise only $219,000 by increasing taxes 2 1/2 percent. The structural deficit is $500,000. The increase in the levy limit will not cover the structural deficit for FY 15. If you don't ask for an override or use Free Cash and/ or stabilization funds then the only thing left is to make cuts. That scenario does NOT take into consideration the nuclear option.