Templeton wants tax bills paid
TEMPLETON
— On the heels of Tuesday’s ultimatum between eviscerating the town
government or accepting receivership, the Board of Selectmen were told
of another encroaching financial issue a town cash flow problem.
Without a balanced budget, the Department of Revenue will not certify the town’s tax rate, leaving the town unable to send out tax bills for the third and fourth quarter. Two estimated bills have already been sent out for this fiscal year but the money collected has not been enough to cover the town’s expenses.
“The town accountant has said to me that we have about $3 million in obligations to get through until the end of the (fiscal) year and we have about $2 million in cash,” explained Town Administrator Bob Markel. “So we’re short.”
Complicating the situation is a $2.65 million loan taken out by then Treasurer Dan Keeney to keep the town operating in the absence of tax revenue. That note will come due May 15 and must be discharged by June 30, or the end of the fiscal year.
“That money has been used to pay bills and meet payroll,” Mr. Markel said. “We’re running out.”
According to interim Town Accountant Matt Angell, the town will run out of cash around June 13.
“The solution to that is to set the tax rate and get the bills out and get revenue in the door so we can pay off the note and pay the bills,” said Mr. Markel.
The board originally planned to hold a tax classification hearing Tuesday to set the rate, but was unable to follow through after the override failed to pass on Monday’s ballot. Moving forward, the town has two options to balance the budget – make $505,000 in cuts to the current fiscal year’s budget as soon as possible or accept a $350,000 loan from the commonwealth and state control.
The “draconian” cuts to this year’s operating budget would leave the town government gutted, with more employees than not facing layoffs or furloughs until July 1. The public library and Council on Aging would remain closed for the remainder of the fiscal year and the police and fire departments would have their spending and payroll slashed. While the cuts would be devastating, they would allow the town to set its tax rate, get bills out and start getting revenue in the door.
The other option would be to accept the state’s loan and their financial intervention. The fiveyear loan would be paid back through $80,000 installments and come with considerable state control over the town’s finances.
This option would still leave the town with a $505,000 gap in their budget for the coming fiscal year as well as $80,000 in additional cuts necessary to cover the loan payments. The legislation, after being introduced by state Sen. Stephen Brewer, DBarre, would need to pass through both the House and Senate and be signed by the governor before the town could receive any money, delaying an already dire situation.
“If it takes two weeks or more, that’s time going by where we haven’t sent out tax bills. We need to get tax money through the door prior to June 30,” explained Mr. Markel.
“The taxpayer has a month to pay so if you send out your tax bills midMay or the end of May, they have until the end of June,” he added. “It really cuts it close, although it could work.”
To help alleviate the burden, officials encouraged residents to pay their estimated tax bills to the town.
Police Chief David Whitaker said he would work to put out a call asking for residents to send in their tax bills as soon as possible.
“We cannot run out of money in June and default on our various payments and obligations,” said Mr. Markel.
“The gravity of the situation cannot be overstated,” agreed Vice Chairman Kenn Robinson.
The Board of Selectmen delayed its budget decision until all members were present. The vote will likely take place during Thursday’s meeting in the Kiva at 5:45 p.m.
Without a balanced budget, the Department of Revenue will not certify the town’s tax rate, leaving the town unable to send out tax bills for the third and fourth quarter. Two estimated bills have already been sent out for this fiscal year but the money collected has not been enough to cover the town’s expenses.
“The town accountant has said to me that we have about $3 million in obligations to get through until the end of the (fiscal) year and we have about $2 million in cash,” explained Town Administrator Bob Markel. “So we’re short.”
Complicating the situation is a $2.65 million loan taken out by then Treasurer Dan Keeney to keep the town operating in the absence of tax revenue. That note will come due May 15 and must be discharged by June 30, or the end of the fiscal year.
“That money has been used to pay bills and meet payroll,” Mr. Markel said. “We’re running out.”
According to interim Town Accountant Matt Angell, the town will run out of cash around June 13.
“The solution to that is to set the tax rate and get the bills out and get revenue in the door so we can pay off the note and pay the bills,” said Mr. Markel.
The board originally planned to hold a tax classification hearing Tuesday to set the rate, but was unable to follow through after the override failed to pass on Monday’s ballot. Moving forward, the town has two options to balance the budget – make $505,000 in cuts to the current fiscal year’s budget as soon as possible or accept a $350,000 loan from the commonwealth and state control.
The “draconian” cuts to this year’s operating budget would leave the town government gutted, with more employees than not facing layoffs or furloughs until July 1. The public library and Council on Aging would remain closed for the remainder of the fiscal year and the police and fire departments would have their spending and payroll slashed. While the cuts would be devastating, they would allow the town to set its tax rate, get bills out and start getting revenue in the door.
The other option would be to accept the state’s loan and their financial intervention. The fiveyear loan would be paid back through $80,000 installments and come with considerable state control over the town’s finances.
This option would still leave the town with a $505,000 gap in their budget for the coming fiscal year as well as $80,000 in additional cuts necessary to cover the loan payments. The legislation, after being introduced by state Sen. Stephen Brewer, DBarre, would need to pass through both the House and Senate and be signed by the governor before the town could receive any money, delaying an already dire situation.
“If it takes two weeks or more, that’s time going by where we haven’t sent out tax bills. We need to get tax money through the door prior to June 30,” explained Mr. Markel.
“The taxpayer has a month to pay so if you send out your tax bills midMay or the end of May, they have until the end of June,” he added. “It really cuts it close, although it could work.”
To help alleviate the burden, officials encouraged residents to pay their estimated tax bills to the town.
Police Chief David Whitaker said he would work to put out a call asking for residents to send in their tax bills as soon as possible.
“We cannot run out of money in June and default on our various payments and obligations,” said Mr. Markel.
“The gravity of the situation cannot be overstated,” agreed Vice Chairman Kenn Robinson.
The Board of Selectmen delayed its budget decision until all members were present. The vote will likely take place during Thursday’s meeting in the Kiva at 5:45 p.m.
The cash flow problem is critical. If the Town of Templeton defaults on the June bond payment, it will effect not only the town's bond rating but the state bond rating. This will impact every town department including TMLWP, the school department, the sewer department.
ReplyDeleteFor years I have worked to bring to light financial practices that were unsound. It took 4 years to get the BOS to accept the DOR review. I kept bringing up accepting the DOR review because I felt and still feel the recommendations are a blueprint for financial stability.
Templeton now has a town administrator form of government. This is a big transition and shift of responsibilities from the BOS to an administrator. The next challenge is the adoption of a formal PILOT agreement with the Light department.
Hope to see many people at tonight's BOS meeting in the KIVA.
PILOT means they have to play fair. No more of the we have lower rates than the others or we do things right over here. The facts are if the TMLWP had to pay the PILOT they would look like a poorly run monopoly that it is. With the endless money flow they have they have no reason to not give the town at least what they have in the past. For us to get less is not doing things right. It's the point that we have not got the money to pay back the charges for the power our department purchase every year. We pay,pay,pay them for the service we allow them to provide the twon and then they profit from the very town that owns them. To start with, they should provide the town blds. with free power and the schools with 1/2 price power. If they won't pay a PILOT they need to provide us with the reason swhy and year to year cost changes on paper to prove why they have a cash flow problem. Any department who has a budget can manage to change the amounts to eat up surplus.
ReplyDeleteThe corners they cut will only hurt our town and with no regards to the outcome do they even care?
Not yet!
PILOT = "Pofit Internally Leave Out Templeton"
Did anyone hear about the Net Metering offer from the TMLWP people?