Friday, September 24, 1999
FinTeam seeks fix for FY00 budget shortfall
The town's financial management team met September 21 to try to quantify budget adjustments which have resulted in a significant shortfall between the amount required to balance the FY00 budget and the amount which can be collected under the Proposition 2-1/2 levy limit. While exact numbers or solutions have not been finalized, the FinTeam discussed the need for a transfer from the town's free cash account of between $200,000 and $225,000. The FinTeam further discussed that, should this transfer not be approved at this fall's Town Meeting, cuts in the town's operating budget may be necessary.
The specific items contributing to the need for the adjustment discussed at the meeting included a free cash transfer that was intended but not made at the spring Town Meeting, revisions to excluded debt, additional liability under the police department contract, additional liability for teachers' unemployment compensation claims, expenses of short-term borrowing, revised lottery money expectations and revised local receipts. Aside from the forgotten free cash transfer ($142,000) and the police contract adjustment ($15,000), none of the other items could be quantified with any certainty, although the FinTeam discussed ballpark figures. Based on these figures, chair of selectmen Doug Stevenson summarized that between $200,000 and $225,000 will be needed to make up the shortfall.
The finance committee will make a recommendation whether to make up this shortfall by a transfer from free cash. The FinTeam discussed no other alternatives except for a reserve fund transfer which was ruled out as inappropriate in most cases because the adjustments were not unforeseen. Free cash is a surplus account built up over time if town receipts exceed expenditures. Once a year, the town's free cash balance is certified by the state (reserving amounts that have been committed to expenditures) and this balance can be used to to reduce the tax levy. While technically, the town has no money in its free cash account until the department of revenue certifies this amount, FinTeam members estimated the amount at $500,000. The paperwork has been submitted to the state and local officials hope that the amount will be certified prior to Town Meeting.
The FinTeam was created to address concerns about coordination and communication among the town's financial personnel. Team members at Tuesday's meeting included selectmen Stevenson and John Ballantine, FinCom members Tony Allison and Charlie Parker, town clerk Sarah Andreassen, town treasurer Nancy Koerner, town assessor Rena Sweezey, town administrator David DeManche and school business administrator Eileen Riley.
© 1999 The Carlisle Mosquito