Self-proclaimed budget hawk Dick De Gray got an earful of budget in his first performance as chair at last night’s Selectboard meeting. In what proved to be an edifying session, not one but two major budget issues were aired in depth, with citizens calling for more information and transparency while town officials did their best to explain the gaps. In the end, the board voted to approve the borrowing of $500,000 to cover the Utilities fund deficit and in a rare departure from typical Selectboard practice, passed a motion to require the Town Manager to provide spending details for the Transportation project by June 27.
The meeting was barely into Citizen’s Participation before the first budget-related issue was raised. Jim Maxwell rose to his feet, asking once again for a full accounting of the town’s expenditures on the ‘Multi-Modal Transportation Project,’ aka the parking garage and Union Station. Maxwell, who was the attorney for the Woods family in recent litigation associated with the project, said nevertheless that it was “disingenuous” of the town to withhold this accounting because of the lawsuit. “All I want is an accounting,” he said, of the expenditures from the federal grants used to fund the projects.
Assistant Town Manager Barbara Sondag, who was on the hot seat for most of the meeting, explained that while she had the Union Station numbers, she did not have an accounting of the Transportation Center expenditures, which go back to 1999. She said that those numbers would have to be reconstructed due to lax bookkeeping in the past. She also made it plain that she was overwhelmed with work as she has been filling in for the finance director for months. In addition, she said, the 2007 budget had to be completed by the end of the month, also a high priority.
“I’m trying to give as much as possible,” she said, “ but my plate is full. Unless you make this a priority, I can’t do it.” She then addressed the Selectboard, telling them that if they wanted her to get the information, they would have to direct her to do it through Town Manager Jerry Remillard.
Jim Maxwell then said that he would be content with the reports from project manager New England Management which would have had to be filed in order to draw down the federal grant funds.
At this point, Jerry Remillard jumped in for some heated give and take with Maxwell. He seemed bothered by process issues, asking why Maxwell hadn’t just gone to him with his question instead of bringing it before the Selectboard, or better yet, requested that it be made an agenda item. Maxwell countered that he had been asking for the information since before Town Meeting in March, and had written two unanswered letters to the Selectboard already. Many in the room agreed that the town had had enough time to produce a report, especially since all they had to do was call the management company and request it.
DeGray tried to smooth the waters, suggesting that with the 2007 budget process coming to completion, this wasn’t the best time to ask for extra reports. At this, both Maxwell and Rich Garant leapt to their feet. Garant repeated Maxwell’s earlier assertion that the management company could produce the information, that no town staff time need be expended, and that by doing so, transparency would be achieved and the matter resolved.
Remillard agreed, at Selectperson Audrey Garfield’s prodding, that the management company could produce the reports, and the matter wound to a close with Jerry promising to get the information to Maxwell “as soon as we can.” Garfield, however, was not content with this and asked if a motion could be introduced giving the Town Manager a ‘directive’ from the Selectboard to provide the information by a given date. DeGray demurred, but suggested that the matter could be brought up later during Other Business.
After a brief interlude in which Mr. Diabetes informed us of the horrors of diabetes (he is doing a ‘perimeter walk’ around the country to build awareness) and Tri Park brought us up to date on its water and sewer project funding (“tricky” according to grant manager Sarah Friedman), it was back to budgets. This time, the matter under discussion was the conversion of a $500,000 deficit in the Utilities fund to debt — in other words, to borrow $500,000 in the form of a 3 year loan and apply that money to the deficit.
Again, Barbara Sondag was grilled. The big question was: what exactly is this $500,000 deficit and how did it happen. Barbara ventured a few guesses. For starters, the original 2005-2006 budget had a $500,000 difference between projected revenues and expenses that was apparently not caught. It was thought that the money might come out of reserve funds, but as we know from last years budget problems, there are no more reserve funds. In addition, there were other problems including something to do with the SCADA wastewater project that cost on the order of $300,000.
Barbara said that they had known since February that they were going to be short, and that the town had introduced stern cost cutting measures which had saved money. They also raised utility rates, which brought in additional revenue. But despite these efforts, they were still short. They had thought the deficit would amount to about $350,000 initially, but now they thought it was going to be $500,000. But when pressed as to why the number had grown to $500,000, Sondag couldn’t explain what had changed. “It’s my best guess,” she said.
The $500,000 figure is not completely accidental, however. Sondag said that the town had had a problem between Utilities and the General Fund for some time, and that the amount they were looking for in the General Fund was $500,000. So it made sense to borrow that amount regardless of what the true amount of the Utilities deficit turns out to be. With the $500,000 loan, the town will have at least covered the General fund shortfall, which Sondag said was necessary to cover cash flow. The money borrowed would then be repaid out of Utilities revenue over the next three years.
Audrey Garfield expressed shock that the town could have somehow come up half a million short, and said she was surprised that others on the Selectboard were not more concerned. After that, things got testy between Garfield and Sondag. Sondag, who appeared visibly upset at times during the meeting, lashed back at the Selectboard. “Did someone approve a budget that was $500,000 off?” she asked. She repeated that staff were trying as hard as they could but couldn’t fix everything at once. And then she explained the myriad reasons for the Utilities shortfall, everything from reduced usage to incorrect budgeting of the rate increase. And it did seem, to this reporter, to be a ghastly mess.
In the end, the Selectboard voted to approve the deficit-to-loan conversion by a vote of 3-1, despite protestations by Audrey Garfield that the deficit amount was not certain and the rate of the loan yet to be determined. Earlier discussion had revealed that the town was going to try to get the loan repayment amount broken out on customer’s bills so they can see how much they’re paying for this unfortunate fiasco.
At this point, I must confess, I went home. But we tuned in the meeting on BCTV (still in progress at 9:30pm) to learn that Audrey Garfield had in fact introduced a motion to direct Jerry Remillard to provide the Transportation project accounting to the public by the June 27 Selectboard meeting. Some discussion ensued. Greg Worden spoke in favor of getting the information out but felt that a directive from the Selectboard was unnecessary. Kevin Yeager agreed that it was very important to get this information out quickly, and felt that three week’s time was adequate, but stopped short of endorsing the motion for the directive.
At this, Wayne Carhart rose to speak, asking with some passion why the Selectboard was displaying “such resistance” to providing this information after months of requests. DeGray said that he wasn’t resisting and had not said anything against the motion. Carhart disagreed. DeGray also disagreed, with some candor, and Audrey Garfield asked him if he wanted to gavel himself. Finally, it came to a vote and somewhat surprisingly, passed 3-1, with only Worden voting against.
When all was said and done, Jerry Remillard, who has now been ‘directed’, summed things up: “It’s not one problem in the General Fund or the Utilities Fund — it’s a problem with all the funds.”
And that’s the situation of our town right now, one that is being played out around Vermont and the nation — towns running out of money and discovering just how good or bad their financial conditions really are, without the insulation of reserve funds and abundant cash flow. Brattleboro has fallen into this trap, exacerbated by financial mistakes, bad luck, poor oversight, and years of bad bookkeeping. Now, with citizens paying close attention. calls for transparency can no longer go unheeded.