Town Meeting Representatives have been sent packets containing reports on the revenue and expenditures for the Town's three major funds - the General Fund, Utilities Fund, and the Parking Fund in anticipation of Thursday's informational meeting.
Due to the quick scheduling of the informational meeting, the numbers provided could not yet be audited. The Town has 60 days after the close of a fiscal year take care of the final payments and expenses, and the meeting falls within that 60 day period. This Thursday's meeting is, then, just a preliminary look at the financial situation, and citizens are asked to anticipate additional meetings in the future that will focus on the audited financial reports and explaining FY06 statements.
In a cover letter entitled "Numbers Do Change," Assistant Town Manager Barbara Sondag says that "it is vital that citizens understand the financial well-being of the Town is not simply based on revenue and expenditures." She explains that it only tells part of the story, much like an individual's checkbook balance isn't a true evaluation of her total financial security. "Banks don't base loans on your checkbook balance," she adds. "They look at your earning potential, your total debt obligations, your assets, etc."
For a better picture of the overall picture, citizens are encouraged to study and understand a few things, such as cash flow. The Town works on a modified accrual basis. That means that when bills are sent out, the Town revenue reflects what was BILLED. Deposits into the bank occur as they are received. In other words, if the Town sent out $1000 in bills, it would immediately show that we have $1000 in revenue, but we wouldn't really have it in the bank until the checks were cashed.
The memo recommends that citizens review and understand is the Town's audit. It also states that the new, professional Financial Director. John Leisenring was hired partly for his ability to explain things in simple terms.
The cover memo explains that "the next several years will continue to be financially difficult for the Town." (You have been warned.) The General fund will be "tested by the need to repair and replace a crumbling infrastructure," so roads and buildings may see less maintenance. The Utilities fund "struggles with its own infrastructure requirements... while faced with lower water usage and more storm water regulations." Finally the Parking system is just beginning to enter what had already projected as "its most lean financial years."
Sondag sums it up as follows: "These are the struggles we face as a Town. These issues are not insurmountable, but do require a level of financial monitoring that the Town has not, until recently, had. We must identify new and/or different revenue sources to maximize all potential earning. We must review how and what services are provided with a focus on increased efficiency. We must work with State Legislators to identify and correct State mandates and property tax regulations that unduly burden Vermont Towns."
An overview of the preliminary numbers:
1. General Fund Unaudited as of July 31, 2006
FY06 Budget - $11,207,885.00
YR End - $11,493,439.69
2. Utilities Expenditures and Revenue FY06 Unaudited
Expenditures Budget- $3,178,909.21
Expenditures Adjusted - $2,997,742.21
Expenditures Actual - $2,971,950.51
Revenue Budget - $3,178,909.00
Revenue Actual - $2,796,614.21
Expenditure over Revenue ($175,336.30)
3. Parking Fund Unaudited FY06 Year End
Revenue Budget - $749,500.00
Revenue Year End Actual - $993,882.44
Expenditures Budget -$756,085.00
Expenditures Actual - $1,003,609.84
There is a summary of FY05 Audit findings, what corrective actions were taken by the Town and when, and the current status included in the packet, as well as a preliminary report of the Multi-Modal Funding Sources and expenditures.