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Community Corner

BoF Surplus Policy Allows Funds to Be Used to Reduce Tax Rate

To their credit, the Board of Finance has scheduled a Special Meeting for Monday, July 14th with two agenda items:

1) Consideration of discussion on the General Fund and
2) Consideration of discussion on Budget Contingency Planning.

Interestingly, the Town actually has a specific policy on the General Fund Balance.

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Recommended by the Board of Finance in January, 2013, and approved by the Board of Selectmen shortly thereafter, the Plan is very clear when it comes to the use of surplus funds. You can read the relevant excerpts from the Board of Finance meeting’s minutes by clicking here.

The policy calls for maintaining a fund balance of 10% of the operating general fund expenditures. No less than 50% of the fund balance should be available in liquid assets, occasionally dipping below when necessary for short term funding of cash flow and asset acquisition. According to the Bethel Town Comptroller, the current account balance for this fund is $11 million dollars – or about 33.33% above the recommended 10 percent.

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Further, the recommendations clearly state that one of the four important functions a positive fund balance serves is that it can periodically be used to smooth out major fluctuations in the property tax rates. It goes on to list the specific circumstances in which unrestricted fund balance can be "spent down,” such as operating emergencies or an unanticipated budgetary shortfall. 

In the event that the fund balance exceeds 11% at the end of any fiscal year, the excess may be used in one or a combination of the following ways:

  1. Transfer excess to the Debt Service Fund for future debt payments;

  2. Transfer such excess to the Capital or Nonrecurring Fund for future capital projects;

  • Use directly to reduce the tax rate in the subsequent year provided that care is taken to avoid a major fluctuation in the tax rate in succeeding years.

  • Bingo!

    So then why, at a recent Town Budget Meeting, were those of us who stood at the microphone and proposed this solution met with icy stares from the panel and audible groans from the audience?

    Perhaps it’s our personalities combined with our tenacity. It could be that we ask the same question over and over again so that we can collect all the conflicting answers we receive and evaluate them to translate to the many who ask us questions!

    Or, maybe it’s because we seem to be the only group of citizens who care whether or not Bethel's administrators adhere to statutory mandates, stick to correct town meeting government protocol, and now, are imploring the Board of Finance to FOLLOW ITS OWN POLICIES.

    Isn't the Town of Bethel taking the concept of “Rainy Day Fund” a bit too far?How bad does the storm have to be?

    By the time the Town budget is passed, Bethel will have spent over $50 thousand dollars on referenda. How is that serving anyone?

    The First Selectman continues to tell us time and time again that the town's finances have improved tremendously over the past five years. It's quite a statement to make - that while the private sector is facing the most challenging financial climate in decades, and Bethel taxpayers try and cope with the second highest equalized mill rate in the area -  it's the TOWN'S financial situation that shines brighter than the PEOPLE'S!

    In light of all this, using a portion of the general fund excess to keep the mill rate flat and mitigate a tax increase seems completely reasonable. Especially given that there is already a policy in place that solidly supports this action.

    If the Board of Finance follows its own advice on how to use the excess fund balance, those "yes" signs will go up lickety-split!

    Are we nuts or what?

    Cynthia McCorkindale, Chairman
    Billy Michael, Treasurer
    on behalf of the BAC and its Supporters


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