Revenue problems in 2013 create a $1.4 million deficit in

The town is at least four or five months away from its summer budget deliberations, but it’s already looking at a $1.4 million deficit for fiscal year 2013. And the shortfall has nothing to do with the town’s outstanding pension fund obligations.

Finance Director Sue Smith and Town Manager Dave Bullock informed the town’s Investment Advisory Committee at its Jan. 15 meeting that revenues have not come in as anticipated for fiscal year 2013. That budget ended Sept. 30, but revenue items such as gas and electricity franchise fees are still coming in for that year and are lower than expected. The results of the budget are still subject to audit adjustments.

“We didn’t make the revenues we thought we would make,” Smith said.

To counterbalance the problem, the town has used more of its fund balance, and Bullock’s preferred operating budget, which maintains a 90-day minimum operating fund balance in case of an emergency, has now dropped by 15 days to 75 days.

Commissioners agreed with a guideline to maintain a general fund balance with an emergency fund balance of between 90 days and 120 days, or between $3.5 million and $4.68 million when they discussed the budget last year.

This summer, Bullock told committee members staff will present a two-year plan to return the budget to the 90-day operating budget.

Although the deficit concerns Bullock, he said the town anticipates property values to increase as the economy recovers, which will help offset the deficit.

Bullock said the town continues to look at costs, and his directors monitor their budgets weekly. He said the town’s budget is updated daily on its website.

Bullock also explained that Smith took over chief accountant practices for the last few months before the position was filled, and she uncovered some practices that had been handled incorrectly for years; those errors will be fixed. For instance, the town has not addressed office-supply inventory for more than 10 years and was expensing supplies to department budgets when they needed items. Tennis Center supplies, Smith said, also were not being accounted for correctly.

And, Smith said the town will no longer carry purchase orders over prior years, which affected the operating budget and increased department budgets.

Fiscal Year 2013 Budget
Total Revenue: $14,711,173
Total Expenses: $16,103,491
Total Deficit: -$1,392,318

*The preliminary results of operations for the fiscal year that ended Sept. 30 is expected to end with a deficit amount of $1,392,319, which is higher than expected when the town crafted the 2014 fiscal year budget.

Contact Kurt Schultheis at [email protected]