After much discussion, the assembly unanimously approved a resolution to establish a new budget policy that will help guide management of Borough funds.
Giesbrecht introduced a document he and Finance Director Jody Tow have been working on to help department heads more easily formulate their budgets and to help explain the budget process more simply to the public.
The resolution was approved with one change introduced by member Nancy Strand, which moved tobacco excise tax funds from a special fund into the general fund. The excise tax was approved by local voters at the municipal election in October.
Assembly member Cindi Lagoudakis proposed that the excise tax funds be appropriated instead to the community services budget whose funds are used at the Assembly's direction for local nonprofit organizations providing services that benefit the whole community.
Strand and Assembly Member Jeigh Stanton Gregor said that allocating the excise tax revenue into the general fund would provide the assembly more discretion to use it as they see fit. This amendment was approved by a four to one vote, with Lagoudakis being the one in opposition.
The new budget policy as a whole focuses on fund balances as the guiding measure. For the general fund, for instance, the resolution establishes that the fund balance should be maintained at “no less than four months and no more than six months of operating expenses.” These maintained funds should be available “to cover unanticipated revenue shortfalls and to provide an adequate level of reserves to cover unforeseen needs and emergencies,” according to the resolution.
They could also be used if necessary to cover a shortfall in one of the other Borough funds. Those outlined in the resolution include the community services budget, the property development fund, the national forest receipts special revenue fund, the enterprise fund and a capital projects fund.
Tow said that statewide a two to six month policy is typical. The resolution's suggested four to six month policy represents a more conservative approach by the Borough and was set by the Finance Committee in 2011, Tow said.
Assembly Member John Havrilek expanded the conversation to general budget priorities. He advocated for less spending and more savings.
“I would like to see us spend less than we did last year, all around...I'd like to have as much put aside as possible to pay our own way, because I think that's what the climate is,” Havrilek said.
He pointed to falling oil prices leading to fewer opportunities for funding from the State and increased demands by the State for municipalities to provide matching funds for capital projects.
Giesbrecht said that paying our own way would amount to increasing rates at a level that would likely cause community backlash. Also tightening up too much would lead to cuts in services when many community members are asking for increased levels of service for creation facilities.
“People want more, not less,” Giesbrecht said.
He and Tow both said the Borough is in very good shape right now.
“Between four and six months (of operating expenses in a fund balance), we're at six months right now. I feel like we're in really good shape, and there are other funds available to borrow from if we needed to,” Tow said.
Both acknowledging the current shape of Borough finances and looking at the realities of a changing fiscal climate on a state and federal level, Giesbrecht said, “Am I comfortable that the way we're spending money will allow us to continue to operate? Yes, as long as something else doesn't change in a big way. What's the likelihood of those things changing? Probably more now than they've ever been for a while.”
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