Trying to understand a town’s budget seems like it should be a difficult, but straight-forward process, with revenues and expenditures lining up on either side.
Not so with Fairfax’s budget, says a group that has formed to fight – Measure D – on the Nov. 8 ballot. The No on D committee has created a website, with charts based on town audit numbers, to demonstrate what they argue is consistent misrepresentation and a lack of clarity with the town’s money.
“They consistently underestimate revenues and expenses,” said Jory Prum, one of the members of No on D. Prum said that according to the yearly audits the town both took in far more money than anticipated and spent far more money over the last five years. “That tells me the budgeting process is not accurate.”
Prum, Bill Parker, John Molloy, and former council member Susan Brandborg have created a series of foot-noted charts based largely on the yearly audits that show an increase in expenses, an increase in revenue, and a discrepancy between budgeted and actual amounts.
Based on that, they argue, residents should vote no on the local sales tax.
“Vote no on Measure D to send a message to town hall: fix the mess,” said Prum.
But, said Town Treasurer Barbara Petty, basing all that off the audits misses a number of key points and differences from the annual budgeting process.
“The audits present the numbers in an entirely different way,” she said.
One of the main claims that the No on D Committee is making is that the town has taken in $2.7 million more than expected from 2005 to 2010. But, according to them, the town has also spent even more than that over what the budgeted expenditures were in that time.
Most of this information is based on the yearly audits. The audit for 2009-10 clearly states, for example: “General Fund revenue during the FY 2009-10 year totaled $6,126,075, which was more than the final budgeted amount by $479,071, or 8.5%.”
Great, thinks any Fairfax resident, the revenue was higher than expected.
But, the next paragraph in the audit reads: “General Fund expenditures for FY 2009-10 totaled $6,758,910, and were lower than the final budgeted amount by $151,962, or 2.2%.”
That means, according to the audit, said Prum, that even though revenue was higher than expected and expenses were lower than expected, the town still overspent. It would appear that expenses in 2009-10 were more than $600,000 than revenue.
But, a look at the town budgets muddles up those numbers.
General Fund numbers don’t take into account special funds, such as the Measure I (formerly Measure F) money, state COPS money, or Measure K capital improvement money, for example, said Petty. All those funds are held separately – and some are noted as transfers into the General Fund, which would appear as revenue. Measure I money, around $450,000 each year, is largely transferred into the town’s General Fund. All of which is clearly delineated in the budget and referenced in the audit.
Simply trying to find the numbers the audit references for 2009-10, though, in the budgets is difficult.
In the approved budget for 2009-10, the anticipated expenses and revenue were $6,939,900 – with a $306,591 transfer from the dry period fund to cover the deficit that year. That number matches the budgeted expense number referenced in the audit for that year, which the town came under, but not the budgeted revenue amount – implying the audit doesn’t take into account certain fund revenue transfers that are budgeted for
“Public budgets are complex documents and they can be opaque,” said Mayor Larry Bragman
It is that opaqueness that concerns the No on D Committee. How can the residents know what tough cuts need to be made, said Prum. “I don’t know what they’re spending it on. The info isn’t transparent enough.”
For example, he points to the commonly referenced argument that 80 percent of the town budget goes to payroll. But only about 60 percent of the actual town budget goes to payroll and salaries, he said.
The 80 percent number, Bragman said, is figured by factoring in the payroll cost of the and other contractors the town uses to provide services. The town doesn’t not their payroll, because it is simply paid out as a contract fee.
Prum argues that that doesn’t make sense to reference a statistic in the budget that can not be reached with information in the budget. Instead, one has to download the fire department’s budgets and calculate their portion of money that goes to payroll – likewise for other contractors.
“There’s no real transparency,” he said.
But, said Bragman, the reality is the town has been cutting expenses and coming to grips with a challenging economic situation.
“It’s not like we have some secret stash of money,” he said.
The town has had higher revenues than expected because they budget conservatively, said Bragman. And, there have been higher expenses than expected because pension, healthcare and medical costs have gone up.
In addition, said Petty, over the five years examined, the town spent just over $900,000 on repairs after the flood – some of which it is still waiting to be reimbursed for from FEMA. The FEMA money is supposed to go into one of those separate funds from the General Fund and accounted for differently, but, said Petty, because the staff had never done FEMA reimbursements before some of it was mistakenly put into the General Fund after the flood.
The town, which has gone through a series of financial directors in the last six years, did have accounting problems a few years ago and had gotten behind on its auditing process. But, with the most recent audit, which gave the town a clean bill of accounting health, they are nearly back on track.
If residents don’t pass Measure D, the half-cent sales tax, they may soon find themselves in a “race to the bottom,” said Bragman.
State funds, sales tax and property taxes have gone down, while costs such as pensions are going up. “You can’t argue about the reality,” he said.
Actually, you can.
The No on D committee disputes all those claims and says that it’s just been one stop-gap tax after another. It’s time for Fairfax to get it’s finances in order.
“They see an opportunity for easy money,” Prum said.
Are you going to vote yes on Measure D? Are you worried about the town finances?