Voters in the town of Boulder Junction approved a resolution to increase in the 2019 tax levy to be collected in 2020, with 87 voters in favor of the resolution and one opposed, at a budget hearing and special meeting of the electors Nov. 14.
Also discussed at the meeting were reconciliation plans for the road project which exceeded the amount authorized by voters in 2017 and a possible 2019 budget deficit.
The board addressed budgeting shortfalls over the past few years which resulted in what town officials consider an “under calculated” tax levy.
Town supervisor Jim Galloway explained how town budgets were created by estimating revenues and expenditures, while saying within state-imposed limits outlined on the levy worksheet.
This levy worksheet, according to Galloway, comes to town officials with most numerical values already filled in, and the only area the town officials had an effect on was the amount paid for debt service.
“The purpose of this is simply to allow the town to include its obligation to pay its debt service by including the amount in tax revenues ultimately paid by town residents and businesses,” he said.
When the town began working on the 2020 budget in September, Galloway said the first thing the board did was look at the levy worksheet from the previous year, where it was discovered that, even though the town had budgeted to pay its full debt service of $533,301, it had only paid $273,840.
In reviewing the debt services of previous budget years, Galloway said they had found the same pattern, with the total deficit in tax collection over a three-year period, from 2017 through 2019, being $533,059.
Galloway called this a “significant loss of opportunity.”
“These budget dollars are important simply because we have multiple buildings and we have infrastructure to maintain, we have equipment that needs to be replaced periodically, and we have services to provide, and that takes tax funding to do,” he said.
Galloway said the decision not to tax the townspeople made it necessary to reallocate funds within those budgets to pay the full debt service of $1,033,555, which impacted other necessary areas of the budget negatively.
“To reverse this pattern, this board is going to enter the full amount of debt service on current and future budget levy sheets,” Galloway said.
He added this action was not the result of new debt, but rather was the first accurate reporting and taxation of the town’s debt, including the full impact of the road improvement project.
Town supervisor Laura Bertch introduced the 2019 levy proposal for the 2020 budget plan.
According to Bertch, the proposed levy for the 2020 budget is $1,381,329 with a proposed mill rate of $2.82 per $1,000 of valuation.
“Please note that this is important, very important, to approve the proposed budget 2019 levy tonight, to support the operations in 2020,” Bertch said.
Bertch presented a budget summary comparing the 2019 budget to the 2020 budget. In this comparison, she noted a 23.3% change between last year’s levy of 1,060,794 and the proposed increase to $1,381,329.
“If we had entered the full debt obligation on our levy worksheet last year, our mill rate would’ve been around $2.72,” town clerk and treasurer Dan Driscoll said. “And our property tax rather, instead of $1,060,794, would’ve been around $1,320,000, I believe.”
Driscoll said when the road project was discussed, a $2.72 mill rate was something he believed people expected, and that it was surprise when the mill rate was “so low” last year.
“I think it’s fair to say, if we had entered that full debt obligation like we should’ve, there wouldn’t be a 23% increase this year. It would be more like 5% increase,” Driscoll said.
“It’s been a lot of work and the four of us sitting up here, we recognize that there’s some things that we have to correct and we’re making an effort to correct them,” town chair Dennis Reuss said. “This town is in good shape financially, but we want to keep it that way and we want to keep improving.”
Road plan reconciliation
Residents of the town of Boulder Junction voted during a special meeting of the electors in 2017 to authorize a road plan not to exceed $5 million.
At a recent special town board meeting, Reuss explained that changes during the project ultimately exceeded the $5 million limit set by voters by approximately $977,000.
Reuss explained that the board, as well as Driscoll, would present a plan for how reserve funds and budget allocations would be made to eliminate the deficit.
“Our commitment to you, when we were elected, when we took office earlier this year, the four of us, constituting the town government, committed to all of you honesty and full transparency in our actions,” Bertch said.
Bertch said the total cost of the road project had come out to $5,834,450.43.
“There wasn’t properly, a proper journal entry by the previous clerk, for Stiloski and Fishtrap Roads,” Bertch said. Those roads, according to Bertch, were started in 2017 and completed in 2018.
“In 2018, those two roads were charged to the road project, instead of to the town roads budget,” Galloway added. “That could’ve been corrected with a budget amendment and transferred the charge to the proper place.”
Galloway said that wasn’t done, and grant funding opportunities were taken advantage of, as well as revenue generated, that should’ve been adjusted in the total.
“I think, when all is said and done, even though it looks $800,000 over budget, it’s really much closer to the actual budget than that,” he said.
Bertch said the bill for the project amounted to $976,807.40, the majority of which had been paid for using available funds and the ADM account. The remainder would be paid through designated fund transfers from the road fund, police fund, and room tax fund.
Bertch explained the plan to restore those fund balances by 2024, including a plan to reduce budget line items and transferring those funds to the funds the board had borrowed from.
“There was an error, and it’s being corrected with this plan,” Bertch said.
Kayla Houp may be reached via email [email protected]