Fake Budget Slams Scarborough Taxpayers

An Ugly Trifecta

It feels like we’ve just hit some trifecta of unwelcome events at Scarborough Downs.  Here’s what’s happening now:

  • a fake budget is working its way through the usual ugly process,
  • a fake emergency is being conjured up to avoid a Charter-required vote on bonding a capital project and
  • another land give-away at Pine Point seems likely.

It’s amazing to us that the Town Council can find so many different ways to outrage so many folks all at once.  Since it can’t be avoided, let’s get to it…

Yes, we know, the “fake this” and “fake that” craze is mercifully coming to an end.  But it is such an appropriate concept for the Scarborough budget process that we can’t resist. 

Why is the Fiscal 2018 budget a fake budget?  Well, here are a couple of ways:

Fake Budget Reason #1:  Miraculous Budget “Refinements”

The bad news is delivered, with an upbeat spin, at the Budget Forum.

You may recall that in our last blog entry we reported that taxpayer funding of the schools was up 10% from last year’s budget.  So with great fanfare at the Budget Forum last Wednesday evening (4/26) it was announced that certain “refinements” had been made to the school budget, reducing it by $872,000!  No meaningful detail of the refinements was provided at the Budget Forum.

But the next day we did learn the details.  So here’s how these “improvements” to the budget were achieved:

  • Received better information on future insurance and electricity costs — $306,000
  • Made a better estimate of salaries and benefits costs of existing staff — $171,000
  • Received better information on State reimbursement of laptop program — $130,000
  • Moved capital items from the operating budget to bonds (equivalent to putting it on a credit card instead of paying cash) — $264,000

As our golfing friends would say, these were all gimmies.  There was absolutely no heavy lifting involved in making these refinements.   And isn’t it amazing that all these beneficial refinements could be made in just the three weeks since the budget was first presented on April 5!  If you should hear about the “valiant efforts” and “tough decisions” made by the School Board and Town Council, don’t be fooled!  And if someone tells you the school budget has already been cut, don’t waste your breath, just walk away; they’ve been brainwashed to the point where logic will no longer influence them.

So here’s a recap of where taxpayer funding of the schools stands now after that grueling round of “refinements:”

Yes, after the refinements, taxpayers are still expected to cough up a 7.8% increase in funding of the schools.  Wait, haven’t we seen this movie before?  Yes, indeed, we have.  In fact, we see it every year at this time.


Fake Budget Reason #2:  Using $2.1 million of Fund Balance

Loyal readers of this blog are well aware of the Wentworth Windfall – a technique whereby borrowed funds left over from the Wentworth School bond issue were used to reduce operating expenses in Fiscal 2016 and 2017.  Although legal, this unexpected inflow of money artificially reduced our tax rate in Fiscal 2017.  But we burned through the windfall and gave no thought to what would happen to taxes when the windfall was no longer there to soften the tax blow.  And that time is here now.  So in Fiscal 2018 we have a somewhat larger expense base but the Wentworth Windfall money is no longer there – leaving a big hole in the budget that needs to be filled by increased property taxes.

But wait!  There’s another gimmick!  In Fiscal 2018 the budget includes the use of $2.1 million of fund balance.  Before your eyes glaze over, don’t be intimidated by the use of that arcane accounting term, “fund balance.”  Although an accountant might quibble with this description, it’s really pretty much just cash surpluses that the town and schools generated in past years.  In effect, it’s our tax dollars that were collected over and above what was actually needed.

When you hear town and school officials explain the school budget, you are likely to hear only one number – a $1.4 million reduction in State education aid funding.  While this is certainly a challenging fact of life, you almost never hear about the $2.1 million of fund balance (surpluses accumulated from prior years) included in the upcoming budget.  Yes, the budget includes “dipping into our reserves” to the tune of $2.1 million.

And that $2.1 million more than covers the reduced State aid of $1.4 million!

So here are a few crucial questions about the use of $2.1 million of surpluses:

  • How much of this fund balance/accumulated surplus is available anyway?
  • How did they arrive at $2.1 million as the correct amount of surplus to use in Fiscal 2018?
  • Why not make it $3.1 million and get taxpayer funding of the schools down to less than a 5% increase (and a total mill rate increase of less than 2%)?
  • If they say it wouldn’t be “prudent” to use more than $2.1 million this year, why haven’t they  produced a projection of future years’ tax rates and fund balance use that will support that prudence?

Bottom line: The $2.1 million use of surplus in the budget more than compensates for the loss of $1.4 million of reduced State education aid.  Yet Scarborough taxpayers are still expected to increase school funding by 7.8%.  You have been warned.


Another Pine Point Land Give-Away Moves Forward

The potential give-away of the Avenue Two extension at Pine Point Beach was described in our October 19, 2016 blog entry which you can see here.  In a nutshell, the Town is preparing to cave to a local real estate developer and resolve a very murky ownership issue in his favor without even putting up a fight.  This seems to have been the preferred solution of former chairman Donovan and current chairman Babine from the beginning – but who can know what was in their hearts?

If you know one thing, faithful reader, it is that LookOutScarborough is tight with a buck.  So we appreciate the need not to waste taxpayer dollars on quixotic quests.   On the other hand, the ownership issue of the Avenue Two extension is so uncertain that we believe the Town should assert its rights.  And the Town enters this game with a fairly strong hand – the developer needs to make the first move, i.e., sue the Town.  Remember, he’s a developer… this is a business proposition to him, so there’s a finite amount he will rationally spend to pursue his claim.

Putting aside the principle of the matter for a minute, let’s remember that the 25-foot wide piece of property that is the object of Mr. Gendron’s desire is worth about $500,000.  We don’t see what the Town would get if it gave up its ownership claim. 

The Town has shown an unfortunate streak of wimpiness in past beach access controversies.  Perhaps this would be a good time for us to stand up and defend the property we own as well as maintain long-standing beach access.

What you can do to stop this give-away:

There are two important ways you can help:  1. Send a quick email to the Town Council telling them that you are opposed to this bad deal for taxpayers.  One email address will reach them all: scarboroughtowncouncil@googlegroups.com.  2.  Come to the Town Council Workshop at 6pm on Wednesday, May 3.  If you would like to, you may make a public comment on the matter at the Town Council meeting that will follow at 7pm. 

Even if you are not a Pine Pointer, speak up!  We all have an interest in the Town protecting our access to the beaches and defending against private land grabs.

For more information or to help out, contact pinepointmaineusa@gmail.com.


Fake Bonding Approval Emergency

Another slap in the face for Scarborough taxpayers.

We’ve already taken too much of your time, but we want to make certain you are aware of yet another Town Hall shenanigan.  This one involves the requirement in the Town charter that bonds issued for capital equipment or projects costing more than $400,000 get voter approval.  It’s very important to note that the vote is not to approve the piece of equipment or the project itself.   The Town Council does that.  The voters are only asked to approve the borrowing (issuance of bonds) for the project or piece of equipment.

Well, about a month ago, the Town Manager brought the Town Council a list of capital equipment/projects to be bonded.  This happens every spring at this time and the Council routinely approves it.  The trouble is, one of the projects on the list was the replacement of the Public Works fuel station with a proposed bond amount of $687,000.  A sharp-eyed resident said, “Hey, why isn’t the public voting to approve the bonding of that project as the Charter requires?”

There was some mumbling about it being an oversight and then – in a desperate attempt to justify not complying with the Charter – the assertion that this is an emergency situation, and the Charter allows the Council to skip the public vote in cases of “financing of improvements or equipment needed as a result of fire, flood, disaster or other declared emergency. [emphasis added]”

No one is questioning the need to replace the fuel island… just the need to follow the charter if we’re going to borrow for it.

Apparently there is a Department of Environmental Protection deadline for completing the fuel station project.  But the trouble is that this project was approved in last year’s capital budget, and the contract for it has already been awarded.   The project is happening and will presumably be completed in time to meet the DEP deadline.  The Town has the funds available to complete the project.  So what, exactly, is the “emergency?” 

 

There’s no rush – or emergency – in terms of when the project gets bonded.  In the past the Town has often bonded projects after they have been started or even completed.  When the funds from the bonds finally come in, they just reimburse the Town for the costs incurred for the project/equipment.

There is no conceivable way that the failure to adhere to the Town charter qualifies as an emergency for the purpose of issuing bonds.  The only emergency here is another transparency emergency at Town Hall.

For a concise summary of this non-emergency, take a look at a recent letter to the editor in The Forecaster. 

It will be interesting to see whether the Council decides to honor the Charter or moves ahead with a contrived emergency.


A Plug for SMARTaxes

Our friends at SMARTaxes have a new website that should be of interest to everyone interested in property taxes in Scarborough.  It’s at www.SMARTaxes.com.

Like this blog, SMARTaxes is interested in reasonable property taxes for all Scarborough residents.  Taxes that balance the often conflicting needs of municipal and school services with the ability and willingness of the town’s taxpayers to pay for them.  Check out SMARTaxes!


That’s all for now.  Thanks for your patience!  There’s so much happening all at once.  Please make your feelings known!

Be neighborly,

TT Hannah


 

 

 

 

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