TO Sneak Preview
Your article blasting the Ashland Chronicle, and the piece in general, suggests that there is no budget crisis.
Dean Silver, writing for The Ashland Chronicle, has supplied many researched facts and figures that show the opposite. Sometimes folks just do not like to get their heads out of the sand and blame the messenger instead.
The City Council members deny there is a financial crisis because it has been their decisions that have put us there. They approved the current budget with a vote of 4-2. Our current 21-23 City Budget was initially balanced by using a one-time $4.3million Federal Grant to cover expenditures that were more than revenues. It was discovered that these funds were received early – in April 2021 – and $2M was actually spent in the FY 19-21. It has never been revealed what these funds actually covered. Therefore only $2.3M was available for our current 21-23 budget.
No substantial cuts have been made since. It is clear that our next Budget, will not have that $4.3 in revenue. A sustainable budget is one where regular operating expenditures do not exceed ongoing, regular revenues.
In addition, to balance the current budget, $2million of F&B taxes were used to cover part of the Parks budget. Parks funds are usually drawn from the General Fund, not taxes, so this relieved the General Fund of $2M expenditures. Since then, this use of F&B taxes has been determined to be of questionable legality, and City Manager, Joe Lessard, has stated that Parks funding is to come from the General Fund, as it always had previously.
The current budget also did not include any raises in the 2nd year and yet just last month raises have been approved for 11% over 3 years. This adds to our expenses, increasing the deficit.
It is difficult to see our real position in regard to the budget since there have not been any detailed public reporting to show a comparison of the budget to actuals, (a normal ongoing practice of a Finance Department). But, we have unfilled positions saving money according to City Manager Joe Lessard. Is this really a savings? Maybe for this year. Maybe that means the budget should be cut to reflect reality? Where should cuts be made? Should we hire an efficiency expert to figure this out? In the next budget we will not have the Federal Grant to bail out the General Fund. We will not have F&B taxes to fund the General Fund. How is this sustainable in the 23-25 Fiscal Budget? It is not… This is magical thinking.
The reluctance to make substantial cuts, to deny a crisis, has left a larger deficit every year. Every year the Financial Directors have said that this is not sustainable and yet expenditures continue to increase. Yes, this is a crisis and one due to financial mismanagement and poor judgement. Poor judgement in regard to lawsuits has led to higher insurance rates. Poor judgement in depleting the vehicle replacement reserves has led to a lack of sufficient funds when a new fire engine was needed. And much more…When I inquired where the Federal Grant of $4.3million had been spent, I was told by the Finance Director that she really did not know. Is that what we are going to say to the Feds when they ask for a report? I recommend a forensic audit to find where these and other funds have gone.
The current Council voted 4-2 to approve a budget that was only “balanced” by using a one time Federal Grant of $4.2M and improperly shifting $2M F&B taxes. The budget committee had a long list of recommendations to get to a sustainable budget, yet, to my knowledge none have ever been seriously considered.
So, yes… we are in a budget crisis. And borrowing with increasing interest rates is not looking like a good option. Let’s face the hard facts. Denial has gotten us here and something must be done – without blaming the messenger.
Election time is coming. It is time to get educated and ask the candidates for their solutions.
Former Finance Director, ASME Council 36
Former Finance Director Upward Bound House (Senior and Homeless Housing)