One of the oft-heard concerns throughout the budget process relates to the desire of many for the boards to work diligently and collaboratively to flatten out the rate of increase in the budget and, more importantly, the mill-rate change year to year. A key consideration in how the Granby Board of Finance looks at budgeting and the fiscal affairs of the town IS that stability in working towards a modest slope in the rate of increase in both.
Steps we have taken within the budget help in doing just that, such as strengthening the Other Post-Employment Benefit Fund (OPEB), as well as the funding of the Capital Non-Recurring Expenditure Fund (CNEF) to help keep the impact of debt service for future-bonded capital projects minimal. These are part and parcel of what we can do—and should do—to meet that challenge of balancing the natural increase in expense over time with the desire to maintain a modest stability in taxes.
A strategy in doing just that involves moving resources to where we can put them to better use in the near future, such as meeting obligations for the actuarially-determined contributions into both the retirement plan and the OPEB fund, as well as the Small Capital Infrastructure Fund (SCIF). The latter is what pays for the yearly repaving and road work, cruiser and dump truck replacements, building repairs and equipment replacement. Between the municipal and school buildings and properties, that runs about $3M annually.
As the fiscal year nears its end June 30, the Board of Finance has acted to move $690K from the General Fund to the SCIF to reposition money where we know we will need it in upcoming near-term budgets. The more funds pre-positioned this way, the less we will need to fund through the annual budgets, i.e., through taxes. The board’s considerations in doing so are to strengthen our ability to meet the needs of the town itself while limiting budget and mill-rate increases to meet those needs. Dollar for dollar, the more in those dedicated funds or the General Fund itself improves the ability and stability to present modest changes in the annual overall budget year to year.
This transfer, shifting money from the General Fund to the SCIF, leaves the General Fund reserve or rainy-day fund just above the 15 percent of the budget recommended by the credit rating agencies. Being AA+ rated currently by Standard and Poor’s—and with a strong possibility of seeing that raised to AAA—Granby is well positioned since the town will soon consider approval of a number of capital projects.
It is incumbent on Granby’s boards—and in particular the Board of Finance—to recommend and take steps that are in the best interests of the people of Granby, and of the municipal entity itself. The above exercises in fiscal discipline work to not only maintain our financial strength and reduce borrowing costs, but also strengthens our ability to put money where we know we will need it and simultaneously lessens the pressures on future budgets … mill rates … property taxes. Properly executed fiscal conservatism pays dividends in meeting the town’s needs, in managing the deployment of resources and in moderating the upwards movement, year to year, of the budget and the mill rate.