Petersburgh Struggles With Budget

by Alex Brooks
The Town of Petersburgh is having a difficult time putting together its budget for 2014 because the 2013 budget used $60,000 of unexpended balance in the General Fund and $40,000 of unexpended balance in the Highway Fund to reduce the tax levy. The 2014 budget will not be able to use any unexpended balance to reduce the tax levy, according to Town Supervisor Siegfried Krahforst and Bookkeeper Charles Guntner. [private]This puts the Town Board in a situation in which it would have to create a budget for 2014 in which budgeted spending is $100,000 less than 2013 budgeted spending in order to keep the tax levy the same.
Cutting budgets is always a painful enterprise, but the thing that makes it questionable in this instance is that the reason the Town is in financial trouble is that it has spent significantly more than it budgeted during the first nine months of 2013. The Town would have to cut its spending significantly just to match the amounts budgeted. Town Board members are struggling with the fundamental question of whether the root of the problem is a lack of control on spending or a 2013 budget that set unrealistically low spending targets. The answer is probably some of both, but this uncertainty explains why, after spending four hours on Monday, September 30, going over the budget, trying to find ways to cut it, the Board ended up with a larger budget than they started with, having increased many lines in the name of being “realistic.”
Councilman Duane Goodermote had a conversation with Bookkeeper Guntner early in the meeting in which he said, “Our expenses have exceeded our budget this year, but it was covered by cash that we had left over from previous budgets – but next year if we exceed our budget and there is no cash to cover it, that would be a very bad situation, wouldn’t it?” Guntner acknowledged that it would be a bad situation. But later in the meeting Goodermote was brought up short by a comment from Library Director Sharon Hodges, who said she didn’t think it is a good idea to reward department heads who exceed their budgets by raising the budget to match the previous year’s spending. Goodermote acknowledged that she had a point.
Originally the culprits named as causes of the budget problem were a heavy rainstorm at the end of May that caused a lot of damage to the roads and the demolition of the leaning garage, which cost about $25,000.
No firm estimate has been compiled of what the cost will be to repair damage from that storm, but initial estimates were in the neighborhood of $70,000. The Town will be getting $82,000 in CHIPS money for road improvements, and Highway Superintendent Ray Harrison said he can use $72,000 of the CHIPS money to pay the cost of rebuilding roads damaged by the storm. But Guntner said he thought the cost of repairing storm damage was really more than the $70,000 estimated.
In any case, Guntner said that even after he counts the $82,000 income from the CHIPS money, he is projecting that the Town will have on hand only about $20,000 come the first of the year. He said that number is typically $100,000 or more.
It’s difficult to assess how much spending is over budget in the middle of the year, so there are no firm figures available about how far over budget the Town will end up by the end of 2013. According to figures Goodermote mentioned, there are some cost overruns in many areas of the budget, but the largest ones he mentioned were in the Highway Budget. These were contractual expense for road repairs, where the storm damage costs would show up, and contractual expense for machinery, which reflects larger than usual expenses repairing the trucks and road building machinery.
Some of the measures taken to keep costs down in the 2014 budget include cutting the capital outlay for Town buildings from $15,000 to $5,000 and deciding not to keep the Town Park mowed, which reduced the mowing expense from $3,000 to $500. They kept the $500 so that it can be mowed once or twice a year so bushes and trees won’t grow up on the field. There will be no raises for any Town employees this year. Supervisor Krahforst cut his own salary from $10,000 to $9,000. He also added $1,500 to pay for his personal secretary, but he cut his contractual expense budget from $5,000 to $3,000, so the overall budgeted cost of the Supervisor’s office is $1,500 less than 2013.
The budget remains a work in progress. The Budget Workshop on September 30 began with a tax levy increase in the neighborhood of 9% and ended with an increase in the low teens. But it is expected to come down again when the Board gets down to making the final cuts. There are two more budget workshops scheduled, on Thursday, October 10, at 7 pm, and on Monday, October 21, at 5 pm, before the regular meeting.[/private]