I am writing to respond to the questions Jim Haff raised in his letters to the editor recently about our Irene flood reimbursements. These questions he raised have been addressed by the Selectboard at several public meetings and in letters to citizens, but I am glad to have the opportunity to address them again to clear up any lingering confusion:
Mr. Haff asked why the Town Report doesn’t show a deficit with flood funding and FEMA in the Town Report like the auditor’s report does?
The section of the auditor’s report Mr. Haff refers to does not reference a debt to an outside entity as his question infers. It refers to internal fund accounting, which we accounted for in the Town Report. Here’s the explanation:
Irene caused just over $3 million in damages. We made all the repairs, rebuilt the damaged infrastructure and paid all the bills. The state and federal governments (primarily FEMA) have reimbursed the town for the projects they deemed eligible, which represent a large majority of the costs of the work to date. The town is waiting for its final reimbursement claim, primarily represented by Stage and Ravine Road bridges. The reason these final claims are outstanding is that the state has been helping make the case that the town should receive more money than FEMA planned.
The letter to The Mountain Times references the auditor’s internal fund accounting of the town or, in other words, the town’s share of flood repairs, which has already been paid. The auditor’s report does not reference a debt to an outside entity as inferred by the question. In other words, we owe this debt to ourselves.
Mr. Haff asked how the town plans to restore the undesignated balance and sufficiently fund the town?
Two points. First: the undesignated fund balance is closer to $770,500 than $585,500, as a transfer of funds from the fire department for a scheduled truck replacement occurred after the yearend instead of before, as scheduled. I confirmed with the auditor that it this would have added to the undesignated balance. Also, there are still FEMA payments expected of over $200,000 as well. Once this occurs, the FEMA balance of approximately $600,000 ($800K-$200K) will be reconciled against the undesignated fund balance. Second: This Selectboard has outlined a plan in a letter to residents in March and most recently at a special meeting on June 11, 2015 on how we will rebuild our undesignated balance. We are following the advice of our professionally trained certified public accountants who conduct our audits, by: (1) moving to a fiscal year and four tax collection payments; and (2) gradually rebuilding our undesignated balance. All of these steps are underway. Once the reconciliation of the flood account has occurred and the undesignated balance is brought back to a level of approximately $600-$700K (about 2 months worth of expenses, as recommended by the auditor) the cash flow issues we have experienced due to Irene will dissipate.
It is also important to note here that Mr. Haff was one of three selectmen who voted in 2011 and 2012 to spend the undesignated balance of the town to help cover the costs associated with the flood, as well as other town expenditures (page 27 of the 2013 Town Report). We supported that decision and this Selectboard is working restore that balance.
Mr. Haff questioned the town’s transparency related to finances. All of our town’s financial information as well as Selectboard meeting minutes and documents are made available to the public on the town website, at public meetings and at the town office. Today, with the use of technology and support of our staff, we have more information available than ever before. In addition, we distribute quick summaries to the email list and work weekly to answer citizen’s inquiries.
I also plan to continue to write letters monthly to The Mountain Times to address citizens concerns publicly so that all residents and property owners can stay apprised of the facts. If residents have further questions, please direct them to the Town Selectboard. You can reach me by email at email@example.com or contact our Town Manager, Seth Webb at firstname.lastname@example.org.
(This letter is based on my impressions of the matters before the town and are not approved of, nor have been reviewed by the full board.)
Thank you for your time and consideration,
Patty McGrath, Killington Selectboard Chair