Where do our tax dollars go?

I recently opposed the raise for the Town Manager. I offered some of my reasons, but did not offer complete explanations during the Council vote. My reason was simple: brevity... particularly in light of the fact that the motion was going to pass. Keep in mind... the Council had several meetings on this topic, so the TM and Council members all knew where I was coming from... as well... as you'll see here... some of my questions are financial questions that are, IMO, difficult to explain in words. So instead... I offer you a spreadsheet.

The basic idea is this... the town has a "Rainy Day Fund," also known as a "fund balance," "unreserved fund balance," "fund balance equity" and perhaps some other names. And the Rainy Day Fund has increased significantly over the past couple years. Anyway....

As you can see by the chart below, the Rainy Day Fund has increased approximately $2,000,000 in two years. Which leads to the first of my two requests... "Please provide a cost/benefit analysis for the $2,000,000 in tax dollars collected that went unspent." I mean... if we collected $2,000,000 and increased the existing Rainy Day Fund, then... don't we, the taxpayers get a benefit for it? If so, then what is the benefit?

Then I have a second request. That request relates to maintaining the Rainy Day Fund. See, we've been told about the benefits of improving our "debt rating." We're told that when we improved our debt rating last December, we had a one-time savings of $30,000 - $50,000. And that's great. But for that benefit... there is a cost (I estimate that cost to be annual cost of $90,000... see chart below). And part of that cost relates to our Rainy Day Fund balance increasing from 5% to 8%. For without that increase (an increase in the % of the Annual Operating Budget maintained as the Rainy Day Fund) in the Rainy Day Fund, we wouldn't have gotten that $30,000 - $50,000 one time savings. So this all leads to the second of my two requests... "Please provide a cost/benefit analysis for additional dollars being collected on an annual basis... as a result of the 8%, rather than the 5% fund balance target." (Keep in mind... only two years ago, it was considered sound public policy to maintain a 5% fund balance target... but two years later... 8% is considered sound public policy.)

Here's the spreadsheet representing our unspent tax dollars:And if my explanation above is confusing... then just focus on the numbers highlighted in yellow... first the $2,000,000 collected in taxes to increase the existing Rainy Day Fund. Then look at the estimated $90,000 that will be collected annually... just to maintain the 8% fund balance.

Don't get me wrong... at this point, I'm not decided on whether it is more appropriate to have a fund balance of 8%... 5%... or perhaps something else.

I do know one thing though... I think the taxpayers deserve a cost/benefit analysis explaining both the increase in the existing Rainy Day Fund and the increase in maintaining the Rainy Day Fund. Unfortunately, that cost/benefit analysis does not appear to be forthcoming.

Btw, on my request for a cost/benefit analysis on maintaining the Rainy Day Fund... back in April, both Ms. Esty and Mr. Schrumm agreed with me that it was a good idea.... so I have no idea why it has not yet been provided.

Tim White
Town Council, Budget Committee