The budgeting process

By MAYOR DAVID W. PYATT
As published June 17, 2009

One of our concerns has been the long-term process of replacing and adding to our Town’s needs in the years to come. The town staff has done a pretty good job of identifying these needs and trying to set money in escrow so we don’t get caught short.

This year has been particularly challenging because of the economy and drop in revenues. We also had to take money from the General Fund to supplement increases in costs in water and sewer operations.

Most people are unaware of how low our municipal tax rates are and what a bargain they have received over the past 20 years or so. There are many reasons for this, but I think it stems from a “can do” community attitude.

While I can’t light a candle to some of our past mayors, I consider myself a pretty frugal person and basically hate to spend money unnecessarily – sometimes even necessarily. Just ask my wife. I think duct tape is right up there with the Internet.

In the 1990s and early 2000s property values increased more than the cost of living, and we were able to “lower” our tax base a little at a time using something called the “constant yield tax rate,” an accounting trick only understood by a few Nobel laureates in economics. But it sure gets your attention when it stops working. It sure got my attention this spring.

I have a few (actually, more than a few) friends who aver that elected officials should never raise taxes and that it should be their sworn duty to lower them whenever they can. Sort of like a POW’s duty is to try and escape. I used to believe this, too.

Now that I’m sort of in charge of this budget process, I’m starting to realize that expenses are rising, in many cases faster than income – which is sort of going the wrong way.

I have a lot of admiration for Arnold Schwarzenegger – I can imitate his voice and sometimes call people and pretend I’m him – and I see how a pretty good guy has been twisted into a financial pretzel. I’m beginning my first loop of the pretzel with next year’s budget, which will start later this fall.

I’m not sure whether a tax increase will be required (I’m hoping it’s not), but I promise to squeeze as much juice from things as I can.

I spent the last 15 years of my career planning to replace nuclear facilities built in the 1950s and 1960s using more up-to-date building codes and, my specialty, safety standards. It is unnerving to see cost and time estimates to replace aging facilities often built in mere months and for a fraction of the modern cost.

I don’t see a relaxation of analogous codes and standards that municipal governments must follow today. I recently joined the American Society of Civil Engineers, and one of their agendas is to emphasize the need for infrastructure replacement, which their annual “Scorecard” gives grades like C, D and F in most cases. It has been pointed out that folks get recognized much more for building new things than replacing older things.

They make duct tape in colors now (I’ve added white to my inventory) and consider it as a very acceptable method for infrastructure replacement if that works.