Letter to PTA Members and Friends – June 1
Dear PTA Friends,
Once again we find ourselves defending reasonable budgets against unfounded claims of “surpluses” and “high taxes.” Uninformed citizens who don’t have the time or the desire to learn the facts about the budgets make for easy targets of this misinformation assault.
The cuts already made to our Education Budget are significant! This budget needs to be passed on June 6!
I want to address one piece of toxic information that was randomly put into the conversation at the last referendum and continues to “poison the well” around town. A million dollar surplus. This is just another example of how far the opposition will go.
At a minimum – if you watch the CTA explanation of this money you will notice that 1/3 of that amount is not even realized funds at this point but merely an “expectation.” The other very important point that is conveniently missing from the explanation is the charter imposed requirement that, when a budget fails, the Board of Finance CANNOT add revenues to the next iteration. They MUST reduce expenses. The CTA’s claim to vote no and use this surplus is simply prohibited by our charter. The Board of Finance can use this, if they deem it prudent, NEXT year.
In any case, IT IS NOT AN EDUCATION BUDGET SURPLUS and it CANNOT be used to adjust the budget we are voting on so it is NOT a reason to vote no on Wednesday. If you want a more detailed explanation of the surplus you can keep reading below.
Review FACTS about the Education Budget and help us spread the TRUTH:
Website: https://clintonpta.org/ (click the red bell bottom right to sign up for notifications)
Facebook Page: https://www.facebook.com/clintonctpta/ (LIKE and FOLLOW this page)
Valeri Nye – PTA President
More details: Clinton has “money in the bank,” otherwise referred to as a fund balance. It is our reserves. Our reserve policy in the Town Charter calls for at least 10% of expenses. Anything lower would lower our bond rating, meaning we’d pay much more to borrow money for large projects. This “surplus” is indicating that our money in the bank is $1 million more than 10%. Ironically, the primary reason is because the Board cut the Education Cost Sharing grant expectation last year and we ended up getting more than anticipated. In any case, if the Board chooses to spend down this money, they have to add it as a revenue item “spending from reserves” at the beginning of the process and that will likely be debated next year. It cannot be used at this point in the process. Note that Westbrook’s reserve policy calls for 12%-15% of expenses so it is debatable what balance is the right balance. But note that in 2017, Moody’s assigned a negative outlook to Clinton, but not to Westbrook. Is this a good time to reduce our fund balance?