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Village hears gloomy prognosis for budget

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CHATHAM — The Village Board held a special meeting last week to discuss finances, with much of the session spent on a presentation by Earl Kelsey, the village auditor about issues with the budget.

Mr. Kelsey, who is also the controller for the Town of Chatham and volunteers his services as village auditor, said that he reviewed the current budget and that the major issue is less money in the fund balance than the board planned on. He said that the board was overly optimistic in its revenue projections when putting together the budget.

A similar set of conclusions from the village Audit Committee has been the subject of debate and discussion at recent meetings. The village may face a shortfall of up to $70,000 in the current budget. The fiscal year for all villages in the state runs from June through May.

“If you do not raise taxes by twice the inflation rate, you are falling behind,” Mr. Kelsey told the board at the meeting Thursday, August 25 held in the second-floor courtroom at the Tracy Memorial. He suggested that in order to balance the books for the village general fund the board could delay full payment on some of its bond anticipation notes. There is a $70,000 bond anticipation note (BAN), a common form of municipal borrowing, on a project on School Street. “It’s not forgiven,” he said of the debt payments, adding that the village must pay the debt within five years with additional interest.

Mr. Kelsey and Michael Richardson, the co-chair of the village Audit Committee, both said the state will not let the village operate with an unbalanced budget.

Mr. Richardson talked about the option of “punting” the BAN payments into the next budget. He also said that the general fund budget includes $112,000 in payments on past projects and equipment purchases. “Ten cents on the dollar of everything we spend is paying for the past,” he said.

Former Mayor Paul Boehme was attended the meeting. As Mr. Richardson spoke about the village debt Mr. Boehme said, “You’re talking about equipment, things we had to have.” Mr. Boehme said the village has frequently used BANs or debt financing through bonds to pay for village projects and equipment.

Trustee Lael Locke brought up the issue of $83,000 in as-yet unpaid village property taxes.

Mayor Tom Curran said he was planning to talk to the village attorney about collecting those taxes once he receives a complete list from the village clerk/treasurer. But Mr. Boehme said the legal fees involved in going after outstanding taxes that might negate any benefits.

There was once again a discussion about cutting services. “I can’t promise you anything,” said Mayor Curran about cuts, but he said he’s focusing on bringing in more revenue. “We are in a global economy that is going down and if we try to maintain status quo we have to raise taxes by 10% to 15%,” he told the group of 20 people, both residents and business property owners.

Trustee Joanne DelRossi said the board is talking with village employees about efficiencies. Trustees have spoken with Deputy Clerk Barbara Fischer about her hours at the village office and whether cutting down on hours that the window for transactions with the public is open would enable her to get other work done.

Mr. Kelsey suggested village have a contingency budget next year. “We are not the only municipality having trouble balancing their budget,” said the auditor.

The next village meeting is Thursday September 8 at 7:30pm in the Tracy Memorial.

To contact reporter Emilia Teasdale email eteasdale@columbiapaper.com.

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